28468 Blue Arrow Client Advisory Guide_WEB - Flipbook - Page 6
Supplier due diligence
Contractual safeguards
It perhaps goes without saying that before engaging
any staffing agency or third-party recruitment provider,
thorough due diligence checks must be conducted.
Any new vendor has to be able to demonstrate that they:
Contracts can also act as tools for governance,
rather than just a transactional element of the
supply chain. Ensure that your contracts include
key clauses such as:
Have legal registration and financial stability
as a business.
Compliance obligations that require suppliers
to adhere to all relevant laws and regulations.
Adhere to labour laws, health and safety standards,
and ethical recruitment practices, including equity,
diversity and inclusion commitments (EDI).
Audit rights that allow your organisation to
inspect records and processes at any point.
Have a solid historical performance and no past
compliance breaches.
Remain up-to-date with the evolving employment
compliance and legislation landscape.
Have clear processes for handling compliance
concerns or complaints.
Some sectors will have additional requirements to
the above, but regardless of the needs, this stage
of choosing and onboarding a supplier should never
be skipped or rushed. It’s also important to remember
that due diligence should be ongoing, not just
a one-time tick box exercise. Regular re-evaluation
ensures continued alignment with your standards
and reduces risks in the long term.
Indemnity clauses that protect your business
from liability arising from supplier misconduct.
These safeguards create a legal framework that
reinforces accountability throughout the supply
chain. They also act as a means of weeding
out any potential suppliers that pose a risk
to the compliance of the talent supply chain.
If a vendor doesn’t want to include these
clauses in a contract, it’s a red flag that
should be given consideration.
Monitoring and auditing
Even the best contracts are ineffective without
enforcement, and it’s crucial that HR and
procurement teams have a clear plan in place
to regularly monitor and audit suppliers to
identify any gaps in agreements that could
expose the employer to any risks.
Regular monitoring and independent audits
help ensure that suppliers are living up to their
commitments. This can include:
Site visits and worker interviews.
Reviewing payroll and timesheet data.
Verifying right-to-work documentation
and tax compliance.
It’s also crucial to have ad hoc conversations
regarding how staff are engaged in the run-up
to any changes to employment regulation.
If not already actioned, it is important that
employers ask their supply chain what steps
they are taking in relation to the planned changes
in the Employment Rights Bill, and agree on
regular touchpoints linked to the planned
implementation of this.
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