How to Choose an Umbrella Company

Other pages within this section:

• Starting Out in Contracting using an Umbrella Company
• Umbrella Company Expenses
• Is your Umbrella Company Compliant?

Most umbrella companies will publish testimonials on their site, and rarely will they highlight their failings or include comments from contractors who are unhappy with their service. As such, it can be tricky to get an accurate picture of how reliable a company is and how they treat the contractors on their books. Some of the things that you might like to consider include:

How do they handle calls?

Nobody likes listening to endless menus on automated answering systems, and you might find that you want to get in touch with your umbrella company with a question that you really need to have answered quickly. If you find that you have to navigate your way through their phone options only to have your call placed in a queue, then you might wish to choose a company which places more emphasis on customer service. Some companies guarantee that their phones will be answered within a certain length of time, so if this is important to you then check their policy before you sign up.

Will you be treated differently as an existing client?

Many companies prioritise landing new business over looking after their existing clients, meaning that their resources are diverted to the sales lines rather than those offering support to those already on their books. If you want to ensure that you won’t be at the bottom of the pile, ask whether there are separate phone lines for sales enquiries and for existing customers to speak to someone about their employment.

Will you get a dedicated member of staff who will be familiar with your situation?

When you first start contracting under an umbrella company, it is natural to have lots of questions about how you should be doing things. If you have to go through the details of your situation every time you call, you could find yourself wasting a lot of unnecessary time on the phone, so check whether your enquiries will be dealt with someone who will be aware of your circumstances.

Will you have direct contact details for a dedicated member of staff?

If the umbrella company routinely gives out generic email addresses and the number of their main switchboard, the chances are that you may have trouble getting hold of someone to answer your questions. If your emails or calls all have to be routed through a third party then you could be wasting valuable time waiting for answers to relatively simple questions.

Does the company guarantee their service levels?

Sometimes it can be hard to gauge whether you have unrealistic expectations of a company, or whether they are failing to provide a suitable level of service. Having to wait for a long time to receive a response to emails or phone messages or finding it difficult to get in touch with the right person can all cause delays and affect your ability to complete the paperwork you need to get paid on time. For this reason, it is always worth asking if an umbrella company has a service guarantee which specifies a maximum time that you would have to wait before receiving a response to an enquiry. For reference, many companies will guarantee a same-day response whereas some will promise an answer within 48 hours, so choose one which will suit the way you work.

Does their margin depend on your earnings?

It is unlikely that someone earning more will actually cost more to represent – processing payments takes the same amount of time whether the contractor is on a higher or lower rate, so there should be no need to change the margin dependant on the value of the contract. You should be able to predict how much you will be paying your umbrella company, not getting nasty surprises when your payslips come through and you see how much you have been charged.

Some agencies have a list of umbrella companies that they prefer to work with, but that doesn’t mean that you have to use one of them if you don’t think they will represent your best interests or meet your particular needs. You should choose your umbrella company because they meet your requirements, not feel as though your hand is forced because an agency gets a good deal from them when it comes to referral fees. For this reason, we always advise our clients to do their own research rather than just using a company based on a recommendation from an agency.

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Looking to join an umbrella company?

If you’re looking to take your first step into the world of self-employment, an umbrella company could be the solution for you. At Nixon Williams, we specialise in contractor accountancy, however, our sister company Parasol are one of the UK’s leading umbrella companies. They will be right by your side to guide you through the process, to take care of your finances and to box off your admin. To find out more, just fill in the form below and a member of the Parasol team will be in touch.