9 harsh truths about bad staffing agencies

Dan Blake is co-founder and COO of Florence

Back in 2016, when Charles and I launched Florence to help nurses book their own shifts, we wanted to make caring easier for everyone. This meant being a true partner to our users: helping people find or fill shifts, quickly and stress-free, without fear of being ripped off.

It should not have been revolutionary – but in many ways, it was.

Don’t get me wrong, there are lots of good staffing agencies out there doing their best to support care.

But this post is about the bad ones (of which sadly, there are also many) who pollute our industry, and how to avoid them – whether you’re a care organisation, a nurse or a carer.

After watching the BBC’s upsetting Panorama investigation over Christmas, which exposed terrible, interwoven cases of shady agency practises, staff exploitation and patient neglect, I’m sharing more about the worst agency behaviour I’ve seen in the industry myself.

Here are nine harsh truths to help you recognise how bad agencies can operate, and why they get away with it.

Scroll to the end to find my top questions to ask to find a good agency to help you thrive and stay safe in our hardworking industry.

Truth 1: Setting up an agency is way too easy

Anyone can set up a staffing agency, with no background experience or criminal record checks.

This is especially true in England, where the CQC decided in 2010 nursing agencies didn’t need to follow any set regulations.

In the rest of the UK, local regulators play a far more active role in vetting and controlling nurse staffing agencies.

With very low barriers to entry in England and no regulations, new agencies pop up as quickly as they fold.

Truth 2: Profit can win over care

Some agencies are driven solely by profit, as shocking reports of the top NHS-supplying agencies’ income rising by tens of millions of pounds during the pandemic shows.

Agencies can whack up the cost they charge a hospital or care home per shift and pass on only a fraction to the people who actually work the shift.

The worst agencies are steered by out-of-control greed., which affects everything they do.

There is little to no focus from these agencies on the actual quality of the care work being delivered, or worse, setting up and maintaining long-term relationships between organisations, staff or residents.

Truth 3: Staff can get ripped off

I’ve heard of nurses and carers being charged to access their own pay, to get copies of their training certificates or even be fined for cancelling a shift at short notice for a valid reason.

Stories of agencies holding on to workers’ passports and using threatening language are also sadly not uncommon.

Additionally, there are reports of agencies withholding holiday pay from workers but still billing their clients for it.

Recently, I heard of a terrible case of malpractice that caused tremors in the industry: a shady individual got caught signing up multiple people to staffing agencies but provided only his bank account.

This criminal individual held a large chunk of the workers’ wages, akin to a despicable form of modern slavery.

Truth 4: Some are tax cheats

Despite clear guidelines from HMRC about how VAT is chargeable, or not, for nursing agencies, there’s widespread tax avoidance in the industry.

Some agencies don’t apply VAT to their worker rates in order to appear significantly cheaper. When these dishonest agencies get caught, they simply close and start again under a different name.

Other agencies claim their turnover to be below the £85k threshold, making them exempt from being VAT registered.

Under standard accounting practices, turnover includes workers’ wages, so assuming agencies take 20% in margin, they claim to be running a company with all associated costs for under £20k a year.

This is clearly not possible for a company that is hiring, training and supporting agency workers.

Truth 5: Some work with dodgy umbrella companies

Umbrella companies will always be more expensive for workers, and in many cases can also help people avoid paying income tax.

Some social care agencies will only allow workers to get paid via an umbrella company (and may even get a financial kick back from the umbrella).

The umbrella gets the carer to set up their own limited company and then pay the money into there. This is done to try and circumvent IR35 rules.

The carer is then supposed to sort out their taxes themselves.

If they do this properly they will realise that they would have been far better off just being paid PAYE (as the umbrella has taken a fee out of their pay) – but many don’t and look to avoid tax, either knowingly or not.

Truth 6: Documents can be forged

There’s a scarily real risk of a person with a fake ID and no evidence of relevant qualifications turning up to work at your care service, depending on your agency.

This is because getting hold of documentation – such as IDs, right to work checks, relevant qualifications, references, work history and training – can be time consuming, so some agencies cut corners; some even choosing to forge a fair few of these documents.

Truth 7: Some don’t pay minimum wage

From the 1st April 2024, agencies will have to pay PAYE staff an absolute minimum of £14.10 per hour.

Any agency that says they can supply a nurse or carer for around this cost or less will intentionally not be making a profit (unlikely!); or breaking the law – as they will be taking their cut out of their workers’ enshrined wages.

I hear of this happening all the time with the current minimum wage, and don’t expect those agencies to have a fit of conscience by raising their prices dramatically in April.

Bottom line: If the cost sounds too good to be true, then it probably is.

It’s illegal, greedy and unethical on every level on these agencies’ part.

Truth 8: They can rip you off

Recently I heard of a nursing home in Oswestry needing a last minute shift covered.

It was 3pm and the shift was due to start at 8pm. They called their usual agencies and none were able to help.

So they called a national agency that is famous for always being able to cover a shift but at a very high price. They were quoted £800 which is more than double the normal rate.

The nursing home said they would have to keep trying as they could not afford that. They called back an hour later as they couldn’t find any alternatives.

The high-priced agency knew they had no alternatives so increased the price to £1200.

The home had no choice but to pay.

At least 50% of that would go to the agency and not the worker.

It’s an extreme example, but it shows how some agencies can operate.

Truth 9: They don’t handle incidents well

If an incident occurs involving a member of agency staff, some unscrupulous agencies may assign it to a very inexperienced consultant to try and sort out.

These people will not have the training or experience to handle the incident properly, and it’s often seen as a box-ticking exercise so they can get back to making profit.

Bad agencies will not provide thorough incident support to a worker or care provider; often they will simply block the worker from that site again and assign them somewhere else, with little to no additional training.

How to avoid bad agencies (like the above!)

These harsh truths expose how some care staffing agencies work. Low barriers to entry and lack of regulation does attract people who are happy to cut corners to make a quick buck.

There are, however, many agencies and staffing apps like Florence out there, who pay fairly and have high compliance standards in place.

As a care provider or worker, here are questions to ask when looking for your next agency…

1. What are their governance, quality and incident reporting guidelines and processes? Do they even have any?

2. Do they use umbrella companies? (If they do, find another agency that doesn’t.)

3. If they are charging low rates, ask them how they can operate a business successfully and profitably? How can they guarantee people are paid a fair wage; and how can they ensure all staff are qualified and trained on such low margins?

4. What’s their typical margin? 15%-25% is reasonable. Anything under means they will not be able to run a credible operation and anything over is just ripping off clients and their workers.

5. What’s their approach to VAT? If they are exempt from VAT, ask them to provide some justification.

6. How do they validate staff training, and most importantly, maintain it?

7. How do they deal with cancellations? Are there any late cancellation fees, for instance?

8. Can they provide a copy of their insurance policy?

9. Are there any additional fees they charge? What are they, and why do they charge them?

Asking these questions will help you find an agency that does better for you. You don’t need to accept working with uncaring profit-chasers, when ethical alternatives are out there too.

Curious about Florence? Book a demo to learn how we can help you find, retain and train an experienced team to help you deliver outstanding care.

You might also be interested in:

– Florence vs agencies: 10 reasons to choose Florence

– Florence joins the Care Workers’ Charity £500 Challenge

– 5 predictions for health and social care providers in 2024