In one small corner of our economy the time is ripe for a disruptive innovation, and although a disruptive process may take longer to develop than by the existing approach, once it is deployed in the market it is assured to achieve a faster penetration rate and a higher degree of impact on the established markets.
It is no secret that the habitual response to the Government's ongoing clampdown on tax avoidance in the temporary labour market is a switch to yet another 'compliant' payment model. Agency bosses that focus solely on margins, and moreover the avoidance of employer responsibilities, actively support the once conventional approach, but more enlightened and customer focused agency leaders are now starting to look at the adoption of different strategies.
Following a lot of media attention and increased anti-tax avoidance activity by the Government, both clients and workers are becoming suspicious of the way that agencies and umbrella companies appear to collude in certain arrangements, which are demonstrably of little benefit to agency workers who are paid 'off payroll', and this fact alone may force many more to consider their position.
A disruptive innovation doesn't have to be another tax loophole, it could simply be a solution which is far cheaper than the one that conventional service providers supply. The Model T Ford was a disruptive innovation, or rather its production method was the disruptor in the automobile market, simply because it brought affordability to the masses.
Cost is always key, and any business that supplies services of less value to the customer at an increased cost is heading towards inevitable oblivion. In reality, the only thing that currently keeps the 'umbrella companies' that operate in tandem with many agencies afloat, is a cartel system that has sprung up over the last few years that promotes member companies, and ensures that all other competitors are excluded from the market.
A change is coming and I am not alone in possessing a good understanding of the average business life cycle, equally my company is not alone in introducing services into the market place at a fraction of the cost of the conventional service providers. There is choice and based on cost, this choice will become the disruptor in much the same the Model T Ford once was, and will speed up the process of the aready inevitable decline of the service providers peddling services that are no longer relevant or cost effective.
The change is coming but surprisingly, it will not come through HMRC enforcing anti tax avoidance legislation year on year, but through market forces.