Key finding one
Most have heard. Two in five could explain it.
80% of respondents had heard something about the changes. The actual self-reported understanding of them was thinner: 22 of 57 said they could explain them, 24 had heard of them only vaguely, and 11 had not heard of them at all, less than two months before commencement.
The size gradient is the sharpest pattern in our data. Nine of the ten firms with more than 100 staff said they could explain the changes and none were unaware. Among firms with less than 25 staff, 3 of 26 said they could explain them and 11 had not heard of them at all. The businesses least likely to have heard are the ones where compliance is a director's side-task with no system behind it.
No published survey has measured awareness of the October changes anywhere; the nearest comparator is the Home Office's own employer research, which found the same size split on right to work rules generally, 41% awareness of recent changes among large employers against 16% of micro firms.
Key finding two
Confidence follows the stack.
The Home Office's own research found a gap between confidence and competence: 89% of employers said they were confident that they conduct checks correctly, yet 80% answered at least one compliance question incorrectly.
We did not find blanket overconfidence but we did find something more specific: confidence tracks infrastructure almost perfectly. Of the 18 respondents who said they were very confident about responsibility from 1 October, 16 track right to work through a dedicated checking tool or an ATS with automated alerts. Of the 19 who said they were not confident or had not looked at it, 18 track on spreadsheets, email, paper or manually checked systems. People broadly know where they stand because of the software they put their trust in.
The risk sits in the middle: twenty respondents, the largest single group, described themselves as somewhat confident, and 13 of those 20 are tracking right to work manually. Being "somewhat confident" on a spreadsheet is the posture most likely to produce an unpleasant surprise in an audit, because it feels close enough to fine to stay low on the priority list.
Key finding three
Evidence on demand: the tool decides.
We asked how long it would take to evidence a compliance check for every worker currently on assignment if the Home Office or a client asked them tomorrow. There is no published data on this anywhere; these are the first numbers of their kind. Excluding the six perm-only firms, 28 of 51 could evidence within 48 hours and 9 said they would need longer than a week.
The headline hides the real finding: evidence speed is almost entirely a function of infrastructure and ownership. Eleven of the thirteen firms using a dedicated checking tool said they could provide evidence on the same day. Not one of the thirteen spreadsheet-reliant businesses said same day, and six said longer than a week. The pattern repeats with ownership: 18 of the 20 firms with a named compliance owner could evidence within 48 hours, against three of the fifteen where checks sit with an office manager and none of the seven where consultants handle their own.
As one respondent at a legal recruitment firm put it: "We are confident, but gathering the actual physical evidence takes a long time." Being compliant and being able to prove it quickly are different capabilities, and from 1 October the second one is what a client's contract, and a Home Office visit, will actually test.
Key finding four
Ownership, hours and what compliance already costs.
When we asked who takes care of complaints at a business, a named compliance role was the most common answer, but it is a minority position: 35% of firms have one, heavily concentrated among the larger and temp-heavy businesses. In the rest of the sample the job belonged to an office manager, a director, or the consultants themselves, and two agencies told us plainly that nobody owns it.
Ownership is not an org-chart nicety: as finding three showed, it is the second strongest predictor of whether a business can evidence its checks, behind only the tooling itself.
The hours are substantial too. 44% of firms spend 15 or more hours a week on compliance admin, which at the government's own admin labour rate of £19.48 an hour is at least £15,000 a year in staff cost, before the October changes add even more admin overhead.
Across the wider economy the picture is the same: in the government's Business Perceptions Survey, directors and managers handle compliance in 46% of businesses and the owner personally handles it in 40%. Only 20% of SMEs treat regulatory compliance as an organisational priority.
Key finding five
The commercial wave has crashed onto one side of the market.
Since 6 April 2026, agencies have been jointly liable for PAYE owed by non-compliant umbrella companies in their chains, and the right to work extension now layers a second supply chain liability on top. Both push clients the same way: demanding contractual proof of their suppliers' compliance. We asked whether that demand has arrived, as no published data measures it anywhere.
It has arrived, selectively and predictably. 27 of 57 respondents have been asked by at least one client for contractual guarantees about their checking process. Every one of the ten firms with more than 100 staff has been asked. Among temp and contract specialists it is 18 of 22. Among the 20 perm-focused firms it was zero.
Client procurement teams are moving to where the new liability sits and have not yet turned to the smaller and perm-side agencies at all. For a small temp agency, the first request is now a matter of when, and the agencies that have not seen one have a short window to decide their standard answer before a client's lawyer decides it for them.
28 of 57 have lost or delayed a placement to compliance admin, and only 10 of those 28 have ever put a number on the cost. An uncosted loss appears in no business case, which is one reason compliance tooling stays unbought until a penalty or a lost contract forces the maths instead.
For scale: at a £3 to £5 an hour margin over an average 18 week assignment, a completed temp placement is worth roughly £2,000 to £3,400 in gross profit, so a single £45,000 penalty erases the profit of 13 to 22 completed assignments.
Key finding six
Automation: a sector split in two.
44% of firms automate no part of their compliance process, while at the other end a fifth run digital right to work checks and one in nine has end-to-end workflow automation.
The two halves live in different worlds. Of the 32 firms with any automation, 25 could evidence their checks within 48 hours. Of the 25 with none, three said they could. The manual half also holds 18 of the 19 respondents who were not confident or had not looked at the changes, so the gap in tooling, the gap in confidence and the gap in audit readiness are the same gap, and it aligns with company size.
One word of caution though: the automated firms actually report higher compliance hours, because automation concentrates where the regulatory load is heaviest, in healthcare, public sector and industrial temp supply.
In their words
What would need to be true to feel ready?
We closed with an open question, and most respondents answered it. The most common ask was for someone to translate the rules: "A fool-proof guide to the new rules." "Time to actually read the government guidance." "Clarity on freelancers vs agency workers." That last distinction is exactly the part the draft guidance settles and the bit that almost nobody has read.
The second theme shows that respondents knew where their gaps lay: "We need to move away from spreadsheets immediately." "A miracle. Or a new CRM." "More staff to process the paperwork." Notably, few small firms connected readiness to the dedicated checking tools that actually separate same-day evidence from a week of scrambling.
And the prepared firms mostly did not get ready only for the Home Office: "Our banking clients demand 100% RTW compliance even for perm hires, so we treat it like temp." "Nothing, we've automated the entire seasonal intake." Client pressure, not enforcement, built the sector's existing compliance capability, which is worth remembering as the contractual guarantee wave spreads. All quotes used with consent.
The gap in the data
The questions with no published answer.
In building this report we searched for published benchmarks against every question we asked. For five of them, none exists. Nobody has published data on awareness of the October changes in any sector, on hours spent on compliance admin in staffing, on how long agencies take to evidence right to work checks under audit, on the ratio of agencies still tracking right to work on spreadsheets, or on clients demanding contractual compliance guarantees from staffing suppliers.
The Home Office's enforcement statistics contain no line for recruitment, and the draft Code of Practice never mentions the sector at all: no mention of employment businesses, no agency worker, no umbrella, no labour supply. The sector carrying most of the operational load of this change is invisible in the rulebook written for it and in the data measuring it. This report is a first attempt at filling that gap.
This also lands on a pile of increased responsibilities for recruitment agencies: since April, agencies have absorbed the umbrella PAYE liability shift and the Employment Rights Act's first tranche, with the ERA's October provisions commencing the same day as the right to work changes. Different laws, one compliance function, and our survey showed that in most agencies that function is somebody's side job.
Method: 57 respondents, fieldwork August 2026, a self-selected sample of UK recruitment and compliance leaders reached through our network, targeted ads and direct email. Comparisons with published benchmarks are directional, and no group smaller than ten is broken out.
Legislation and guidance
Statistics
This report is general information, not legal advice.
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