The Gabem Blog:
Home of umbrella gossip online

As you may or may not be aware the umbrella company industry is pretty competitive, it always has been. After 10 years you come to welcome the challenges and changes that the business throws at you. With the credit crunch things got tougher, but our numbers have continued to rise despite playing fair so we're pleased to be ahead of the game.

Just recently though things have gotten a little more intense with the competition feeling more one on one; whether we are or not is another matter. This has it's good and it's bad points, the good being that you try that little bit harder, and it forces you to look at your strengths and weaknesses, the bad being that it can be tempting to point out other companies bad points rather than our own good ones, we won't do it but the temptation is there.

One of the sticking points for contractors and agencies that keeps cropping up is price. As you're hopefully aware we take £22 per week, and have done since the umbrella companies started back in 2006 (if you can remember as far back as I can, we were charging £22 for our composite company service in 2001). £22 is beneath the market so you would assume this puts us in a pretty good position. Unfortunately this isn't always the case, and that's solely down to the fact we advertise our costs as a gross figure.

The gross fee is really the only fair representation as it's static. it's not going to change person to person, and it can't be manipulated to make it look better. Net fees are essentially just a gross fee minus the PAYE tax a person would have paid on that amount, so it's always lower (for a higher rate tax payer our net fee comes out at around £11.31). In addition due to the fact that people pay different amounts of tax it can fluctuate a fair amount making it just inaccurate.

It would be the easiest thing in the world for us to change the marketing stuff, but it would mean intentionally misleading our customers.

Hugo
@GabemUmbrella
20/11/2009