If you’re looking for a new umbrella company, chances are you will conduct some online research as part of the vetting process. Here we consider why you should treat online ‘reviews’ with a degree of skepticism.
Why you should treat umbrella company reviews with caution
The problem with umbrella company reviews — and online reviews in general — is that they aren’t necessarily objective, unbiased, or reliable.
It’s all too easy to fool a website into thinking a review is genuine when it isn’t. This holds true even with big, popular websites like Tripadvisor that have sophisticated algorithms in place precisely to weed out fake reviews.
More to the point, we humans are wired to remember negative events more vividly than positive ones.
In prehistoric times, this was a useful evolutionary advantage. It meant we learned about danger quickly and made sure we avoided it the next time. But now that the risk of breakfasting on poisonous plants or becoming a sabre-toothed cat’s dinner have become negligible, we’re turning our negativity bias to more modern pursuits.
The upshot is that we’re more likely to tell our friends about negative experiences — and leave bad reviews — than good ones. This means online review sites can get hijacked by people with an axe to grind.
Umbrella companies also engage marketing firms to spread the word about them. And part of this service can include publishing sponsored content that presents a biased view of what the company is like.
Review sites may also make money through affiliate partnerships. As a result, they’ll promote some umbrella companies over others even though they’re not necessarily the best, simply because they’ll get a commission when you sign up.
How umbrella company reviews can help
Clearly, you should take umbrella company reviews with a generous pinch of salt. And while reputation is important, you should choose an umbrella company based on a number of factors.
Try our guide – 10 questions to ask a prospective umbrella provider.
That said, online reviews aren’t necessarily worthless. Picking an umbrella company out of the thousands that are operating today is tricky. And reviews can provide you with useful information that’ll help you make a better-informed choice.
Here are four things to look out for to help you make the most of umbrella company reviews.
1. Are there any red flags?
Before you dive into the substance of an umbrella company review, it’s worth checking it for reliability.
According to Which?, there are five tell-tale signs that an online review could be unreliable or fake:
It sounds unnatural
Perhaps the review is relatively long but doesn’t go into much detail, almost as if the reviewer doesn’t have first-hand experience but fluffed it up to hit a word count. Or maybe it’s short and focuses only on positives — even the best umbrella companies have downsides.
It’s also worth checking how the review compares to others on the same site. If most reviews broadly say the same things, it may be a sign that they’re biased or promotional.
The page is polarised
Does an umbrella company only have five-star and one-star reviews, with no middle ground?
Things are rarely that black and white, so it could be a sign that something shady is going on.
Is a reviewer (or a number of them) going to great lengths to praise something about a particular company that everyone else is criticising?
It could be a sign they’re getting paid to turn the company’s reputation around.
Check the dates when the reviews were published. A flurry of reviews posted within a few days of each other could indicate it’s part of a strategy.
The reviewer’s history
Is there a particular reviewer or group of reviewers who have written several reviews and always rate companies five out of five?
It’s unlikely that a contractor has switched several umbrella companies in a short period, which suggests they may not be speaking from experience. And it’s equally unlikely that they have only positive things to say about every single one of them.
2. How long has the umbrella company been operating?
A relatively new company isn’t necessarily a bad choice. Nor is one that’s been operating for decades always a good option.
That said, working with a new company may be risky, because they might not have the right experience or all their legal and administrative ducks in a row. Seeing as the umbrella company you choose to work with will essentially act as your employer, you may be more comfortable going with a company that has a solid track record.
Look for evidence of compliance; an industry audit by Professional Passport or membership of the FCSA are positive signs.
3. How many contractors does the company have on its books?
If an umbrella company has lots of contractors on its books, it may mean it’s a good choice. This holds especially true if their turnover rate is low and many contractors have been with it for several years.
The flipside is that, the larger an umbrella company is, the less flexible their terms will be. Customer service may also deteriorate if you join a ‘factory line’ operator rather than a more ‘niche’ player.
4. Do they have coverage on other websites? What is it like?
Read some great reviews about an umbrella company?
It’s worth doing a more thorough internet search. This way, you can get a feel for their reputation based on diverse sources, and not just a handful of reviews on comparison sites.
Also, read industry forum posts. Overeager umbrella marketing people are likely to be told where to go if they try to manipulate things on high traffic bulletin boards.
Also, look out for articles on reputable news websites. Has an umbrella company ever been featured in a positive light? Has it hit the headlines for all the wrong reasons?
It’s worth reading umbrella company reviews… but don’t take their word for it
Umbrella company reviews aren’t always reliable. And it can be hard to separate the legitimate ones from those that have been paid for or posted by people with an agenda. The flipside is that, if you treat them with caution, you can still glean invaluable information that can help you decide who to sign up with.
That said, a better way to go is to ask around in your network or reach out to other contractors on professional groups. They’ll be more likely to give you first-hand, no-nonsense advice you can count on.
And above all, only use a PAYE umbrella company. Don’t be tempted to join an offshore scheme that promises unrealistically high returns.
All legitimate umbrella companies should deduct the same amount of tax from their employees. The only difference between them should be in the weekly or monthly fees they charge.
Make sure you read our latest guide – how to spot a dodgy umbrella company – if you have any doubts.
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