Recruiter - May 2017 by Redactive Media Group

Business intelligence for recruitment and resourcing professionals

May 2017

INCORPORATING Recruitment Matters

BENCHMARKING Matching up with the competition COMPLIANCE IR35 changes still raise public sector concerns

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MATT CHURCHWARD Do you practise what you preach?

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RYDING HIGH James Ryding, easyJet’s head of talent acquisition, on recruiting with ‘Orange Spirit’

10/04/2017 15:43

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C R ONT ENT S 44

INCORPORATING Recruitment Matters

COV ER IMAG E | JO N ENOCH

NEWS

05 Recruitment Sector Barometer – latest findings Research reveals recruiters are rather optimistic 06 Aristos pays the cost... ... of English tests for nurses from the Philippines to boost UK applications

2O THE BIG STORY Ryding high on Orange Spirit

James Ryding, head of talent acquisition at lowcost airline easyJet

26 A taxing time

34 Compare and contrast Benchmark against the competition for success

07 Arrows Group repositions The technology recruiter moves with the changes

07 Star recruit: Smithy, the retired police dog with 3,000 followers on Twitter 08 This was the month that was... 10 Contracts & Deals

TRENDS

12 Insight Agile learning: the new frontier in candidate assessment

Tech & Tools Candidate relationship management systems

Changes to the new IR35 legislation haven’t curbed public sector concerns

06 What is a ‘great’ recruiter? A new assessment tool shows what recruitment ‘greatness’ should look like

FEATURES

E COMMUNITY 37 39 40 43 44

45 48 49 50

Social Network Employability Business Advice Community careers The Workplace, Guy Hayward My brilliant recruitment career: Andy Raymond, Redline Group Recruitment Movers & Shakers Recruiter Contacts The Last Word: Matt Churchward

INTERACTION

18 Viewpoint Jon Hull, head of resourcing at Carillion 19 Soundbites

I M AG E S | I STO C K / SUP ER STO C K / SH UTTER STO C K / A K IN FA LO P E

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UPDATE

WE LCO M E

LEADER

ecruitment is a business of regeneration, and regeneration is happening at a rapid pace this spring as leaders of recruitment businesses move to other established practices, rising stars kick off their own

enterprises and long-time recruiters start more new ventures. It’s as if the long dark mantle of winter has given way to verdant green shoots popping up everywhere. Here’s to healthy regeneration that is as well planned as that of Doctor Who! Over at easyJet a regeneration of the

“It’s as if the longs dark mantle of winter has given way to verdant green shoots popping up everywhere”

recruiting/talent acquisition function has been underway for a while, and the airline’s Orange Spirit is generating real sparks. James Ryding and his team are putting in place practical yet creative solutions to real

head-scratchers like expanding their talent pool and truly localising their approaches to recruitment. (Clue: it’s more than taking out adverts in the local language.) Learn from our in-depth look at easyJet’s action plan, which proves the airline’s ideas go beyond providing reasonable fares. This month we share the ﬁrst results of the ﬁrst Recruitment Sector Barometer run by our Ask the Expert/SME Coach Alex Arnot, in association with Recruiter. Your contributions, ie your responses to the survey, combined with Alex’s unsurpassed knowledge of the recruitment sector, have delivered razor-sharp insights you’ll want to study. And have you booked your tickets yet for the Recruiter Awards 2017?

DeeDee Doke, Editor

Recruitment Sector Barometer shows fair weather ahead BY COLIN COTTELL

RECRUITERS ARE MORE OPTIMISTIC about the prospects for their businesses than a year ago, with more than 70% predicting a rise in profits in Q2 when compared to Q2 2016, according to the latest Recruitment Sector Barometer, produced by Alex Arnot, non-executive adviser to more than 20 recruitment firms, in association with Recruiter. Nearly a third of respondents exceeded their latest revenue target for Q2, 30.1% say their average fee rate is higher than a year ago, while 65% expect to increase their headcount. The latest Barometer surveyed 123 recruitment business owners and directors between 30 March and 4 April. However, amid the optimism the Barometer reveals some clouds on the horizon. A primary concern is the availability of candidates, with 66.4% of recruiters citing it as one of their top three challenges. This figure is up from 58.2% in Q1 of 2017. The second and third-ranked challenges are availability of consultants chosen by 42.6%, virtually unchanged from Q1, and economic conditions/uncertainty chosen by 41.8%. Commenting on the results of the The Recruitment Sector Barometer, Arnot said: “Confidence across most recruitment companies has risen this quarter and the triggering of Article 50 has had little impact on the financial performance of the majority of businesses completing the Barometer. “Two of the main challenges remain around the availability of quality experienced recruiters and candidates for client roles. I am seeing the clients and boards I advise dedicating ever more time to finding solutions to these which is bearing fruit.” ●

IM AGE | IKON

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UPDATE

Aristos covers the test cost BY COLIN COTTELL

The English test is extremely costly for nurses coming from the Philippines

Tool shows what great looks like BY COLIN COTTELL

ALC EXECUTIVE SEARCH is launching a psychological assessment tool that is initially aimed at helping recruiters recruit their own staff. The tool, which was due to be launched by ALC Discovery on 27 April, is tailored for the recruitment industry by looking at the skills and attributes of over 200 recruiters who

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34,341 FOLLOWERS AS OF 10 APRIL 2017

PUTTING SOCIAL RESPONSIBILITY at the heart of business has proved a winning formula for international nurse recruiter Aristos Group, according to its managing partner. Mark Linden, whose company recruits between 75 and 100 nurses a month from the Philippines to work in the UK, told Recruiter that “the major part of the reason” he set up Aristos Group a year ago was “the social responsibility that should be borne by organisations who are recruiting from the Philippines”. With 25,000 newly-qualiﬁed nurses a year leaving Philippines’ universities but only enough jobs for 5% of these in the home health system, many nurses are desperate to come to the UK, said Linden. However, he explained that with only 11% of nurses who take the IELTS (International English Language Test) – Level 7, proving their ability to speak, read and write English – a requirement before they can practise

in the UK, many who are made job offers but subsequently fail the test are left in debt by having to pay for the cost of the test (13,000 Philippine Pesos or £207). Linden reckons that only 1% or 2% of those offered jobs actually take up roles in the UK. “I do not want anyone in debt who wants to make a better life for themselves, and therefore we are set up to carry the cost of their IELTS exam to make sure they can get through and start a life in the UK in a profession that we are desperately in need of their skills,” said Linden. Aristos covers the cost of the test, and it also trains nurses to help them pass it, with an 82.5% pass rate, Linden said. According to Linden, this has proved to make good business sense, with NHS clients attracted by his company’s ability both to provide IELTS-qualiﬁed candidates, but also by its ethical approach of covering the cost of the test.

billed more than £250k a year, to build up a picture of what a great recruiter looks like. Recruiters too often rely on their instincts as recruiters to hire staff for their own companies, Tim Connolly (pictured right), a partner in ALC Executive Search, told Recruiter. While this can work well “a lot of the time”, Connolly said, doing so also led to poor hiring decisions, with recruiters guilty of unconscious bias and prone to hiring people in their own likeness. This resulted in the industry missing out on a lot of great talent, he said. Connolly added there was

“a sub-conscious fear among some recruiters that using something like an assessment instrument is taking away their skill, their job, their expertise, and that the wrong candidate will be hired”. With the tool, candidates are assessed under seven broad competencies, such as account management and building relationships and within each, they are assessed against traits such as conﬁdence and persistence. Candidates’ values and emotional intelligence can also be assessed. After taking the assessment candidates are given a score, and the hirer receives a report, Connolly said.

IMAG ES | G ETTY / SUP ER STO CK

Find more daily news stories at recruiter.co.uk/news 10/04/2017 17:48

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THOUGHTS FROM…

GREG SAVAGE RE C RUITMENT BU SINESS GROWTH CONSU LTANT, S P EA K IN G ABO UT A N AFTER DINNER SPEECH HE WAS INVITED TO G IV E AT TH E INSTITUTE OF CHARTERED ACCOU NTANTS IN AUST R A L IA

IM AG E / WE ST M IDL AN DS P O LI C E

“This guy came through the crowd and said, ‘Mr Savage, that was the worst after dinner speech I have ever heard’. The president of the Institute of Chartered Accountants… had seen this encounter… came up to me and said ‘Greg – don’t worry about Bob – he just goes around repeating what everyone else says’.”

UPDATE

Arrows Group aims at changing needs of clients BY COLIN COTTELL

GLOBAL TECHNOLOGY RECRUITER Arrows Group has completed a two-year strategic repositioning, aimed at adapting to the changing needs of its Arrows Group offers clients an integrated portfolio of services clients, according to cofounder James Parsons. As a result of the repositioning, Parsons told Recruiter the company now offers clients an integrated portfolio of services from workforce advisory, scaling and managing teams under statement of work (SOW) and embedded MSP (managed service provider) services to compliment traditional permanent and sub-contractor STEVE TURNER A SSISTANT GENER AL SECRETARY OF THE U NITE UN I ON , staffing services. PROV ID IN G EVIDENCE TO THE GOVERNMENT ’S FU T URE OF Over the past two years, Parsons said the company had WORLD OF WORK INQU IRY IN PARLIAMEN T established a global delivery centre based in Gurgaon, India, which has enabled the group to globalise its service delivery. “Perhaps we only come into contact with This has helped international sales to grow by over 55% in the the criminal and the dodgy. We do tend past 12 months. To coincide with its transition to a global to come across a number of agencies that strategic resourcing business, the company has also launched a operate at the lower end of the market new website and branding. that are purely used for exploitative “Clients are demanding more from their recruitment purposes. That’s our experience of the partners,” said Parsons. “Companies are also evaluating their risks and alternative models around running large use of agency [workers].” subcontractor teams, all of which means there is opportunity to shape our client engagements strategically.” Parsons said the group was STA R RECRUIT increasingly supplying project SARAH CHILDS, HEAD OF That furry complexion the right side of the law. teams under SOW ECOMMERCE, CX & WEB gained him a lot of Smithy’s career was ANALYTICS, AT REDCAT attention on Twitter, so built on his sense of smell, terms, where the DIGITAL OFFERS ADVICE perhaps Instagram is and there are a lot of agency provides TO RECENTLY RETIRED his next move. Working sneaky suspects out there SMITHY, ONE OF THE freelance with some on the social channels. staff to deliver preMOST POPULAR POLICE of his favourite brands With a nose like his, Smithy DOGS ON TWITTER WITH would help them market could undoubtedly sniff scoped outcomes on MORE THAN 3,000 to their customers by out their online lies and a ﬁxed-price basis, FOLLOWERS. utilising his mass following. bring them to justice! After eight years on #puppydogeyes However, maybe Smithy allowing it to better the police force, Labrador Everyone needs finally deserves a wellcompete against the Smithy is putting his paws an online community earned break. A YouTube up. During his time, he manager and what better channel about ‘How to big management demonstrated his social pup to manage a forum retire in doggy style’ is Smithy with his dog handler consultancies. ● media skills were on point. than one that has been on much better suited. and owner Terry Arnett

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THIS WAS THE MONTH THAT WAS… Here is a round-up of some of the most popular news stories we have brought you on recruiter.co.uk since the April issue of Recruiter was published M A R C H •‒‒‒‒‒‒‒‒‒‒→

FRI, 17 MARCH 2017

FRI, 24 MARCH 2017

TUE, 28 MARCH 2017

LLEWELLYN SINGS THE PRAISES OF RECRUITMENT IN HER NEW CAREER

AGENCIES FEAR OVERTIME BAN WILL HIT NHS STAFFING

BIGWIG RECRUIT’S HAIR-RAISING SCHEME FALLS FLAT

A recruiter-turned-soprano, who is set to star in a new production of Puccini’s La Rondine this summer, has told Recruiter how her start in recruitment helped her forge a successful singing career. Due to play the role of Magda in Puccini’s opera, Elizabeth Llewellyn began in recruitment by accident in the late 1990s after she was interviewed by IT and telco recruiter Octagon for a sales role at one of their clients. Octagon was so taken with Llewellyn that they asked her to come and work for them instead. Llewellyn said that despite having a love of music since her school days, had she not been made redundant by Octagon she would still probably be working as a recruiter. But the skills gained in her recruitment career hold Llewellyn in good stead to this day. “There’s a huge sales element to recruitment that is inevitable if you are a self-employed/freelance singer. “You need to understand rstand what it is you’ve got to sell, what at concert promoters are needing,” Llewellyn lyn said. “There then comess a point when you actually have ave to ask for the business, where ere you say ‘you need this – I’ve got this to offer – right, let’s get this contract written and d signed – let’s go into business ess together’. You do need ed to have that business sales ales mind.” Llewellyn opens the he 2017 Investec Opera Holland Park season n in Puccini’s La Rondine from 1-23 June. More: http://bit.ly/2nV3rZp nV3rZp

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More than three quarters of recruiters expect the NHS’s current staffing crisis to intensify due to new measures restricting trusts from recruiting agency nurses and locum doctors also employed as substantive staff in the health service. From 1 April, NHS trusts are no longer able to turn to agency workers also employed in the NHS as substantive staff to ﬁll gaps in rotas due to a move from government aimed at encouraging nurses and doctors to take on overtime shifts via internal NHS banks rather than through recruitment agencies. However, a recent survey of 199 healthcare recruiters carried out by the Recruitment & Employment Confederation (REC) has found that for 48% of agencies, more than half of the temporary nurses, doctors professionals and allied health p on their books are also employed the NHS. substantively in th The survey also found 77% of recruiters expect healthcare recruit their books to favour candidates on the the private sector ﬁnding work in th rather than the N NHS in response to 56% expect some the ban, while 5 nurses and doctors to stop additional shifts working a NHS altogether. in the N Only 18% 1 of recruiters surveyed think some surve candidates will cand transfer to hospital tran banks bank for additional work.

A young would-be recruit for the Western Central Indian state police of Maharashtra has been turned down for a post for wearing a wig to boost his height. The Indian Express reports Rahul Patil from Trimbakeshwar had met the height requirements for a constable role having measured above 165cm, but after a police constable suspected some foul play and being questioned, Patil admitted wearing a wig and was disqualified. Recruitment for police constables posts began in March across the state, excluding Mumbai and Aurangabad city, for 5,756 posts. Such subterfuge is the height of dishonesty… (see what we did there?) More: http://bit. ly/2naBh0v

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‒‒p://bit.ly/2o32alT ‒→ More:‒‒ http htt

IM AGES | ISTOCK / PA

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MON, 3 APRIL 2017

Cobalt Recruitment appoints Wakefield CEO Cobalt Recruitment has appointed James Wakefield to the newly created role of CEO. Wakefield has been with the international property, financial services and engineering recruiter for 10 years. At the start of 2009, Wakefield relocated to the UAE to establish Cobalt’s presence in the region and in 2014 was promoted to international managing director, adding the Asia and New Zealand businesses to his remit. More: http://bit.ly/2nDYP9t

DAYS

←‒‒‒‒‒‒‒‒‒‒• A P R I L

MON, 3 APRIL 2017

HEALTHCARE STAFFING IN CRISIS FROM ‘PERFECT STORM’ Recruiters have backed calls by MPs to ensure the NHS can continue to recruit from the EU post-Brexit. The healthcare sector suffers from a “perfect storm” in which agencies are still recruiting from member states but interest in roles is dramatically decreasing. Tory, Labour and Liberal Democrat MPs have called on government ministers to not only guarantee that EU staff already working in the NHS can stay, but also that recruitment from EU countries can continue, with NHS workers given special status. Tawhid Juneja, CEO at healthcare agency Primary Care People, told Recruiter he did not think it was an over exaggeration to say failure to act on the MPs’ request would cost lives if EU nationals do not have the freedom to work in the UK. “It shouldn’t even be a consideration,” he said. “We have 30 GPs from Europe arriving this week for our GP scholarship programme and then another 30 every other month… we have to continue to support understaffed areas of the UK to ensure patients safety.” But Barry Pactor, group managing director ttm Healthcare, said attracting EU workers to come to the UK in the first place is easier said than done in a post-Brexit world. “Our research shows applications from the EU are down 90% since Brexit. That’s also down to English language tests being set at a ridiculously high level. The two together have created a perfect storm, so EU nurses are no longer interested in coming to the UK.” Meanwhile, Olivia Spruce, operations director at TFS Healthcare, called on the government to “firmly acknowledge” the “critical shortage” of nursing talent within the UK. “This is a huge recruitment and retention crisis, which we need to address,” she said. “By no means is EU recruitment a panacea to the overall skills shortage, but it is certainly one recruitment and retention opportunity that we need to be open-minded to. To safely staff our wards, we need to explore global staffing as well as domestic solutions – why would we not consider the EU as part of this?”

TUE, 4 APRIL 2017

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RECRUITERS REPORTED TO BE AMONG BIDDERS FOR NHS PROFESSIONALS

RECRUITERS ASK PM TO EXTEND FREE MOVEMENT TO FIVE YEARS

Reports suggest two recruitment agencies are among the bidders to take a controlling stake in NHS in-house recruitment agency NHS Professionals. Hays and HCL, along with outsourcing firm Serco and investment house Aurelius Equity Investors, have entered the bidding ahead of the government identifying a preferred bidder for the in-house recruitment agency later this year. Last November, Recruiter reported the government was moving to privatise NHS Professionals, and was looking for an investor to take a majority stake in the agency, with a tendering process launched through an advert in the Official Journal of the European Union (OJEU). Sky News reported professional services firm Deloitte, who is running the sales process on behalf of government, has now asked bidders to lodge proposals to buy a majority 70% stake in NHS Professionals by 7 April. Sky claims insiders have told them that Hays, HCL and Serco have all attended potential investor presentations, while Whitehall sources claim Aurelius Equity Investors is also expected to table an offer. When Recruiter contacted the firms, Hays, HCL and Aurelius said they would not be commenting, while Serco had not responded by deadline. Both Deloitte and the Department of Health said they would also not be commenting, as the deal is commercially sensitive. More: http://bit. ly/2o9O6qV

More: http://bit.ly/2oBK383

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Recruiters have called on Prime Minister Theresa May to extend free movement of people from the EU to the UK for up to a period of ﬁve years following Brexit. The BBC reports the PM, speaking to journalists during her visit to Jordan and Saudi Arabia in early April, said there would be an “implementation” phase once an exit deal had been struck with the EU so business and governments have a “period of time” to adjust. James Webber, founder of hospitality staffing specialist James Webber Recruitment, told Recruiter the hospitality sector would need an additional year following Brexit to adjust to any new immigration restrictions on recruiting people from the EU.

Recruiters operating in the industrial sector claim clients will need longer. “The factories we work with are hugely reliant on EU workers,” Stephanie Newitt, managing director at DR Newitt, told Recruiter. “It will take a lot of years to replace workforces.” Andy Hogarth, CEO at industrial recruiter and welfare to work provider Staffline, agreed. “Five years would allow companies the time to adjust … and train people on the welfare-to-work side.” More: http://bit.ly/2nJNdSZ

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CONTRACTS

CONTRACTS & DEALS

National Locums Medical staffing specialist National Locums has been appointed to the NHS Wales Shared Services Partnership agency nursing framework, covering all seven Welsh health boards and every NHS hospital in Wales. National Locums provides doctors, nurses and allied healthcare professionals such as physiotherapists to NHS and independent hospitals throughout the UK.

Dentsu Aegis Network Global media group Dentsu Aegis Network has agreed a deal to use enterprise cloud applications provider Workday’s human capital management software. Dentsu Aegis Network’s team will use the software to help better understand and manage its talent across its business.

Recruit Right Industrial and commercial recruiter Recruit Right is expanding its business in the North-West of England with its acquisition of LTC Recruitment. The acquisition follows Recruit Right’s move last year to open a new satellite office in Manchester, a decision due in part to winning a major new call centre contract, which has five different locations in Greater Manchester. Existing LTC staff will continue to operate out of their Blackburn-based office. The firm says plans are currently under way to open another satellite office in Wrexham to support businesses in North Wales.

City Centre Recruitment South West-based recruiter City Centre Recruitment has won a contract with Hunt’s Foodservice to help the food supplier meet seasonal demand and attract new staff to its expanding team. The deal sees the agency supply staff including HGV drivers, warehouse and stores personnel to five facilities located across the South-West. Fifty jobs have been created initially with immediate starts.

The Curve Group Recruitment and HR outsourcing company The Curve Group has been appointed to provide recruitment and training outsource services to home credit business Provident Personal Credit, which is part of the Provident Financial Group. The Curve Group will manage a large-scale campaign for Provident, assisting it in engaging and onboarding some 3,000 customer experience managers across the UK this year. This will include delivering a training programme to all those engaged in the new roles, amounting to more than 17,000 delegate training days.

KDC Resource Aerospace and defence recruiter KDC Resource has signed a long-term agreement with the West of England Aerospace Forum (WEAF) to become WEAF’s strategic recruitment partner. The deal covers the supply of recruitment and consultancy services to WEAF members across the South-West.

DEAL OF THE MONTH

Access Group Software provider Access Group has completed the acquisition of Safe Computing, an outsourcing group for the HR, payroll, financials, credit control and staffing sectors.

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Access says the acquisition will add to its existing recruitment sector capabilities, with Safe’s Tempest ‘Pay and Bill’ solution being an obvious extension. Safe’s other products in the

human capital management (HCM) and financial management system (FMS) space will focus on functionality and market segments that complement its existing portfolio.

The deal also sees Safe CEO Sandy Scott leave the business, with Paul Vogel joining as managing director of the Safe subsidiary. Terms of the deal were not disclosed.

More contract news at recruiter.co.uk/news 10/04/2017 15:44

TRE NDS

INSIGHT

AGILE LEARNING: THE NEW FRONTIER In today’s shifting world of candidate assessment, learning agility is one of the latest aspects to be assessed through gamification in the virtual world BY DR MICHAEL BURNETT & CHARLES MARTIN

rontiers are where the known ends and the unknown begins. The arrival of games – dynamic, interactive, multi-dimensional – in the assessment market is opening up a huge ﬁeld, which designers of tests and their customers are only just beginning to explore. One of the ﬁrst features of this new landscape to be mapped, however, is learning agility. Technology cycles are shortening – even as its capabilities are expanding exponentially. In response, job roles are shifting. More importantly, the speed and breadth of that shift is becoming a topic in its own right.

From rare storms to weather pattern It’s one thing to see your job shift from typewriter to PC; earlier generations might see one such upheaval in a career. In such a world, the focus is on mastering the new – and then settling down to carry on much like before. But in a world where the new is in turn uprooted for something else, not once in a career but continually, the perspective shifts. Upheavals become seen not as wild but rare storms in an otherwise calm sea, to be survived by each as best they may, but as a weather

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pattern the ship should be routinely rigged to sail in. With this shift in mindset percolating through industry, employers are reasonably asking: how do we select for this? And this is where the ﬁeld of

games comes in. By using the additional dimensions offered by a game – time, space and environment, character interaction, choice and consequence – a much richer seam of data is opened up. But what can it tell us?

Job roles are shifting – the speed and breadth of that shift is becoming a topic in its own right

Learning on the virtual job This multi-dimensionality is already well established in another quarter: that of training simulators. Pilots train on ﬂight simulators because it provides effective learning. A work-environment simulation likewise creates learning; players are stretched and immersed and, as they get to grips with their virtual world, they learn.

IMAG E | SUPERSTOCK

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INSIGHT Selecting candidates who have a fundamental ability to learn rapidly is likely to be essential team-work, customer contact and managing resources as they experienced various situations and demands. Essentially the game is a resource allocation puzzle in which the candidate has to apply organisation, planning and trade-offs to complete the game. Optimising within his or her time and resource constraints, the candidate can be seen learning as the game develops – their task performance rises and their mistake rate falls. Plotted for a cohort of applicants, this data allows us to see the spread of learning agility in a cohort and locate an individual on a percentile of their peer group.

Reaping the benefits

A working example

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For example, in the Ipsemet game each game-play gives the candidate a series of tasks to do which they must get done while events unfold around them. The game is set in a hotel and the role is framed as a summer job. Meanwhile, a boss, colleagues and guests add a human dimension to the day. The work unfolds in a sequence of four shifts with the essential outline of the shift repeating. Each candidate deals with the simulation across a number of periods at work – the learning agility measure assesses whether the candidate improved their performance at completing tasks, being accurate,

↗

As any pilot will tell you, a session in a simulator is as demanding as the real thing. It matters not that there’s no real aircraft, or 96 passengers sitting behind you. The concentration required is absolute; the immersion total. It’s this quality, the sense of immersion, where the ‘real’ world drops away as the player works at the given task, that makes simulators so powerful and the learning that results so enduring. The environment that creates learning can also measure it – the data is already being collected. This data – the task performance, error rates, and the choices and trade-offs that a player makes – permits a picture of the player’s learning patterns to be developed.

Just as psychometric games are at the frontier of candidate assessment, so many businesses – particularly those experiencing rapid growth – ﬁnd themselves at a frontier where the known ends and the unknown needs new tools to measure. The additional capability that these new technologies bring can offer exactly the needed insights to enable them to build teams for a changeable future. Selecting candidates who have a fundamental ability to adapt and learn rapidly is likely to be essential to any business that ﬁnds itself repeatedly on the frontier – be that technical, commercial or social. For organisations facing that reality, new thinking and new technologies have become the weather pattern. Those who have hired for learning agility will be the ones better equipped to weather the storms. ●

DR MICHAEL BURNETT is chief scientist and CHARLES MARTIN is CEO at Ipsemet, developer of game-based assessments to help organisations recruit and retain the right talent

10/04/2017 17:11

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T R E N DS

TECH & TOOLS

Exploiting relationships The potential power of the CRM SUE WEEKES

Candidate relationship management (CRM) systems are recognised as the backbone of the recruitment industry. As well as helping the agency to run more efficiently, they can also help generate value and create more business opportunities. Too often though, recruiters fail to exploit the potential power of the system and the data that resides inside it. “This is understandable, considering providing administrative efficiencies, ensuring process compliance and basically keeping track of everything has been the focus for many recruitment systems for a long time,” says Chris Bogh, technology director of recruitment software developer eploy. “Business development, though, is key to the continued growth of a successful recruitment ﬁrm.”

IS YOUR SYSTEM FIT FOR THE FUTURE? Map out precisely what you want from a new or upgraded CRM system before you take a firm decision or get carried away with whizzy feature wishlists. Make sure you base your vision of a new or upgraded CRM on future aspirations as much as current needs. “Ask your team what they require today, but also manage what they’d like in the future,” says Paul Thompson, sales director of Voyager Software. “And be open-minded minded in your vision of the future. Change can be good.” Be thorough with any scoping exercise; as well as talking to providers, ask for reference sites and speak to users. He also advises “treading carefully” with free software and trials: “They are only there to get you hooked in.”

I L L UST RAT I O N | ISTO C K

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IMPORTANCE OF ANALYTICS No recruitment agency should be buying a system that doesn’t have selfservice data and analytic tools built in, and these must be easy-to-use. “Unless business developers have simple tools that can guide them toward new opportunities, they’re not going to get value from the mass of data the CRM collects,” says Bogh, who adds that they also need to be designed with business development in mind. “Many managers will confirm that their best salespeople are very often their worst CRM users, largely because the system isn’t designed to help them track and win new business opportunities. Modern sales pipeline tools can help business development teams progress sales opportunities through their sales process, calculating forecasts along the way and helping identify those opportunities that are ‘stuck’ at a specific stage,” he says.

PEOPLE PRACTICES Generating value and business opportunities has to do with people practices as well as analytics tools and dashboards. There is little point in mapping old ways of working on to a new system. Poor practice can mean that the data in the CRM has far less value, believes Jon Guidi, co-founder and president of recruitment platform HIRABL. “Recruiters spend too much time looking on external sources for contacts,” he says. “This is largely because they frequently miscode contacts when they put them in to begin with. So by starting with better data entry practices the recruiter will end up with a more useable asset in the long run.”

CULTURE CHANGE

NOT WHO, BUT WHEN?

Getting the most from a modern system can also involve culture change. Managers need to make sure that the competitive agency environment isn’t counter to using data from the CRM to create more business opportunities. Bogh explains that becoming ‘insight driven’ works best when it is a ‘teamsport’. “One of the best examples I’ve seen is a business owner who has regular team meetings where their teams ‘share’ their dashboards with each other,” he says. “For example, using sales call data and outcomes to spot sectors and roles that are hot.”

With everyone findable, the role of a CRM will increasingly be to alert consultants ‘when’ is a good time to maximise a business opportunity. Guidi believes the most common method of tracking candidates and hiring managers is too random in nature and tends to revolve around talking only when there is a “current” need. However, big data is helping to change this. “By using technology to automate the tracking, and by keeping track of the career journeys of both clients and candidates, a recruiter will have opportunities to re-engage at the right time and hopefully be involved in more transactions.”

W H AT TO E X P E CT FR O M A C R M CRMs enable recruiters to manage their pools of passive and active candidates in a highly structured and organised way. Increasingly, more is being expected of them, combining recruitment CRM with functions such as applicant tracking and onboarding, as well as analytics.

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10/04/2017 15:44

INTE R AC TIO N

VIEWPOINT

Plugging the skills gap Building bridges with refugees BY JON HULL

he unemployment rate among refugees is 12 times the national average, confusion reigns among employers about right to work and there is a lack of clarity about how qualifications from other countries equate to those in the UK. With fear and hostility created towards refugees by many in the mainstream media, this group isn’t really a great bet for employers. Too risky, you might think... Well think again! More than 25% of the 7,136 refugees that arrived in 2015 are highly skilled, and a large number are engineers of all varieties. (Yes, only 7,136 – it seems the Daily Mail is off target again.) Headlines abound that UK plc is facing a crisis because of a shortage of key skills, that engineering is the way that Britain will muscle its way through Brexit; and yet many of these candidates struggle to find work in the profession they trained in. Employers and agencies alike seem to shun these candidates. There is little formal government support for these individuals and they are asked to navigate a minefield of a new culture and an employment landscape they don’t understand. The vast majority end up taking low-skilled work and never maximising their potential – or indeed, helping UK plc become more productive and pay more tax money into the Treasury’s coffers. If this were any other industrial problem, there would

+ JON HULL is head of resourcing at Carillion

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“Headlines abound that UK plc is facing a crisis because of a shortage of key skills”

have been a taskforce set up to look at how we match key skills, and engage and support employers in this mission. Sadly, this is overlooked. The Department for Work & Pensions (DWP) has little to say on this issue, simply leaving both parties in limbo. For companies looking to bridge the skills gap there is huge competitive advantage – trained engineers across a variety of disciplines with credible work experience, often in challenging environments, and candidates who are going to be loyal, hardworking and with something to prove. The mix only has benefits. Obviously, there are challenges in educating hiring managers. A few organisations facilitate this – Transitions London CIC being one – and help find candidates short work placements, as well as supporting them so that they are work-ready for the UK market. Major corporations such as Network Rail, Arcadis and Carillion, Arup and Crossrail have taken this approach. Arcadis ran a pilot programme to employ 10 such engineers on three and six-month placement programmes, with five of the candidates ultimately receiving full-time permanent offers at the conclusion of the programme, while the other five have valuable and credible UK experience. If we think that perhaps 1,000 of these refugees are engineers and their skills could be matched to the vacant posts... how competitive could UK plc really be?

IMAGE | ISTOCK

10/04/2017 15:44

I N T E R AC T I O N

SOUNDBITES

WEB CH AT

Is recruitment a dirty word?

SCHOOLS, TAKE ON SUPPLY TEACHERS PERMANENTLY At NonStop Education, we’ve noticed many schools are currently heavily reliant on supply teachers, who have been filling urgent gaps since the beginning of this year but many of whom now see their positions at risk. While many of those supply teachers say they would continue in post permanently, their expressions of interest in permanent roles have gone largely unaccepted by schools, pointing to a skills gap or a perception they are too expensive. But with a smaller pool of available permanent candidates, schools would do well to consider taking supply teachers on permanently or risk continuing reliance on supply staff. Or they could consider international candidates. This is an approach that has found success in other sectors, such as social care, but does not seem to be very common in the education sector.

SIMON THOMAS

OLIVER JONES, TEAM LEADER, NONSTOP EDUCATION

MA N AG IN G D I REC TOR , CA ST L E EMP LOY M E N T

ALLIED HEALTH SPECIALISTS WILL LEAVE THE NHS IN DROVES I’m a speech therapy locum (freelancer) and most of my jobs are in the NHS. Due to the way I work as a locum, my contracts have always been outside IR35. I work away from home and incur significant expense (usually about £800-900 per month, including travel). My hourly rates were capped last year and I am already earning less. I have never earned the rates that doctors earn, as agencies were already operating within set price agreements. The caps are usually enforced by an intermediary liaising on behalf of the hospital (an additional cost that was not present before the caps, which consequently negates any cost benefits of caps). Public bodies and agencies are already applying blanket recommendations of being inside IR35. This means I will be personally out of pocket on all my expenses, plus have none of the benefits of being ‘employed’. The recent changes will make no difference, as already contracts are being worded to reflect a status as ‘inside IR35’, when in practice, once working, we are actually outside IR35. A good example is supervision – I have never had any documentation to support this happening. I am making plans to leave the NHS and this country altogether. My agency informs me several other locums have also decided to do this. That’s less tax revenue right there. With the advent of the mass exodus of EU staff, the NHS will be in a complete mess without its allied health staff as well. LISA VAUGHTON

BR A N D A N D ST R AT EGY D IREC TOR , TA L EN T WO R KS IN T ERN AT I ON A L

“Recruitment has many of the negative connotations of ‘getting bums on seats’, ﬁlling vacancies and delivering a process that is focused primarily on the interests of the hiring organisation and forgets the importance of the candidate experience. The transition to talent acquisition is a positive step towards recognising the increased sophistication needed to attract quality talent through managing an employer brand, recognising candidates as customers who need ‘caring for’ from initial contact through every touchpoint of the experience.”

SUZANNE BURNETT “Like every industry, recruitment has its shady side, but it’s been my life for 20 years and I wouldn’t have had it any differently. Yes, I’ve had to compete with some people with seriously questionable ethics. But I’ve always taken a very simple view: if you work hard, if you’re honest, if you take a long-term view and you never do anything less than your best for your clients and candidates, you’ll be rewarded. Those basic values have sustained me – and they’ve helped me build a successful business.”

MARK NEWMAN S A L ES D I REC TOR , R A IN CON S ULTA N CY G RO U P

“The negative image we recruiters have all experienced is borne out of bad practice and poor services. Educating both clients and candidates in a good quality, focused recruitment process is a constant challenge. We must remember you only recall the bad experiences you have in life, so it’s the responsibility of all quality professional recruiters to promote best practice to their clients and candidates to ensure they receive a valueadded, measurable service built upon quality, trust and partnership. If we all embrace high standards of service, we can change a negative perception into a positive!”

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T H E BI G STO RY JAMES RYDING

WHO I S HE?

James Ryding November 2015-present Head of talent acquisition, easyJet February-November 2015 Head of resourcing, EMEA & UK, HSBC September 2008 â&#x20AC;&#x201C; December 2014 Director international talent acquisition, then vice talent acquisition, NBC Universal 2006-08 Recruitment and talent manager (global finance), then group resourcing managerAsia, Tesco 2004-06 Senior consultant, Astralis 2000-04 Consultant, Penna

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MAY 2017

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B he ud Ja ad get m o a es f t irl R ale ine yd n e ’s ing t ac asy C sp qu Je ol o is t’ in k it s C e t ion ot o te ll

RY D O SP N IN IR O G IT RA H I G NG H E r ti e ru c e R

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T H E BI G STO RY JAMES RYDING

AS A GENERAL RULE, chief executives of FTSE 100 companies don’t work in open-plan offices. Nor do they work in revamped aircraft hangars. So the sight of Dame Carolyn McCall, CEO of low-cost airline easyJet standing among banks of identical desks chatting amiably with her HR director comes as quite a surprise. But perhaps it shouldn’t. For according to James Ryding, easyJet’s head of talent acquisition, Britain’s biggest low-cost airline is no ordinary company. “We call it ‘Orange Spirit’,” says Ryding, who goes on to explain he is referring to the airline’s culture, the attitude of staff and their commitment to making it successful. Ryding and his team of around 30 recruiters have certainly been in need of that Orange Spirit in recent times. The company has been hit by a profit warning, currency fluctuations and strong competition from rivals. On top of all this, there is the uncertainty of Brexit. Facing a headwind, or experiencing a spot of turbulence, whatever way you describe it, you might think this an inauspicious time to be an easyJet recruiter. But not if the company is imbued with that Orange Spirit, insists Ryding. “If there is that kind of culture, if there are those shared values, where you can say you are proud to work, it is easy to be a recruiter,” he says, as we meet at Hangar 89, easyJet’s Luton headquarters, our conversation set against a soundtrack of the constant low whining of jet engines, as easyJet’s planes in their unmistakable orange livery fly off and return from Paris, Milan and other destinations in 31 countries. Ryding is at risk of being unduly modest, and underselling the work he has done since he arrived at easyJet in November 2015. For that too has needed oodles of that same Orange Spirit. “I wanted to join an organisation where there was a job to do,” he says, as if to undermine the scale of the challenge he faced. Indeed, the way Ryding describes it, the talent function needed to go back to first principles – ensuring the airline

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had sufficient staff to keep its planes in the air. Ryding highlights two particular issues that exercised his mind on his arrival, following an almost two-decades long career in recruitment, which included roles at NBC Universal, Tesco and Penna, among other companies. The ﬁrst was competitors poaching easyJet’s cabin crew, and the second was competition from rival airlines for the ﬁxed pool of pilots. A third challenge, says Ryding, was “not getting out enough in terms of telling people what it is like to work here”. Something radical was clearly needed, and it was against this backdrop that Ryding launched easyJet’s new strategy for talent in January 2016.

Philosophy of recruitment Work for an organisation you believe in and whose values you really share Ryding says a key aspect of the new strategy was to better understand the different countries in which easyJet draws its talent. The next step was being sufficiently agile to adapt the strategy to those local conditions. In Germany, for example, he says easyJet “was struggling to recruit” because there was lots of competition for cabin crew from other airlines. In addition, “your typical German applicant would value more working for a German company than a British one”, he says. Perhaps unusually from a British workplace perspective, Ryding says he took advice from the German cabin crew union, taking advantage of their in-depth knowledge of the German market – for example, on which

candidate pools to target and how to differentiate easyJet from the competition. One outcome was that all cabin crew adverts were stamped ‘union approved’. “People could see these guys are obviously in it for the long haul even though they are not German,” says Ryding. After realising that offering potential recruits a 10-month fixed-term contract when the competition was offering them a full-time permanent contract put easyJet at a disadvantage to its rivals, the airline began to offer full-time contracts rather than temporary or part-time ones. “There are organisations that can’t adapt, where the attitude is ‘there is nothing we can do’, but with easyJet, I went straight to the head of cabin crew and she simply made a decision to offer full-time contracts,” explains Ryding, his appreciation of easyJet’s culture again very much to the fore. Ryding says there was a clear recognition by his colleague that “this was a strategic area where we needed to win, and that wouldn’t happen without change”, followed by a willingness to act. As a result of the actions taken, Ryding says, easyJet is now fully staffed in Germany. “We have adjusted our employment proposition to make sure we meet the demands of the marketplace and that has really helped us,” he says. Although Ryding accepts permanent staff are more expensive than temporary staff, he says they compensate in other ways, such as having greater knowledge and experience. Longer job tenure also saves on the expense of constantly having to recruit new staff. At the same time, there have been efforts to give staff more certainty over their rosters to enable them to enjoy a better work-life balance. Fears that fewer temporary and part-time staff could reduce the airline’s ability to flex staff numbers up and down in response to fluctuations in business needs are more potential than real, he says. With easyJet continuing to grow, “the likelihood of wanting to flex down is less”, he says, while even with permanent staff, it is possible both to transfer them across

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I M AG E | JO N EN O C H

T H E B IG STO RY JA M E S RY D I N G

C O M PANY

easyJet Founded 1995 HQ: Luton 2016: Revenue £4,669m 11,000 staff 874 routes in 31 countries

Europe and in some situations to flex up and down. Ryding says the type of employment model used in Germany “can definitely work” in other countries and has been used in the UK. However, “it is horses for courses”, he says, and what works in one country may not be the best solution in another. “We have segmented the market across the 28 countries [where easyJet employs staff ], from high competition [for talent] to low competition,” Ryding says. “While there are some places where you don’t need to go out and find people at all, there are other bases where it is red hot, and you really have to go out and be very competitive,” Ryding explains. The new strategy also focuses on what Ryding describes as ‘Smart Investment’. So out went ‘pay and pray’ advertising and in came a targeted approach, using programmatic advertising, a relatively new concept that uses special software to automatically buy and sell digital advertising. In one campaign, striking cabin crews employed by another airline received adverts for easyJet cabin crew roles through their rostering app, resulting in 14,000 click-throughs. “We can target specific geographies, socio-economic groups, populations and software applications. It is incredible how the science has moved on so amazingly,” says Ryding. In another high-tech initiative that takes targeting to another level, jobs for easyJet pilots have been posted on closed online forums, such as The Portuguese Pilots’ Forum, even though easyJet itself

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TH E B IG STO RY JAMES RYDING

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Ryding (centre) with easyJet’s talent acquisition team

and what they think about the culture. So telling people about what it is like to work here and what we believe in is much more motivational for candidates than random marketing,” says Ryding. So following a relaunch of its social media, out went “very highly polished and artiﬁcial messages”, replaced by informal two-way conversations, managed by members of Ryding’s team. As an airline with a large workforce across the UK and continental Europe, Ryding acknowledges Brexit is an issue, with potential threats to the current mobility of labour between the EU and the UK a clear concern. The ability to recruit talent from other EU countries is especially valuable for senior executive search specialists in his own team, says Ryding. Although, most easyJet staff are on local contracts, he says he hopes the outcome of the Brexit negotiations will allow him to continue to bring in staff, say from Eastern Europe, when there is a shortfall of staff at Gatwick. Brexit will undoubtedly bring its own challenges along with the many others that go with the role. It may be a long haul, but as long as Ryding and his team continue to be imbued with that Orange Spirit, there is a good chance of reaching their destination. ●

Secret of success Find an environment in which you can be comfortable to be your true self, and have a great team around you

IM AG E S | J O N E N O CH

can’t be a member. Ryding admits that even he “doesn’t know how it works”. Paperless assessment centres have also been introduced, saving money, while ﬁtting in with the airline’s stance on the environment. Each year easyJet runs more than 200 assessment centres. For a company with such a prominent consumer brand, it is not surprising that much of the strategy is so customerfocused, in this case on the candidate. With 55,000 applications a year for cabin crew, the company streamlined the process by introducing ‘try before you ﬂy’. This allows candidates to go online to see if they really have the right attributes and motivations. Discovering all the processes were manual, Ryding says switching to an online process saved each candidate 30 minutes, equivalent to 25,000 candidate hours a year. Streamlining the pilot assessment process by introducing single assessment days rather than asking busy people to come in several times, and even to stay in hotels overnight, also improved the candidate experience. Many organisations recognise the value of a great candidate experience, but Ryding says easyJet went further. By asking candidates, it discovered that while 80% were existing easyJet customers, 20% weren’t. Doing the sums, the latter represents potential revenue of £1.6m, and provides a solid commercial reason for providing these candidates in particular with a great candidate experience. Happily, Ryding says the signs are the airline is on the right track, with 71% of those who were not a customer saying they would become a customer as a result of their candidate experience. “We want the same kind of excellence and focus on the experience you have as a customer as a candidate,” says Ryding, who goes on to highlight how any failure of the candidate experience to match the customer experience risks putting off potential recruits from applying. While Ryding recognises the importance of aligning the candidate and customer experience, he says the strategy takes a similar approach with the airline’s consumer brand and employer brand. “I think people choose an employer much more because of their ethical stance

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05/04/2017 15:23

CO M PLIA NCE

Changes to the new IR35 rules havenâ&#x20AC;&#x2122;t curbed concerns of its impact to public sector recruitment, with fears of a knee-jerk reaction to the legislation. Colin Cottell reports

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CO M PL I A N C E

THE BEGINNING OF THE TAX YEAR is always an anxious time for the recruitment sector. And this year is no different. For those agencies supplying PSC (personal service company) contractors to the public sector, the past few months have been particularly unsettling for payment intermediaries, payroll companies, accountancy services providers and the contractors themselves. PSC contractors are widely used across the public sector, particularly in central government departments, education and the NHS. However, the government has long been concerned that many of those hired were not genuinely self-employed, and that this was resulting in a loss of between £20m and £25m a year to the Exchequer. In December the government published draft legislation to the Finance Bill, which made it the responsibility of the public sector end-user to determine such a contractor’s IR35 tax status. But to the consternation of many in the sector, where a PSC contractor was caught by IR35 status – ie. was not genuinely self-employed – the law could make the agency responsible for deducting

and paying the National Insurance Contribution (NIC) and tax. In March, just a few weeks before the new legislation came into effect on 6 April, the government relented under fierce pressure from the industry, with the result that the bill contained a number of vital amendments. Perhaps the most of important was a new responsibility on public sector bodies to take “reasonable care” when determining the contractor’s IR35 status, and making it responsible for any underpaid PAYE and NICs should the HMRC decide that “reasonable care” was not taken in the decision. In addition, public sector contractors have a legal duty to inform recruiters if they supply through a PSC, through a limited liability partnership or via the services of another person. Public sector bodies must also inform the agency of their decision on whether a contractor is inside or outside IR35 before the contract is entered into or (if later) before services are supplied. Many in the sector welcomed the government’s change of heart. “These changes are positive because the public sector body understand the assignment better than anyone else. The ‘reasonable care’ clause is eminently sensible, and as a result there will definitely be more accurate assessments,” says Matthew Brown, managing director of umbrella and accountancy services provider services, giant Group. Brown says he is hopeful that public sector bodies will be less prone to the knee-jerk ‘safety-first’ reaction observed by many across the sector, where public bodies adopt pretty much blanket polices of assessing PSC contractors as inside IR35, and consequently putting them on their payroll. However, Barry Roback, director of employment management solutions provider Anderson Group, says the changes were “a bit of huff and puff, and don’t change the substance of the legislation”. Roback says that the amendments are unlikely to change the behaviour of public bodies. He argues that while the

The government has long been concerned that many of those hired were not genuinely self-employed intention of the “reasonable care” clause is to stop public sector bodies making such blanket assessments and to encourage them to make assessments on a case-by-case basis, for cautious-bynature public bodies it is unlikely to have the desired effect. He explains that since putting a contractor on the payroll means there can be no future liability on the fee-payer because the maximum amount of tax and NI is deducted and paid whenever a contractor’s salary is paid, continuing a cautious policy of payrolling public sector contractors remains the safest and therefore most likely option. “All the government has done is to effectively take away choice from the contractor, and the consequence of that is they are caught by IR35 [through the policy of the public body] when [in reality] they are not caught by IR35.” Roback says there will be a few cases, for example highly-skilled Ministry of Defence contractors on £1k a day “where there will be some care and attention taken in making the assessment”, but “in the vast majority of cases the de facto decision seems to be you are caught”. Paul Dewick, commercial director at Boomerang Funding, part of The Brookson Group, agrees: “This could see public sector bodies not wanting to risk getting this wrong and as a result could end up taking an overly cautious stance

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CO M PLIA NCE

when it comes to assessing IR35.” Crawford Temple, CEO at PRISM, a trade body for service providers, is not exactly fulsome in his praise for the changes. “I don’t think they are unhelpful, but giving people 14 days, before the changes ‘go live’ is not long enough to see the effects,” he says. “In six months’ time you might see it settle down and proper assessments being made, but you are talking about thousands of workers and there is no way people can make all those decisions in that time frame,” Temple continues. Faced with this reality, he says, the short-term reaction has been “to push everyone into umbrellas”. “What we are seeing in the main is that everybody is moving into umbrellas because they appear to offer the best [take-home-pay] rate. And of course, that nulliﬁes the whole thing because in those circumstances IR35 is irrelevant.” Matthew Huddleston, MD at umbrella company solutions provider FPS Group, says before the changes were announced “many contractors had been burying their head in the sand and hoping for major tweaks to the legislation”. Huddleston says the Chancellor’s sudden reversal of his plans announced in the March Budget to increase rates of NI for the self-employed raised contractors’ expectations, and so a lot of public sector contractors continued to operate their PSCs until the very last moment possible. However, having seen their hopes of a major government climbdown dashed, “there has been a whole suite of responses”, says Huddleston. These range from exploring umbrella options, to going onto agency payrolls as PAYE workers. According to Huddleston, there is also anecdotal evidence of contractors deciding to work in the private sector or going abroad at least until the dust settles in the UK, with Germany being a favoured option for some: “They are extremely unhappy with the situation they ﬁnd themselves in.” John Randall, engagement director for Standards in Recruitment, a provider of compliance and accreditation programmes to recruitment agencies, welcomed the

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government’s amendments “for putting more emphasis on the hirer” when determining IR35 status. However, “there are still several issues that need to be ironed out”. Among his concerns is the HMRC’s online tool to determine IR35 status. “In our opinion and of many others [it’s] fundamentally ﬂawed or wanting to say the least,” says Randall. While he shares the government’s concerns about tax avoidance, he argues that “it seems to be going about it in a piecemeal and adhoc way rather than having a holistic plan that will work for the whole industry”. While resigned to the likelihood of the government pressing ahead with the legislation, Randall says it would have been far better to wait until the outcome of the Taylor Review on Employment Practices in the Modern Economy, which is expected to publish its ﬁndings in June. “This may itself have an impact on IR35. So could we be seeing another change?” Given successive governments’ records over the years, the almost certain answer is yes. Clearly, few in the industry would be surprised if the sector continues to face further upheaval over the coming months and years. ●

WHAT WERE THE LAST-MINUTE CHANGES TO THE FINANCE BILL? The public sector end-user must take “reasonable care” when determining a public sector contractor’s IR35 tax status. If HMRC later deems “reasonable care” was not taken, the public body becomes the fee-payer and is liable for any underpaid tax and NICs, as well as penalties and interest. The public sector body must inform the agency of their decision before the contract starts (or if later) before the supply starts. Failure to do so means the public body becomes the fee-payer. They must also respond to the supplier of the contractor if challenged as to their decision. Assuming the end user has taken “reasonable care”, where the agency is paying the PSC, it is responsible for ensuring that the contractor is correctly paid either gross, if outside IR35, or net of tax and NI if caught by IR35.

Act now on data protection, or repent at leisure The EU’s GDPR (General Data Protection Regulation), which strengthens and unifies data protection for individuals living in the EU, doesn’t come into force until May 2018. “However, recruiters who wish to avoid huge fines of up to 4% of world turnover need to be planning ahead and taking action now to ensure they are compliant in a year’s time,” according to Alex James, director of product development at executive recruitment software and service provider Dillistone Systems. Despite the UK’s decision to leave the EU, the government has confirmed that the GDPR

will come into effect in May 2018, although it is it unclear whether it will remain on the Statute Books, and in what form after the UK leaves the EU in March 2017. With recruitment companies holding huge amounts of data about candidates, and in many cases transferring that data outside the EU, the potential to get things wrong, with consequent damage to reputation and in the worstcase scenario for the fine to destroy the company is huge. According to James, recruiters who store data held on local devices in an unencrypted format are

taking particular risks. “A laptop is stolen every 52 seconds. A mobile is stolen every 12 seconds,” says James. “A stolen device could constitute a breach. “Recruiters need to be actively looking at minimising the amount of data floating around on these devices. I suspect many recruiters allow local data storage by default – it needs to stop,” James advises. “One way to reduce this risk is to ensure your IT uses truly cloud-based, browserdelivered technology that does not use vulnerable local devices, such as memory sticks.”

MAY 2017

10/04/2017 15:46

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04/04/2017 10:08

Expert opinion S P ON S ORED COL U M N F P S G R O U P

Change to payroll for Public Sector Workers The impact so far Around summer 2016, I made a comment in one of our board meetings which I soon came to regret. The umbrella industry had just suffered major upheaval with the removal of Travel & Subsistence relief for home to work travel.

+ Matt Huddleston Managing Director, FPS Group

So it was that I rashly predicted a Government fully occupied with BREXIT in the months to come, would surely leave our industry alone for a year or two enabling us to bed-in the changes so far. How wrong! Anybody involved with the supply of workers to the public sector will by acutely aware of the new legislation that has come into force from 6th April regarding these workers. So what has happened and why? Historically successive Governments have supported entrepreneurialism with lower taxes for those who set up their own small businesses, compared with employees. Things started to change around 1999 when HMRC became concerned that employees were incorporating their own companies in order to ‘pretend’ they were small businesses and access tax benefits. Hence the introduction of IR35. Problematically for HMRC the initial decision on whether IR35 applied sat with the worker and their limited company -- the very worker who would benefit in tax terms from deciding they were outside IR35. The new legislation moves the responsibility for deciding the worker’s IR35 status to the end client, rather than worker and their company. Getting the decision wrong can result in the end client bearing the risk/cost for any missing tax.

Without confirmation from the end client that the assignment is Outside IR35, it means the best option for recruitment agencies is to engage with an intermediary, such as a compliant umbrella company, that ensures that PAYE is operated in full and therefore outside the scope

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Many contractors are extremely unhappy at the significant additional tax burden, potentially reducing their take-home pay by 15-20%. The Government might claim that these contractors had been avoiding paying the right tax and NI in the first place, but this is certainly not true in all cases. From HMRC’s perspective, the legislation must seem a masterstroke. Agencies and end clients are now enforcing the very IR35 rules that HMRC struggled to apply for over a decade and a half. Conversely though, the changes may well place pressure on already struggling NHS, local authorities and other public bodies. As for the future, well I’ve now given up making predictions, but how long do you think it will be before these provisions are rolled out to the private sector in the name of fairness or levelling the playing field? ●

ABOUT THE AUTHOR: Managing Director Matt Huddleston BSc, FCA has worked at FPS Group for over 13 years having trained and qualiﬁed as a Chartered Accountant with Ernst and Young. Matt attributes the major success that the group has enjoyed in payroll services over more than 20 years entirely to the dedication, hard word and exceptional industry knowledge of the colleagues it is his pleasure to work with.

↗

Unsurprisingly end clients are not willing to get into the complexities of IR35, especially when they carry the risk. Over recent months, there has been a general trend of public sector end clients declaring that all workers are Inside IR35 – they should be taxed as employees.

of the legislation. Consequently, we have seen unprecedented levels of enquiries for umbrella company services over the past few weeks.

FPS GROUP Administration Centre, Ramsey, IM8 1GB For further information please visit: www.fpsgroup.com Telephone: 0800 634 4848 Email: sales@fpsgroup.com

MAY 2017

10/04/2017 10:46

Issue 49 May 2017

RECRUITMENT MATTERS The View and The Intelligence

Big Talking Point

Brexit begins

Scale Up Workbook

p2-3

Legal Update p4

Restrictive covenants, are they still necessary? p6-7

JOBS MUST BE PRIORITY DURING BREXIT NEGOTIATIONS Jobs and prosperity must be the focus of upcoming Brexit negotiations, according to the REC. Prime Minister Theresa May’s triggering of Article 50 in late March began the UK’s two-year withdrawal from the European Union. The REC will be monitoring negotiations and has worked alongside the Migration Policy Institute and Fragomen LLP on an analysis of the UK labour market. REC chief executive Kevin Green says the UK labour market is in a strong position and negotiations should consider the importance of jobs. “The UK labour market has

@RECPress RM_MAY_17.indd 1

performed well since the EU referendum. Employers are continuing to create jobs and employment has reached record levels. As Brexit negotiations begin, we need the government to prioritise a deal which creates more jobs and prosperity,” he says. “The UK has near-full employment and recruiters are saying the task of filling vacancies is becoming more

difficult. EU workers are more likely to fill labour and skills gaps in industries that persistently report unfilled vacancies and skills shortages. We need an immigration system which reflects this

Products and Training TREC 2017 is here

reliance on workers from the EU. Everyone loses if UK employers can’t hire the people they need.” Since the referendum, the REC’s focus has been on keeping members informed of Brexit related developments and, making the case in Westminster and beyond for a future EU/UK relationship that supports Britain’s flexible labour market and skills needs. The trade body is encouraging members to keep abreast of Brexit developments. “The key message for now is that nothing has changed and it is ‘business as usual’ until Britain formally leaves the European Union in April 2019,” the REC says. “Nevertheless, clients and candidates are likely to have lots of questions about the referendum vote. That’s why we have produced factsheets for candidates and clients to help explain what Brexit means for them.” REC members can keep track on all major Brexit developments at www.rec.uk.com/brexit

www.rec.uk.com 10/04/2017 14:07

Leading the Industry

THE VIEW

Let’s keep the jobs market strong says Tom Hadley, REC director of policy and professional services

It’s time the industry paid attention to customer excellence, says Kevin Green, REC chief executive

SCALE UP YOUR CUSTOMER SERVICE We have just published our latest Scale Up Workbook all about customer excellence. It’s a seminal piece of work for recruiters who want to grow. The workbook explains why measuring customer satisfaction and candidate experience can provide long term superior financial performance and an effective means of differentiating your business in an increasingly competitive industry. Here are three key questions all recruitment business owners and directors should ask themselves: • How do know how good your service is unless you collect data from your clients? • How good are your consultants at meeting your clients’ expectations? • What do you need to improve to increase loyalty and increase their spending with you? The workbook provides REC members with practical tools to help improve customer and candidate service by focusing on your staff. If your people are totally motivated, fully enhanced and well-led, they

2 RECRUITMENT MATTERS MAY 2017

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BREXIT BEGINS

will deliver great customer service and a top notch candidate experience. The workbook includes many case studies from recruiters who are using customer metrics – like Net Promoter Score (NPS) – to measure how good they are and to establish new ways of improving their service offering. For the past two years, our Scale Up campaign has been helping recruitment businesses take advantage of a growing market. The Scale Up Workbook illustrates how to secure the benefits of focusing on customer experience. If you want to find out more about customer excellence, why not join me at our Scale Up in the Round events? We’re in Portsmouth, Manchester, Taunton, Exeter and Newcastle soon. We also have a Scale Up Live event on 25 April dedicated to customer excellence. Join us in upping your game by providing world-class service to your clients and customers. Recruitment Matters takes a look at some of the lessons in the latest Scale Up Workbook on pages 4-5. Follow me on Twitter @kevingreenrec

And they’re off… The triggering of Article 50 set many hares a running but also focused minds on what the postEU landscape might look like. Maintaining a dynamic and agile employment eco-system must be one priority, which is why our core policy mission remains the same: to work with policy makers to build the best jobs market in the world. Access to staff and skills is an immediate concern. REC JobsOutlook shows 51% of employers expecting candidate shortages, with 78% reporting little or no spare capacity. Ramping up UK skills and driving inclusion are part of the solution, but we also need immigration policy to reflect labour market needs. Positioning our voice at the forefront of this debate is at the heart of the work we have just completed with leading law firm Fragomen and the Washington-based Migration Policy Institute (MPI). Evening Standard columnist Antony Hilton recently made the point that, while politicians are focused primarily on Brexit, “there are greater challenges in jobs and education ahead”. This broader debate has been a recurring theme at recent member meetings. Case in point (your honour!) was the REC Legal & Financial Services meeting where specialist recruiters identified automation and AI as a greater threat to agencies supplying qualified legal staff than any post EU referendum uncertainty. Speaking at the latest Interim Management Association (IMA) event, Staffing Industry Analysts (SIA) underlined the potential for increased ‘platformitisation’ and labour market ‘dis-intermediation’. Is this where we are heading? Back in 2007, our Recruitment 2020 project with leading think tank Demos was bullish and concluded that “intermediaries have become hugely important; they tell us where to shop, who to do business with and who to hire”. More recently, a conclusion from the World Employment Conference in New Delhi was that the pace of change will require more people to make sense of this constantly evolving employment landscape which could actually make the role of intermediaries more important. The REC’s aim is not only to pre-empt forthcoming challenges, but to influence the direction of travel wherever we can. In the words of Abraham Lincoln, “the best way to predict your future is to create it”.

You can follow Tom on Twitter nt @hadleyscomment

www.rec.uk.com

10/04/2017 14:07

THE INTELLIGENCE WITH REC SENIOR RESEARCHER, MARK HARRISON We welcomed the last-minute decision by NHS Improvement (NHSI) to indefinitely pause a ban on NHS trusts using agency staff that hold substantive roles in the NHS. The ban had been due to come into force on 1 April and had the potential to cause chaos for NHS trusts. Agency workers account for approximately 1% of total NHS employment. Whilst 1% may sound small, that is a huge number of people in an organisation of over 1.5 million staff and which is increasingly under strain. Not only would the ban have exacerbated the staff crisis within the NHS, it demonstrates an unwillingness to engage with the reasons many healthcare workers are choosing to work for agencies alongside their NHS roles.

PERMANENT PLACEMENT REVENUES REMAIN CHALLENGED FOR THE MEDIAN RECRUITER With many of the listed recruitment organisations recently reporting that their permanent placement revenues have been challenged – notably so in the second half of 2016 – an examination of the general UK industry trend shows that they are not alone. The latest information from the RIB Index, sponsored by

www.rec.uk.com

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A report published in February by the National Institute of Economic and Social Research (NIESR) in partnership with the REC explored the experience of agency workers in the NHS from the perspective of agencies, agency workers, and NHS trusts. Interviewees and focus group participants highlighted not only a shortage of staff within the NHS but a retention problem on top of that. One healthcare recruiter stated: “Nurses are leaving the NHS in huge numbers… As a former nurse myself, I find it exceedingly worrying.” Some trust directors conceded that staff retention is an issue the NHS needs to understand better. Flexibility came through as the main driver for healthcare professionals turning to agency work, followed by poor working conditions and working culture within the

AGENCY WORKERS ACCOUNT FOR APPROXIMATELY 1% OF TOTAL NHS EMPLOYMENT. WHILST 1% MAY SOUND SMALL, THAT IS A HUGE NUMBER OF PEOPLE IN AN ORGANISATION OF OVER 1.5 MILLION STAFF

NHS. Interviews and focus groups with those working in frontline NHS roles highlighted inflexibility from managers, as well as poor people management and a lack of respect for workers’ personal lives. One research participant suggested that NHS managers would ‘dictate’ to them rather than work with them, a feeling that surely would have been aggravated further by the proposed ban on substantive staff working agency shifts within the NHS. An REC survey of healthcare recruiters carried out in March suggests the ban would have exacerbated the staffing crisis within the NHS even further. When asked about the expected impact of the new

Figure 1. Average quarterly permanent billings, versus prior year, for the median recruiter

20%

10%

2016 monthly average for the Median RIB recruiter: -1.4

1.5%

0% -5%

-3.8%

-0.7%

-2.6%

Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016

Bluestones Group, highlights that, year-on-year, the median industry recruiter saw revenue from permanent placements decline by an average of 1.4% across 2016.

“NURSES ARE LEAVING THE NHS IN HUGE NUMBERS… AS A FORMER NURSE MYSELF, I FIND IT EXCEEDINGLY WORRYING.” rules, less than a fifth thought that candidates would transfer from agency shifts to the NHSrun staff banks (which were also criticised as poorly run in the NIESR report). With the NHS already under increasing pressures, it can’t afford to forego large numbers of agency shifts. To ensure the NHS is fit to meet the needs of the future, NHSI should commit to developing more flexible staffing models and building more collaborative working partnerships with recruiters in order to attract and retain the staff our health service so desperately needs.

average margin improved year-on-year (from 15.4% in 2015 to 16.2% across 2016). As such, we can assume that it is the shortfall in the volume of placements that caused the negative year-onyear growth.

25%

15%

ONE HEALTHCARE RECRUITER STATED THAT

Encouragingly, the average permanent placement salary for the median recruiter was higher, as an average across 2016 (£34,538), than in 2015 (£33,690). Additionally, the

Belinda Johnson runs employment research consultancy Worklab, and is associate knowledge & insight director of Recruitment Industry Benchmarking (RIB) – part of the Bluestones Group. The RIB Index provides bespoke confidential reports on industry benchmarks and trends. See www.ribindex. com; info@ribindex.com: 020 8544 9807. The RIB is a strategic partner of the REC.

RECRUITMENT MATTERS MAY 2017 3

10/04/2017 14:07

BIG TALKING POINT

SCALE UP WORKBOOK Is customer experience part of your business strategy? It could prove a revenue boon. Recruitment Matters looks at the REC’s new ‘Scale Up Workbook: How to deliver customer service excellence’ A NO-BRAINER It’s a no-brainer that customer service is important. Competitive industries like recruitment are constantly amending their practices to etch out marginal gains. But surprisingly, few agencies are doubling down on customer service. Being clear on the customer journey is one of the key ways recruiters can differentiate themselves, and that could mean money – and good will – in the bank.

A PRACTICAL GUIDE The third part in the REC’s series of publications providing practical guidance to recruitment leaders

seeking to take a bestpractice approach to running a recruitment business, The ‘Scale Up Workbook: How to deliver customer service excellence’ includes key lessons, action plans, and checklists to help recruitment businesses make financial gains by improving interactions with clients. Alongside lessons in the value of customer service in a recruitment setting, the workbook contains insights from HR decision makers, recruitment agencies and thought-leaders to illustrate the everyday challenges and benefits of thinking about customer experience.

“IN THE RETAIL SECTOR, BUSINESSES WITH AN ABOVE-AVERAGE SECTOR SCORE FOR THE UK CUSTOMER SATISFACTION INDEX HAD A SALES GROWTH MARGIN OF AT LEAST 3% ABOVE THOSE WITH A BELOW AVERAGE SCORE” SCALE UP WORKBOOK The workbook finds that only 36% of companies have a strategy in place to link customer service to financial performance, while only 41% say they’re working on it. The UK Customer Service Index shows a correlation between a high index score and scores on customer loyalty, likelihood of

recommendation, trust and reputation. And that means £££ in the bank. REC chief executive Kevin Green says the Workbook is an essential tool for any recruitment business. “For the past two years, our Scale Up campaign has helped recruitment agencies to improve and expand to

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www.rec.uk.com

10/04/2017 14:08

best take advantage of the growing marketplace as well as respond to these new challenges,” he says. “This report outlines all the questions you need to be asking yourself about the customer experience, provides insight from clients about their preferences in a recruitment partner and presents practical steps you can take to ensure you’re on top of your game. It complements our podcasts, masterclasses and services, which are all tailored to give recruitment leaders the key ingredients for success.”

THE COLD CALLS HAVE TO STOP For a recruitment company that hasn’t traversed its customer experience journey, the path may seem daunting. But it’s well worth planning ahead. Response from HR professionals interviewed for the Scale Up Workbook

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“THE COLD CALLS HAVE TO STOP… IT’S NOT A GOOD USE OF THEIR TIME. IT’S NOT LIKELY THAT WE WILL THINK OF THEM AS A PARTNERSHIP” were adamant it’s a must-do. “Take the time to get to know your clients… take the time to train the staff,” said one. “The cold calls have to stop. I realise that they have ridiculous targets and they are trying to hit their targets. But take the time to train staff to build relationships. [Cold calls] are so obvious and it is not a good use of their time. It is not likely that we will think of them as a partnership. We are busy here. It makes zero impact.” The numbers back it up. The Workbook includes a survey of 400 HR professionals who had used an agency. A staggering 60% said they would use an agency if “it understood our business and

brand better,” while 50% were more drawn to agencies “sent fewer speculative CVs”.

WHAT CAN YOU DO? The Scale Up Workbook offers practical advice and steps recruitment agencies can use to bolster their customer experience platforms. It also includes a checklist recruiters can use as a launch pad for articulating their customer experience approach. Here are five of some of the big tips the Workbook offers: 1 Develop a vision of what customer experience means to your organisation 2 Research different approaches to giving feedback

3 Create a long-term strategy (one to five years) to monitor and revisit the customer experience. 4 Devise a marketing strategy which integrates customer experience messages 5 Develop a persona map of your customers The Scale Up Workbook is free for all REC members – visit www.rec.uk.com/ customer. Hard copies are available. Non-members and IRP members can purchase the report from the REC and IRP shops – visit www.rec.uk.com for more.

RECRUITMENT MATTERS MAY 2017 5

10/04/2017 14:08

Legal update

CONTRACTS

RESTRICTIVE COVENANTS: ARE THEY STILL NECESSARY? By Bunmi Adefuye, solicitor and commercial advisor at the REC Recruitment agencies tend to employ commercially astute individuals who will naturally be thinking about the next step in their career, which could be setting up their own recruitment agency or simply joining a competitor that will pay a higher salary. Agencies spend a considerable amount of time building and maintaining relationships with their clients and candidates but risk losing the benefit of those relationships if an employee leaves and then decides to exploit his/her knowledge of a former employer’s client and candidate database. The damage to any agency if they lose commercially sensitive information, trade secrets and connections could be quite severe. Even though it is an implied term of an employment contract that employees should not misuse confidential information belonging to their employers, the scope of what is ‘confidential’ diminishes when the contract comes to an end so it is very important to have appropriate restrictive covenants in place. The first crucial step when employing staff is to issue a contract of employment that sets out all the relevant terms and conditions including any restrictive covenants that will limit their activities post termination.

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It is best to ensure that the employee is fully aware of such provisions at the outset rather than trying to impose restrictions afterwards which can be quite challenging and, depending on the circumstances, could result in a contentious dispute. Strictly speaking, restrictive covenants are a restraint of trade and have been debated by courts for many years because they are contrary to public policy. Restrictive covenants, depending on the facts of each case, will only be upheld if they are reasonable and protect the employer’s legitimate interests. In addition, they should be set out clearly in writing and not go beyond what is necessary to protect the employer’s interest. The most common restrictions that agencies seek to impose are:

• Non-competition which prevents former employees from entering into similar employment with a competitor for a limited period of time • Non-dealing and nonsolicitation, which prevents former employees from seeking and accepting any business opportunities from their previous employer’s clients • Non-disclosure which restricts the use of the former employer’s confidential information. The enforceability and reasonableness of any restrictive covenant depends on a number of factors such as the nature of the employer’s business, its duration, the scope, its geographical location, the employee’s role and whether such a restriction

is commonly used in that sector. Despite the various challenges the recruitment industry faces, it is reassuring when an agency knows that they have taken the necessary steps to protect their business interests. Restrictive covenants can be an effective deterrent to ex-employees and their future employers who should not deliberately induce them to breach restrictive covenants, otherwise they could face a claim for damages. Although we currently have a stable jobs market, there is still that innovative entrepreneurial trend in our industry and agencies should ensure that they have appropriate restrictive covenants to prevent others from gaining an unfair commercial advantage in a highly competitive sector.

www.rec.uk.com

10/04/2017 14:09

Inspiration

BEHIND THE SCENES AT THE INSTITUTE OF RECRUITMENT PROFESSIONALS

The View

Lucy Wiltshire is a recruitment consultant with Meridian Business Support

TOP STUDENT Congratulations on being top student in February’s Level 3 Cert RP exam. How does it feel? I’m still in shock, to be honest. After the exam I wasn’t too sure how I’d done and I thought I hadn’t passed, so it was a great relief. How did you find taking the Level 3 Cert RP Fast Track course? When the book came through, I was in utter shock by the size of it. When you’re in recruitment, you think you have a good idea of what’s going on. I found it a lot harder than I thought and there was a lot of material to learn outside the day-to-day world of recruitment. It forced me to think about the bigger picture and how that related to recruitment. It’s been really helpful for me for speaking to clients – you can talk confidently about external factors in the economy and labour market that will affect them. Would you recommend the Level 3 Cert RP to everyone? Yes, I would. It teaches you the correct processes and it helps you become more consultative, have a better business acumen and think about the wider market What do you love about recruitment? I don’t think there are many other jobs that have the variation recruitment offers. There are always new situations, new roles and new companies to learn about. When you’re working with people, you’re always encountering something new and exciting. Recruitment keeps you on your toes. What would you tell yourself on your first day? You have good days and bad days, but the job’s about thinking ahead and knowing you’ll have more good days than bad. There will always be those nice moments where you feel like you’ve made a difference.

erton Natalie Winterton is a resourcer at BPS World

APPRENTICESHIPS How did you get into recruitment? I had previously worked in childcare and found myself in a predicament with nothing on the horizon, but I knew I wanted to do something different. I had applied for a lot of jobs online and read about BPS’ recruitment apprenticeship programme. After I applied, I got a call from BPS’ Learning & Development Manager – she walked me through the programme and I was really excited by the opportunity. I attended the assessment day and the rest is history. How did you find your apprenticeship? After my first night, I went home and went straight to sleep – it was full on – but it’s not every day you get to work with a company whose apprenticeship scheme has won national awards. You don’t appreciate how much knowledge you’re picking up as an apprentice until you’re on the sales floor. I had mentoring at every stage and it pushed me beyond my comfort zone. Around the time of my probation, one of the senior recruiters asked if recruitment was going to be the career for me. I had no idea at the time as this was my first role in a corporate environment but now I can confidently say I love what I do and feel I’ve found my calling. Would you recommend a recruitment apprenticeship? Absolutely! Working for BPS allows me to get the best out of both recruitment and myself. I’m constantly re-evaluating how I can improve on what I do. My apprenticeship has given me confidence in myself and my recruitment abilities. What do you love about recruitment? I love that feeling when you meet someone who’s struggling and unhappy in their job, and place them somewhere that makes them happy and allows them to flourish and grow. There’s nothing better than making a difference in people’s lives.

To keep up to date with everything the Institute of Recruitment Professionals is doing, please visit www.rec-irp.uk.com

www.rec.uk.com

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Products and training

THE TALENT RECRUITMENT AND EMPLOYMENT CONFERENCE 2017 ATTRACT, RECRUIT AND RETAIN – FUTURE PROOFING BUSINESS SUCCESS When: 21 June 2017, 9.00am-4.00pm – followed by networking drinks Where: Grange Tower Bridge Hotel, London

ARE YOU READY FOR A DIGITAL REVOLUTION? Dedicated to bringing innovative thinking to the fore, The Talent Recruitment & Employment Conference 2017 (TREC) is a must-attend event for all professionals looking to enhance their expertise in securing the best emerging talent, meeting and exceeding goals, winning clients and achieving longterm posterity. Be part of the revolution by discovering from keynote speakers, Matthew Syed and

Dave Coplin, how through embracing the potential of technology and a mindset of continuous improvement your company can rise above the competition to become a high-performing

industry leader. TREC also offers an invaluable opportunity for those working across the resourcing sector to discuss topical issues such as talent assessment, early careers

and emerging talent, the cost of bad recruitment, employer branding, post EU policies and retention strategies. Visit www.rec.uk.com/ trec17 to book.

APPRENTICESHIPS ARE YOU INTERESTED IN HIRING AN APPRENTICE? The Apprenticeship Levy is here. Using the REC’s recruitment apprenticeship programme makes sense for you and for your business. Our recruitment apprenticeships have been designed with your needs in mind. Built to develop loyalty and effectiveness – there has never been a better opportunity to grow your business, gain new talent and start to make real plans for the longer term. Any training provider can deliver our apprenticeships, but

they have to be approved to do so by the REC. Our providers have already gone through this process and are operating the programme currently. Find out more at www.rec-irp.uk.com/careerdevelopment/employers

RECRUITMENT MATTERS

Membership Department: Membership: 020 7009 2100, Customer Services: 020 7009 2100 Publishers: Redactive Publishing Ltd, 17 Britton Street, London EC1M 5TP. Tel: 020 7880 6200. www.redactive.co.uk Editorial: Editor Michael Oliver michael.oliver@redactive.co.uk. Production Editor: Vanessa Townsend Production: Production Executive: Rachel Young rachel.young@redactive.co.uk Tel: 020 7880 6209 Printing: Printed by Precision Colour Printing

The official magazine of The Recruitment & Employment Confederation Dorset House, 1st Floor, 27-45 Stamford Street, London SE1 9NT Tel: 020 7009 2100 www.rec.uk.com

© 2017 Recruitment Matters. Although every effort is made to ensure accuracy, neither REC, Redactive Publishing Ltd nor the authors can accept liability for errors or omissions. Views expressed in the magazine are not necessarily those of the REC or Redactive Publishing Ltd. No responsibility can be accepted for unsolicited manuscripts or transparencies. No reproduction in whole or part without written permission.

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www.rec.uk.com

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s to ason

coun

10 am: # e r t S ay t on P

Problems? PayStream will come to the rescue.

PayStream, a leading provider of accountancy and payroll services, have been preparing for the new public sector IR35 changes for some time. Within the public sector knowing a PSC’s IR35 status is more important than ever because of the financial risk for agencies. PayStream have already supported several agencies by ensuring that they understand the changes whilst also providing help and advice regarding their options and by offering compliant solutions for all of their workers.

With PayStream by your side, you’re safe in the knowledge that you’re working with a fully compliant provider you can trust every time, and here’s why: 1. A full suite of services including umbrella and limited company services 2. In-house expert IR35 and compliance team 3. Independently audited compliant services 4. Award winning customer service 5. Expertise to help you set up and manage a PSL By ensuring that your contractors are kept HMRC compliant - that’s another reason to count on PayStream.

Call 0800 197 6516 e: info@paystream.co.uk or visit www.paystream.co.uk

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07/04/2017 10:50

A truly RISK FREE, fully funded way to start your own recruitment business… Jark Holdings Ltd, the parent company of Jark Ventures PLC has acquired Recruit Ventures Ltd to create The Recruit Venture Group offering recruiters a truly risk-free, fully funded way to entice them to start their own recruitment business. Their unique offering, which has no personal financial outlay, is a truly ‘risk-free’ business opportunity with a complete back office support function making it a no brainer for entrepreneurial recruiters looking to launch their own recruitment agency and brand. With a vision to create the largest joint venture recruitment operation in the UK by 2027, The Recruit Venture Group is now one single business entity boasting a combined turnover of £131 million and 40 joint venture businesses. No longer a traditional recruitment business or an investment firm, The Recruit Venture Group is one company solely focused on attracting, funding and supporting top performing recruiters with five years consecutive experience to become successful business owners in their own right. The Recruit Venture Group has a structured 10-year business plan in place to achieve their goal.

100% RISK-FREE FREE E Funding They will deploy their experience, knowledge, and expertise to attract 56 NEW Joint Venture Partners and generate a combined turnover of £250m by 2027. When Chairman John Buckman ﬁrst launched Recruit Ventures in early 2011, it was done in the belief that there were many recruiters within the industry who truly had the drive and ambition to launch their own business. A unique business model was created

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specifically for the recruitment industry which offers full back office support, financial backing and the security and freedom recruiters needed to concentrate on developing their businesses. Recruit Ventures continued to grow from strength to strength, achieving £3m in year one to £49m by year five and the model went on to inspire many recruiters to set up on their own.

There are many recruiters who truly want their own business and can now achieve it. JARK, founded in 1996, had already established itself as one of the UK’s largest independently owned recruitment companies with a network of branchmanaged recruitment ofﬁces operating across many sectors covering the UK. In 2016 JARK adopted the Recruit Ventures model and migrated from a branch-managed recruitment company to become a joint venture operation itself. 20 new businesses were created, and existing branch and area managers were empowered to become business owners. “It was a business risk changing the structure of Jark but the Recruit Ventures model enabled us at the time to empower our managers to become business

owners in their own right. They are now in control of their own destinies and that is what The Recruit Venture Group is all about.” Said John Buckman, Chairman.

Enjoy the best recruitment business in the world... your own recruitment business! The Recruit Venture Group enables successful recruiters to become business owners, focus all their time and resources on recruitment and grow their business fast. The group invests heavily in its back office infrastructure to support their Joint Venture Partners. The model provides the ability for a business owner to focus and expand without the restrictions and complications which prevent many new businesses reaching their full potential. Business owners can start a business from scratch and make it profitable very quickly. The Recruit Venture Group is focused on attracting top talent to join the business with plans to expand their backoffice teams to support more budding entrepreneurs across the UK. The old style ‘Head office’ approach to business has been replaced by a robust Central Services team which has become the most financially secure support

04/04/2017 10:07

The Recruit Venture Group Central Services Support Team

platform recruiters can access, proven to deliver excellent service to existing joint venture partners, their employees and their business as entity.

Full back office ffice ce rvice vice support service “The Recruit Venture Group is a proven success. A self-sufﬁcient business model with structure and foundations. With a 10-year structured plan already in place to guide our future and a commitment from all to provide long-term growth and support, we are conﬁdent that we will succeed in our ambition to become the largest joint venture recruitment operation within the UK” Said Paul Mizen, Managing Director.

Recruiters are by nature, dynamic, ambitious and driven individuals who want to achieve whatever goal they set themselves… second best is never an option The Recruit Venture Group wants to build the business with people just like that. Those currently working in recruitment, with ﬁve years consecutive experience in the industry interested in becoming the boss of their own recruitment business and brand, those with the drive to become successful in their own right. IS THIS YOU? The Recruit Ventures model is simple, there is no personal outlay, and the financial security from the outset enables the recruiter to retain their current lifestyle. It provides 100%

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funding, no limitations on location or number of branches, full back office

It provides the security and freedom recruiters need to develop a business from scratch to proﬁt fast. support services including HR, IT, Accounts, Payroll, Credit Control and Marketing. Everything is geared to getting a new businesses launched and into profit fast, BUT most importantly it is RISK-FREE. It’s the perfect opportunity for a

successful experienced recruiter to become Director of their own business and develop their own high-street recruitment agency and brand. A confidential chat is all it takes and it’s a quick click and connect to info@ recruitventures.com to get the wheels in motion to a new beginning. So with a 10-year plan already mapped out for the business and the financial governance and capital headroom behind them to ensure the safety and security of all their joint venture partners now and for the future. Exciting times beckon for The Recruit Venture Group.

are you ready to o la lau launch unch nch sines ess? your own business?

left to right – Neil Rogers, Paul Mizen and Danny Parr – The Recruit Venture Group Board of Directors

04/04/2017 10:07

BE NC HM ARK ING YOUR RECRUITMENT BU SINESS

nderstanding and benchmarking one’s performance against similar-sized businesses as well as the market is always considered good practice. This is particularly important given the current uncertainty surrounding Brexit and the free movement of labour, an increasing skills gap and a devalued pound. M&A ﬁrm Clearwater International has analysed all the current data of privately-owned, UK-based recruitment agencies that reported a minimum annual turnover of £5m in their latest available ﬁnancial accounts. The data covers the reporting periods from January 2014 to March 2016. The analysis revealed some interesting themes.

Fragmentation The 361 businesses analysed together generated total revenues of £18.5bn, which account for 54% of the £35.1bn industry. The 25 largest privately-owned ﬁrms, which are dominated by oil & gas recruiters, 34 RECRUITER

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make up close to 25% of the UK recruitment industry. The statistics highlight just how fragmented the UK marketplace is – a situation further accentuated by the 4,000 new recruitment ﬁrms being founded each year.

Growth Privately-owned agencies, whose performance is highly correlated to economic cycles and business conﬁdence, have achieved robust growth over the past three years, with a compound annual growth rate (CAGR) of 8%. The statistic is consistent with research by the Recruitment & Employment Confederation that the total market has grown at 9% per annum over the same period. The fastest-growing sector was education with a three-year CAGR of 21%, followed by ﬁnance with a 15% CAGR. The industrial sector, which represents 23% of the list, only recorded a CAGR of 5%.

MAY 2017

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It’s never been easy to operate a successful recruitment business but being able to compare your company against your competitors is a good start

Margins While it is always positive to witness top-line growth, the real acid test comes with the gross profit margin and its conversion rate to earnings before interest, tax, depreciation and amortisation (EBITDA). Over the past three years, gross margin has tracked fairly consistently between 21% and 22%, with an average gross profit margin to EBITDA conversion rate of 6%. However, there are stark differences between sectors. Unsurprisingly, the executive search firms are achieving the best margins. These firms, which focus on high-level, C-suite placements, have a revenue mix skewed towards permanent placements and, as such, will report very high gross margins. The average for a search firm was 57%, but with a broad range from 20% at the low end through to 95% at the high end. This contrasts to the multi-sector recruiters who often provide a range of lower value blue-collar contract recruitment. The average gross margin for a multi-sector business was 19% with an EBITDA margin of only 4%. WWW.RECRUITER.CO.UK 35

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Education is another sector that makes for interesting analysis, and is one that is receiving heightened attention as UK schools face an impending recruitment crisis. Last year agency spend in the sector reached £1.3bn, having surged by 25% in the past two years alone. The data is alarming and illustrates the severity of talent shortages in the market. Recruiters with access to vetted talent have naturally benefitted from the inability to suspend classes and to some degree the inelasticity in pricing. This is reflected in the key metrics, with the average gross margin standing at 32% and an EBITDA conversion rate of 30%. Continual pressure for businesses to be at the forefront of technology has resulted in the IT recruitment market often being heralded as one of the best markets in which to operate. However, with both the lowest gross and EBITDA margin, at 18% and 4% respectively, the data paints a different picture. This sector is dominated by niche specialists, in fact 53 of the 361 companies focus just on the vertical. A consequence of such fierce competition is often the impact on margins as companies adopt aggressive pricing strategies to secure work. The analysis provides an aggregated view by sector, but it naturally varies significantly on an individual level and by maturity profile. For example, a firm looking to aggressively expand will most likely be in the process of hiring key personnel, but there will be a period of onboarding and inevitably a degree of churn. The company in question is therefore likely to report a

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subdued proﬁt ﬁgure. However, this is not always the case, as increasingly newly formed and highly successful entities are sourcing proven personnel that can hit the ground running. While these individuals often come at a market premium, it can help to create a highly efficient, lean business often with market leading margins.

UK vs International Privately-owned recruitment firms with significant international operations continue to benefit from a devalued pound. By billing international clients in local currency recruitment firms have been able to inflate profits. Further, a broader geographic spread helps to mitigate risk in domestic territories. In total, 131 agencies reported a breakdown of sales by domestic and international geographies. The data illustrates that for these companies 21% of revenue was generated overseas at an average gross margin of 23%. The constituents are heavily skewed towards the technical and the IT sectors whose client base – by their very nature – have greater international demands and candidates who are very fluid geographically. The gross margin varies significantly between the two sectors though, with the average gross margin for an IT recruiter standing at 20% compared with 13% in the technical recruitment sector. The lower margin in the technical sector is indicative of the ongoing

difficulties being felt in the oil & gas sector, which has resulted in extensive job cuts and offshore rigs remaining inoperative.

M&A The recruitment industry continues to be one of the UK’s most active sectors for M&A. There is a welleducated and well-funded buyer and investor population who understand the overall market performance and its future growth prospects. Buyers and investors will identify the hot sectors with strong underlying fundamentals, recognising that different sectors have different dynamics and growth opportunities, and within those ‘hot’ sectors the leading businesses of scale. Typically buyers are attracted to fast-growing, high-margin businesses with strong management teams and well-invested infrastructure, and who are able to show a coherent and well-executed growth strategy.

Outlook The next 12 months is certainly set to be an interesting period for the recruitment industry, with Theresa May triggering Article 50, and the impending German, French and Dutch elections likely to create uncertainty in the European market and weigh on client and candidate conﬁdence. That said, recruitment ﬁrms will welcome news offering clarity on the movement of migrant labour, particularly in those sectors most reliant such as healthcare and construction.

MAY 2017

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CO M M U N I T Y

SOCIAL NETWORK WHAT HAVE YOU BEEN UP TO? GET IN TOUCH!

From reducing your carbon footprint, raising money for charities or making big or little differences, here’s what else you’ve been up to outside recruitment… Making a difference with bags for children in care

GUIDANT MAKES LITTLE DIFFERENCES WITH BAGS FOR KIDS IN CARE VIA To mark this year’s World Social Work Day in March, recruitment outsourcing specialist Guidant Group delivered brand new bags to children relocating within the care system. Entitled Little Differences, the aim was to make the experience of moving to a new home a little bit easier for a child in care. Guidant discovered that many children in care in the UK are forced to relocate to a new home using carrier bags and bin bags to transport their belongings. This can be incredibly detrimental to the mental health and self-esteem of children who are already in a potentially distressing situation.

£6k

WENT TO THREE CHARITIES EACH

QUANTA RAISED £18K FOR THREE CHARITIES VIA

Brightwork makes the planet a better place thanks to Changeworks

Quanta Consultancy Services presented three charities with a cheque for £6k each, raised through day-to-day activities along with regular fundraising events. Quanta’s three charities are the Pepper Foundation, Thomley and The Silver Line.

TW I TT E R

Will Wylie from Changeworks and m Lynsey Rayne fro Brightwork

CHANGEWORKS RECYCLING HELPS BRIGHTWORK REDUCE ITS CARBON FOOTPRINT VIA Last year, staff from Scotland’s recruitment agency Brightwork discovered Changeworks Recycling. Part of environmental charity Changeworks, which works with organisations, communities and individuals to deliver practical solutions that reduce carbon emissions, fuel poverty and waste, Changeworks helped Brightwork reduce its carbon footprint by almost 215kg of carbon emitted into the atmosphere since September 2015.

RULLION ENCOURAGES GIRLS INTO STEM SUBJECTS VIA Recruitment specialist Rullion sponsored an event at Manchester High School for Girls to encourage girls into STEM subjects. Pupils were joined by members of the STEMettes, a social enterprise which works to inspire and support young women into STEM careers.

Duaine Eyeson @duaine_eyeson Thanks @RecruiterMag for the latest issue, article on chat bots and AI written by Sue was a great read!! @RecruiterMag instagram.com/recruitermagazine/ recruitermagazine.tumblr.com/

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CO M M U N I T Y

EMPLOYABILITY

never considered going into hospitality then you can come along and maybe gain a new skill set, develop your social skills, explore the possibilities and hopefully gain conﬁdence,” she says. “It is more about focusing on ability rather than disability, and that is why we support it,” adds Chennells. Having this on their CV, and also being able to demonstrate that they have the social skills to work in the hospitality sector “which is all about communication”, should also help impress potential employers, she says. Feedback from those employed in the popup café has been positive, with one participant praising the employability aspects, as well as the fact that it gave her the opportunity to develop new skills – teaching non-deaf customers sign language. Chennells says the intention is to expand the initiative within Germany, with the hope of being able to grow it sufficiently so as to be able to employ people “on more of a full-time basis”. There could also be opportunities to take it to other countries. “I am deﬁnitely going to reach out to deafness organisations in the UK,” Chennells says. ●

POP-UP CAFÉS OFFER NEW SKILLS FOR DEAF BY COLIN COTTELL

op-up cafes are helping people who are deaf or hard of hearing to get a foothold in the hospitality industry. Backed by funding from the Ford Motor Company, the initiative is being delivered by students from the University of Cologne in Germany, working in partnership with local café owners and organisations that support the deaf community. The students were inspired to act after seeing how difficult it was for deaf people to order lunch in a regular café. Since the initiative began six months ago, seven pop-up events have taken place in cafes across Cologne, with 12 people from the deaf community employed as waiters and waitresses, serving more than 1,000 customers. Each event lasts for a day, with customers, many of whom are not deaf themselves, encouraged to order food and drink using sign language. After the opportunities have been advertised, candidates go through an interview, either face-to-face or via Skype, with one of the students, who are proficient in sign language. Each candidate is provided with a dedicated member of the student team. Those who get to the next stage then receive training via video, which is followed by a test, which they must pass. Before starting work in a café they must also obtain a health and hygiene certificate. The waiters and waitresses, who are paid, receive on the job training based on their individual needs. Debbie Chennells is manager of the Ford Fund, Ford of Europe, the non-profit branch of the automaker, which provides a grant to the University of Cologne students as part of its 2017 Ford College Community Challenge. She says an advantage of the pop-up café initiative is that it provides a safe environment for deaf and hard-ofhearing people. “If you are deaf or hard of hearing and have

“It is more about focusing on ability”

POWER POINTS

1 2 3 4

Create a safe environment. This is important in building confidence among disadvantaged or marginalised groups, who may lack it in a ‘normal’ setting. Make sure you have the right resources in place to recruit and then support people, who may have specialist needs. You don’t have to do it all yourself. By adopting a partnership approach you can tap into specialist skills and knowledge as well as resources from charities or support groups. Students and young people can also provide a lot of enthusiasm and raw energy. Involve the whole community. This creates a real buzz, gives extra confidence to those you are helping and raise awareness of the problem you are trying to address.

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E BUSINESS ADVICE CO M M UNITY

ASK THE EXPERT

Q: We’re outgrowing our offices. What should we do?

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Alex Arnot The SME Coach

“Given the costs and commitment involved, planning is critical” ﬁve-year term with a two or three year break is more suitable. Whichever lease you are considering, work with a specialist property lawyer to make sure it is appropriate for you. Good luck and I hope your success continues. DO… ● Plan ahead to future-proof your move ● Ensure you have the ﬂexibility to thrive. DON’T… ● Risk your business by being overly ambitious ● Underestimate the importance of nice offices to the success of your business.

↗

After staffing, property is the second greatest single cost for most recruitment consultancies, especially in areas where there is a shortage in supply such as London. Furthermore the process of moving is time consuming for senior management, disruptive to the whole business and generally costly, so minimising the frequency of moves is sensible. Given the costs and commitment involved, planning is critical. Start by creating hiring and cashflow plans for the next three years. This will ensure you know how much space you will need, when you will need it and ensure you will be able to afford it. Armed with your cashflow and hiring plans you will be better placed to choose between serviced, leased and, in rare cases, purchasing offices. Offices have a big impact on your ability to attract your five marketplaces: candidates, clients, existing employees (retention), prospective employees (attraction) and investors, so it makes sense not only to secure the space you need but also have cash available to invest in making the environment as comfortable and as attractive as possible. Serviced offices are generally best suited to small companies or satellite offices that need flexibility. The terms of serviced offices vary, so make sure you are clear what is included and what will incur additional charges. Some serviced offices allow you to personalise the look and feel of your space; others do not. Some office providers will include line rental and other on-site charges, while others charge exorbitant amounts for these essentials on top of your basic cost. Read the small print and seek expert help if you’re not comfortable. Leased offices provide greater control over your space as well as a solid base from which to build your company. The most important factor to consider is your lease term. For smaller companies, a three-year lease with a 12 or 18 month break clause is often most appropriate. For larger companies, a

ALEX ARNOT is a non-executive adviser to more than 20 recruitment companies.

MAY 2017

10/04/2017 16:08

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