RM Nov 2013

Recruitment Matters Issue 20 November 2013

Trade Association of the Year

What’s inside

The 2 -3 Intelligence and REC talk

Clive Totman

The creative industry numbers and the challenges that recruiters are currently facing

4-5 Westminster student Joshua Watkins, who was awarded ‘Trainee of the Year’ for his internship at insurance firm QBE European Operations, with London’s Lord Mayor

Paid internships are the way forward How do you get the necessary experience for a role without doing unpaid work first? The City Business Traineeships (CBT) programme, which is funded by the City of London Corporation and delivered by The Brokerage Citylink, opened the doors of the City this summer to the brightest students in the surrounding boroughs of the financial district.

The programme places students aged 18-19, who live in the seven boroughs and attend state schools, in prestigious City firms, paying them £400 a week.

Since 2000, the scheme has helped almost 1,000 young people into internships. These businesses have benefited from access to untapped talent and potential future employees.

Mark Boleat, policy chairman at the City of London Corporation, says: “The City of London Corporation strongly believes that all

internships should be paid because we have always recognised the importance of levelling the playing field and helping talented young people who live on the City’s doorstep find careers.”

The problem of unpaid internships is one that will surely become increasingly prominent in the coming years. And, as we explore on pages 4-5, it is already a big issue for many sectors, including the marketing, media and creative sectors, which have long been so popular that many young people feel they have no option but to work for free when they start out.

Recruiters have a large part to play in how internships and apprenticeships will change and develop in the future. As Kim Regisford, policy and PR advisor at the REC, says: “Recruiters can learn what the workplace needs and encourage employers to implement the best hiring practices for their business.”

Marketing, media and PR

How different hiring strategies in the creative sectors could improve the talent pipeline

Update and 6Legal Business Matters The legal lowdown on internships and how to call for global compliance issues

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Institute of Recruitment Professionals We speak to a top recruitment practice exam student and a long-time recruiter from the industrial sector

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The best events and training

How the Business Brains events are boosting members’ technological know-how and how to be compliant

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Leading the Industry

the intelligence in other sectors too. The number of creative jobs in the UK grew by 9% between 2004 and 2010, compared with 1.6% for all jobs. In their Global Media Outlook, PwC forecast a compound annual growth rate of 4.2% for the UK’s media and entertainment sector to 2016, a higher level of growth compared to Germany or France.

Like other emerging high growth sectors, the scale of growth will, in part, be determined by availability of skilled workers.

The ONS labour market figures released in October show that the number of job vacancies in the arts, entertainment and recreation sector have grown 11% since last year.

This sector is generally considered to have an oversupply of new entrants to the workplace. However, the sector skills assessment for creative industries in the UK (2011) drew attention to potential skills shortages including sales and marketing, multi-skilling and proficiency in using specific software packages.

Undoubtedly, the increased business confidence in the media, marketing and creative sector is positive but the question now is will this be hampered by continued skill shortages?

Marketing confidence index July 2013 vs April 2013

2 Recruitment Matters November 2013

0

+8.65 -100

+20.36

+100

10 8 6 4 %

Against a back drop of continued growth, the REC/KPMG Report on Jobs signalled a widening rift between the number of vacancies requiring skilled workers and the number of skilled staff to fill them. So what are the implications for the marketing, media and creative sectors?

The Marketing Confidence Monitor, produced by the Chartered Institute of Marketing, produces a quarterly report based on the views of 1,000 UK marketing professionals. The report shows a five-fold increase in business confidence among UK businesses this year. The figure of +20.36 shows a 12-point improvement since April 2013 and is five times higher than the figure reported last year (see graphic below).

The data also shows that during the last year, the proportion of people with greater business confidence has increased from 38% to 44%. In addition, business performance and potential has increased by 14 points to 23.07 in the last quarter.

Marketing professionals are also asked about growth and change. Some 43% of marketing professionals think that their organisation is taking a positive attitude towards risk and investment in the next year.

Professionals are also optimistic about the economic situation outside of the UK, with one in three marketers saying that are planning to increase exporting activity in the next year.

This resurgence is expected

Fig 1: Median recruiter turnover growth

2 0 -2 -4 Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Aug 11 12 13

Fig 2: Recruiter profit margins 5

4

3 %

Nina Mguni, senior researcher at the REC, considers the skills deficit in the creative sector

2

1

0 Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Aug 11 12 13

Profit margins slip I have frequently commented, and demonstrated, that the number of vacancies in the UK labour market is an accurate predictor of future recruiter revenue trends. So much so that last month I said that, although recruiter revenues had shown signs of recovery, I was concerned at the sustainability of that recovery. Median recruiter revenue growth in August fell back by 1.3%, as can be seen in Figure 1.

The decline in turnover growth had been driven by a fall in fee earner productivity, with median revenue per fee earner falling £830 since June.

We are also concerned that the recovery in profit margins we had seen in the first quarter of the year has been slipping back from 3.9% in March, to only 3.2% in August – perhaps due to the falling fee earner productivity we mentioned earlier – as can be seen on Figure 2.

Trying to finish on some better news, the Office for National Statistics has reported that the decline in vacancy growth seen in recent months did reverse slightly in August, so we hope that the historic correlation continues and that indicates some improvement for recruiters’ revenues in the next few months.

• Chris Ansell is chief financial officer at Recruitment Industry Benchmarking (RIB). The RIB Index provides bespoke confidential reports on industry trends. See www.ribindex.com; info@ribindex. com: 020 8544 9807. The RIB is a strategic partner of the REC.

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Leading the Industry

Making change happen Tom Hadley, the REC’s director of policy & professional services, looks at the new opportunities for specialist recruiters Job roles and skills needs are evolving, and the expectations of clients and candidates are also changing. The aim of REC sector groups is to pre-empt what the changing landscape means for specialist recruiters.

A good example of this was the latest meeting of the REC Marketing, Media & Creative (MMC) sector group that brought together recruiters, employers and representative organisations. You can read more about this sector on pages 4-5. Industry experts talked about how flat structures mean that employers are looking for people who can work with autonomy and can build good working relationships within the organisation. A surge in demand is good news for specialist recruiters – the challenge is to encourage more employers in the sector to develop a genuine partnership approach to address evolving short and longterm skills needs.

Responding to the challenge of an increasingly candidate-driven market is a core theme for other high-end sector groups such as REC Technology, REC Life Sciences and REC Engineering. From an industry perspective the aim is to continue to drive the industry’s voice on the skills agenda, in particular through our work with high-profile organisations such Engineering UK, E-Skills and STEMNET UK. From an agency perspective, getting involved in initiatives to promote careers in high-growth sectors is a great way of raising profile and brand, as well as a means of ‘doing the right thing’.

Another example of how the changing landscape can provide new opportunities for recruiters came at the recent ‘Smarter Working in the Public Sector’ conference, which we were invited to chair. Public sector employers, in particular local authorities, are going through huge structural and cultural changes.

There is a real shake-up in the way people work – for example, employers are embedding flexible working practices. The feedback at the conference was that there is a key role for temporary, contracts and interim staff within this brave new world.

Embedding a genuine partnership approach is the ‘holy grail’ for specialist recruiters – it is also the best way for businesses to bring in the staff they need and to make change happen.

The View The economy is growing and looks sustainable for the first time in five years. This is great news for our sector; the data suggests that the recruitment market has accelerated since the spring and is now just shy of our pre-recession peak of £27 billion.

However, challenges remain. Margins are suppressed and we don’t foresee any significant return to pre-recession levels.This is our new competitive reality. The issue of skill and talent shortages is paramount. When candidates are in demand it creates the need for specialist recruiters who know the market. However, if talent is in really short supply, greater efforts are needed to find, attract and convince candidates to move and the counter offer becomes the enemy.

The skills, talent and employability agenda will be an on-going theme for the REC. We will be pushing government to get its education policy right, with high quality careers advice and work experience becoming central to preparing young people for work. We are supportive of more high quality vocational qualifications and apprenticeships, and we like the look of the proposed technical colleges only on the understanding that these are heavily employer led. We have to become more effective at getting capable young people to study what’s going to be in demand in the economy. Training of the unemployed, as well as making work pay, is now a national priority. We must get people into the labour market and then encourage them to progress.

We will continue to speak directly to government and raise these serious issues in the media but we need you to do your bit. We have developed an apprenticeship in recruitment so that we can attract capable young people to our profession and we have 350 recruiters signed up to go into schools as part of our Youth Employment Charter. I urge you to get involved with both.

• You can follow Kevin on Twitter

• You can follow Tom on Twitter www.twitter.com/@hadleyscomment

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Recruitment Matters November 2013 3

The Big Talking Point

Getting creative in recruitment RM editor Francesca Steele explores how different hiring practices could improve the marketing, media and creative sectors

L

ast month, it was revealed that the US publishing house Condé Nast will be closing its prestigious internship programme in 2014 after a period during which the provision of internships in the media industry has been beset by problems.

The publisher behind Vogue and Glamour is being sued by two former interns at the New Yorker and W Magazine, who claim they were paid less than $1 an hour for working up to 14-hour days.

Similarly, in June, a judge ruled that Fox Searchlight Pictures had illegally employed two interns at below minimum wage on the film Black Swan. A former intern’s case against Harper’s Bazaar is currently moving through the courts.

These examples highlight one of the issues crucial to recruiters in the marketing, media and creative sector (MMC): how to help implement hiring practices that encourage as diverse and comprehensive a talent stream as possible.

The creative sector provides over two million jobs in the UK alone, while the industry contributes £24.8 billion to

Britain’s economy annually, according to research conducted by Bedfordshire University.

Marketing and PR are in rude health, with job opportunities in the UK increasing by 13% over the last year, according to figures from the Reed Job Index. The report also suggests salaries are on the up too, with wages swelling by around 2.5% over the last 12 months.

This figure compares favourably to the all sector average increase of 1.5%.

Kim Regisford, policy and PR advisor at the REC, says: “The sector is on the up so it’s more important than ever to get the hiring process right and to ensure that the perceptions of certain things are right too. One problem we have noticed a lot, for instance, is that apprenticeships are traditionally paid for, while internships are not. But apprenticeships are still associated with blue collar work, meaning that some employers don’t want to have them and that many graduates don’t want to apply for them. Recruiters can make the difference by showing employers and employees why good hiring practices and

We insist that after two weeks the interns are paid the minimum wage Amanda Fone, founder and managing partner of f1 Recruitment

4 Recruitment Matters November 2013

proper internships can provide a better stream of job candidates.”

The Chartered Institute of Public Relations (CIPR) and the Public Relations Consultants Association (PRCA) are looking to address this issue through practical guides and ‘Internship Toolkits’.

And at the REC’s latest MMC sector group meeting, which brought together recruiters, employers and representative organisations such as the Chartered Institute of Marketing (CIM), the PRCA and the National Apprenticeship Service, industry experts agreed that, while demand for staff in marketing, media, PR and comms is surging, the challenge is to encourage more employers in the sector to develop a genuine partnership approach to address evolving short and long-term skills needs.

One recruiter who has already made a difference in this regard is Amanda Fone, founder and managing partner of f1 Recruitment, which has long partnered with clients to provide an established internship programme. “Work experience is a fantastic way to find fresh talent –

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Only 44% of marketing departments have a good working relationship with their HR departments

Image Source

Chris Moriarty, head of corporate affairs at the Chartered Institute of Marketing

the only thing we discriminate against is attitude – if applicants are keen and enthusiastic we will introduce them to clients. But we insist that after two weeks the interns are paid the minimum wage.

Occasionally we have had to fight hard for that but clients usually do understand that to get the best people they can’t limit themselves and that that requires proper wages.”

According to Wayne Reynolds, director of Birchwood Knight, “current hiring procedures can create a barrier”. He adds: “There is often a disconnect between stated intentions of sourcing the best talent and procurement practices that force suppliers to focus only on active job seekers. The RPO [recruitment process outsourcing] model doesn’t work well

if you are hiring for a senior role. The increased use of RPOs in the dampened, money-saving economic climate can be very challenging for any specialist recruiter. If you can’t speak to the person who is hiring then you’ve got one arm tied behind your back.”

Higher up the chain, it is crucial not just how clients use recruiters but how prepared candidates themselves are for the changing demands of the sector, says Fone. “We used to have people starting with broader skills and narrowing their focus as they went up the chain. But now it’s the opposite. A marketing and communications director needs a very broad set of skills.”

Today, she explains, someone in a senior role would probably need commercial

Apprenticeships are still associated with blue collar work, meaning that some employers don’t want to have them and that many graduates don’t want to apply for them Kim Regisford, policy and PR advisor at the REC

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If you can’t speak to the person who is hiring then you’ve got one arm tied behind your back Wayne Reynolds, director of Birchwood Knight experience, plus some knowledge of customer relationship management, public relations, social and digital marketing. “We get a lot of senior people coming to us saying they feel totally vulnerable and that they know they need to learn about digital. But we work very hard to give our candidates the right skills. For example, we can recommend online courses, such as Squared, an online digital marketing course created and run by Google. A candidate might not have worked with digital but if they can show willing by achieving a respected qualification that will go a long way to making them more appropriate for many senior roles.”

Looking ahead, it was agreed at the MMC meeting that the most crucial thing for recruiters and their clients in this sector is to build strong partnerships, both outside of organisations and within.

Chris Moriarty, head of corporate affairs at CIM, says: “Only 44% of marketing departments have a good working relationship with their HR departments – this will need to change.”

Recruitment Matters November 2013 5

Legal Update

Employing interns: what you need to know Carrie North, REC legal adviser, considers the legal ramifications of taking on help from non-employees Work experience Work experience typically describes a voluntary unpaid one or two week programme where an individual, usually a school or college student, shadows a member of staff, in order to build experience of how that business or industry sector operates.

Internships Internships are more widely used in the MMC industry and are typically a contractual form of professional experience. An internship will normally last between one and six months and is of practical benefit and value to both the business and the intern.

Interns are differentiated from unpaid work experience students as they will often perform work and have duties that contribute to the employer’s productivity. Therefore, they are workers and entitled to a number of statutory rights, including the National Minimum Wage (NMW), statutory minimum holiday and payments, such as Statutory Sick Pay, Statutory Maternity Pay and Statutory Paternity Pay where applicable. There are also specific working time rights and employers should particularly note that young workers under 18 are not permitted to work more than 40 hours per week (or an eight hour day) including time at college and must have 2 clear rest days in a week. The NMW is currently an hourly rate of £6.31 for those aged 21 and over, £5.03 for those aged 18-20 and £3.72 for those under 18. There is a real risk that an unpaid internship, or one which covers travel expenses only, may breach NMW legislation and businesses should obtain the own legal advice regarding their liability.

Apprenticeships Apprenticeships are work-based programmes that combine practical training with study and typically take between one and four years to complete depending on the level of apprenticeship.

They are available to those aged 16 plus and can cover a variety of entrant roles in the MMC sector. Available at different levels, apprenticeships enable individuals to gain job-specific skills working alongside experienced staff, whilst earning a wage and studying towards a related qualification or being formally assessed. As apprentices are employees, they are still entitled to the same statutory rights as listed for interns above and will also be owed a duty of care in relation to health and safety and other employment rights, such as maternity or paternity leave.

However, employers will benefit from the specific apprenticeship NMW rate, which is £2.68 per hour for apprentices aged under 19 and for those aged 19 plus who are in the first year of their apprenticeship. Otherwise apprentices are entitled to receive the national minimum wage rate applicable to their age. Apprentices must be paid for both on and off the job training and, therefore, must still be paid if they are attending college.

This is a brief overview of the employment rights of individuals undertaking work experience, internships or apprenticeships and further guidance is advised. REC corporate members can contact the legal team for further information.

• Contact the REC legal team on 020 7009 2199.

Business development: Going abroad With global expansion increasingly on the minds of many growing recruitment practices, ensuring compliance in different foreign jurisdictions is paramount. Crescenzi Consulting has many years of hands-on experience in working with recruitment agenices and end-user companies to achieve international contractor compliance.

“Setting up abroad is definitely something we see more and more companies and individuals thinking about doing,” says Brian Daly, CEO. Employment law and contract law vary considerably from country to country both in the written legislation and in their practical application, he adds. Crescenzi Consulting has the knowledge and experience to best manage these risks whilst not restricting your current business model. From simple compliance advice and country reports, through to full

6 Recruitment Matters November 2013

compliance management and compliance and contractor audits, their services are designed to help their clients navigate the choppy waters of managing international contractors and temporary workers.

Creszenzi Consulting will charge on a retainer that can vary in price depending on the amount of work they do for you – so of course, if the consultation is minimal you needn’t worry about being charged for hours and hours of work.

“For many businesses, going abroad may start with just a couple of contractors scouting out the local market,” adds Daly.

“But the fewer people you have definitely doesn’t mean you can afford to be any less meticulous about adhering to local laws.

We can help you do that.”

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Inspiration

Behind the scenes at the Institute of Recruitment Professionals

Best practice This month we speak to Zoe Tanner, who was the top student in the February Certificate in Recruitment Practice exam RM: Well done! How did you prepare for the exam?

ZT: They send you a booklet, which includes the six units on certificate practice, which you read, do the webinars, and attend two days’ teaching. Then you take the exam.

RM: Has it helped you achieve more in your work?

ZT: I actually only started in recruitment this year, so yes, definitely! I think there is a lot of on-the-job learning in recruitment but completing the certificate introduced me to the wider industry. It gave me an awareness of some of the sales cycles, how to plan business development, and how to develop and maintain a good relationship with clients.

RM: How did you feel when you found out you had come top, despite only recently joining the sector?

ZT: I was shocked when they told me because I’m so new to it. It obviously didn’t go down too badly with my boss either.

RM: What made you decide to go into recruitment?

ZT: I was a financial advisor for five years, but there were quite a lot of changes going on in the industry and I was given the option of redundancy. I loved the relationship building element of what I did before, so when I looked at career options recruitment stuck out.

RM: Were you particularly drawn to a specific sector?

ZT: I researched lots of different options and markets. I liked the idea of construction sales because there seemed to be a lot going on.

RM: Were you surprised that this type of certificate existed?

ZT: Yes, I think there is an outside perception that exists for some people that recruitment doesn’t involve many qualifications or regulations. But I’ve found that not to be the case and anything like this that helps people show just how qualified they are is a great thing.

Things I Know Rhian Balshaw Long-time employee at Linear Recruitment

The X Factor is more important than skills I started off as a trainee in the industrial division and did that for 10 years until moving recently into a new role looking at training and devloping for the whole company. Next year I’m going to move over to the HR side so I will effectively be recruiting recruiters. We definitely look for people with the X factor, people who’ve got the right work ethic. We’re actually less bothered by the skills and knowledge of the sector. We feel we’ve got the ability to provide them with skills; we’re looking for people with get up and go.

Clients increasingly value what we do There are still some people who think we just look at CVs and then charge them lots of money to do so, but I think more and more clients, especially those you’ve had a long-term relationship with, understand that it’s much more than that.

But they do want more for their money…

I feel that the clients’ attitudes have also changed with regard to the candidates. In the industrial sector they want to know that clients have done a numeracy and literacy test, that they’re fully referenced checked and so on. They want more for their money.

Newbies often confuse recruitment with HR Brand new people to recruitment sometimes think they will primarily be dealing with people, and that because they have good people skills they will be fine. They don’t realise that you can only do that once you’ve got the business, and that starting out a lot of recruitment is actually sales.

Stats are important It’s amazing how many people come to an interview without proof of their success. I like to see what someone has made on margin per hour, or what their greatest week of gross profit was. I want someone to be able to show exactly what they’ve achieved.

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

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Recruitment Matters November 2013 7

Events and training

Make sure you are ahead of the game Are you compliant? Make sure you know all about the REC’s compliance test

The most recent Business Brains event, with Matt Alder leading the session

The brains behind the business Look into attending the REC’s latest Business Brains events to improve your technological know-how It’s all very well having lots of fancy new technologies, but how do you know if you’re maximising their potential?

The REC wants to help its members navigate the complicated world of technology, which is why it has set up its Business Brains events, where members can listen to and ask questions of people in the know about recruitment technologies.

The most recent events, which took place last month in Manchester, Birmingham and London were well received by members.

Speakers included members of the team behind the REC’s RecTechHub (an online resource teaching members about technologies), including Lisa Jones of Barclay Jones and Social Talent’s Johnny Campbell, Matt Alder from Metashift, as well as sponsors Supply Communications, ROAR Communications

Lisa Jones

and recruitment software provider Mercury xRM. REC member and managing director of Personnel Care Bank, Rosalind Payne, said: “I found the sessions extremely worthwhile and took a number of nuggets away with me which have already enhanced the business and been a cost saving.”

The REC is planning on running more free member Business Brains events over the course of the next year, so visit the REC’s events section on the website for more information at www.rec.uk.com/events

Recruitment Matters 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

8 Recruitment Matters November 2013

Johnny Campbell

It is important to the REC that new applicants have knowledge of the relevant industry legislation and the REC Code of Professional Practice – indeed, the REC is the only membership body within the recruitment industry to have a compliance test as part of the entry process.

The compliance testing process is a key part of demonstrating to your clients your commitment to adhere to relevant industry legislation, and show that you embody the ethos of the REC Code of Professional Practice.

How does it work?

In 10 easy steps. The test is broken down into 10 bite-sized chunks, consisting of a series of online questions in a multiple choice format, and cover industry legislation and the REC’s Code of Professional Practice. The questions are tailored to the type of business that you operate.

A dedicated team of compliance executives is on hand to support you through the process, in addition to a range of training tools and compliance workshops. Once you have logged on, you have a 24-hour window to complete the test – although it will only, in reality, take a fraction of that time to complete!

The REC recommends taking the test as soon as possible. For more information contact the REC Compliance Team on 020 7009 2100 or take the test online at http://www.rec.uk.com/ about-recruitment/standards/ reccompliancetest

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 Publisher: Anne Sadler anne.sadler@redactive.co.uk Tel: 020 7880 6213 Consulting Editor: Ed Sexton ed.sexton@rec.uk.com Editorial: Editor: Francesca Steele francesca.steele@redactive.co.uk. Production Editor: Vanessa Townsend Production: Deputy Production Manager: Kieran Tobin. kieran.tobin@redactive.co.uk Tel: 020 7880 6240 Printing: Printed by Southernprint © 2013 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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