Issue 56 December 2017
RECRUITMENT MATTERS The View and The Intelligence The future of the REC
RM_DEC_17.indd 1
Legal Update
Future of jobs
Pension enrolment
p4
p6-7
p2-3
The REC’s first members’ week has been labelled a critical part of the trade body’s plans for the future. Groups comprised of all 75 REC staff visited more than a dozen different recruitment companies around London and the South East during the first week of November. In previous years, the REC had initiated a “members’ day”, where all REC staff downed tools to call corporate members across the country. But a week dedicated to meeting members in person was considered more valuable. REC chief executive Kevin Green called members’ week a valuable and necessary exercise. “At the heart of the REC vision is putting our members first, so getting all of our 75 staff out to meet our members at their place of work was
@RECPress
Big Talking Point
REC membership 2018 What’s new?
p8
FIRST MEMBERS’ WEEK “CRITICAL” critically important,” he says. “We are always seeking to listen to and understand our members wants and needs and this development builds on our successful members’ days which we have run twice a year for the last four years. The learning and feedback will help us improve all we currently do plus help us build new products and services for
REC and IRP members.” Alison Nightingale, business development manager at REC member Three R’s says: “The opportunity to take part in Members’ Week provided us with a face-to-face meeting with two of the REC team, helping to bridge the gap between professional body and agency. We were able to discuss upcoming legislation,
recruitment trends and good practice. “Compliance is incredibly important to our agency and the schools we work with. We are proud to be REC members and respect the credibility this partnership provides us with.” REC members can find out more about the success of members’ week by visiting www.rec.uk.com
www.rec.uk.com 09/11/2017 12:17
Leading the Industry
THE VIEW
Recruitment knows its way to the future says Tom Hadley, REC director of policy and professional services
What’s next? asks Kevin Green, REC chief executive
I expect that you are aware by now that I will step aside as the REC’s CEO early next year. It’s really been a fantastic job, one which I have enjoyed every day for almost 10 years. One of my colleagues put an old copy of a 2008 Recruitment Matters on my desk. There is a young Yours Truly on the cover with a big smile and a quote saying this was the ideal job for me. So it turned out. What I am keen for the industry to realise is that the UK labour market is going to change radically over the next decade. The destruction of midskilled jobs will continue. This job polarisation will see an ongoing growth in both high and low-skilled jobs, with the ones in the middle being eliminated. There are two significant threats from this change: one is higher unemployment as AI, algorithms and robotics eliminate more jobs than they create. However, the one that concerns me the most is the hollowing out of the jobs market, so progression becomes much more difficult. As we live longer and are likely to work into our seventies, it’s worrying that the inequality that we see
MAPPING A ROUTE TO 2025 presently will be made worse by this technology disruption. Those who have the talent will be in short supply, and will have the opportunity to work for who they like, choosing the location and hours they want. Those working in the gig economy are likely to be doing two or three jobs just to get by – with no benefits, no paid holiday and no chance of progressing. The REC ‘Future of Jobs’ commission’s final report talks about what the government needs to do to radically change the focus of our education system, with a move away from creating knowledgebased ‘exam factories’. We also need businesses to overhaul their recruitment processes so it’s less about technical skills and more about energy, creativity, communication and problem solving. The report is available here www.rec.uk.com/ futureofjobsreport I have six Scale Up in the Round events scheduled before my departure in the spring. I would love to see as many of you as possible before I move on. Also don’t forget follow me on twitter @kevingreenrec
WHAT I AM KEEN FOR THE INDUSTRY TO REALISE IS THAT THE UK LABOUR MARKET IS GOING TO CHANGE RADICALLY OVER THE NEXT DECADE 2 RECRUITMENT MATTERS DECEMBER 2017
RM_DEC_17.indd 2
Launching the findings of our ‘Future of Jobs’ commission, Esther McVey MP, former employment minister and chair of the commission, underlined the need to “build a clear vision for what we want a future UK jobs market to look like by 2025”. Creating a vision is one thing, delivering it another. As well as taking forward the commission’s recommendations, our priority is to work with policy makers to develop new ways of jobs market evaluating to ensure that it delivers for individuals and employers alike. The UK jobs market is a success story with record employment levels. However, there is increasing scrutiny on quality and quantity of jobs. The OECD’s Job Quality Framework focuses on three areas: earnings quality, labour market security, quality of the working environment. Are these still the right indicators? The feedback from the commission was that other measures should be factored in. Overall employment levels and job creation remain key. Other indicators should include progress on social mobility and inclusion, productivity and individual fulfilment. The British Social Attitudes survey shows that less than half of us feel our job is just a way of making money; an important measure must be how work makes us feel. This goes to the heart of Matthew Taylor’s ‘good work’ agenda and chimes with our ‘jobs transform lives’ mantra. Building a jobs market that works for all means facilitating progression opportunities and creating a step-change in terms of inclusion. It’s an opportunity for our industry to make a difference. It was great to hear John Whelan, HR director at BAE Systems, underlining the fact that “our recruitment partners will continue to play a pivotal role in driving the diversity agenda” during the Future of Jobs launch. Our commission is not an end in itself; it signals the start of a series of activities aimed at creating the post-Brexit jobs market we want to see. As well as feeding into the debate on how and what we measure, our goals are to clearly define our industry’s role within a successful future jobs market and to position our voice at the forefront of future of work agenda. Let’s crank the speedometer up to 88mph and set our sights on 2025. See you along the way! You can follow Tom on Twitter @hadleyscomment nt
www.rec.uk.com
09/11/2017 12:17
0.4%
THE INTELLIGENCE WITH REC SENIOR RESEARCHER, MARK HARRISON On 25 October, the ONS published its latest GDP growth estimates for Q3 2017. The economy overall continues to grow slowly, with the latest figures estimating a 0.4% increase in GDP over the quarter. However, when looking at individual sectors, the construction sector contracted by 0.7% in Q3 after a 0.5% contraction in Q2, meaning it is technically in recession. The ‘technical’ part of this definition is important to note here for two reasons. First of all, as the ONS notes, the construction industry in Q3 2017 remains well above its pre-downturn peak. Secondly, the output of the construction industry is affected by the government’s commitment to big infrastructure projects as well as the house building and repair market. HS2, a potential new terminal at Heathrow
PERMANENT PLACEMENT REVENUES TURN POSITIVE IN Q2 2017 With many of the listed recruitment organisations reporting challenging conditions for permanent hiring – notably so in H2 2016 and Q1 2017 – new RIB data indicates that Q2 2017 may have offered some potential respite. The latest information from the RIB Index, sponsored by Bluestones Group, highlights that, year-on-year, the
www.rec.uk.com
RM_DEC_17.indd 3
and both the main political parties intending to increase housebuilding means there are reasons to hope that growth may return to the sector soon. Having said this, a range of data suggests that the construction sector is facing a skills shortage even though it has been contracting. The REC’s latest ‘JobsOutlook’ data showed construction employers to be the second most likely to anticipate skills shortages when trying to recruit permanent staff. In a Q2 2017 survey of its members, the Royal Institute of Chartered Surveyors (RICS) found that skills shortages were constraining the growth of 55% of respondents, with a particularly acute shortage of quantity surveyors and bricklayers. If immigration is overly restricted once the UK leaves the EU, construction is an area that could be significantly impacted, particularly in London. The REC’s June report ‘Building
THE ECONOMY OVERALL CONTINUES TO GROW SLOWLY, WITH THE LATEST FIGURES ESTIMATING A 0.4% INCREASE IN GDP OVER THE QUARTER. CONSTRUCTION INDUSTRY TRAINING BOARD FOUND THAT, AMONGST THOSE CONSTRUCTION FIRMS THAT USE NON-UK WORKERS, A LACK OF SKILLED UK APPLICANTS WAS A PARTIAL REASON TO DO THIS FOR 57% OF RESPONDENTS AND THE KEY REASON FOR 35% OF RESPONDENTS.
the Post-Brexit Immigration System’ found that 8% of construction workers in the UK were from the EU, rising to 33% in London. In its June 2017 report ‘Migration and Construction’, the Construction Industry Training Board found that, amongst those construction firms that use non-UK workers, a lack of skilled UK applicants was a partial reason to do this for 57% of respondents and the key reason for 35% of respondents. RICS notes that skills shortages are increasing in 2017, having eased throughout 2016. This change may be in part due to EU workers deciding to leave the UK after the vote to leave the EU (as we have found in our ‘Ready, Willing, and Able?’ report into EU workers in the UK).
With new infrastructure and housebuilding projects on the horizon, an evidencebased approach to immigration is needed to ensure the exclusion of non-British workers doesn’t exacerbate the construction skills shortage further. Domestically, partnerships between FE providers and industry to develop and implement the new construction ‘T-level’ vocational qualification has the potential to reinvigorate the pipeline of British workers entering construction.
Average quarterly permanent billings, versus prior year, for the median RIB recruiter 25%
2016 monthly average: -1.4% H1 2017 monthly average: -3.3%
20% 15% 10%
5.4%
5%
1.5%%
0 -3.8%
-5%
-0.7%
-2.6%
-10%
-11.9%
-15% Q1 2015
Q2
Q3
Q4
Q1 2016
median industry recruiter saw revenues from permanent placements return to positive territory in Q2 2017. Whilst welcome, this followed an acute 11.9% yearon-year decline in permanent
Q2
Q3
peers’ trading performance is eagerly awaited by RIB members to see whether the Q2 performance came courtesy of new financial year budgets or was the start of an upward trend.
Q4
Q1 2017
Q2
revenues in Q1 2017. As such, the monthly average performance across H1 2017 was 3.3% lower than prior year. With early indications for Q3 2017 being mixed, the September benchmarks of
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 DECEMBER 2017 3
09/11/2017 12:17
The Big Talking Point
FUTURE OF JOBS
BACK FROM THE FUTURE REC director of policy and professional services Tom Hadley looks at some of the key messages back from the ‘Future of Jobs’ launch event Last month’s launch of the findings of our Future of Jobs commission was a high-energy affair, setting the tempo for a series of future-facing activities. The launch event at REC HQ was an opportunity to gauge views and seek feedback from an audience of policy makers, employers and recruiters. Over the last six months, the commission’s work has covered areas such as boosting inclusion and progression opportunities for all, pre-empting the implications of demographic and technological changes, and understanding the aspirations of future generations of workers. The final report includes a specific focus on how hiring strategies are likely to change and how the role of recruitment professionals will evolve to reflect the ‘brave new world’ of jobs. So what kind of jobs market should we be aspiring to by 2025? Here are some of the key messages from the launch event...
LET’S BE A ‘PROGRESSION NATION’
IT ALL STARTS WITH EDUCATION
A future UK jobs market must be one where individuals can not only access work but also progress through work, irrespective of their background. Government policy can make a real difference here, and it was encouraging to hear Esther McVey MP – former employment minister and chair of the Future of Jobs commission – underline the need to “make the current Apprenticeship Levy into a ‘lifelong learning levy’ that can benefit more people”.
Louise Hewett, founder of Hewett Recruitment and a member of the Commission, made the point that “it is in all our interests to ensure that future generations feel prepared and confident”. What will create real value in organisations over the next five years? Creativity and innovation are at the top of that list, which is why we must ensure our education system really nurtures these qualities. McVey also underlined the “need to build resilience and awareness amongst the next generation
4 RECRUITMENT MATTERS DECEMBER 2017
RM_DEC_17.indd 4
of workers to cope with a fast-changing world of work”.
GETTING TO GRIPS WITH THE AI REVOLUTION How will artificial intelligence (AI) impact on recruitment, jobs and society as a whole? This is a central theme of the ongoing future of work debate and delegates at the launch were happy to share
the fact that they found some of the future scenarios “truly terrifying”. Rob McCargow, AI programme leader at PwC, provided a balanced picture, including the thought that “AI could add $15.7 [£12] trillion to global economy by 2030 and dramatically boost productivity”. The reality is that jobs have always been destroyed and
www.rec.uk.com
09/11/2017 12:17
experts in order to compete in what promises to be an increasingly competitive jobs market.
THE ROLE OF RECRUITERS WILL EVOLVE
replaced by different jobs. What is different now is the sheer speed of change. One of the aims of the Future of Jobs commission is to prompt more employers and recruiters to look ahead and start planning now.
THE SKILLS CHALLENGE WILL INTENSIFY According to PwC’s
www.rec.uk.com
RM_DEC_17.indd 5
McCargow, “accessing talent is now a top three business issue for CEOs around the world”. This was echoed by leading employers and underlines the potential opportunities for those involved in the skills and talent arena – including recruitment professionals. The scale of the challenge was underlined by Chris
Moore, president of group operations at Adecco Group UK and Ireland and REC chairman, who flagged the “lack of skills needed to embrace the changes that automation is bringing to the workplace”. Recruitment will get harder, the only solution for employers is to get better. This may result in more businesses turning to recruit
Mandy Brook, managing director of RSE Group, underlined the fact that “recruiters already play a key role in educating clients on latest jobs market trends – we are unsung heroes!”. A big message from delegates was that the changing world of work will provide opportunities for recruiters to innovate and offer a variety of new services to clients and candidates. The faster the world of work changes, the more employers, workers and policy makers will need employment experts to help them make sense of a constantly evolving landscape. This is the niche that recruiters can own in a future UK jobs market. During his opening address, REC chief executive Kevin Green made the point that “a great jobs market is not just about high employment rates, it is about providing good work, it is about creating progression, purpose and fulfilment”. Galvanising employers, recruiters, policy makers and other stakeholders around this shared agenda lies at the heart of our Future of Jobs commission project. Last month’s launch event was just the start. For more information To find out more about the work of the Future of jobs commission, visit www.rec. uk.com/futureofjobs
RECRUITMENT MATTERS DECEMBER 2017 5
09/11/2017 12:18
Legal update
PENSIONS PENSIONS AUTOMATIC ENROLMENT – STAGING DATES AND INCREASE IN PENSION CONTRIBUTION By Lorraine Laryea, solicitor and commercial adviser Staging dates for new employers Pensions automatic enrolment is the process that requires all employers to enrol eligible workers into a pension scheme. It began in 2012 with a staging process that applied to businesses in accordance with the size of their PAYE scheme. The largest employers, those with more than 120,000 in the PAYE scheme, had a staging date of 1 October 2012. The staging date for medium and small employers will occur over a five-year period until the scheme is fully implemented in 2017. Staging dates were set according to the size of an organisation’s PAYE scheme from 1 April 2012 and were fixed dates. However, for ‘new employers’ (ie organisations that became an employer after 1 April 2012 cut-off date) a new a staging date regime that is based on when they first pay a PAYE income to a worker
will apply. Any new employer who first paid PAYE income from 1 April 2012 up to and including 30 September 2017 has a staging date between 1 May 2017 and 1 February 2018. These staging dates are not based on the number of workers in the employer’s largest scheme but on the date the employer first pays PAYE income to any worker (see staging date list below). Any businesses that first pay PAYE from 1 October 2017 will immediately be subject to the automatic enrolment regime and will have to enrol their workers from the outset. Employers can check their
staging date on The Pensions Regulator website. Pension contribution increases The minimum pension contribution that employers must make currently stands at 1% but, from 6 April 2018 to 6 April 2019, this minimum pension contribution will increase to 2%. The contribution from enrolled workers will also see an increase from 1% to 3%, providing an overall contribution of 5% into a worker’s pension scheme. From 6 April 2019, the minimum contribution for
Date of first payment of PAYE income From 1 April 2015 up to and including 31 December 2015
Staging date 1 October 2017
From 1 January 2016 up to and including 30 September 2016
1 November 2017
From 1 October 2016 up to and including 30 June 2017
1 January 2018
From 1 July 2017 up to and including 30 September 2017
1 February 2018
employers will increase to 3% and enrolled workers’ contribution will increase to 5%, giving an overall contribution of 8% into workers’ pension schemes. It is the employer’s responsibility to make deductions from their employee’s pay and put this into their pension scheme and to pay the minimum pension contributions that they are obliged to. Recruiters will need to factor these charges into charge rates for temporary workers and will also need to take into account the annual increases to the National Minimum Wage and National Living Wage in April. The Pensions Regulator is responsible for enforcing employer duties and has also compiled guidance on its website for the pension contribution increases in April 2018 and 2019 and for businesses employing staff for the first time: www. thepensionregulator.gov.uk.
THE FUTURE OF WORK A FLEXIBLE WORKFORCE? The most valuable asset that this country possesses is its people, and the way that people want to work and the work that they will do is changing quickly. In the recently published ‘Future of Jobs’ Commission produced by the REC, the recommendations are aimed at delivering this as well as the goal of ‘Creating the best jobs market in the world by 2025’. The ongoing need for flexibility Two of the most important themes within these recommendations are firstly, the ongoing need for flexibility in the workforce, but delivered in a way
6 RECRUITMENT MATTERS DECEMBER 2017
RM_DEC_17.indd 6
that fairly balances the benefits between workers and the businesses that engage them; and secondly, the impact that technology will have in terms of how we work and what things we work on. A collaborative approach It is incumbent on the government, employers, recruiters, service providers and individuals to each play their part in making the UK the best jobs market in the world and even with this collaborative approach, it will be a significant challenge. Helping individuals who want to work flexibly, assisting organisations wanting
more access to this flexible workforce, or supporting entrepreneurs looking to start or grow their business are all key to this. The rise of self-employment The rise of self-employment and ‘gig’ working has been rapid: currently 15% of people choose to work in this way. The best jobs market is one with opportunities to get into work and subsequently progress, one where people have genuine choice in terms of ways of working, and one where flexible working options become the norm. Martin Hesketh, CEO, Brookson
www.rec.uk.com
09/11/2017 12:18
Inspiration
BEHIND THE SCENES AT THE INSTITUTE OF RECRUITMENT PROFESSIONALS
The View
Jordan Wood is a contract consultant in the e R&D/Engineering ng division at Redline ne Group
Judith Thorpe e is a director at Thorpe Molloyy
DAY IN THE LIFE
WHAT I KNOW
I’m responsible for... Sourcing the best contract candidates in the engineering and R&D sector for our UK and mainland European customer base. I’m one of the top achievers at work as well as being in charge of ‘all food related tasks in my household’ – cooking, food shopping and bill paying.
Aberdeen is picking up I think we’re definitely starting to see the tide turning in terms of our monthly figures. The numbers are going up and we’re seeing teams experience significant success. We’re not talking about adding members to our teams just yet, but we will revisit that in the next six months if things continue to grow into the New Year.
My typical day Business calls first, candidate sourcing second, but I am always flexible, so I never have a day that is ever the same. Throw in some contract team banter and a healthy snack along the way… My most memorable work moment My first sales conference in Morzine, France for a ski trip. It was my first time skiing and I was dreadful! The influential part was being surrounded by Redline’s top achievers so early in my career, whilst getting to understand the permanent business model in more detail. I love recruitment because... It’s an industry where you are rewarded for your efforts. You are continuously incentivised to work as hard as possible. Every day is different, which keeps it exciting. My biggest candidate success story I had a candidate who had been unemployed for over seven years due to grieving the loss of their partner. The candidate lacked confidence at the time, and I was able to reassure them of their skills and abilities, and encouraged them to feel more positive about the interview process. At the same time I had to ensure the client was reassured that the candidate was now ready to work. I managed to secure the candidate with back to back contacts with several different companies due to the power of persuasion, client rapport and trust developed throughout my communications.
Always be eager Never be complacent. It’s a mind-set, but it’s vital. You need to continually go about growing and being the best and making your brand stands out. We do that by making sure our team is continually the best by investing and developing their success. If you do that, it will translate across your whole business. Be realistic Success doesn’t come without sacrifice. The reality is that sacrifice is a part of growing a business and you have to accept that – particularly with family commitments. You find yourself attending networking events in the evening and early morning and doing what you have to do to make your business successful. That’s a difficult trade-off, and it helps if your business favours flexible and part-time working. Champion your team Celebrate your success. You can find yourself being caught up in the moment and thinking about what comes next, but it’s worth taking time as well to reflect on all the things you’ve done well. Remain positive and push yourself I am a high energy person and I’m positive. I always believe in the glass being half full and I always look for an opportunity to step out of my comfort zone.
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
RM_DEC_17.indd 7
RECRUITMENT MATTERS DECEMBER 2017 7
09/11/2017 12:18
Members
REC MEMBERSHIP 2018 Being an REC member is about more than impressing your clients and candidates. We believe what you do transforms the lives of millions of people, and that we’re here to help your business grow and develop. All members should have received the 2018 handbook, outlining how we’re improving your membership and adding value next year. Among an impressive suite of products and services, we’re also excited to give you a glimpse of what membership looks like in 2018.
NEW IN 2018
and safety experts will identify areas for improvement and deliver practical advice and deliver a full written assessment of your business. Free for all REC members until 31 March 2018*.
SAFECHECK SafeCheck is a complete review of your business’s health and safety performance. It includes a tour of your premises and a thorough review of any pertinent documents. Croner’s health
SALARYSEARCH Salaries and benefits form the heart of every recruitment conversation. It features data for roles across a wide variety of industries and sectors nationwide. You will be able to tailor your
searches to suit your organisation, client or candidate requirements. The data is easy to access, free from bias, and updated regularly. Free for all REC members until 30 June 2018* *Terms and conditions apply.
I HAVEN’T RECEIVED MY HANDBOOK OR INVOICE Please email info@rec.uk.com or call us now on 0207 009 2100 and we will send a new pack to you. Please ensure you have your REC membership number ready.
What’s new for you in 2018
IRP AWARDS – WHO WILL WIN? Look out for the names of the winners from the 2017 IRP Awards in the next issue of Recruitment Matters. Find out more about the night now at www.irpawards.com
RECRUITMENT MATTERS
Membership Department: Membership: 020 7009 2100, Customer Services: 020 7009 2100 Publishers: Redactive Publishing Ltd, 78 Chamber Street E1 8BL. 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.
8 RECRUITMENT MATTERS DECEMBER 2017
RM_DEC_17.indd 8
www.rec.uk.com
09/11/2017 12:18