Recruitment Matters December 2018

THE VIEW AND THE INTELLIGENC E

Creating fair and diverse workforces P2 BIG TALKING PO INT

Making the Apprenticeship Levy work P4 LEGAL UPDATE

RECRUITMENT MATTERS

Email contracts P6-7 Issue 68 December 2018

WHAT’ S C O MING UP

Dates for your diary: training and events P8

MODE R N SL AV E RY

REC backs Protocol to help eradicate labour abuse and modern slavery T

he REC recently joined leading names in the construction industry by signing the Gangmasters and Labour Abuse Authority (GLAA)’s Construction Protocol to help eradicate labour abuse and modern slavery in the construction industry.

The GLAA regulates the supply of labour to the farming, food processing and shellfish gathering sectors. It had its enforcement (but not its licensing) remit extended by the Immigration Act 2016 to tackle labour abuse in all sectors of the economy – recognising that serious labour exploitation wasn’t restricted only to the agricultural sector and proactive enforcement was needed more widely.

The GLAA was also given new police style powers to search and seize property as well as making arrests,

@RECPress

“By working together we can help eradicate modern slavery and labour abuse in this sector for good” which the REC welcomed at the time.

The GLAA identified the construction industry as a high-risk sector due to its high numbers of migrant workers, complex supply chains and the high rate of selfemployment. The GLAA reports that this sector is the fourth most reported sector for labour exploitation after car washes, agriculture and food processing, and referrals have doubled since April 2017.

The GLAA was quick to use its new powers in this sector and has since been able to identify victims

of modern slavery, and carry out criminal investigations, at addresses in Croydon, East London and Coventry based on intelligence received in the construction sector.

The GLAA wants to work with the sector, through the Protocol, which aims for all parties in the construction supply chain to work in partnership to protect vulnerable workers, share information where possible, commit to raising awareness in the supply chain of exploitation and abuse, and maintain momentum.

The REC proudly signed the Protocol and encourages agencies supplying to the construction sector to join us. By working together we can help eradicate modern slavery and labour abuse in this sector for good.

Phillip Campbell, REC senior policy advisor

www.rec.uk.com

L E A D I N G T H E I N D U S T RY

the view...

Compliance is everything, says NEIL CARBERRY, REC chief executive

S

ince joining the REC I’ve spent a lot of time talking to members about the direction we are taking as an industry. The market is changing and now more than ever what you do is pivotal to the success of UK plc.

As clients contend with an uncertain political environment, new technologies, entrenched talent shortages and evolving workforce expectations, they’re looking for recruitment experts to help them compete and thrive. Recruitment is redefining itself as a professional service.

The REC’s role in this is to help create an environment in which the value of the recruitment industry is fully recognised and respected. Every day we champion our members in the media, in government and with companies, and we demonstrate that recruitment is a well-regulated, compliance-focused, and socially progressive part of the economy.

Jobs really do transform lives. So we need to be good at what we do as an industry, and expect high standards of each other – on behalf of our own businesses, and of clients and candidates.

At the heart of the REC message about professionalism is our compliance test, which we ask all members to take every two years to prove that they are maintaining those high standards.

Having this test as a prerequisite for membership, ensuring we investigate complaints from candidates and clients, and expelling the non-compliant, underpins the sector’s reputation. It means REC membership stands for something to the people you work with. As more clients use membership as signal of supply chain compliance, this demand is only likely to grow.

We are prepared to refuse membership because it ensures members carry a badge that is a sign of quality and confidence to clients and candidates alike. We advise people to only work with a recruiter who is a member of the REC and therefore accountable to clear industry-led standards.

If your business is due to take the compliance test before 31 December your compliance contact will have already received details, and I encourage you to complete the test as soon as possible. If you need support, get in touch.

If you want to keep up to speed with all things recruitment then follow me on Twitter @RECNeil

2 RECRUITMENT MATTERS DECEMBER 2018

Ready for the year ahead? asks TOM HADLEY, REC director of policy and professional services HADLEY ’ S C O MMENT

Join the 40 per cent club!

With the annual circus of the party conferences behind us, now is a good time to take stock and look ahead to 2019.

Highlights this year have included positive outcomes within the Taylor Review, an initial delaying of the IR35 review, wide-ranging GDPR implementation support, positive movement on the Apprenticeship Levy, and an agreement to regulate umbrellas. We have also doubled our contact points with ministers and parliamentary groups, and increased member engagement in our campaigning work by 40%. This insight and collective drive from REC members has been crucial, as the old saying goes “the wolf makes the pack stronger, the pack makes the wolf stronger”.

What about the negatives? Candidate shortages have intensified, there has been real pressure on recruiters in sectors like healthcare and education and frustration over a lack of government enforcement resulting in an unlevel playing field for compliant recruiters. In 2019, providing scenario-planning support as we head towards Brexit will be a major priority. Here are some other areas where we want to make an impact: • I R35 – Pushing back on private sector extension and delivering implementation support when needed; • Apprenticeship Levy – Building on recent announcements so that changes to the levy work for recruiters; • I mmigration & skills – Providing innovative solutions that reflect the needs of employers and recruiters; • I ndustry regulations – Ensuring that developments on the back of the Taylor Review are workable for the industry; •C ompliance – Promoting the REC’s compliance role, and calling on government to boost enforcement and a level playing field; • F uture of jobs – Positioning our voice at the forefront of the future of work debate and building on our Future of jobs commission; • I nclusion and ‘Good Work’ – Making change happen; • S ectors, regions & global markets – Driving campaigns across sectors, regions and devolved nations; working with the World Employment Confederation on global campaigns.

As well as amplifying our collective voice, campaigning work in 2019 will provide content and a regular ‘heads-up’ that members can use for competitive advantage. Get involved, join the 40 per cent club!

ou can follow Tom on Y Twitter @hadleyscomment

www.rec.uk.com

18%

the intelligence...

WITH REC SENIOR RESEARCHER, THALIA IOANNIDOU

G

ender diversity in the workplace has been high on the agenda, with the public and private sectors urged to adapt practices that promote equal opportunities for women. The introduction of mandatory gender pay gap reporting for employers with more than 250 employees, which came into effect in April 2017, is the latest effort to remove the substantial disparity in the average pay of women and men. The new figures reveal some alarming truths – the median pay gap across the economy is 18% in favour of men, one in 10 large employers have a gender pay gap of more than 30% and eight in10 large employers have more women in their lowest paid positions than in their highest positions.

At a time when demand for skills is mounting, it is crucial to secure and appropriately reward the contribution of women across sectors and occupations so that their talents and potential can be fully utilised. In fact, it has been estimated that if the country’s gender gap were to be closed and every UK region matches the pace of the fastest-improving region over the past decade, this could generate an additional £150bn to the gross domestic product (GDP) by 2025.

According to McKinsey Global Institute, this would require 840,000 additional female employees and more

FEE EARNERS AS A PERCENTAGE OF TOTAL STAFF RESTORED TO 70% LEVEL

78% 75% 75% 72% 70% 71%

Median RIB recruiter

Q1 Q2 Q3 Q4 Q1 Q2 2017 2018 Fee earners as a percentage of total staff, for the median recruiter, Q1 2017-Q2 2018

www.rec.uk.com

women employed in most productive sectors and occupations.

Good recruitment is central to these The new figures reveal some alarming truths – the median pay gap across the economy is 18% in efforts. Recruitment is the foundation favour of men. upon which a fair and gender-balanced organisation is built. Only when to enact strategies that will improve an open, accessible and inclusive the gender balance and performance recruitment process is in place, diversity of organisations. Asking the right at the workplace can be achieved. questions is paramount to driving As the experts in hiring strategies, change. Does the job specification recruiters and HR professionals have appeal more to male candidates than invaluable insight to share with the females ones? Is the organisation a wider business community and are champion of flexible working and ideally placed to help drive change enhanced maternity and paternity in organisations. From conscious and leave? Are the selection criteria used unconscious biases, poor flexible to screen candidates transparent, working arrangements to direct and impartial and fair? Good intentions indirect discriminatory practices must be translated into tangible at various stages of the hiring action at each and every process, recruitment recruitment stage. professionals are in a To find out more on good position to call how recruiters can out bad practice. support organisations The to refine their one in 10 large recruitment resourcing employers have industry is strategies and a gender pay gap best placed to raise ensure an inclusive process, of more than 30% awareness on genderdownload our latest related biases and help research at www.rec.uk.com

The latest real-time information from the RIB Index shows that, having peaked at 78% in Q1 2017, fee earners as a percentage of total staff within the Median RIB recruiter returned to historical 70% levels across H1 2018.

With total employee numbers 5.6% higher in H1 2017 than in H1 2016, the data suggests that

30%

much of the H1 2017 headcount growth came in the form of fee earners. By H1 2018, total employee numbers were just 3.4% higher year-on-year, suggesting that recruiters were being more cautious in their hiring and/or that the new headcount was required in support service functions.

Whilst employer

demand remains high for agency support in hiring, the REC’s JobsOutlook report also evidences a growing need for agency partners to provide insightful management information as a value add – with 64% of hirers highlighting this as a selection criterion in JulySeptember (up from 57% a year earlier).

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.

DECEMBER 2018 RECRUITMENT MATTERS 3

APPRENTICESHIP LEVY

big talking point

Making the Apprenticeship Levy work More than 18 months on from its introduction, the Apprenticeship Levy has not achieved what it set out to do. So how can the system be transformed into something that offers more training to more people? Recruitment Matters explains.

If you run a business with a payroll of over £3m, you should already know about the Apprenticeship Levy. You’re probably also more than aware that time is running out to spend your first contribution under the scheme. But just like many in the recruitment industry, you might be far less clear about how to make it work for you – and, more importantly, your employees.

That’s because the Apprenticeship Levy was introduced in April 2017 as a means of bringing training and development opportunities to permanent workers. It doesn’t currently benefit those on more flexible and temporary contracts – and that is a wasted opportunity for everyone involved.

A question of time Although recruitment agencies must pay the 0.5% levy on all those on their payroll – both permanent and temporary – they simply struggle to provide any of the training allowed under the scheme to their agency workers.

An apprenticeship must last 52 weeks or more – far longer than a traditional agency worker assignment.

The REC’s ‘Recruitment Industry Trends’, published in December 2017, found the

4 RECRUITMENT MATTERS DECEMBER 2018

average length of a temporary worker assignment was 17 weeks. Only 1% of assignments lasted a year or more.

Changes in sight

April 2019. The range of courses will also be expanded, particularly around STEM subjects, transport and healthcare.

“But we know that we may need to do more to ensure that the levy supports the development of the skilled workforce our economy needs,” he said. “So in addition to these new flexibilities, we will engage with business on our plans for the long-term operation of the levy. Working hand-in-hand with employers to ensure that every young person can fulfil their

In total, the number of people starting apprenticeships in April 2018 was down nearly 40% on April 2016 figures. When the government’s original target was to fund 3 million apprenticeships by April 2020, it’s becoming ever clearer that the Apprenticeship Levy is not working. So in his speech at the Conservative Party Conference on 1 October, Chancellor of the Exchequer Philip Hammond recognised business concerns.

He set out measures designed to provide ACCORDING TO A RECENT SURVEY more flexibility in OF REC MEMBERS, the system. They 70% – of members that pay into the levy are SMEs, include allowing large directly employing less than 250 people employees to transfer 52% – of members view Apprenticeship Levy up to 25% (rather than payments as a tax write-off and take no 10%) of their levy further action funds to businesses in 64% – of members would fund agency workers’ their supply chain from training if the Apprenticeship Levy was broadened to a skills and training levy

THE RECRUITMENT INDUSTRY’S REACTION

APPRENTICESHIP LEVY

potential and achieve their dreams.” It’s an invitation that the REC is keen to take up.

A broader skills and training levy “The commitment to make the Apprenticeship Levy a more flexible offering is something the recruitment sector has been consistently campaigning for,” said Neil Carberry, chief executive of the REC. “This will benefit workers by improving training opportunities, as well as helping recruitment businesses who are currently paying the levy but are unable to spend it.”

But the REC also made it clear to the Chancellor before the Budget that agency workers will only be able to benefit from the levy if it is broadened to a skills and training levy. This should be focused on upskilling all workers, and providing clearer opportunities for progression in key sectors which struggle to attract a UK workforce.

REC members have provided specific examples of shorter training courses, such as those for HGV and forklift truck drivers, or catering courses for hospitality workers, which they could offer temporary workers under a broader scheme. And when Ofqual already has over 40,000 registered training courses, it needn’t be difficult to maintain the high standards of a fully accredited system.

The REC and its members want to work with government to develop a pilot scheme for

www.rec.uk.com

39% the fall in the number of apprenticeships started in April 2018 (24,100) compared with April 2016 (39,400)

the recruitment industry that clearly measures both the impact for agency workers and the return on investment to business.

On any given day there are on average 1.3 million temporary or contract workers who work via a recruitment agency. A new training levy would enable thousands of these workers to learn new skills and to progress through the labour market.

WHAT IS THE APPRENTICESHIP LEVY? • All employers with a payroll of over £3m are taxed 0.5% on that pay bill • The levy applies to anyone you pay via PAYE – permanent staff, as well as any contingent labour on your payrolls • You have 24 months to spend the amount accumulated in your company’s digital account, before the value resets to £0 • The levy can only be spent on accredited apprenticeship programmes

DECEMBER 2018 RECRUITMENT MATTERS 5

REFERENCES

legal update What constitutes a valid contract over email?

By KATE DICKENS – REC legal executive

A

lot of the business conducted by recruiters is done via email, but it is possible for a client to be bound by a contract issued by a recruiter, either deliberately or inadvertently as a result of their conduct.

For a valid contract to exist there must be offer, acceptance, consideration and an intention to create legal relations. A contract is simply an agreement between two or more parties to do something (or refrain from doing something) in exchange for some form of consideration. At the most basic level, an enforceable contract exists if there is an offer by one party, acceptance by the other party,

DIVA LIMOUSINE VS. UBER IN MISCLASSIFICATION BATTLE DOMINIQUE THEW, PRECISION GLOBAL CONSULTING

6 RECRUITMENT MATTERS DECEMBER 2018

“When most people think of contracts, they think of written agreements between parties, and assume that a contract is not valid unless it is on paper, and signed” and some exchange of value between them.

When most people think of contracts, they think of written agreements between parties, and assume that a contract is not valid unless it is on paper, and signed.

However, a number of contracts are not written and courts can enforce them. With this in mind, there is

October saw yet another case that has brought Uber into the spotlight for the way the company manages its workers in the US. It is now involved in a lawsuit with a limousine company who alleges that the gig economy giant is deliberately misclassifying workers to cut costs.

The Southern Californiabased Diva Limousine claims that Uber is in violation of unfair competition laws by classifying workers as independent contractors (ICs) where they should be employees. Companies

no reason why a contract entered into through email should not be enforceable.

If an email or chain of emails clearly states an offer by a recruiter to provide their services and the client responds by email accepting those terms, then there is a very good chance that a valid contract has been formed between the parties. Similarly, the consent to the contract does not have to be on the same email as the contract. It is possible for consent to be deduced from previous emails and still constitute a valid contract between the parties. Furthermore, without express acceptance of the contract it can be proven that an agreement exists by implied acceptance, which is demonstrated by any acts indicating a person’s consent or the absence of any objection to the provision of the services. Again the email thread can be used as evidence of a binding contract.

In some cases it is difficult to obtain an executed contract and unfortunately a lack of a signed contract may result in both parties having irreconcilable positions on what was actually agreed, which increases the likelihood of costly litigation. This being the peril of beginning work without definite agreement, so it is always best to obtain to agree the contract first, ideally with a signature (even a digital one via email) and then start work later!

that employ workers as ICs can see significant cost advantages from avoiding providing benefits and insurances, and Diva says that Uber is using this to its advantage, applying the savings to offer rides below the true cost and pricing competitors out of the market.

Misclassification has been a hot topic in US employment law over the last couple of years, with studies indicating that the US government is missing out on billions of dollars a year in loss of taxes due to the issue. In response,

large penalties and stricter classification methods, such as the recently introduced California ABC test, are being enforced in an attempt to prevent it. As this particular case unfolds, it highlights a wider concern beyond government standards and amongst companies offering services within the same space that there is an even playing field for all.

Precision Global Consulting operates in the US, Canada and the UK. For more information visit www.pgcgroup.com www.rec.uk.com

I N S P I R AT I O N To keep up to date with everything the Institute of Recruitment Professionals is doing, please visit www.rec-irp.uk.com

RICKY MARTIN founder, Hyper

CIARA PRYCE group services

Recruitment Solutions, on raising the industry’s reputation

director, VGC Group, on protecting the workforce of the future

More recruiters should be more focused on being consultants, not just sales people.

You were named in this year’s inaugural Top100 Corporate Modern Slavery Influencers’ Index.

Why should other recruiters take note?

morally we must all do more to protect the most vulnerable in society.

I have promoted ethical recruitment practices for a number of years and am proud of the quality of people we supply to the construction industry.

VGC was only the third company to achieve the BES6002 Ethical Labour Sourcing Standard.

Construction is a ‘high risk’ industry for modern slavery. But for us, combating modern slavery is about driving good recruitment and engagement processes, and training our recruiters and managers in spotting the signs and reporting any concerns.

If people are not in their roles willingly that creates risk for any business. While there are legal and commercial reasons to comply,

Diversity and inclusion are up there with financial and safety targets for our board. The skills shortage means we must work harder to attract new entrants to the industry. We have focused on women, exoffenders and ex-military alongside an active schools engagement programme. We invest in upskilling and nearly 7% of our workforce are on apprenticeships.

Just as people go to a doctor to help them feel better, they come to us to help their careers, to help them pay the bills and support their families.

Do something you’re proud of or don’t do it at all.

It’s my advice to those coming into the industry or setting up on their own. For those already established in the business, do more to act as an ambassador for the industry. You can take shortcuts, do a deal and fill a job. Or you can find the right person for the right company. That might be harder, but it makes such a difference.

As a biochemist that recruits for the sciences, I help pharmaceutical companies make

www.rec.uk.com

Q&A

What I know

BEHIND THE SCENES AT THE INSTITUTE OF RECRUITMENT PROFESSIONALS

medicines that save lives.

Remember about the people who don’t get the job.

Our actions to give them the best chance to find the next job are important. Candidates are spending valuable time and money on interviews. We have a duty of care to make sure they are looking at the right job and we represent them well.

Even with the REC’s ‘Jobs Transform Lives’ campaign, I don’t think enough recruiters recognise the impact that they can have.

Stop worrying about disruptions.

Whether you’re concerned about new technology or Brexit, focus instead on getting the basics right and put recruitment on the map as being a real professional service.

You’re also passionate about diversity and inclusion…

What’s your biggest motivation?

Doing the right thing. We want to deliver a lasting legacy to our people and the communities we work in. By doing so we are creating a sustainable business for the future.

DECEMBER 2018 RECRUITMENT MATTERS 7

W H AT ’ S C O M I N G U P ?

Upcoming Events

Upcoming training Last minute training courses to prepare yourself for the year ahead

Technology Sector Meeting 5 December Ensure you’re up-to-date on the latest policy and compliance changes, and discuss market trends and issues specifically facing your peers in the technology sector.

Interim Management Association Sector Meeting 10 December Hear from industry experts on key industry trends following the Autumn Budget.

Future of Learning Focus Group 12 December As the representative body for individual recruitment professionals, the IRP is seeking to engage with REC members on the future of learning for the industry. This informal meeting will provide the opportunity to discuss how new technology, skills requirements and ways of learning should align to accelerate professional development.

4 December Business Development Planning (Leeds) Perfect Client Meeting (London) 5 December Essential Skills for a Permanent Recruiter (Manchester) Management Essentials (London) Recruitment Law: Supplying Limited Company Contractors (Birmingham) 6 December Recruitment Law: Understanding the Essentials (Birmingham) 11 December Start up your own Agency (London)

Winter Networking Drinks 12 December As the festive season fast approaches, we would love you to join us from 5:15pm on Wednesday 12th December 2018, for canapés, cocktails or a glass of bubbly at the REC annual winter networking drinks reception.

For more information on these events, including timings and locations, visit https://www.rec.uk.com/training-and-events/events or call 0207 009 2100 to book your place

Upcoming Report 2017/2018 Recruitment Industry Trends Report Coming in December 2018 Recruitment industry trends (RITS) is the REC’s annual report about the shape of the UK’s recruitment industry. Use the data from our industry snapshot to measure your performance against industry-wide benchmarks. Available for REC members to download and non-members to buy from our shop.

As profiled in September’s Recruitment Matters, this three-day intensive course is designed to give a comprehensive overview of how to run a profitable recruitment agency, from financial matters and the basics of business planning to your legal responsibilities.

13 December Recruitment Law: Understanding the Essentials (London) For more information, visit https://www.rec.uk.com/training-and-events/training Or call 0207 009 2100 to book your place

Keep an eye out at: https://www.rec.uk.com/research/latest-research

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 DECEMBER 2018

Membership Department: Membership: 020 7009 2100, Customer Services: 020 7009 2100 Publishers: Redactive Publishing Ltd, Level 5, 78 Chamber Street, London E1 8BL Tel: 020 7880 6200. www.redactive.co.uk Editorial: Editor Pip Brooking Pip.Brooking@rec.uk.com. Production Editor: Vanessa Townsend Production: Production Executive: Rachel Young rachel.young@redactive.co.uk Tel: 020 7880 6209 Printing: Printed by Precision Colour Printing © 2018 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.

www.rec.uk.com