Recruitment Matters - February 2016

Issue 34 February 2016

RECRUITMENT MATTERS The View and The Intelligence

Member of the Month

Scale Up and the EU p2-3

Forces Recruitment

p4

Legal update and the IRP

IRP Awards

IRP Awards Winners p6-7

Photos from the big night

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the workforce, while simultaneously helping small companies to hire.

Most recently, in November’s Autumn Statement, Chancellor George Osborne announced plans to impose a new apprenticeship levy of 0.5% on company payrolls from April 2015, to ensure that large companies ‘shoulder the cost’ of training workers.

Self-employed and small business owners should keep track of all the public schemes available to them.

Incentivise staff When it comes to staff wages, small companies typically struggle to compete with large corporations, so it is important that SMEs seek other ways to encourage the best candidates. Jobseekers prioritise roles that offer flexible work hours (37%), meaningful work (35%) and a pleasant work environment (32%).

SCALE UP YOUR BUSINESS WITH 2 INDEED Small to medium-sized businesses will need balance staff incentives with growing pressures on bottom lines, according to new research.

The REC’s Scale Up partner job search engine Indeed has published a series of tips for SMEs looking to hire in 2016.

Its UK managing director Bill Richards says small businesses will want to bring on new staff in the New Year to benefit from the good economic climate.

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“2016 is going to be a telling year for a number of self-employed workers and micro-businesses as they look to take on some of their first employees and grow their businesses,” he says.

“This is a crucial stage of building and growing a company – these early employees will establish the success, culture and make-up of the organisation’s future.”

Indeed’s four tips for hiring SMEs:

Plan for the National Living Wage With staff costs rising, SMEs will need to find new ways to maintain profit margins and appeal to talented recruits.

Embracing remote and flexible workers can be a successful strategy for businesses that lack the funds to maintain a physical office presence, or have the flexibility to operate outside of the standard 9–5 working hours.

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Apprenticeships are vital The government announced a number of apprenticeship schemes to support young people to get into

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Take a multi-channel approach to hiring More than half of job searches through Indeed came via a mobile device.

However, Indeed uncovered that 9% of SMEs currently optimise mobile for recruitment – with many UK SMEs still relying on newspapers and personal contacts as their main means of hiring.

• For recruitment businesses looking to make the most of the New Year, visit www.rec.uk.com/scale-up

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Leading the Industry

THE VIEW

What would ‘Brexit’ mean for your business, asks Tom Hadley, REC director of policy and professional services

Can your business grow if your people don’t, asks Kevin Green, REC chief executive

Here we are at the start of 2016 with a great year behind us. We are forecasting the UK recruitment industry to grow by 8.1% this year; the opportunities for REC members are significant. However, we believe the winners will be those businesses that invest in their people.

It’s very clear from our research that the fastest growing recruitment businesses are those that are good at attracting and retaining talent. When I interviewed Adam Buck of Phaidon International last year for our Scale Up podcast he said that one of his core objectives was to grow his business at the same speed as the ambition of his people. What I took this to mean is that he recognised Phaidon needed to provide development opportunities for his key fee earners to avoid them either moving on or setting up on their own. This is a model that we think many recruiters need to replicate.

At the REC we will play our role in supporting recruitment leaders to develop their only key appreciating asset: their staff. We now have over 8,200 members within

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BUILDING A VIEW ON THE EU

the Institute of Recruitment Professionals (IRP), which is dedicated to enhancing the skills of the 100,000 people who work in our profession.

We will soon launch a new online continuous professional development (CPD) tool, which will assess IRP members’ knowledge and help them keep their skills up to date. We will also launch our new Level 5 Diploma in Recruitment Leadership qualification in the first few months of 2016.

We are delighted to say we have 600 young people studying for an apprenticeship in recruitment.

We would love to double this number in 2016, so if you want to attract young people with potential to your business and our profession, then please get in touch.

I am going to be travelling across the UK meeting members, so if you want me to visit your business let me know.

Also, why not follow me on Twitter to keep up to speed with all things recruitment?

In the meantime, here’s to a great 2016!

You can follow Kevin on Twitter @kevingreenrec

The debate on the UK’s membership of the EU will be intense and will have huge implications for the UK’s business landscape and for our jobs market. It will also have specific implications for the recruitment industry, which is why we need to do everything we can to understand the potential impact on clients, jobseekers and business.

A core message in our ‘Manifesto for Jobs’ is that enhancing the UK’s position in the global marketplace and unlocking the full benefits of EU membership is important to maintain our highly effective labour market. Essentially, we want a broad repositioning of EU activities around jobs, growth and global competiveness, as well as a specific focus on other practical measures that will enhance the benefits of EU membership such as more effective recognition of qualifications.

One of our other priorities is to ensure that the EU debate includes a specific focus on what outcome is in the best interests of the UK jobs market. The ongoing insight from REC members will have a crucial role to play here. Here are some of the questions we need to be asking ourselves in the run-up to the EU referendum: • If you are currently active in another EU country, what would a ‘Brexit’ mean for your business?

• How would client organisations be likely to respond?

• How can recruiters best engage their staff, clients and governance in the run-up to the referendum?

• What specific EU reforms would make a positive difference?

• What would be the impact if free movement of workers was restricted?

• Would leaving the EU facilitate or hinder access to key skills and talent?

The REC’s overriding aim is to stimulate debate and reflection and to help raise awareness of what the various scenarios might mean for members. It’s going to be quite a year!

You can follow Tom on Twitter @hadleyscomment

www.rec.uk.com

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74%

THE INTELLIGENCE DIANA BEECH, SENIOR RESEARCHER, ASKS WHAT WE CAN EXPECT FROM THE UK’S PRODUCTIVITY PUZZLE IN 2016 The UK jobs market is in a strong position.

According to figures from the Office for National Statistics (ONS), the UK employment rate is the highest it’s been since comparable records began in 1971 – standing at 73.9%.

The number of jobs vacancies is also at a record high at 747,000, whilst the proportion of people who are economically inactive (21.9%) has not been lower since Q4 1990. Despite these successes, the UK is yet to find a convincing solution to its greatest economic challenge over recent years – namely its

STILL GROWING SLOWING

poor productivity rate.

A nation’s productivity is generally measured by how efficiently it translates labour and capital into goods and services. Historically, UK labour productivity has increased by approximately 2% year-on-year.

However, since the recession it has stagnated to levels which the ONS describes as “unprecedented in the post-war period”. According to the latest figures, Britain’s productivity gap with other G7 advanced economies has widened to its largest since 1991.

Fortunately, 2015 brought some relief to the UK’s productivity problem. The ONS reported that productivity (measured by output per hour) grew by 0.9% from Q1 to Q2. According to a study commissioned by the International Festival for Business (IFB 2016), this marks the start of a dramatic turnaround in the UK’s fortunes, with productivity levels

THE UK EMPLOYMENT RATE IS THE HIGHEST IT’S BEEN SINCE COMPARABLE RECORDS BEGAN IN 1971 – STANDING AT 73.9%

predicted to rise by a total of 10.7% by 2020.

Most notably, the study predicts a much-needed growth of 15.5% in productivity in UK manufacturing – a sector which saw output per hour fall by 0.5% on the quarter in spring 2015, suggesting no end to its exceptionally weak post-crisis productivity trend.

Not everyone is optimistic about progress, however. A recent report by the Resolution Foundation warns that UK productivity needs to rise significantly in the coming year to keep real-term pay growth at its present rate of 2.5%.

If productivity fails to pick up and inflation takes off more than expected, the Foundation fears pay growth could slow to less than 1%, leaving British workers wait-

40 ■ Upper Qtile ■ Median ■ Low Qtile 30

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%

10 0 -10 -20

Oct 13

Nov

Feb 14

May

revenue growth demonstrates the importance of bench marking performance against other recruiters to maximise performance.

The picture for Net

Aug

2% SINCE THE RECESSION IT HAS STAGNATED TO LEVELS WHICH THE ONS DESCRIBES AS “UNPRECEDENTED IN THE POST-WAR PERIOD PRODUCTIVITY LEVELS PREDICTED TO RISE BY 2020

BY A TOTAL OF

10.7% ing even longer to experience the types of pay rises they enjoyed before the crisis.

Raising productivity will undoubtedly be key to sustaining the UK’s economic recovery this year. It is, therefore, important that recruiters, employers and the government work together to solve the productivity puzzle by investing in skills and supporting British workers.

On a more positive note, although RIB member turnover growth is slowing, the profit margin RIB members is earning has rebounded in the last six months, with median temp margin now standing at 16.8%.

Figure 1: Recruiter turnover growth

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Last month I talked about slowing revenue growth with median RIM recruiter revenue growth slowing to only 1.4% in September (Figure 1). There is a wide variance between different recruiters with a quarter of RIB members seeing revenue growth of over 13% and a much less fortunate quarter seeing revenues FALLING by more than 10% on a year ago.

This extreme divergence in

UK LABOUR PRODUCTIVITY HAS INCREASED BY YEAR-ONYEAR APPROXIMATELY

Nov

Feb

Sep 15

Disposable Revenue is slightly better with median NDR growth of 5%, but a quarter of RIB recruiters are seeing NDR more than 10% LOWER than a year ago.

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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The BIG talking point

MEMBER OF THE MONTH

A FORCE UNTO ITSELF The stigma surrounding ex-military candidates is waning, but there is still work to do. Forces Recruitment managing director Graham Brown talks about those challenges Recruitment Matters: Why does working with ex-military candidates appeal?

Graham Brown: This is the best niche you can have in recruitment. We’ve cracked the golden egg here as far as I’m concerned. The trade skills they’ve got are up to a very high standard and easily equivalent to anything else out there.

RM: And that comes with a military work ethic too, right?

GB: Absolutely. What these guys bring is a different attitude to most civilians. They have organisation skills, the ability to think on their feet and the ability to work under extreme pressure. They’re

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also humble to a fault, which is something we have to coach them on.

RM: What does that involve?

GB: Some have only had one job outside of the military for up to 20 years. Many reach the age of 40 without having been to a job interview.

They’ve achieved an awful lot of stuff in their military career, so we have to organise these things and get them to sell themselves, because ex-military people aren’t good at that.

RM: It hasn’t always been this way, has it?

GB: There has been a massive paradigm shift in attitude

towards ex-military. If you played a word association game a few years ago and said “army”, people would use a few colourful adjectives that wouldn’t have been supportive.

More people are starting to see how these people are built to make a difference and add value. I once placed a vehicle technician a few years ago and got a call from a client saying he was going well, but there had been an incident the other night.

down. “I had to fix that part,” he said. The client explained that all he had to do was order a new part. “When you’re in the desert you can’t order anything,” he replied.

The fact he came up with a creative solution speaks to the mind-set. One of the things we sell to client is that many of these guys don’t have a fixed trade, but come with organisational skills and a ‘cando’ attitude, which means a lot to employers.

RM: What happened?

RM: As someone who has

GB: The client got a report

served in the military yourself, has that affected the way you run your business?

about a light on in the garage around 9pm and went to check it out. He came upon the technician in there with the engine of a car stripped

GB: I don’t think you appreciate at the time what the military prepares you for. www.rec.uk.com

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values and we work very hard to understand our clients and candidates. In this day and age, in a candidate-driven market, you’ve got to have a very sharp idea of what you’re doing.

[Forces Recruitment] was borne through not wanting to work for someone else.

RM: What makes a good recruiter?

GB: I’d say someone who has a good pair of ears, is flexible and committed. Finding the right fit is absolutely critical.

I think the industry norm has been to shoehorn people into jobs to get a fee. You can’t do that anymore. We’re not built for cutting corners – we have a way for doing certain things at Forces. We like to think ourselves in retail terms as a John Lewis rather than a corner shop.

It made a man of me – I came back from the Gulf War with a very different attitude towards life and a lot of things. When I got home and saw my family, I said: “If I can get past what gh, I can get by I’ve been through, rows at me.” whatever life throws That resilience served me well fe. in commercial life.

RM: How do youu feel about uitment right working in recruitment now?

GB: I don’t thinkk most people enced the will have experienced ondition it is market in the condition cruiters we are right now. As recruiters conditioned to focus on the client, but part of our sixe interview stage candidate ned to process we learned understand our candidates

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much better. It’s important to understand your candidates as well as your clients.

RM: Quality above quantity?

GB: Yes. I would rather place 20 people into roles where they grow and develop instead of 40, where half disappear within three-six months. It’s not good recruitment practice.

W need our clients to come We ba to us and say: “We love back th guy. Go find us another that on one.”

RM: How did it all begin?

R GB: I did a search at the time G an there was nothing around and ffor ex-military in terms of recruitment. There were a few headhunters in the city, but nothing that covered the three services and all ranks. When I set the company up, we were the first of our kind. We stayed true to our core

RM: What recruitment process do you go through?

GB: We recruit in six stages and want our people to build their career here. That includes assessments and a three-stage interview process.

If you don’t come through that in very good form and with very good marks, we won’t take you on.

RM: Like the military, standards are important.

GB: Absolutely. Our clients – and particularly our candidates – deserve the best. When it comes to the candidate process you need to understand them properly, otherwise you’re really going to suffer in this industry.

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Legal update

THE EU: WHAT AFFECT WILL BEING IN OR OUT HAVE ON RECRUITMENT?

Shutterstock

By Lewina Farrell, solicitor and head of professional services at the REC At the time of writing David Cameron is trying to renegotiate the UK’s place in the EU as a precursor to a referendum, which may happen as early as summer 2016. Whenever the referendum happens the question is – what will the outcome mean from a legal perspective?

If we stay in the EU it is probably safe to say it will be business as usual for recruitment businesses in terms of employment legislation. But what if we vote to leave? Firstly there would be exit negotiations and we simply don’t know how long those could take. We are also unable to know at this stage what form of co-operation might exist between a departing UK and those countries remaining in the EU. Separately we have an issue about domestic law, in particular employment law, much of which emanates

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from the EU. Matters such as the Transfer of Undertakings (Protection of Employment) Regulations (TUPE), the Agency Workers Regulations, Working Time Directive, collective consultation for redundancies legislation and others have become embedded in our employment legislation and working arrangements.

Would these be dismantled or replaced in the event of a vote to leave the EU? Outside of employment legislation the EU has the

lead role in the development of key areas such as data protection legislation and electronic commerce regulations. Even if we did leave the EU, these pieces of legislation might remain on the statute books – particularly if we had arrangements such as those negotiated by Norway, which remains outside the EU but is part of the European Economic Area and therefore required to comply to a large extent with European economic, social and

employment policy.

Of course there is also the thorny issue of migration.

Whilst the political focus is on reducing migration into the UK, in the event of an exit from the EU freedom of movement would be affected both ways. What will happen the hundreds of thousands UK citizens living elsewhere in the EU, whether studying, working or retired? As my colleague Tom Hadley has flagged, the key for our industry is to be asking the right questions so that we can make an informed decision when it comes to the referendum vote.

Other areas such as pensions and tax legislation are outside the remit of the EU and entirely a domestic issues. So we should not anticipate any changes to ITEPA including the agencies legislation (ss44-47), the ITEPA reporting or IR35 based on the outcome of the EU referendum.

www.rec.uk.com

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Inspiration

BEHIND THE SCENES AT THE INSTITUTE OF RECRUITMENT PROFESSIONALS

The View

Claire D’Amelio is the principal SAP consultant at Energize Solutions and winner of Recruiter of the Year at the 2015 IRP Awards.

Brian Wilkinson iss the chief executive of Matchtech Group and Lifetime e Achievement recipient at the 2015 15 IRP Awards

AWARD WINNER

WHAT I KNOW

What’s it like recruiting for companies in Germany while based in Manchester?

The UK and German markets couldn’t be more different. A lot of the time German clients and candidates take a cautious approach to recruiters. Job boards are rarely used there and a good candidate would never put their CV on one. With me being English, it’s an extra mark against me. But I like being able to prove them wrong and show you don’t have to be a native German to understand their market.

What’s the most important tool in a recruiter’s tool kit?

The telephone. You build your business through the development of relationships. How do you form relationships? By talking to people and meeting with them – you don’t build relationships through a keyboard and a screen. That was true 35 years ago and it will be true in the future.

The line a lot of recruiters use is that they “fell into recruitment” – was that the case with you?

Going into recruitment wasn’t on the horizon at all. I was at uni in Liverpool and studying business, and was one of the unfortunate ones among my friends who had no idea what they wanted to do when they grew up. After graduating, a lot of my friends were moving to London, and yes, that’s where I fell into recruitment.

What about recruitment excites you?

One of the big things people think about recruitment is the money, but honestly, that’s not the main thing that drives me.

One of the things that gets me buzzing is that candidates in Germany are never active – it’s about headhunting and trying to improve candidates’ lives. When I get through to the end of the process with a candidate and they say “Thank you so much, this is the dream job that I didn’t realise I needed before”, it’s very satisfying.

Do your clients appreciate that approach too?

One of my key clients is an automotive engineering company where I’ve placed nine people. A few weeks ago their head of department called me up to ask for updates on recruitment that they can take to their board. It’s the biggest compliment to have that kind of trust held in me.

What position is the industry in this year?

I think we’re in great shape. The industry has professionalised enormously over the past 25 years; we are now seen as a credible partner, a more consultative service to our candidates. We now bring a greater intelligence across the industry that he individual client can see.

What are some of the major challenges facing recruiters?

There will be questions about membership of the EU and what that means for freedom of movement. I think the industry should do whatever we can to encourage the free movement of people and resist populist calls for cutting all immigration. It would be a shame that a political decision was made that would impact on that. The prospect of changes in terms of taxing of self-employed consultants is a threat and something that government need to be careful not to kill the goose that lays the golden egg.

What piece of advice would you give to someone thinking about starting their own recruitment business?

I would keep my overheads low and stick to a specialist market I knew well and have relationships in. Resist the temptation to open another desk or division in a related market. We are such a fragmented industry that you can build a terrific business that’s focused without being all things to all men.

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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Events and training

BUSINESS GROWTH

IRP AWARDS 2015

The night’s winners

The stars of the recruitment industry were out in force at the 2015 IRP Awards.

Recruitment Matters takes a look back at the glitz and the glamour

Lifetime achiever Brian Wilkinson

Master of Ceremonies Steph McGovern

The party begins

Recruiter of the Year Claire D’Amelio with REC chief executive Kevin Green

David Smith, REC chairman Simon Noakes, Sarah Gordon, REC CEO Kevin Green, Tony Taylor

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

© 2016 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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