Recruitment Matters - February 2018

Issue 58 February 2018

RECRUITMENT MATTERS The View and The Intelligence

Member of the month

Legal Update

Five things to watch in 2018 p2-3

Lynis Bassett of Class People p4

Growing businesses

Events and training p6

All new Compliance workshops p8

APPRENTICESHIPS WILL SHAPE RECRUITMENT AS CAREER OF CHOICE The government’s decision to approve funding and qualifications for recruitment apprenticeships will have a big effect on recruitment, says the REC. The decision by the Department for Education to approve funding of up to £5k per recruitment apprentice came in late December 2017 following three years of work by the REC’s trailblazer group.

The funding covers both recruitment consultants at level 3 and recruitment resourcers at level 2.

REC chief executive Kevin Green says the news will be welcomed by recruitment businesses looking for a confident start to 2018.

“We want recruitment to be a career of choice and apprenticeships are an important way to bring fresh

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talent into our sector. We need to secure thousands of new recruiters to meet potential growth in years ahead. Now our members can access funds gathered via the Apprenticeship Levy to p attract and train more p people inesses, for their own businesses, try to grow helping our industry and thrive.

“Recruitment iss a great industry to work in. With total revenues of £32bn at has it’s the engine that ible driven our incredible jobs market for ng decades by helping he businesses find the people they need and transforming livess by placing individualss into e says. fulfilling work,” he arning Derek Goff, Learning & Development manager ons and at Serocor Solutions

chair of the recruitment trailblazer’s employer panel, says: “It’s great news that the government has confirmed the funding for both these recruitment apprenticeships at a level which enables a y robust and effective delivery.

It has always been our

primary objective to create a programme of learning that is entirely fit for purpose and meets the needs of our modern, dynamic recruitment industry.”

The Apprenticeship y affects all business Levy with a payroll of o over £3m.

Recruitment businesses bu who met that turnover turnov – which included con contingent labour payrolls – were required to pay tthe 0.5% levy.

REC members looki to take looking adva advantage of the new funded recr recruitment app apprenticeships e are encouraged vis www. to visit rec.uk rec.uk.com/ apprent or apprenticeships contact their th account manager on 0 0207 009 2100.

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Leading the Industry

THE VIEW

Our policy priorities aim to shake things up, says Tom Hadley, REC director of policy and professional services

Here are five things the recruitment industry needs to look out for in 2018, says Kevin Green, REC chief executive Let’s look ahead to what’s in store for the recruitment industry in 2018.

1) Will employers keep hiring?

Our data says that businesses will continue to hire and that overall employment will continue to grow in 2018, but the rate of growth might be slower compared to the last few years. Our industry has weathered difficult times before, and whatever the next few years hold I am confident that recruiters will adapt.

2) Will the post-Brexit deal become clearer?

We‘re hopeful that 2018 will bring a clearer understanding of the impact that Brexit will have on trade, the customs union and immigration. This should help to dispel the uncertainty that’s undermined our economy since the referendum.

3) Will the automation revolution hit the jobs market?

In 2018 we will see more predictions and analysis on the challenges that automation will present for the future jobs market.

4) Will recruiters recognise apprenticeships as an opportunity to grow?

The news that the government has approved the funding of recruitment apprenticeships is huge because it means that recruiters can now access up

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2018 AND THE SEISMIC SIX… to £5k per apprentice. This will help the industry to recruit the people it needs to meet potential growth in the next few years.

5) Will the government stop interfering in the jobs market?

The REC continues to fight for a dynamic, flexible and agile labour market. We will respond to consultations on IR35 and the Matthew Taylor Review, and announcements on the government’s plans around both of these issues will follow during 2018.

Your REC membership in 2018 We have ‘In the round’ events planned for Q1, in Peterborough (28 February), Edinburgh (1 March) and Manchester (6 March). We will publish more podcasts and research to give you the knowledge you need. Our annual Talent, recruitment and employment conference (TREC) is an invite-only event this year. Hold 4 July in your diary and hope for an invitation.

This is my last New Year’s message and the REC Council hopes to make an announcement by the end of March about who will follow me as the REC’s chief executive.

Here’s to a prosperous new year.

Follow me on Twitter @kevingreenrec

In a recent member poll, 85% said that finding the right candidates got harder over the last year. With Brexit negations entering a new phase and the staffing squeeze set to intensify, 2018 will be a pivotal year for the jobs market and our industry.

1. Immigration & skills – UK businesses must be able to access the staff and skills they need to compete and grow.

As well as using our data and research to make the case for a balanced immigration strategy, we will ensure people and skills remain a key component of the government’s industrial strategy.

2. Industry regulations – The regulatory landscape must be proportionate and protect the interests of compliant businesses. Two of the priority areas we will be driving are next steps on the Mathew Taylor Review and on labour market enforcement.

3. Inclusion – Let’s make change happen by promoting good recruitment and showcasing our industry’s role in helping people from all backgrounds get into and progress in work.

4. Procurement – Public procurement must promote good recruitment, sustainable supply and flexible staffing arrangements. We will be driving this message through our work on in health and social care, education and the wider public sector.

5. Taxation – We want to ensure clarity and a level playing field and will be driving a strong response to the latest IR35 consultation. We will build on recent discussions with ministers and No 10 in making the case for the Apprenticeship Levy to be made into a more flexible training ley to benefit all workers.

6. The future of jobs – We will work with policy makers to build the best possible post-Brexit jobs market and use the findings of our Future of jobs commission to position our industry as the forefront of the future of work debate.

The input and drive of REC members will be pivotal as we continue to ramp up our industry’s voice on the challenges ahead.

You can follow Tom on Twitter @hadleyscomment nt

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25%

THE INTELLIGENCE WHAT’S BEHIND THE UK’S PRODUCTIVITY PROBLEM? The UK’s productivity – the amount produced per worker (or per hour) – is essentially the motor that drives sustainable growth. Figures from the last decade speak to an alarming truth for the future of the UK economy.

On one level, the UK has enjoyed unprecedented high rates of employment and low rates of unemployment.

Yet on another level, the economy has been impaired by stagnation and erosion of output. This, in turn, has pushed prices up with CPI inflation rising to 3.1% in November 2017 – the highest in nearly six years.

As the productivity gap between the UK and the rest of the G7 remains substantial, whatever factors stalled productivity growth in the wake of the 2008

AGENCY HEADCOUNT GROWTH IS RESTORED The latest information from the RIB Index shows that growth in the headcount of the median industry recruiter has been restored in 2017, following the need to trim back numbers in H2 2016.

With revenues and GP/ NDR in negative year-on-year territory across 2016, the median recruiter responded accordingly by initially constraining headcount growth (in H1) before paring back numbers in the

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financial crisis appear to be a less convincing explanation for the persistently weak performance.

UK employment rates alone are not indicative of the overall economic conditions nor of hiring and investment decisions. As uncertainty brought about by the EU referendum shock and ongoing Brexit negotiations creeps in, productivity is further hindered by deteriorating employers’ confidence in the economy, as revealed in the REC’s December 2017 JobsOutlook report.

In particular, 33% of employers surveyed in September-November 2017 believe economic conditions are worsening while 25% believe they are improving.

Following a downward spiral since June 2016, the net balance (-9) for this period is the joint lowest on record.

Confidence in making hiring and investment decisions also

33% OF EMPLOYERS SURVEYED IN SEPTEMBER-NOVEMBER 2017 BELIEVE ECONOMIC CONDITIONS ARE WORSENING WHILE 25% BELIEVE THEY ARE IMPROVING

fell by three points to +11.

The UK is faced with a declining availability of candidates and an emergent mismatch of skills. A drop in net migration from the EU in recent months has exacerbated the adverse impact of a progressively shrinking workforce in the UK. The REC’s January 2018 ‘Report on Jobs’ reported a further steep drop in both permanent and temporary candidate supply during December 2017. At the same time, insufficient investment in infrastructure, new technology, education and training is severely impeding productivity however hard employees work.

A healthy, high-performing jobs market rests on the quality, skills and aspirations of its workforce. The recruitment

will continue to be highly changeable. In such a climate, the importance of benchmarking performance against industry peers – and having the agility to respond accordingly – cannot be underestimated.

Figure 1. Total employees versus last year (%) – quarterly average 16% 14% 12% 10% 8% 6% 4% 2% 0 -2% -4%

Average monthly total employees v last year % Q1 Q2 2015

Q3

Q4

Q1 Q2 2016

second half of the year.

Against a more favourable backdrop of positive year-onyear growth in both turnover and £GP/£NDR figures in 2017, the median recruiter has had the confidence to add to

Q3

Q4

Q1 Q2 2017

its headcount once more.

As market uncertainty is set fair to continue for both employers and candidates alike, courtesy of on-going Brexit negotiations, the demands upon the industry

industry has a vital role to play in addressing heightened business concerns over the UK’s economic outlook and bridging the gap between persistently low productivity and labour market practices.

By focusing on the skills and quality of the UK workforce and ensuring professional and robust practices to secure and invest in new recruits, the industry will support businesses in planning their workforce effectively and increasing productivity so that the UK economy can recover and flourish.

To read more about the latest recruitment and employment trends, subscribe to receive Report on Jobs and JobsOutlook, the REC’s most up-to date sources of monthly UK labour market data and analysis.

Q3

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.

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Member of the month

LYNIS BASSETT

A CLASS ABOVE Specialist education recruiters Class People rode the wave of a challenging 2017, but came out with two awards at the 2017 IRP Awards. Chief executive Lynis Bassett tells Recruitment Matters how they made it to the top of the class.

Recruitment Matters: Congratulations on your IRP Awards wins – has it sunk in?

Lynis Bassett: To be honest, are things any different now?

Not really, because we still plough on with carrying out our plans growing this business. We made some key changes in 2017 and it was a challenging year, so the recognition was good for the teams and individuals who had the courage to stay and work through the more difficult times. Surviving in good times as a recruitment consultancy is easy; surviving through challenging times is something else. Therefore the award is a big, big thank you to them.

RM: What made last year so challenging?

LB: It started in April 2015 when I noticed we were falling

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behind the curve. There had been some key changes within the marketplace.

For 10 years, I had built a model around providing quality teachers who bring value and go the extra mile, and this worked well. But in what the sector calls “destress call” – ad-hoc daily sickness – many schools will opt for the cheaper option.

The market was inundated with competitors providing cheaper solutions. That put real pressure on our model.

We weren’t going to increase our rates and we weren’t in a situation where we could take on fewer candidates because

of the teaching shortage. The solution for us was to reduce our overheads.

RM: How did that play out?

LB: We have a superb head office that speaks volumes for us and our brand. It’s lively, it’s energetic, and it’s us. But where we were struggling was in our satellite offices. We felt too busy, almost like we were forever peddling in the lowest gear on the flats, ultimately going nowhere. I built this business on a gut feel for what is right and what is wrong.

I can’t go on gut feel alone anymore, but I look for the

“I REMEMBER AS A SUPPLY TEACHER I WAS TREATED LIKE A NUMBER. IT WAS A BIT LIKE A SAUSAGE MACHINE – THEY PUT TEACHERS AT THE TOP AND SQUEEZE THEM OUT THE BOTTOM INTO A CLASSROOM”

data to back that up. In looking for the data to back up my decision of the restructure, we asked our schools: on a scale of 1 to 10 does the location of our office matter? The results were that it always scored between one and three.

RM: How did the business start?

LB: In 2003, I was a primary teacher in Gloucester and had a lightbulb moment. The process for hiring supply was that a school couldn’t contact me directly – they had to go through an agency. I was tired of the phone calls and thought I could make it simpler by doing it myself. I never set up Class People to become what it is today – I was a freelance teacher finding a better way of working. But within three weeks of starting, I had schools saying “We’re short a teacher, do you know

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anybody?” About five years later, I reached a crossroads where I needed to decide if I wanted to run it as a lifestyle business, or pull out into the middle lane and put my foot on the accelerator.

RM: What happened next?

LB: The business has always been education first, recruitment second, but one of the key actions was to bring in an ex-director from Hays, someone who I say taught me how to recruit.

He talked about desks and candidates and suppliers instead of teachers and schools. He taught me to approach schools and ask if there were any roles available rather than waiting for them to come to us. But we still

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differentiated ourselves on providing value.

RM: Tell me more about that approach.

LB: I remember as a supply teacher I was treated like a number. It was a bit like a sausage machine – they put teachers at the top and squeeze them out the bottom into a classroom. I knew I could tweak that proposition and make it more personal.

As a supply teacher, I always strived to add value to every class I taught in and treat it as though it was my own class.

We differentiated ourselves on providing a personal service and going the extra mile RM: What are your key challenges?

LB: Recruitment is hard

RM: What does 2018 look

and it’s becoming harder, especially in education.

There’s more competition now coupled with a lack of teachers. But this company is a good company to work for and we have a strong support network. We want to build our senior leadership team and we have some good people who we will grow and develop.

One of the big things for us is sharing knowledge.

Myself and my daughter Naomi – who also works for the company – understand the history and make-up of schools inside and out. We want to share that sense of history and our overall vision about where we’ve come from and where we’re going to go.

like?

LB: We are in a strong position coming into the New Year.

We’re in a more comfortable space than we were a year ago. Our focus remains on the delivery of that service.

The restructure allowed us to deliver a more efficient service to our schools because of that shared knowledge. Our emphasis is about creating raving fans and we can only do that by caring. Integrity is key for us, and if we care enough, we will create raving fans. We’ve also created two new opportunities for growth – we’ve recently made an acquisition and we’ve also moved into a new area in Bournemouth, Dorset and Hampshire.

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Legal update

GROWING BUSINESSES

By Lewina Farrell, head of professional services Growing a business is exciting but brings with it certain challenges including in HR, legal and compliance. In this article we highlight some of the issues growing businesses need to think about and where they may need extra support.

Internal needs Are you growing by volume or are you expanding into new sectors? Do you have the right people in place? Do you need to recruit externally, for example to bring in sector expertise, or can you promote internally and how will you backfill that resource? Either way make sure that your recruitment and promotion processes are fair and inclusive to all prospective candidates.

Do your working practices reflect the needs of an inclusive workforce? Consider how more flexible working might allow you to retain or attract a more diverse team. If promoting internally consider any additional training required, including management training, as well as any support the successful individuals will need.

If you are an owner/manager employing the first staff for your business where will you get your HR and legal support from?

Do your job descriptions reflect everything your staff do? Do you need to update contracts of employment? If people are moving into more senior roles you may need to lengthen their notice period and review garden leave provisions. You may also need to revisit their commission/ bonus arrangements as well

as post-termination restrictive covenants.

Do you need to bring in internal compliance?

As businesses grow their processes may become more complex or they may acquire clients with more stringent compliance requirements.

There will be a point at which compliance needs a dedicated resource to implement and manage these issues – great compliance can pay for itself whilst allowing the business owner to do what they do best.

If you have attracted external investment, how does that impact on you as a director/shareholder of your business?

The impact of scaling up Growing businesses may find that they come into the scope of new requirements, which

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will impose additional cost or administrative burdens on them. These include: The apprenticeship levy – Businesses with a payroll of more than £3m are required to pay the Apprenticeship Levy, introduced in April 2017. The payroll includes temporary workers paid directly by the recruitment business and the levy calculation is done monthly. So growing agencies might find that they have to pay the levy, although they weren’t required to do so previously and therefore will need to review charge rates/ margins.

Gender pay reporting – Similarly, since April 2017 organisations with 250 or more employees have been required to complete gender

pay reports (the first reports are due by 4 April 2018). For the purposes of these reports ‘employee’ includes individuals required to provide their services personally so will include a majority of temporary workers paid directly by the recruitment business (those working through payment intermediaries will appear on payroll records of those businesses and count towards their 250 threshold).

Organisations must calculate on 5 April each year if they have 250 or more employees and if they do, they will have to publish a gender pay report by 4 April the following year on both their own website and a dedicated government website.

So, exciting times but lots to think about.

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Inspiration

BEHIND THE SCENES AT THE INSTITUTE OF RECRUITMENT PROFESSIONALS

The View

Tim Hodgson n is a director att TGM Recruitment ment

Kristy Moore is the Recruiter of the Year

WHAT I KNOW

IRP AWARDS WINNER

What’s the background of TGM? TGM stands for Tim, Gary and Mark. We met 19 years ago when we worked for another recruitment agency within the construction sector. TGM deals with the supply of white collar workers within the construction industry on a freelance and permanent basis within London and the South-East.

Can you tell us about your role with Acorn?

I predominantly manage a team of four and recruit for all permanent placements across commercial and industrial sectors, as well as heading up the commercial temp desk and ensuring my team fulfil their job requirements week-in and week-out. I also attend new business meetings, generating sales for the branch, and ensure all existing clients are catered for and feel valued. There is no other industry that is so varied, with new challenges daily. Having exceptional customer service is key to being successful in my role, always putting the client first and understanding that without candidates you can never be a success in this industry.

Perm or temp placements?

We’re 60-40 in favour of perm over temp roles. We tend to work with a mix of clients, from SMEs to larger organisations based largely in London and the Home Counties.

How do you differentiate yourselves?

As a small to medium company, one of the ways we stand up to the larger companies is by offering a higher quality of service with more of a personal touch. We get to know our clients well – that way they always know which consultant to speak to when they call in who can offer that specific knowledge to enable us to service their needs and benefit our knowledge in the relevant sector. And the same for our candidates as well; we form a strong relationship so we can find out exactly why they are looking to seek a new opportunity and means we can give an honest assessment about them. Building a sense of trust is important for us.

What challenges lie ahead for TGM? The obvious one is Brexit – will companies be put off investing? Will they move out of the London market? We’ll have to wait and see. We also do a lot of work within the hotel and residential market and I don’t think they’re going to be affected too much because they’re booming right now.

Secondly, there’s the question about candidate shortages.

There are already fewer and fewer professionals around at the moment and I think the UK leaving the EU will have an effect on that too.

What about recruitment appeals to you?

Every day is varied and different from the last. Recruitment is fast-moving, ever-changing and I’m always learning. When visiting clients, it’s paramount to understand the client’s full requirements and what will work well for the business. Areas such as team dynamics are key as you need to visualise the company itself to place the right candidate that will stay and grow within the business for years to come. What I love about recruitment is helping candidates get placed in their dream roles, and knowing that I have made a difference whether it will be saving someone from losing their mortgage (due to them being made redundant), or helping someone overcome their nerves when applying for their first ever job.

I strive to be number one in marketplace, and always strive for perfection in all I do, so really getting to know your clients and what they are seeking will help you place the right candidate first time, every time, and increase profits year upon year What differentiates you from the competition?

My clear passion and never-give-up attitude also add value, as without these attributes, failure is inevitable.

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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What’s coming up?

ALL NEW REC COMPLIANCE TEST WORKSHOPS ANNOUNCED Demonstrating best practice and compliance is an important part of working within the recruitment industry.

It is the professional standards that you adhere to, as an REC member, that set you apart from the rest.

That’s why the REC developed the online Compliance Test, and to help you with ensuring you remain one of the best

agencies in the business, the REC regularly runs compliance workshops.

These one-day sessions help you to understand all aspects of compliance within a recruitment business and enable you to pass the Compliance Test with flying colours.

We are running a number of Compliance Test workshops at our offices in London throughout 2018.

Compliance Test workshop dates • 26 January • 16 February • 15 March • 27 April • 18 May • 27 June • 19 July • 29 August • 26 September • 23 October • 23 November • 6 December Visit www.rec.uk.com/compliance to register or call 0207 009 2100.

BENCHMARK YOURSELF WITH RECRUITMENT INDUSTRY TRENDS 2016/17 Recruiters are the engine that drives the UK labour market. Recruiters helped almost 1 million people find a new permanent job in 2016/17, and on any given day there are 1.3 million temporary agency workers on recruiters’ payroll.

Total industry turnover was £32.2bn in 2016/17; £28.2bn (87.6% industry turnover) was achieved through temporary/contract placement activity, while approximately £4bn (12.4%) was generated through permanent placements.

The report also provides valuable data about the hours worked by temporary workers, and the REC’s forecast for industry growth.

We produce recruitment industry trends for our members. We encourage you to copy the charts and tables to use in your own internal reports and presentations to clients.

Visit www.rec.uk.com/trends to download the report and try our interactive benchmarking tool.

SCALE UP: IN THE ROUND DATES 2018 • Peterborough - 28 February • Edinburgh - 1 March • Manchester - 6 March

RECRUITMENT MATTERS The official magazine of The Recruitment & Employment Confederation Dorset House, 1st Floor, 27-45 Stamford Street, London SE1 9NT

Photo credit: Recruitment Matters would like to thank Cori Shearer at alacodeblog for last month’s photo of Shazam’s Ruth Penfold.

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 © 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.

Tel: 020 7009 2100 www.rec.uk.com 8 RECRUITMENT MATTERS FEBRUARY 2018

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