THE VIEW AND THE INTELLIGENC E
The priorities beyond Brexit P2 BIG TALKING PO INT
A look at the latest industry trends P4 LEGAL UPDATE
RECRUITMENT MATTERS
An update on using Tier 2 Visas P6 Issue 70 February 2019
INSPIR ATIO N
IRP Awards: the winner’s interview P7
WO R KP L AC E R EFORMS
What government workplace reforms mean for recruiters J
ust before Christmas, the government responded to a number of consultations following the Taylor Review of Modern Working Practices, with the following changes impacting the recruitment sector: 1. The government plans to publish legislation to repeal the so-called ‘Swedish Derogation’ of the Agency Workers Regulations that allows agency workers to trade off equal pay for pay between assignments. At the time of writing, legislation hasn’t been published, but there will be an implementation period. If you have workers on these contracts, nothing will change overnight. 2. In order to increase transparency in the recruitment supply chain, the government will introduce a right for agency workers to receive a ‘key facts’ document at the point of registration from their employer. This will contain information on contract type, minimum pay, how the worker will be paid, if the worker will be paid through an intermediate company and any
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deductions, and how these will impact the worker’s pay. This will be enforced through the Employment Agency Standards Inspectorate (EAS) and we will be working with government to produce guidance. 3. We have long called for umbrella companies to be regulated by the EAS, and we are pleased the government has now confirmed its plan to introduce legislation to do this, by focusing enforcement on situations where agency workers haven’t received adequate pay. This will protect decent businesses from unfair air competition. 4. One of Matthew Taylor’s key concerns was that many workers weren’t aware of their entitlement to holiday pay, and some employers weren’t paying workers the holiday
“Recruiters shouldd start preparing for these changes and advising their clients”
pay they were due. The government has said: • State enforcement will now include underpayment of holiday pay • There will be a campaign to boost awareness and understanding of holiday pay and new guidance to support the interpretation of holiday pay rules • Holiday pay reference period will be extended from 12 to 52 weeks 5. There will be a right for all workers to request a ‘more predictable w aand stable contract’ after 26 weeks of service. One of the recommendations se in the Taylor Review was for agency workers to request a permanent w contract with the end-client. We are co expecting more details on this to ex follow. fo Recruiters should start preparing for these changes and advising their fo cclients. Nothing will change overnight, but planning on how the changes will be implemented is a must. Philip Campbell, REC senior policy advisor
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L E A D I N G T H E I N D U S T RY
the view... Search for growth and productivity, and technology is never far away, says
NEIL CARBERRY, REC chief executive
W
e all start the year thinking about growth – and how our market is changing. Sometimes that is about short-term trends in the economy. I’m sure there will have been a lot more on Brexit between me writing this and you reading it. But it is equally important for us to think about the big, long-term changes that will affect our businesses and consider how we will react. One such change is in how we use AI and machine learning. Our data shows businesses are currently failing to hire the right person for two out of five roles. A poor hire at mid-manager level with a £42,000 salary can cost a business more than £132,000. As recruiters, if we use technology well, we could help reduce these numbers by more accurately matching talent to the right jobs. And by being early adopters of technological change, we can add value for clients who aren’t as far ahead. As one of our REC Council members, Simon Conington of BPS World, rightly pointed out: “There is a proliferation of new, technologydriven solutions, but nothing is falling from the stack. Recruiters can help identify what works.” Good use of technology can also help us to be more efficient in our operations. We can better visualise and review key data, and streamline processes. Firms can automate routine sourcing and screening. As a Life Sciences member recently said, AI may well be the new electricity! For Max Knupfer of recruitment technology firm eva.ai it’s down to how recruiters spend their time. While a recruiter should be spending most of it on value exchange conversations – where the consultant is adding value to a client or attracting a key candidate in person – only 5% of their time is available to do this because 95% of their time is spent on admin tasks, communications, data entry and searches. Setting people free to do what they are best at could be a huge productivity boost for the industry – though it will also reshape businesses and career paths. In the future, best in class might look more like a top corporate law firm, where many are already using AI for document review. As business leaders, our challenge is to think big and be bold. The technology to reshape our businesses to be more competitive and effective is emerging now. I would be interested to hear about your experiences – the REC is keen to support members to grow in this new world. If you want to keep up to speed with all things recruitment then follow me on Twitter @RECNeil
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How we respond to industry concerns will help shape the future, says TOM HADLEY, REC director of policy and professional services HADLEY ’ S C O MMENT
Up for the challenge These are turbulent times, but the mood remains upbeat as we roll with an evolving economic and political landscape. Recruiters are a resilient bunch, and our latest round of discussions with industry leaders provided a game-plan for taking on immediate and longerterm challenges. How do recruiters and employers currently feel about the outlook for the UK jobs market? Our ‘JobsOutlook’ report shows declining confidence in the economy, although hiring intentions remain stable. Our poll at the recent Future of Jobs Summit showed a similarly mixed picture, with 37% quietly confident that a strong and dynamic UK jobs market will emerge over the coming years, and 31% feeling that the jobs market will probably deteriorate in the mid-term. What external factors will shape the UK jobs market in 2019 and beyond? Unsurprisingly, Brexit and technology are at the top of the charts, followed by new regulations and evolving employment models. Recent member meetings also confirmed that the approach to new technology remains pragmatic, with 76% saying that AI and new technology would have a broadly positive impact on hiring procedures and recruitment supply chains. But only 32% felt they had good awareness of how changes might impact them. This is why helping members pre-empt and harness AI and new technology will be an REC priority in 2019. Access to staff remains the immediate concern across sectors ranging from industrial and hospitality to healthcare and life sciences. As well as continuing to influence post-Brexit immigration models, we need to spread the good recruitment message and reach out to under-represented groups. The Disability Confident scheme has reached a milestone of 10,000 employers signed up and over 50% of Future of Jobs Summit attendees were confident that a genuine stepchange on inclusion would be made over the coming years. The challenge ahead is to deal with immediate Brexit uncertainty while not losing sight of longer-term priorities and ensuring that recruitment is recognised as one of the UK’s key professional services sectors. Being a leading voice on issues such as inclusion, skills and the future of jobs forms part of this agenda.
You can follow Tom on Twitter @hadleyscomment
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3%
the intelligence... WITH REC SENIOR RESEARCHER, THALIA IOANNIDOU
Confidence in making hiring and investment decisions fell by 3 percentage points to the lowest recorded level since April 2018
A
ccording to current plans, the UK will have left the EU in less than 2 months, and the so-called transition period will be in place. From the ongoing political and economic uncertainty to persistent labour and skills shortages, employers’ heightened concerns are reflected in their economic outlook for 2019. Confidence in the prospects for the UK economy has remained firmly in negative territory in recent months, signifying there has been little or no progress by government to reassure employers. At the time of writing, employers’ confidence in economic conditions deteriorated to net -12, while confidence in making hiring and investment decisions fell by 3 percentage points to the lowest recorded level since April 2018. Moreover, according to a recent survey, three in five employers anticipate economic conditions will be more challenging in 2019 than in the previous year – only 3% of respondents think economic conditions will be less so (‘JobsOutlook’, December 2018). Combine the continuing Brexit uncertainty with changes brought about by tax reforms and technological advances, and employers are starting to make plans to respond to adverse economic conditions and maximise opportunities for growth. The recruitment industry has a crucial role to play in these efforts.
Median RIB recruiter
Jan-Dec 2017
Q1 2018
Q2
-11%
-3%
11%
5%
PERM FEES CONTINUE THEIR YOY DECLINE
Q3
Perm fees versus last year (%), for the median recruiter, JanDec 2017 and Q1-Q3 2018
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the details of the UK’s post-Brexit relationship with the EU as well as labour and skills shortages will remain The REC’s ‘Recruitment Industry most pressing challenges for UK Trends 2017/18’, which reported a businesses in 2019. The recruitment substantial growth of the recruitment industry can help address heightened industry, has highlighted the business concerns by supporting recruiters’ ability to adapt swiftly employers in planning their workforce to changing times and shifting skills effectively and ensuring the longneeds. Meanwhile, notwithstanding term health of the UK jobs market. declining availability of candidates, Analysis by the Treasury indicates there was a notable five-point that the country’s GDP will be year-on-year increase from 73% lower in 15 years under all Brexit to 78% in satisfaction levels of scenarios than it would be with UK employers with agency EU membership. National partners they have used income is expected in the last two years. to fall if migration Of this proportion, from Europe is 27% noted that the satisfaction reduced from they were level of UK its current levels. very satisfied employers with But it’s at times like this – up from 17% in the agency partners, that recruiters add value same period last year up from 73% by connecting people (‘JobsOutlook’, December to opportunities and 2018). employers to people. Uncertainty around
The latest real-time information from the RIB Index shows that, having averaged a year-on-year (YoY) increase of 5% in 2017 – and surging to a noteworthy +11% YoY increase in Q1 2018 – perm billings for the median RIB recruiter were down, YoY, across Q2 and Q3 2018. Due to the buoyant Q1 2018 performance,
78%
however, the median RIB recruiter’s performance across the first three quarters was just 1% lower YoY. In contrast, the average monthly permanent billings of the lower quartile recruiter, across Q1-Q3 2018, were 38% lower YoY, while for the upper quartile recruiter it was +55%. Of additional note, the performance of the latter
remained resilient until Q3 2018. Doubtless, some employers are delaying hiring decisions due to the continuing Brexit uncertainty. The Q4 2018 performance is likely to hinge on the decisionmaking of those that can no longer delay and those who opt not to add/replace headcount.
BELINDA JOHNSON runs employment research consultancy, Worklab, and is Associate Knowledge & Insight Director of Recruitment Industry Benchmarking (RIB) – a strategic partner of the REC. The RIB Index provides bespoke confidential reports on industry benchmarks and trends. See www.ribindex.com; info@ribindex.com: 020 8544 9807.
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I N D U S T RY T R E N D S
big talking point
Fighting fit The REC’s latest Recruitment Industry Trends report paints a picture of growth, as recruiters have responded rapidly to the challenges they have faced. Recruitment Matters looks at some of the highlights
It has been an extraordinary year for recruitment and recruiters,” says Neil Carberry, chief executive of the Recruitment & Employment Confederation. “Tight labour markets and quickly shifting skills needs have driven the growth of the industry – but only because recruiters have adapted swiftly to changing times.” That growth is reflected in the REC’s 2017/18 ‘Recruitment Industry Trends’ report, which shows the industry’s turnover from permanent and temporary placements, as well as other HR services, increased 11% to £35.7bn. The number of businesses operating in the UK recruitment industry also rose by 10% to 30,430 over this period. The biggest growth was seen in the number of permanent-centric enterprises that in turn helped fuel an increase in the number of permanent placements, which was up by 14%. Permanent margins were also up. The average number of temporary and contract workers on assignment on any given day was 8% lower than the average daily number recorded the previous year. The rise in the average number of temporary/contract workers on the broader industry’s payroll in 2017/18 (1,646,000) was driven by the increased likelihood of workers on multiple provider payrolls.
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THE PEOPLE 115,000 – the number of people employed in the recruitment industry, enough to fill all the seats and the pitch at Wembley Stadium. This is up 15% compared to the 2016/17 report 1.02 million – the number of temporary/contract workers on assignment on any given day, a drop of 8% 1.14 million – the number of people placed by recruiters and associated HR services into permanent jobs, up 14% www.rec.uk.com
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I N D U S T RY T R E N D S
Added value The report continues to track the evolution of the industry – and the valuable services it offers – with buoyant demand for recruitment process outsourcing (RPO) and managed service programmes (MSP) in particular. Following the off-payroll reforms in the public sector in April 2017, for example, there has been a growth in demand for recruitment agencies, and their supply chain partners, to take responsibility for administering PAYE for a significant number of workers falling within the remit of IR35. When it comes to permanent placements, there is a growing number of companies that have fewer than 10 employees. This continues the trend towards more niche and specialist businesses, which choose to focus on a local market and/or particular skills. And just as the number of enterprises grew significantly in 2017/18 despite, or potentially in response to, adversity, REC members believe the opportunities for growth continue as employers look to the industry for increasing support for skills and legislative challenges. Looking ahead at the next three years, their optimism is reflected in the forecast for continued growth, albeit at a slower rate – 4% in 2018/19, 4.5% in 2019/20 and 5% in 2020/21. “The path ahead is uncertain – Brexit, immigration reform, tax changes, technology. But this report shows that recruiters can look at that uncertainty and see the opportunities,” concludes Carberry. “Whatever the coming months and years bring, recruiters will continue to use their skills and knowledge to boost the UK’s labour market and find people their perfect job.”
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THE MONEY £30.85bn – 86% of industry turnover was achieved through temporary/contract placement activity, proportionately similar to 2016/17 £4,238 – the average value of permanent placements from the wider recruitment industry, up 6.4% £34,976 – the average annualised turnover of each temporary/contract worker on assignment, up 20% 4% – the growth in average margins for permanent placements, over the last year, compared with a decline of 4.3% in the average margin for temporary/contract placements
THE ASSIGNMENTS 12+ weeks – 64% of temporary assignments were for more than 12 weeks in 2017/18, compared to 61% in 2016/17 6+ months – 20% of temporary assignments lasted for more than six months, at a similar level to the previous year 85% – the proportion of contract placements lasting more than 12 weeks, up from 80%; 45% of contract workers were on assignment for six+ months, including 9% on contract for 12+ months FEBRUARY 2019 RECRUITMENT MATTERS 5
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TIER 2 VISAS
legal update Can employment businesses sponsor candidates under Tier 2 visas? By BUNMI ADEFUYE – solicitor and commercial advisor, REC
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t a time when there are candidate shortages in certain sectors, the Tier 2 visa system allows organisations to source skilled candidates from outside the European Economic Area (EEA) when there are insufficient qualified candidates within it. A few employment businesses have questioned whether or not they can sponsor candidates under a Tier 2 visa and supply them to their clients. The simply answer to the question is no, under the Immigration Act 2016. In the Tier 2 visa sponsor requirements,
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the organisation sponsoring the candidate must do so for the purpose of the candidate filling a vacant position with that organisation. There are no provisions that allow an employment business to sponsor a candidate purely for the purpose of supplying that candidate as labour to another organisation. This is largely because the sponsor must be responsible for directing the work done, as well as paying the candidate. The government produced useful guidance for all Tier 2 and Tier 5 sponsor licence applications made on or after 18 July 2018. The guidance specifically addresses this issue in sections 5.6-5.8 which state that: 5.6 If you are an employment agency, you can
apply for a sponsor licence but only to sponsor migrant workers who will be directly employed by you in connection with the running of your business. You cannot sponsor a migrant if you will then supply them as labour to another organisation, regardless of any genuine contractual arrangement between the parties involved. 5.7 If you are an employment agency or intermediary and we grant a sponsor licence to you on this basis, but later find that the migrants you are sponsoring have been supplied as labour to another organisation, we will revoke your licence. 5.8 If you are a sponsor that wants to employ a migrant worker who has been supplied to you by an employment agency or an intermediary, you can only assign a certificate of sponsorship to the migrant if you: • have genuine responsibility for deciding all the duties, functions and outcomes, or outputs of the job the migrant is doing • are responsible for agreeing and paying the migrant’s salary. • For further information you can review the Home Office guidance here, https://bit.ly/2ByIFu2
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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
Q&A
BEHIND THE SCENES AT THE INSTITUTE OF RECRUITMENT PROFESSIONALS
Why did you choose a career in recruitment? My mum has always been involved in a lot of charity work, trying to give people a better life, and I wanted to follow in those footsteps. Choosing to go into recruitment, for me, was about bringing that mindset into everyday life – helping people achieve their dreams.
What are your guiding principles in how you approach your work? Honesty, integrity and trust are some of the most important guiding principles anyone can have. When you see individuals let down by countless recruiters, giving our industry a bad reputation, I want to make sure I go above and beyond every single time and show them that I really care about their journey.
So what does the “best possible recruitment experience” look like to you? Exceeding expectations. Building strong relationships. Giving a personal experience, not a robotic approach. I’ve even put myself in my candidates’ shoes for the day, volunteering to work with a client on a Saturday. Working
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KRISTY POTTER Chippenham branch manager at Acorn Recruitment on what it takes to win Recruiter of the Year at the IRP Awards
outside the normal 9-5 routine. Customer service is equally important to candidates as my clients and working hours for many people can vary. I often find myself discussing details of vacancies with candidates any hour of the evening, to ensure they feel valued and listened to, and there are no last-minute nerves if an interview is happening the following day.
You’ve won Recruiter of the Year two years in a row, so what’s your secret? Hard work, long hours and just being flexible. And then some more hard work on top of that. Clients and candidates would say that I’m the most resolute person they’ve met, and that my never-give-up attitude is what sets me apart. I was still responding to people when I was on leave for my wedding! Personally, I’d never have believed I could have won this two years in a row. But my divisional director Noel Hoare has given me inspiration, support and belief in myself. He’s my voice of reason. And I’m incredibly fortunate to have such an amazing team
behind me. Without a solid team in place, I genuinely feel I wouldn’t be as successful as I am today.
What’s the biggest challenge you’ve faced, and how did you tackle it? I frequently work outside of my comfort zone – stretching my capabilities. As an example, one of my clients had autism. He inherited his company and was struggling to expand the business and, in particular, hire new staff. He had severe social anxiety, which I discovered from an employee who had recently left his business. I took it upon myself to visit the client several times and helped him overcome his struggles. I felt really proud to sit beside him in the interviews as he communicated confidently – and when the successful candidate accepted I really felt I had achieved something special.
And what’s your biggest success? A client requested 30 permanent placements to be completed within an incredibly short timeframe. I advertised across all job boards and created
leaflets to deliver in the local area. I personally interviewed and prepped each candidate, preparing mock tests, interviews and dress rehearsals. All the hard work certainly paid off, as I achieved a 100% success rate.
As a branch manager, you’re training new recruits – what’s the best advice that you give them? If you work hard, and you keep going, you can achieve anything. Don’t get despondent in rejection. Try different and new techniques. Don’t get stuck by the phone day in, day out. Go out, meet your clients and candidates. Be yourself, but make sure you have presence so you’re not forgettable.
What’s next for you? Well I won’t be entering into the IRP Awards for a third year – but I would love to enter the Global Recruiter Awards. Success breeds success. I want my team to see hard work pays dividends and I want them to believe in themselves. If I’ve helped and encouraged one additional person grow in confidence and feel more inspired, then I feel my mission has been accomplished.
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W H AT ’ S C O M I N G U P ?
Upcoming training The courses over the next two months that will help you to perform at your best, and deliver for your team 6 February Recruitment Law: Supplying Limited Company Contractors (half day, London) 7 February Social Strategy and Branding (London) 12 February Interviewing Skills (London) 13 February Balancing Act (London) Telephone Sales (London) 19 February Candidate Sourcing and Management (London) 20 February Recruitment Law: Understanding the Essentials (Swindon) Business Development Planning (London)
6 March Recruitment Law: GDPR (half day, London) 7 March Recruitment Law: Understanding the Essentials (Enhanced, 2 days, London) 12 March Successful Account Management (London) Telephone Sales (Manchester) 14 March Business Development Planning (Swindon) Develop & Win: Tenders and Large Contracts (London) 19 March Introduction to Recruitment Practice (Bristol) LinkedIn Masterclass (London) 20 March Management Essentials (London)
21 February Recruitment Law: Supplying Limited Company Contractors (half day, Swindon)
26 March Essential Skills for Temporary Recruiters (Belfast)
26 February Introduction to Recruitment Practice (London)
27 March Essential Skills for Permanent Recruiters (Belfast)
27 February Essential Skills for Temporary Recruiters (London)
28 March Perfect Client Meeting (London) ondon)
28 February Essential Skills for Permanent Recruiters (London)
For more information, visit www.rec.uk.com/trainingngand-events/training/ or call 0207 009 2100 to book your place
5 March Customer Service for Recruiters (London) Start Up Your Own Agency (London)
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
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SAVE THE DATE
WHAT: TREC2019 – THE TALENT RECRUITMENT AND EMPLOYMENT CONFERENCE WHEN: 4 JUNE WHERE: GRAND CONNAUGHT ROOMS, LONDON Join HR and talent directors, recruitment business leaders and in-house resourcing specialists at the flagship event of the Good Recruitment Campaign. More than 250 delegates attended last year, with keynotes, panel discussions and roundtables covering everything from the impact of artificial intelligence to the importance of diversity and inclusion.
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 © 2019 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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