Recruitment Matters - January 2016

Issue 33 January 2016

RECRUITMENT MATTERS The View and The Intelligence

Member of the Month

What does 2016 hold?

Red Berry Recruitment

p2-3

p4

Legal update and the IRP

Events and training

Vital tax changes for 2016 p6-7

New Year, new business

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IRP LAUNCHES DEGREE-STANDARD QUALIFICATION Recruitment will have its first degree-standard qualification with January’s launch of the IRP’s Level 5 Diploma in Recruitment Leadership.

The Level 5 DipRL is aimed at senior recruiters and directors, with emphasis on business planning and financial management.

The IRP’s head of qualifications Richard Charnock says the Level 5 is a step above what the trade body has offered before.

“It’s an exciting time,” he says.

“This is not something that’s been thought up by me or our examiners as a good idea. This is something we took to consultation and the

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KEY STATS • THE ONLY DEGREE-

STANDARD QUALIFICATION IN RECRUITMENT • AIMED AT SENIOR RECRUITERS AND DIRECTORS • COLLEGIATE-STYLE LEARNING • SEVEN MANDATORY UNITS AND A CHOICE OF SEVEN OPTIONAL UNITS. • £4,500 + VAT

feedback was strong. People want this.

“It’s designed for recruitment leaders to grow

their business, professional competence and think more strategically. For the first time we’re going outside what our Level 3 and Level 4 diplomas have offered.”

Charnock explains the diploma was assembled by an employer panel made up of small to large companies, as well as in-house recruiters, across different sectors.

The diploma will be taught “collegiate-style”, and students will be enrolled into a learning group that will move through the qualification, assisted by a study coach.

Students will be able to start the Level 5 diploma whenever they choose and

study at their own pace. It’s expected the course will take no longer than two years to complete.

The new diploma is made up of seven mandatory and optional units and will cost £4,500 + VAT to complete.

For more information, visit www.rec-irp.uk.com/DipRL

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Leading the Industry

THE VIEW

The band is warming up for 2016, says Tom Hadley, REC director of policy and professional services

What’s in store for 2016? asks Kevin Green, REC chief executive

2015 has been a cracker of a year for the recruitment industry. Sales peaked at £31.5bn in 2014/15, with growth of £1.8bn or 9.7% compared to last year. I was delighted to see a significant rise in permanent margins as employers hunted for the talent they need.

So what does 2016 have to offer? The market will continue to grow as skill shortages create major problems in many sectors. We’ll keep the pressure on the government to help business by improving our education system with better careers advice, the reintroduction of work experience into the school curriculum and by enhancing the quality of vocational qualifications. In the short term, the government needs to create a balanced approach to immigration, so that when businesses can’t find the skills they need within the UK they can go overseas to fill their jobs. There is a global talent market and we don’t want our businesses disadvantaged or, worse still, relocating abroad to get the people they need.

The opportunity to grow your business next year will be phenomenal. We will provide more training, advice and guidance as part of our Scale Up campaign so that you can

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THE VOICE (2016 REMIX) learn from those that have been there and done it. Keep an eye out for new research, new events and even more podcasts.

We will continue to champion our industry by highlighting not just the value we provide to businesses, but also to jobseekers. We have always made strong arguments about the economic value of our industry and we know that our clients recognise the difference we make. But next year we want to talk about how jobs transform lives. Since 2009/10 we’ve helped over 4 million people find a permanent job – we need to shout about the positive impact we make for individuals.

As an industry, let’s talk up what we do. Let’s stop ranting about cowboys and rogues who make up a very small percentage of the industry. In every sector of the economy there are people who don’t play by the rules – but if we spend our time talking about the few bad apples our clients, the media and government will view us all the same. We make a real difference every day, so in 2016 let’s shout about all that’s good about our great profession.

You can follow Kevin on Twitter @kevingreenrec

2016 looks like being another chart-topping year on the policy front. In the words of American author, religious leader and occasional crooner Dallin H. Oaks, “priorities shape our choices, and choices determine our actions”.

Here are the six killer tunes that we’ll be blasting out next year.

1. Should we stay or should we go? – The EU referendum will go into overdrive next year. The recurring chorus from members so far has been that remaining within a reformed EU is in the best interests of the UK jobs market.

2. Suspicious minds – Our relationship with the procurement community hasn’t always been the most harmonious, but we’ll be in amongst it in the mosh-pit, promoting the need for sustainable supply.

3. I want to break free – Our pitch is to ensure that regulations covering the recruitment sector are proportionate and do not restrict industry growth. We’ll be fine-tuning the Conduct Regulations changes in 2016.

4. The Taxman – We need to create a level playing field by redesigning UK tax systems and achieving a workable outcomes on T&S schemes and self-employment (IR35).

5. Don’t you want me? – Yes we do! Immigration policy must chime with labour market needs. We’ll continue to plug into the Migration Advisory Committee and use our regular jobs data to ensure that our voice resonates.

6. Moving on up – Our research reports and ‘Jobs transform lives’ mantra will provide the throbbing bass line to our ongoing duets with policy makers on big ticket numbers like skills, full employment and labour market progression.

So that’s the song list: EU, procurement, industry regulations, tax, immigration and skills. As ever, the input and energy of REC members will supercharge our campaigning grooves in 2016. Come and join the band!

You can follow Tom on Twitter @hadleyscomment

www.rec.uk.com

07/12/2015 10:21

THE INTELLIGENCE THE INDUSTRY WILL KEEP GROWING, SAYS DIANA BEECH, SENIOR RESEARCHER As the REC’s latest Recruitment Industry Trends Survey reveals, UK recruiters are ending 2015 on a high, having generated record-breaking levels of turnover (£31.5bn) for the second year in a row – making £28.5bn from temporary/ contract business and approximately £3bn from permanent placements.

With UK economic growth projected to continue at a steady pace well into 2016, there is no reason to expect the industry to lose momentum any time soon.

The OECD and CBI are both predicting growth of 2.5% next year, whilst the BCC has upgraded its forecast to 2.6%

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due to stronger than expected growth in household consumption and services.

This correlates well with current business sentiment.

An HSBC survey of over 1,000 SMEs found that the majority (57%) are optimistic about turnover next year, with more than a third expecting at least 6% growth.

November’s JobsOutlook found that 94% of employers plan to increase or hold permanent headcount in the next year, whilst 98% plan to increase or hold agency worker numbers. Competition between hirers will therefore intensify as they strive to attract and retain the talent they need.

This is all good news for recruiters, who are being called upon to support businesses with their most challenging staffing requirements. More than nine in 10 agencies predict permanent growth in 2016 and 89% predict growth within the temporary/contract arena.

As a result, the REC

90% MORE THAN NINE IN 10 AGENCIES PREDICT PERMANENT GROWTH IN 2016 AND 89% PREDICT GROWTH WITHIN THE TEMPORARY/ CONTRACT ARENA

forecasts that total industry turnover will grow by 8.1% in 2015-16 and by 6.5% in 2016-17.

It is, however, important not to become too complacent. With the threat of an EU referendum looming large over 2016, businesses are likely to operate under increasing uncertainty, which may impact their hiring decisions. A KPMG survey of 600 UK companies has found that 56% of respondents already see this uncertainty as harming their business.

Moreover, the prospect of an early referendum may mean that UK recruiters fall short

£31.5bn

UK RECRUITERS ARE ENDING 2015 ON A HIGH, HAVING GENERATED RECORDBREAKING LEVELS OF TURNOVER

£28.5bn £3BN TEMPORARY/CONTRACT BUSINESS

PERMANENT PLACEMENTS

of achieving reforms that would benefit them.

Skills shortages are set to dominate next year. Although the latest Global CEO Survey shows that 85% of UK CEOs are confident about company revenue prospects, 84% are concerned about access to skills – registering 20 percentage points higher than last year.

It’s time, therefore, to ring in the New Year with cautious optimism.

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The BIG talking point

MEMBER OF THE MONTH

BERRY GOOD Red Berry Recruitment managing director Helen Lacey loves working with berries. She tells RM editor Michael Oliver why that’s a good thing

Recruitment Matters: How did you start in recruitment?

Helen Lacey: I started in a local agency in Barnstaple in North Devon, working on the industrial desk. I was the quickest promoted manager they had, turning the desk around from nine temps to 150 in three months. It was good fun, but I thrive off challenges and got bored quickly. I was headhunted by a national agency in 2003, but I’m not a corporate girl and I like to do my own thing. I was offered a chance to take on a franchise, but my gut instinct told me not to do it. From there, Red Berry was born.

RM: What sectors do you cover?

HL: We have three branches 4 RECRUITMENT MATTERS JANUARY 2016

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in the Somerset region. We are multi sector, which means we do everything in temp and perm.

RM: Brand seems pivotal to Red Berry, would you agree?

HL: It’s very, very important to who we are. We call ourselves berries. Berries are highlyprofessional people with can-do attitudes, and you feel that throughout the business.

In fact, I was disappointed at the last awards show we went to when I was the only one who wore red! Our brand is an important differentiator, especially for a small agency up against larger ones.

Everyone talks about the importance of branding, but if we’re not doing it properly then other companies will and you fall behind.

RM: Talent is the word of the moment – what does Red Berry do to keep its people?

HL: The biggest buzz I get is seeing my staff develop.

I always work better with praise, not someone who pushes and pushes. That’s the environment I want Red Berry to be in. Two years ago I started in-house awards because I knew we had such a good team and I wanted that acknowledged – but I

“RECRUITMENT HAS BECOME MORE DIGITAL, BUT RELATIONSHIPS ARE BUILT WITH PEOPLE FACETO-FACE” www.rec.uk.com

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“I AM A FIRM BELIEVER THAT PEOPLE OF ALL LEVELS OF EDUCATION – GIRLS IN PARTICULAR – CAN DO WHATEVER THEY SET THEIR MINDS TO” knew the success of those awards had to come from within the company itself.

That’s why every award is voted on by everyone working here. Having staff can be a headache, but they are your most important asset. Human nature is such that nobody will ride your bus all the time, but there are always going to be those who want a seat and want your company to thrive.

RM: That philosophy’s been noticed outside of the industry with winning at the Somerset Best Business Awards.

HL: That’s right. We are very loyal to our clients and candidates. I’d like to think we’re exponents of good old fashioned values. Recruitment has become more digital, but relationships are built with people face-to-face. You can’t work with anyone unless you know them. As a business, we practice what we preach: we train, we grow and we develop.

RM: You frequently invited to speak to schools about jobs and work. Why is it important for agencies to do things like that?

HL: This bit I absolutely love. I am a firm believer that people of all levels of education – girls in particular – can do whatever they set their minds

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to. When you go into schools and you get talking about employability, careers and positive mental thinking, you can see kids having lightbulb moments. It helps to frame their futures and give them a chance to think about where they are and how they consider themselves as future workers. If I can get through to two of them, then it’s worth it.

RM: What are some of the big challenges facing Red Berry right now?

HL: I am looking at a mini restructure. We’re looking to open two new offices in the next 12-24 months. I’ve noticed that as I’ve stepped away to do other duties, there’s been a gap in the company’s ‘ruthlessness’. So we’re bringing in a ruthless sales manager to fill that. It’s going to be an exciting time for us.

RM: Is that where the future lies for Helen Lacey?

HL: I’m looking at taking on more non-exec and charity work, particularly with older and more vulnerable people.

I want to get Red Berry to a stage where I can offer myself more there. Secondly, I’ll be busy as the first female chairperson of the Somerset Institute of Directors. I want to bring the IOD’s brand back up.

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07/12/2015 12:52

Legal update

WHAT LEGAL ISSUES MIGHT WE SEE IN 2016?

By Lewina Farrell, solicitor and head of professional services at the REC TAX The Autumn Statement confirmed that travel & subsistence expenses tax relief (T&S) will be removed from “…workers engaged through an employment intermediary, such as an umbrella company or a personal service company”.

HMRC’s consultation of summer 2015 proposed that relief would be withdrawn from any temporary worker subject to supervision, direction or control (SDC).

While REC has long called for reform of the T&S rules, we firmly believe SDC is not the correct test. There was no mention of SDC in the Autumn Statement, but by the time this article is published we should have the draft legislation and will know for sure how HMRC plan to proceed.

The industry will only have 13 weeks to prepare for the changes, assuming draft legislation is published on 9 December as promised.

Employment businesses will have to work closely with

their intermediary suppliers and clients to work through the financial impacts of the changes.

Two unanswered questions: • Will clients be prepared to admit when SDC does apply and to pay the additional cost or will they simply expect employment businesses to swallow the cost?

• Will temporary workers continue to take roles where they cannot claim tax relief – what about sectors with skills shortages or clients in remote locations?

PERSONAL SERVICE COMPANIES Interestingly, there was no mention of IR35 in the Autumn Statement. The discussion document in September 2015 made some proposals around engager liability and asked for any improvements to IR35.

We are now told that the government is considering its response to the 160+ submissions it received in September.

Some other snippets from the Autumn Statement: • Employment status: the Government has accepted and

will take forward most of the recommendations set out in the Office of Tax Simplification’s review of employment status.

• Pensions auto-enrolment: The next two scheduled increases in automatic enrolment minimum contribution rates have each been delayed by six months so that the changes align with the start of the tax year. The planned increase in October 2017 (from 2% to 5%) will be postponed until April 2018, and the planned increase in October 2018 (from 5% to 8%) will be postponed until April 2019.

BUSINESS PARTNER: BROOKSON The next 18 months will be a testing time for the temporary labour market with changes to legislation impacting contractors working both via umbrella solutions and through limited companies, for service providers, recruiters and end clients.

The Autumn Statement’s announcement to restrict travel & subsistence expenses for umbrella employees will

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result in the current umbrella model no longer being as attractive to contractors.

As a result, we may see an attempted migration of umbrella employees into limited companies.

It is important during this transition that recruitment businesses do not lose sight of the existing rules (MSC legislation and targeted antiavoidance rules).

These changes, and potentially more to come, provide further reasons for all recruitment agencies to ensure they are enforcing a compliant list of companies to manage the payment of their off payroll workers.

Brookson are passionate about there being a full range of working solutions for the UK’s flexible workforce, including PAYE, umbrella

employment and limited companies, and will continue to work closely with key industry stakeholders to ensure that whatever changes HMRC implement, these do not create disproportionate burdens on the supply chain.

You can contact Brookson’s Agency Support team on 01925 694521 or by emailing agencies@brookson.co.uk

www.rec.uk.com

07/12/2015 10:21

Inspiration

BEHIND THE SCENES AT THE INSTITUTE OF RECRUITMENT PROFESSIONALS

The View

Tom Glanfield is chief executive of Lawrence Harvey Group

Miles Huntt is a director at pital Benula Capital

Q&A

WHAT I KNOW

What makes a good recruiter?

Recruitment is becoming more and more saturated, so you must have expert knowledge of your area. Everything is becoming super-niche, and knowing your market is critical.

Attitude and personality is also important because that gives you the chance to influence and control the recruitment process. You must be a source of information for your clients.

Embrace the new Technology probably now favours the start-up over the established company. The opportunity to go and set up, even in a very competitive market, and find that niche, is huge. For established companies, it’s much more challenging. Their fear of change is one that stalks the corridors of many companies in the UK. They’re wondering what the result will be of all this rapidly-developing use of technology and changing client and candidate behaviours. But the trick there is to embrace it and look at your business model or the broader talentmanagement spectrum of different services.

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

This is going to sound super cheesy, but people buying into people. It’s all about personality – that will shine through each and every time. You can give a recruiter all the tools in the world – from job boards to LinkedIn – but it all comes down to the person running them. Personality and attitude will always come through.

What does the industry look like heading into 2016?

The recruitment industry is maturing, and by that I mean it’s growing up. Where things have been a bit cloak and dagger, technology is going to force recruiters to be more credible. That’s not just in terms of day to day work, but in the kind of company you run. There are websites out there where employees and candidates can write reviews on your business. It shines a light on things like career structures and staff benefits. These sort of revelations will push recruitment through a revolution in the next couple of years.

What challenges face recruiters right now?

There are multiple challenges facing recruiters, but the biggest one is going niche. Gone are the days where specialising in IT could be called niche – there’s a niche inside a niche inside a niche.

Don’t let the economy trick you I think you’ll find you can move in gradual steps down a path that leads to a new opportunity. The worst thing you can do is stick your head in the sand and think what worked in the 1990s will work for me today. Anybody who’s making money off those old methods is probably because of the strength of the economy. Imagine how things will be when the next downturn comes – it will be even more difficult than the last one.

Mid-term strategy is vital Mistakes from the outset were falling into new markets, but a little bit more strategic planning in my early 20s would be more useful. If I were to do it again, I would have taken a shorter term view on some of the markets I invested in.

Get to know finance Any recruitment owner or manager, they’ve got to get themselves familiar with basic financial management. The approach I will always recommend is the lily pad approach: always build on solid foundations. If you’ve got yourself in a position where your business is strong, you’ve got good second-tier management, you’ve got the flexibility to do the next thing.

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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Events and training

BUSINESS GROWTH

YOUR NEW YEAR, YOUR NEW BUSINESS There’s no better time to invest in your recruitment business. The REC has teamed up with Elite Recruitment Network to provide an exclusive suite of products to help your business grow in the New Year ELITE BUSINESS HEALTH CHECK The Elite Whole Business Health Check is a thorough evaluation of your business.

An Elite specialist consultant will sit down with you and understand how your organisation functions and what your goals are.

You will receive comprehensive feedback and a plan for growth. Your Elite consultant will take time to ask you the key questions that your business needs answering in order to take it from ‘good’ to ‘great’.

All you need to do is register your interest and we’ll arrange a time to meet, find out everything that your business needs and suggest the solutions that you need to grow and enhance your business’ prospects.

Price: Free for all REC members

ELITE LEADERS NETWORK Elite Leaders consists of monthly small groups of 12-15 regional professionals meeting of business owners to discuss tactics and best practice. It is a highly regarded peer-topeer learning, support and development community for

recruitment company owners and managers.

Each group is chaired by a leading industry expert, who will share insight on staff, sales growth, building shareholder value, brand awareness and exit strategies.

In addition, each member of the Elite Leaders Network will receive a complimentary Business Health Check.

Price: £6,000 + VAT per member per annum, paid monthly

ELITE FUTURE LEADERS Succession planning is essential for any business owner looking to actively devolve responsibility of their business to the next generation of talent in their organisation. These half-day, bi-monthly workshops are for developing the future leaders in your business.

These sessions include a two-hour peer-to-peer debate on issues and challenges facing new leaders, what techniques they have used to overcome them.

Attendees will receive insight from speakers and experts who have risen up the ranks in their own business. Topics range

from learning to lead from the front, creating a business development culture and people development strategy.

Set the brightest minds in your business on the right track to ensure that your future leaders continue to maintain your business as the excellent organisation it already is. £2,950 +VAT for a 12 month membership – six sessions a year.

BUSINESS CONSULTANCY No business is perfect, but our consultancy services will set yours on the right track. Our consultancy services are perfect for agencies at any stage of operation.

We offer bespoke plans designed to fit your organisation. Our experts will examine your operation and offer advice on: • Planning your first year • Entering markets • Hiring the best talent • Buying or selling an agency • Opening overseas Cost: A minimum of £825 + VAT a session, depending on your requirements.

LEARNING AND DEVELOPMENT DIAGNOSTIC Does your business’ training

strategy need improving?

Our team of experienced consultants have a combined experience of more than 60 years’ training and supporting recruiters.

They will spend a half-day working with you assessing your business’ learning and development needs. They’ll get into the heart and soul of your business and see how it ticks.

The L&D diagnostic will then identify areas for team improvement, agreeing with you a comprehensive Training Needs Analysis action plan.

WHO IS THE TRAINING DIAGNOSTIC FOR? One of our RBA Business Consultants will meet and work with business owners and managers as well as HR and training teams to build a solution to suit. No two businesses are alike, so the L&D diagnostic is tailored to your exact needs and each diagnostic is a bespoke recommendation to your business.

For more information and to book, visit www.rec.uk.com/elite or call your account manager on 020 7009 2100.

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

© 2015 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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