Recruitment Matters - January 2018

Issue 57 January 2018

RECRUITMENT MATTERS The View and The Intelligence Recruitment Industry Trends 16-17 p2-3

Big Talking Point

Legal Update

IRP Awards 2017

Ruth Penfold of Shazam p4

What lies ahead in 2018? p6-7

All the winners

FALL IN NET MIGRATION “CONCERN”

p8

genuine skills and labour shortages lie alongside employer efforts to address these shortages. CIPD research has shown that some employers are still unable to

FOR EMPLOYERS A fall in net migration to the UK is concerning for employers, says the REC. The latest migration statistics published by the Office for National Statistics (ONS) is the first full-year set of data since the EU referendum. It shows a fall in net migration, driven by a fall in immigration and a rise in emigration by EU citizens.

REC’s director of policy Tom Hadley says businesses will head into 2018 knowing that talent will be harder to find.

“Our data shows that candidate availability has

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been falling for four years.

Employers will find roles even harder to fill as fewer people are coming to look for work.

We need warehouse workers to pack up our deliveries, drivers to transport goods, and chefs and waiters in our restaurants. Employers will be hit hard at Christmas and no doubt the consumer will feel the effect as they end up paying more for products and services,” he says.

“The UK currently has a vibrant temporary labour market but as EU workers no longer feel welcome here it

is under threat. We need d this ive country to be an attractive place to work and live, which means the government needs to ramp up efforts on a Brexit deal that provides clarity for EU workers and assures them that they are valuable to this country.”

The REC’s concern is echoed by the CIPD. Its senior market analyst Gerwyn Davies says EU citizens in the UK are starting to vote with their feet.

“Looking ahead, the data underlines the need for policymakers to conduct a thorough analysis of where

fill unskilled or semi-skilled roles despite their best efforts to recruit local applicants through widening recruitment channels, investing in skills and raising pay, which suggests that future government policy should avoid the dogmatic ‘brightest and best’ approach,” he says.

The REC has published a research report about the effects leaving the EU will have on sectors reliant on EU workers. You can read it now at www.rec.uk.com/ readywillingable

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Leading the Industry

THE VIEW

A nod to a busy year, says Tom Hadley, REC director of policy and professional services

2018 will be a year of change. Let’s embrace it, says Kevin Green, REC chief executive As we head into the festive season, I think it’s the right time to reflect on where the industry finds itself and also take a peek into 2018.

This year has been a good year for recruitment, one where we have made steady progress. The government has been preoccupied with Brexit but it has continued to bring in policies that affect the labour market and recruitment industry without having clarity on what it is seeking to change.

This means that the REC has had a big job and a busy year fighting our corner.

I am delighted that this year, we have again published some leading-edge research.

The ones standing out are ‘The Scale up Workbook – How to deliver customer service excellence’ as this defines a proven approach to creating a sustainable and commercially successful recruitment business.

The second and by far the largest project we have ever undertaken was our summer report on immigration, ‘Building the Post-Brexit

2017 AND ALL THAT… Immigration System’. This has opened many doors for us in Westminster – the REC has also been invited to No 10 twice – to put forward the recruitment industry’s point of view. We also launched new qualifications, developed new training programmes, as well as strengthened our sectorial and legal offering.

Next year will see someone else become the REC chief executive. The organisation is in great shape with an excellent leadership team and a new chair. I would like to say to you all, get as involved with the REC as you possibly can as this makes the industry collectively stronger.

Before I depart in March I will be holding six or seven events and I would love to see as many of you as possible.

You really are at the heart of the REC. Have a great Christmas, let’s hope that 2018 will be a fantastic year for you, your business and the industry.

Follow me on Twitter @kevingreenrec

ALL NEW SCALE UP IN THE ROUND DATES FOR 2018: 10 JANUARY - NORTHAMPTON 11 JANUARY - NOTTINGHAM 28 FEBRUARY - PETERBOROUGH 1 MARCH - EDINBURGH 6 MARCH - MANCHESTER VISIT WWW.REC.UK.COM TO BOOK 2 RECRUITMENT MATTERS JANUARY 2018

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This has been another tumultuous year on the political and public policy front. There have been significant challenges but also some important steps forward for us at the highest levels of government.

The Matthew Taylor review into modern working practices was a major centrepiece. The government is still considering its response but our work on the government’s review was an opportunity to underline the key role that compliant agencies play and to raise awareness of existing rights and regulatory requirements. Job done on that front!

What else was hot in 2017? GDPR, public procurement, IR35 and the Apprenticeship Levy are just some of the latest challenges for our industry. We have continued to fight our corner – in particular, on the need to extend the levy into a broader training fund that can benefit all workers. This message is gaining traction and was picked up in the Taylor report. We will continue to drive this in 2018.

2017 has been a bumper year for political engagement. We met with secretaries of state, ministers, shadow ministers, special advisers and over 50 MPs and peers including Brexit Minister Robin Walker, and twice visited No 10. We participated in all major party conferences and used our research and data to feed into Brexit debates. We also built a good working relationship with the new director for labour market enforcement, which will further boost our work to ensure that compliant agencies can thrive.

2017 was also the year we went back to the future with our Future of jobs commission, an REC-led coalition of employers, think-tanks and labour market experts, chaired by former employment minister and current deputy chief whip Rt Hon Esther McVey MP. This has enabled us to articulate a clear vision for the jobs market we want to create by 2025 and a roadmap for making it happen. The report signals the start of a series of future-facing activities that we will continue to drive into 2018. It also positions our industry’s voice at the forefront of the future of work debate.

Plenty to build on in 2018. As ever, our best lobbying tool is the positive role that REC members play in driving compliance and in providing a great service to employers and individuals.

You can follow Tom on Twitter @hadleyscomment nt

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THE INTELLIGENCE WITH REC SENIOR RESEARCHER, MARK HARRISON Earlier this month, the REC released its annual ‘Recruitment industry trends’, giving an overview of the state of the industry in 2016/17. The data shows that recruiters helped almost 1 million people find a new permanent job in the past year with permanent recruitment now accounting for one-eighth of the industry by turnover. On any given day, there were on average nearly 1.3 million workers on temporary agency payroll, of which 1.1 million were on assignment. On top of helping a wide range of employers to source candidates for their organisations, the recruitment industry itself employs over 100,000 people in the UK. The report demonstrates that recruiters help employers source permanent and temporary candidates for all sorts of roles in every sector

PERMANENT INCOME REMAINS CHALLENGED The latest information from the Recruitment Industry Benchmarking Index (RIB Index) shows that, for the median recruiter across the first three quarters of 2017, the average monthly permanent billings were lower than in the same period in 2016.

Whilst Q2 showed a 5% improvement year on year, permanent fees levels at -12% in Q1 and -1% in Q3

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of the economy. However, recruiters’ time is taken up more by sourcing some types of candidates than others.

Employers rely on recruiters to source secretarial and clerical roles more than any other, with these roles accounting for roughly a sixth of both permanent and temporary roles by volume.

In temporary recruitment, industrial and blue collar roles account for another sixth, followed by medical roles and teaching roles, which each account for around a 10th of temporary placements. In permanent recruitment, technical and engineering roles account for 15% of placements by volume, followed by accounting and financial roles and professional and managerial roles, which each account for 11% each.

Looking to the future, the report anticipates an industry that will continue to grow despite uncertainty over the UK’s economic future. Unless the government commits

1.3M ON ANY GIVEN DAY, THERE WERE ON AVERAGE NEARLY 1.3 MILLION WORKERS ON TEMPORARY AGENCY PAYROLL, OF WHICH 1.1 MILLION WERE ON ASSIGNMENT.

to a dramatic U-turn on its policy aims, we are likely to see reductions in immigration exacerbate an already present skills shortage in many sectors of the economy. The latest immigration figures released at the end of November show a statistically significant reduction in EU immigration and a statistically significant increase in EU emigration in the year since the vote to leave the EU. This reduction in net migration due to EU citizens choosing to leave or not come to the UK is likely to increase in the run up to the UK’s exit from the EU in 2019 and the end of the proposed transition period in 2021.

Beyond 2021, an excessively restrictive immigration system could damage the UK’s recruitment industry

Figure 1. Permanent billings versus last year (%) – quarterly average 30% 25% 20% 15% 10%

HOWEVER, RECRUITERS’ TIME IS TAKEN UP MORE BY SOURCING SOME TYPES OF CANDIDATES THAN OTHERS. EMPLOYERS RELY ON RECRUITERS TO SOURCE SECRETARIAL AND CLERICAL ROLES MORE THAN ANY OTHER WITH THESE ROLES ACCOUNTING FOR ROUGHLY A

6TH

OF BOTH PERMANENT AND TEMPORARY ROLES BY VOLUME.

and the wider economy.

However, with candidate shortages likely to continue for the foreseeable future, next year is a year of great opportunity for those agencies that can source ever scarcer candidates for employers keen to recruit and grow. To access the report in full and get the most up to date and detailed analysis of the industry going into 2018, visit www.rec.uk.com/newsand-policy/research. is set fair to continue, the importance of benchmarking performance against other recruiters to maximise performance cannot be underestimated.

5% 0 -5% -10%

Perm billings v last year%

-15% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2012 2013 2014 2015 2016 2017

resulted in a nine-month average performance down 2.5% on the prior year. When looking at the performance of the upper and lower quartile RIB Index contributors, the

former delivered a monthly average YOY improvement of 26% across the nine months, whilst the latter experienced a monthly average 24% decline.

As market uncertainty

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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The Big Talking Point

RUTH PENFOLD Kevin Green: Tell us a bit about Shazam. An entertainment app is how I would describe it – but how do you describe yourself?

Ruth Penfold: First and foremost, music is our heritage and we are fiercely proud of that. We love the fact that we can help you discover the song that you don’t know and the whole idea of Shazam is really we create magic for people.

KG: What kind of people do you employ?

RP: People either think that we’re a dude in a bedroom or that we’re Google. We’re actually neither of those things. We are a small but perfectly formed organisation of about 230 people at the moment, who are based across eight locations. So lots of those locations are in the US and that’s about 100 humans. In the UK, we’re about 100 humans.

KG: Why humans and not people? You love the word humans.

RP: Do you know what, humanising stuff is really important to me. We’re living in a world where we’re all having the threat of automation, and AI and technology is taking over and all that kind of stuff and that’s beautiful, right? I work in a business where most of the roles in my organisation didn’t exist 10 years ago, now they do. So rather than being afraid of the advancement of the working world, I welcome it because that 4 RECRUITMENT MATTERS JANUARY 2018

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SHAZAM’S HUMANFINDER

Ruth Penfold is the director of talent acquisitions at Shazam, the music discovery app. She tells REC chief executive Kevin Green how she gave the company a human face means that I might have a completely different new job and there’s exciting things to come. But I don’t think we should be losing the humanity out of the work that we’re doing, particularly in people functions.

KG: You’ve got 230 people, eight locations, lots in North America and the UK, plus Berlin and Sydney. What’s the big people challenges then for you and for the HR function?

Is it around attraction of talent?

RP: I would really say our people challenges are a tale of two halves. On one side of our business, Shazam has an amazing brand, so any corporate functions, sales all that sort of stuff, it’s actually fairly easy to hire for, because we have a significant brand that people want to be a part of. The brand still stands in the technology piece, but the market is a lot harder. So we’re hiring for very niche

skillsets and in a very, very competitive market. That means that you have to be creative about the way you approach it. The old method of sticking an advert up somewhere on the internet – well, now on the internet – but sticking an advert up somewhere and waiting to see who applies just doesn’t work anymore. You know we’re continuously looking at the way that we are looking for talent. And the other part of your question about retaining talent, the flipside of that is because we have this amazing brand it means that our people are targeted all of the time to go and join other brilliant businesses. You have to stay on your A-game as an employer and make sure that you’re giving people a great experience.

KG: What’s the average age in the organisation? I imagine it’s quite young.

RP: It’s probably not as

young as you think. I would say probably somewhere in the 30s. It’s funny actually, I posted a picture of a bunch of Shazamers and they were like, is anyone there under 25? I was like, well I’m 37 for a start, and some of the other people behind me were in their 40s; just because we look young and happy doesn’t mean we’re not old and experienced.

KG: If you were successful at the end of this year for the business, what would you have done? What would you have achieved?

RP: If I was successful for the business this year I would have provided the business with the life blood of humans that it needs to keep going from being good to great. My role is about attracting those humans and that doesn’t just mean physically finding someone to come in and be with us. I interview people all week long, like lots of people in recruitment do, www.rec.uk.com

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of this stuff is fixed, it has to continuously evolve. And for every satisfied person there’s always going to be someone that’s not happy. So it’s something that you can always look to improve on.

My textbook example is we have an amazing sales guy based in L.A. who I first spoke to two years ago and actually we connected for a role that we had in L.A. at the time. He happened to be in London [where I’m based] so came in to meet me in London. The timing wasn’t right – it wasn’t the right combination at that time. But we then hired him six months ago for our L.A. office because now it was the perfect storm. So, him having a great experience before was the thing that paved the way for us having a great experience now having hired him.

KG: What are you proudest of?

and I ask everybody the same question, “What do you enjoy the most about the job that you’re doing?” And 95% of people say “the people”. One of the biggest things that I’ve been working on is building a culture of employee advocacy

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at Shazam. So that means our people are the best talent attraction tool we have, full stop. If your people are out there telling people about the great experience that they’re having, then the battle is almost won.

KG: If you were describing your aspiration for your candidate experience, what would that look like?

RP: That’s something that I’m very much looking at the moment because none

RP: I think really it’s the general theme of humanity.

When I joined Shazam there was not a single photograph of a human being from Shazam on the internet anywhere. So I have humanised the business. I have given us a face that didn’t exist before, but I’ve humanised us from the inside out by humanising the hiring process, by taking our people out there, by giving them voices, and that’s very much something that’s sort of fluid and moving and growing.

The full interview with Ruth Penfold can be listened to at www.rec.uk.com/ grcpodcast

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Legal update

THE OUTLOOK FOR 2018 WHAT TO EXPECT FROM A LEGAL PERSPECTIVE IN 2018

By Lewina Farrell, solicitor and head of professional services IR35: In the Autumn Budget, the government stated there would be a consultation in 2018 on the possible extension of the off-payroll operational in the public sector to the private sector. Before the budget there was intense speculation about whether such an extension would take effect from April 2018 or later – after all, HMRC had admitted that there was now an unlevel playing field between the public and private sectors.

The announcement does not give a date for any changes so we don’t know if we are looking at 2019 or beyond.

REC is part of the IR35 Forum and will continue to lobby for the best possible outcome for recruiters.

Employment status review: It was also announced that the government will publish a discussion paper as part of the response to the Matthew Taylor review of employment practices in the modern economy. The paper will look at options for longerterm reform to make the employment status tests for both employment rights and tax clearer.

More gig economy cases: In 2017 we saw a raft of ‘gig economy’ cases taken against Uber and a number of courier companies. In these, the individuals concerned sought declarations that they were not self-employed but should be classed as workers or employees for employment

rights purposes. We can expect more cases in 2018 while a number of others will proceed to the higher courts to overturn decisions declaring the individuals as workers entitled to NMW, holiday pay etc.

Data Protection: The General Data Protection Regulation will come into effect on 25 May 2018. This grants new rights to individuals while imposing new obligations on organisations which process data. In preparation for Brexit (see below) the government has also published a new Data Protection Bill, which will import the GDPR standards into UK law.

Brexit: At the time of writing, Parliament is working its way

through the EU Withdrawal Bill aka the Great Repeal Bill. This bill will repeal the European Communities Act 1972, which brought the UK into what was then the EC. It will also incorporate all EU law into UK domestic legislation to ensure a smooth transition post-Brexit, but the legislation will then be subject to review.

It will also end the power of the European Court of Justice in the UK. The bill is an immense undertaking. Whilst government has announced there will be no watering down of worker rights, it narrowly won a vote not to incorporate the EU Charter of Fundamental Human Rights into UK law.

Certainly, there is lots to keep us all very busy in 2018.

NICs and disguised remuneration: The NICs employment allowance of £3,000 was introduced to help small businesses offset the national insurance costs of employing staff. However, there has been concern for some time about how the allowance is being used particularly in ‘mini-umbrellas’ or personal service companies.

To tackle this, from 2018 HMRC will require upfront security from employers with a history of avoiding paying NICs by abusing the employment allowance. The budget also announced a new close companies’ gateway to ensure that liabilities from the new loan charge which applies from April 2019 onwards are collected from the appropriate person.

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Inspiration

BEHIND THE SCENES AT THE INSTITUTE OF RECRUITMENT PROFESSIONALS

The View

Thomas Noot ot is a consultantt with Jonathan Lee e Recruitment

Samantha Cartman tman is a technical recruitment consultant at Morson orson International

DAY IN THE LIFE

LEVEL 4 STUDENT

I’m responsible for...

Driving the growth of our contracts business. We have a strategy to grow by 10% year-on-year, so my role is to make clients and companies aware of our contracting capability and how we can solve their short and medium-term staffing requirements.

Why did you choose the Level 4 Diploma in Recruitment Management?

I had been wanting to do a professional qualification for a while, so when I sat down with my manager and our HR manager and looked at the options, we decided that the Level 4 was going to be the most beneficial to me and my level of experience.

My typical day…

I take a structured approach to my day, making sure I prioritise the vacancies I am working on. I enjoy getting to know my candidates and clients and make an extra effort to ensure they’re up-to-date and happy, so, most of everyday is spent talking to them, arranging interviews, negotiating offers and getting the contracts up and running.

My most memorable work moment…

Winning the 10-cheeseburger challenge. I am proud to be the current record holder for being the fastest to eat 10 cheeseburgers from a popular restaurant chain. Challengers beware!

The best part of my job…

Securing placements and making candidates and clients happy.

I’ve never lost the buzz that a successful placement gives me!

My biggest candidate success story…

One of the most memorable success stories for me was working with a lady who had been out of the job market for an extended period and was really struggling to get a foot back on the career ladder. She had become very dejected after several knock-backs but was really eager to work. I worked with her to find some suitable opportunities, gave advice on her CV and coached her for the interviews. A few weeks later, I called to let her know that she was being offered her preferred job and I was delighted and touched by her tears of joy at the news.

What was the most challenging part of the qualification?

Two modules in particular stand out here and that was the module surrounding the legal and ethical requirements within recruitment, and also the module surrounding all the different types of recruitment contracts.

The legal and ethical requirements within recruitment are something that all recruiters need to have a good knowledge of and this module, whilst probably the most information laden, is also one of the most useful and informative.

The Contracts module is quite a revelation in that, as recruiters, we use various different contracts every day but this delves into things that we maybe don’t necessarily think about as much as we should, such as the ramifications different types of client and candidate contracts have for us as a business and for the contractor as an individual.

How did you find studying while working full time?

It is difficult, I don’t think anyone would ever say otherwise.

Sometimes after nine hours at work, the last thing you want to do is go home and spend another two studying, but the reward and the sense of achievement, not only at the end when you receive your full Diploma, but after every exam and every successful results day, is so worth it.

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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2017 IRP Awards winners

CONGRATULATIONS TO ALL WINNERS FROM THE 2017 IRP AWARDS 1

Recruitment Apprentice of the Year

Natalie Winterton, BPS World

2 Best Newcomer of the Year

Ellis Thorne, Class People

3 Best Candidate Experience

Jodie Rafferty, Rafferty Resourcing

4 Permanent Consultant of the Year

Kristy Moore, Acorn Group

5 Temporary Consultant of the Year

Blayne Cahill, Carrington West

6 Business Manager of the Year

Alison Keogh, Pro-Recruitment Group

7 Business Leader of the Year

Ed Vokes, Evolve Hospitality Recruitment

8 Best Back-Office Support Team

Phaidon International

9 Best People Development Business Award

BPS World

10 Best Recruitment Campaign

Gi Group

11 Best Corporate & Social Responsibility Practitioners

Amoria Bond

12 Best Company to Work for (up to 20 employees)

Class People

13 Best Company to Work for (up to 50 employees)

Evolve Hospitality Recruitment

14 Best Company to Work for (up to 150 employees)

Amoria Bond

15 Best Company to Work for (up to 250 employees)

Rethink Group

16 Best Company to Work for (more than 250 employees)

Serocor Group

17 Lifetime Achievement

Steve Ingham

18 Recruiter of the Year

Kristy Moore, Acorn Group

A SPECIAL THANKS TO OUR PARTNER

AND THANKS TO OUR SPONSORS

VISIT WWW.IRPAWARDS.COM TO SEE PHOTOS AND VIDEOS FROM THE NIGHT.

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

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 JANUARY 2018

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