Recruitment Matters January 2019 by Redactive Media Group

THE VIEW AND THE INTELLIGENC E

Responding to the challenges for 2019 P2 BIG TALKING PO INT

Adapting to the changing labour market P4

RECRUITMENT Issue 69 MATTERS January 2019

LEGAL UPDATE

Opting out of Conduct Regulations P6 WHAT’ S C O MING UP

IRP Awards: the winners P8

C RI M I N AL R E C O R D S

Supporting candidates with a criminal record back into work T

he Recruitment & Employment Confederation has published a criminal records guide designed to support and advise recruiters on best practice for candidates with a criminal conviction. This includes advice on speaking to candidates about criminal records and a checklist for recruiters. Over 11 million people in the UK have a criminal record. The majority of them have been convicted on only one occasion and more than 90% of the people convicted each year do not serve a prison sentence. Yet 75% of employers admit to discriminating against applicants with a criminal record and 1 in 7 said that they would exclude any candidate with a criminal conviction, regardless of the offence. Holding a criminal record should not be a damning indictment on all future job prospects. The vast majority of people who hold a criminal record are good, honest and keen to work and have learnt from their past mistakes. Employment is a crucial

@RECPress

opportunity that reduces the likelihood that an individual will reoffend. Conversely, failure to give employment to people with convictions increases crime and costs society billions of pounds every year. Removing the barriers faced by people with past convictions will not only provide these candidates with a fair chance at finding employment but broaden the talent pool for recruiters and employers. With candidate shortages across the UK economy, even before the UK has left the EU, UK business can no longer afford to discriminate against such a large talent pool. This makes sense for the UK’s society and economy, as well as an individual’s wellbeing. Recruiters have an important

“75% of employers admit to discriminating against applicants with a criminal record”

role to play. They are well placed to encourage employers to be as open as possible by raising awareness of inclusive recruitment initiatives like Ban the Box and Fair Chance. The REC’s Good Recruitment Campaign promotes an inclusive approach to recruitment across the board and provides tools to help employers benchmark and reinvigorate their hiring processes. The REC believes that everyone should be able to pursue their chosen career regardless of their background. Chris Russell, REC 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... The year ahead will bring its challenges, but the sector has the will to succeed, says NEIL CARBERRY, REC chief executive

new year is upon us! I hope it brings you and your business success. 2019 is full of promise – and of uncertainty. Our path on Brexit, and any related economic changes, is still unclear. Where we end up on this will affect the labour market – and therefore recruitment – so the REC will be working hard to support recruiters throughout the process. But we know that there are other big, long-term challenges out there. Many of them are bigger than Brexit in their impact on our daily lives and our sector – technological changes, shifting societal expectations around good work, and clear skill and labour shortages are just three. But for the new year, let’s adopt the mindset of 70% of our members in a recent poll who see these issues as more of an opportunity for recruiters than a threat. In the UK, recruitment is a mature £35bn industry, as REC’s new industry trends survey shows. We are a sector that can influence the path of change – and in so doing boost the role and growth of our businesses. Every day, I hear about members who are working with clients in new ways to address challenges. In Westminster too – despite the Brexit fog – our voices are being heard. Delaying IR35 reform, reforming the Apprenticeship Levy and ensuring there is a flexible lower-skill visa were our key asks of the government in the autumn. We have seen progress on all three. So there is much to be proud about. But lots still to do. And as I enter my first calendar year leading the REC, we are focusing on how we help recruiters in new and better ways. So what are our new year’s resolutions? The REC will be all about brilliant recruitment – championing good practice, speaking up for great recruiters and helping them to succeed. It is this focus that saw our member numbers grow last year and it will guide us in the months ahead. This year, we’ll be investing in supporting members in new ways, with high standards in practical business support, but also market-relevant data and analysis and a more campaigning approach in how we use our voice in public and with the government. These things are essential to us supporting brilliant recruitment – and to better supporting individual members. Because this is your organisation, and it will always put you first. If you want to keep up to speed with all things recruitment then follow me on Twitter @RECNeil

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Despite Brexit uncertainty, there are reasons to stay positive, says TOM HADLEY, REC director of policy and professional services HADLEY ’ S C O MMENT

Riding the storm As we try to make sense of the latest Brexit maelstrom, it isn’t easy to prognosticate about the end destination. But, like most recruiters, I’m an optimist at heart. So here are a few masts of positivity to grab hold of as we sail into 2019. • Shelter from the storm – Our jobs market could face a perfect storm with both demand and supply of staff impacted. Our JobsOutlook report paints a weather-beaten scene of plummeting confidence in the economy. But, so far, the UK jobs market has risen above the Brexit turbulence. The UK labour market (and recruitment industry that supports it) is once again demonstrating its resilience! • All hands on deck – On the supply side, the REC/KPMG Report on Jobs shows that candidate availability has been decreasing month on month since May 2013. Recruitment will get harder in 2019. The solution for employers is to get better at hiring, which is why some REC members are being contacted by clients they haven’t heard from for five or six years. •C harting new routes – Necessity is the mother of invention. Employers need to innovate to attract the skills they need. The opportunity for recruiters to have different, more strategic conversations with clients was a core theme of our ‘Recruitment 2025’ White Paper. The main criteria used by employers to select and agency include quality of service (78%) and specific expertise (73%), according to JobsOutlook. Competing on quantity rather than cost is where the tide is heading. •T he flexible crew – In times of extreme uncertainty, access to a vibrant temporary, contract and interim market is more important than ever. The number of employers saying that a main driver for using temp/contract staff is the ability to respond to fast-changing requirements has jumped to 62% (from 51%) in the last year. Recruitment professionals will provide a crucial outlet for employers and workers in 2019. JobsOutlook shows that 76% of employers are satisfied with the agencies they worked with, despite the tightening availability of candidates. Recruiters are already stepping up to the tiller. And they will have a pivotal role to play as we navigate the choppy political seas of 2019. ou can follow Tom on Y Twitter @hadleyscomment

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11%

the intelligence... WITH REC SENIOR RESEARCHER, THALIA IOANNIDOU

018 was marred by tense Brexit negotiations, persistent labour and skills shortages, and a cautious – if not pessimistic – economic outlook. At the time of writing, ongoing uncertainty over Brexit continued to impact on business confidence. Following three months of positive sentiment, employers’ confidence in the prospects for the UK economy returned to negative territory (JobsOutlook, August 2018). Confidence further plummeted in July to September, returning to levels witnessed at the turn of the year. Survey data published in November showed 11% more employers thinking economic conditions were worsening rather than improving. But despite this, employers remained confident in making hiring and investment decisions throughout 2018. Sentiment towards permanent hiring in the short- and medium-term stayed buoyant in the second half of the year and well above hiring intentions reported for the same period in 2017. Similarly, the net balance of short- and medium-term forecast demand for agency workers in the second half of 2018 remained significantly higher. During 2018, an average of three quarters of employers reported they had little or no capacity to take on more work without needing to hire additional staff. While staff appointments continued to increase at a quick pace, the latest data showed growth of demand for staff remained

HEADCOUNT GROWTH GRINDS TO A HALT

Q3 Q4 2017

Q1 2018

Median RIB recruiter

Q2 Q3

Total employees versus last year (%), for the median recruiter, Q3 2017-Q3 2018

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historically sharp at the start of the fourth quarter (Report on Jobs, November data showed 11% more employers November 2018). The Office for thinking economic conditions were worsening National Statistics (ONS) revealed rather than improving. the number of job vacancies reached 845,000 for August to October – the staff rose, year-on-year, from 42% highest number of vacancies since to 48% and from 40% to 53%, comparable records began in 2001. respectively (JobsOutlook, November Growth in demand for staff is 2018). Recruitment and employment generally a welcome development. consultancies have also signalled a However, UK labour market sustained fall in overall candidate trends point to declining staff availability – this has declined at availability which, in turn, puts a the quickest pace for nine months considerable strain on businesses. The in October. Staff shortages are fast unemployment level in the country becoming business critical, especially is at a record low, while the number in areas such as health and social of EU nationals working in the UK care, logistics and hospitality. has been falling. Comparing the latest Labour and skills shortages will estimates for July to September remain a pressing challenge for 2018 with those of a year earlier, UK businesses in 2019. The the number of EU workers recruitment industry has in the country fell by a vital role to play in 132,000 to 2.25 million addressing heightened – this is the largest business concerns, annual fall since supporting The number of job vacancies comparable employers in for August to records began in 1997. planning their workforce October, according effectively and ensuring the Employers’ concern to ONS over the availability of long-term health of the jobs permanent and temporary market.

The latest real-time information from the RIB Index shows that, having hovered around 6-7% across H2 2017 and Q1 2018, headcount growth subsequently slowed – and flat-lined in Q3 2018. Set in context of total billings, headcount growth declined, hand-

845,000

in-hand with a decline in revenue growth experienced over the same period. Having averaged 10% growth year-onyear across 2017 and remained buoyant across the majority of H1 2018, total turnover growth for the median RIB recruiter

subsequently fell to just 2.9% in Q3 2018. As such, the industry – known for its remarkable agility – eased off from adding headcount while recruiters, and their client base, await the clarity and certainty required for them to return to hiring in confidence.

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.

JANUARY 2019 RECRUITMENT MATTERS 3

THE FUTURE OF JOBS

big talking point

Tackling workforce challenges head on The REC’s latest Future of jobs whitepaper highlights why recruiters need to take urgent action to adapt to changes in the labour market. Recruitment Matters explains how they can make a difference wo thirds of children entering primary school today will end up working in jobs that don’t yet exist. The scale and speed of change in the labour market potentially has massive ramifications for the recruitment sector – and in turn, recruitment professionals have an increasingly important role to play in helping individuals to navigate it. But to create a world-leading jobs market that works for everyone by 2025, those who can influence it need to get on the front foot. That was why, a year ago, the REC’s Future of jobs commission set out recommendations for policy makers, employers and recruiters. After all, the best way to pre-empt the future is to create it. The REC called on employers and recruiters to: • Plan for disruption by developing workforce plans that reflect demographic, technological and labour market changes • Re-imagine hiring procedures to find new ways of attracting staff and skills • Make inclusion the norm by delivering tangible progress on diversity & inclusion and embedding flexible hiring • Be future of jobs ambassadors, working with local schools and colleges to help prepare future generations for the changing world of work.

The future for public sector jobs A year on, the REC is keeping up the pressure by launching a second follow-up white paper focusing on the future of jobs in the public sector. And with concern about the impact of Brexit reaching a crescendo at the end of 2018, it highlights that there has never been a more important time to review the latest workforce trends and find solutions to current and future challenges. 4 RECRUITMENT MATTERS JANUARY 2019

77% of REC’s health and social care members say staffing shortages over the next five years will increase significantly

Staff shortages among NHS workers and teachers are headline grabbing concerns. Not only have 10,000 EU staff left the NHS since the Brexit referendum, the NHS could be short of 51,000 nurses (enough to staff 45 hospitals) by the end of the Brexit transition period alone, says the National Institute for Economic and Social Research. Among REC’s specialist recruiters, 77% say health and social care staffing shortages over the next five years will increase significantly – and 47% say the same for teachers. Evaluating the impact that postBrexit immigration models could have on staffing in the public sector – and pre-empting the effect – is therefore an immediate priority. But the public sector also needs to develop a new generation of leaders – from a much more diverse range of backgrounds – to implement the wide-ranging transformation projects needed to create services fit for the future. Poor management is cited as a key factor in poor UK productivity levels. The UK currently has an estimated 2.4 million untrained ‘accidental managers’ – and, according to the OECD, it costs UK employers around £84bn a year. And as skills shortages persist, the public sector faces stiff competition www.rec.uk.com

THE FUTURE OF JOBS

ADAPTING TO CHANGE: POTENTIAL SOLUTIONS TO CURRENT AND FUTURE TRENDS Scoping future skills and leadership needs

Re-inventing workforce management and working patterns

• Understanding how skills needs are likely to evolve

• Enhancing workforce management

• Pre-empting the impact of Brexit on the workforce

• Embedding ﬂexible work across the public sector

• Building a cadre of future leaders and project managers

• Harnessing external expertise

Finding new ways of retaining and attracting people into the public sector

Future of jobs in the public sector

• ‘Re-branding’ jobs in the public sector • Re-imagining hiring procedures and leading the way on inclusion • Driving ‘good work’

Pre-empting the impact of AI and automation on public sector jobs • How will public sector jobs evolve? • How will technology impact on hiring procedures? • What will recruitment supply chains look like in 2025?

• Promoting jobs in the public sector to future generations

from the private sector for talent. This is especially true for technology roles needed to maintain cyber security and to deliver the public sector’s ‘digital by default’ approach.

New ways of attracting staff Once the scale of the challenges are clear, the burning question is how employers and recruiters can make a difference. Already many are looking at new ways of attracting staff. These include rebranding public sector careers to make them more attractive, and focusing on positive ‘hooks’, including workplace culture, progression and purpose. Revamping hiring practices, embedding flexible working and inclusive recruitment will also drive better results. And 69% of REC health and social care members say increasing salaries would help to attract more people into health and social care roles over the next five years, while 85% believed flexibility and work-life balance are the main reasons why healthcare workers choose to work via an agency. Meanwhile, 72% of REC education members think improved working conditions and support infrastructure will attract more people into teaching roles. www.rec.uk.com

New ways of working The public sector will also have to adjust to new ways of working – whether that’s using flexible staffing models to ensure cost-effective and safe staffing levels; harnessing artificial intelligence and other new technology; or learning from best practice in other fields and tapping into external expertise to find cost-effective ways of working with freelancers, contractors and recruitment specialists. It also needs to get better at training from within to create future leaders and managers equipped to navigating a fastchanging landscape.

New ways of speaking up To support the findings of the Future of jobs commission, the REC launched The ‘Future of Jobs Ambassadors’ network – a group of forward thinking and innovative recruitment leaders who help young people on their journey by working with schools, universities, and Local Enterprise Partnerships to provide work experience placements, jobs, advice and coaching. Building a better bridge between education and the world of work remains fundamental to the long-term future of work – and the more recruiters that get involved, the bigger the difference they can make. JANUARY 2019 RECRUITMENT MATTERS 5

O P T- O U T S

legal update Opting out of Conduct Regulations By ALEX CAVE – legal advisor, REC

iven the proposed changes to tax legislation, the supply of limited company contractors (LCCs) has received increased scrutiny by both HMRC and the media. Employment businesses should certainly remain diligent throughout the IR35 determination process. But they should also take care to ensure that if the LCC opts out of the Conduct of Employment Agencies and Employment Businesses Regulations 2003 (Conduct Regulations) that the opt-out is valid.

Why opt-out? Calling the REC legal helpline, many members ask why LCCs would decide to

6 RECRUITMENT MATTERS JANUARY 2019

opt out of the Conduct Regulations in the first place. Historically, LCCs that opted out of the Conduct Regulations could use it to help demonstrate that they were genuinely self-employed, due to being less protected by legislation and subject to greater financial risk. However, in practice, it is the nature of the assignment that will indicate the IR35 status and HMRC would not be persuaded by an opt-out of the Conduct Regulations alone. One of the key protections under the Conduct Regulations is that work-seekers are protected from having their pay withheld, even in the event of non-payment by the client. This is a key right that can be problematic for employment businesses. However, with an opted-out LCC, employment businesses can mitigate their own financial exposure by inserting a ‘pay when paid’ clause into

their contract with the LCC (excluding certain construction contracts).

How do I opt out? An LCC (who is not working with anyone under the age of 18 or with vulnerable adults) needs to provide written notice to the employment business that they intend to opt out of the Conduct Regulations. The notice needs to be signed by both the individual and a representative of the limited company and it must be received by the employment business before the start of the assignment. The next step is one that is frequently forgotten: the employment business must then notify the client that the candidate has opted out of the Conduct Regulations before the candidate is introduced or supplied to the client. Overall, employment businesses should always check that the opted-out process has been followed correctly. An incorrect opt-out means that the Conduct Regulations would continue to apply as if there had been no opt-out. This can have significant consequences on employment businesses that rely on ‘pay when paid’ clauses as the Conduct Regulations would then render that clause unlawful.

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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

KARLA KEATING-NEL operations

KATHY DORAN director, Morestaff

manager at HumanOne, on giving something back

& AllenDay Recruitment, on what makes a sustainable business

There’s more to doing business than the day job

You were named Best Business Woman in Recruitment at the 2018 Best Business Woman Awards. Judges cited your record for client retention. What are your top tips?

We all want to make money, but we also need to stand for something. As a company, we’ve recently decided to formalise our CSR work and focus on helping youth who haven’t found it easy to get on in life. We’re still working out how best to get involved, by fundraising, offering mentoring and, for those who want to get into hospitality and leisure, CV writing and interview skills.

A small business can do CSR We only have 12 staff members. We don’t have a dedicated person thinking about our values, or what links the CSR we already do. But you need a champion to do it well. That’s now me. And I’ve found that organisations are so open to your offer of

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Q&A

What I know

BEHIND THE SCENES AT THE INSTITUTE OF RECRUITMENT PROFESSIONALS

help, they’ll show you how it can be done in an impactful way, despite the limitations you have. Talking to clients can open up opportunities too.

The industry should pull together to tackle its challenges At the beginning of 2018 we held a meeting with the security management teams from different London hotels to discuss thefts over the summer months – when temps are often blamed. We came up with an action plan to minimise the problem. But since then that initiative has evolved into something far bigger, with meetings every 4-6 weeks, including general managers, heads of departments and a guest speaker to discuss other issues. We’re now setting it up as an organisation called Leaders of Industry. It feels good to be part of something bigger.

Make sure your client sees you as part of their operation. Have regular meetings and solve issues together. Be completely honest at all times. Inform them of any challenges they or you could be facing. Offer them solutions. We’ve been with some clients since we started out 28 years ago, but managers change, so you’re forever building new relationships. The history of what you’ve done for them opens doors, but they will base their relationship with you on what you do going forward.

What drives you to do that? The belief that I will not fail. When I take decisions that other people view as risks, I don’t think they are. I’ve looked at the worstcase scenario and tried to find solutions. I’ve always looked at what I needed to do to get to the next level. I think being a single mum has fuelled my need to be successful.

What are you most proud of? When candidates – or clients – come back after several years. It shows we’re not far from people’s minds when they need help.

What’s next?

I’d like to use my experience to help other people. I’d love to mentor and get more involved with The judges also different industry bodies highlighted your or charities. I’d also like to commitment to do more travelling – and evolving your business maybe open up somewhere to stay competitive. else in the world.

JANUARY 2019 RECRUITMENT MATTERS 7

AWA R D S

IRP Awards 2018 The winners Individual awards

Best Company to work for (Up to 20 Employees) Winner InfoSec People

Newcomer of the Year Winner Chris Forsyth, Redline Group Highly Commended Sariat Adeniji, Hyper Recruitment Solutions

Best Company to work for (Up to 50 Employees) Winner Hyper Recruitment Solutions Highly Commended Bramwith Consulting

Recruitment Apprentice of the Year Winner Matthew Stimpson, Human Capital Ventures

Jobs Transform Lives: Best Candidate Experience Winner Adriana Brito-Brito, One Step Recruitment Permanent Consultant of the Year Winner Kristy Potter, Acorn People Highly Commended Matthew Covell, Search Consultancy Temporary Consultant of the Year Winner Mehreen Ayub, Admiral Recruitment Highly Commended Sophie Banks, Monarch Education

Company awards

Back-office Support Team of the Year Winner Compass Associates Highly Commended Star People Development Business of the Year Winner Amoria Bond Recruitment Campaign of the Year Winner Guidant Global

Business Manager of the Year Winner Chris Pritchard, Search Consultancy Highly Commended Beth Daniels, Jane Lewis

Corporate and Social Responsibility Practitioners of the Year Winner Thorpe Molloy Recruitment

Business Leader of the Year Winner Raj Tulsiani, Green Park

Advocate Company of the Year Winner Serocor Group

Best Company to work for (Up to 150 Employees) Winner VHR Best Company to work for (Over to 150 Employees) Winner Amoria Bond

Overall awards

Lifetime Achievement Award Winner Carmen Watson Recruiter of the Year Winner Kristy Potter, Acorn People

With thanks to our event partner and sponsors:

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

8 RECRUITMENT MATTERS JANUARY 2019

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 ÂŠ 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.