Recruitment Matters June 2019 by Redactive Media Group

THE VIEW AND THE INTELLIGENC E

Making a difference for recruiters P2 BIG TALKING PO INT

Getting to grips with the Good Work Plan P4 LEGAL UPDATE

IR35: the latest developments P6 Issue 74 June 2019

TR AINING

How training can drive growth P8

ACC ES S TO TAL E N T

The REC signs up to Lift the Ban on asylum seekers’ right to work T

he Recruitment & Employment Confederation (REC) has signed up to the Lift the Ban Coalition, which is calling for the right to work for those seeking asylum. The coalition, led by Refugee Action and Asylum Matters, consists of over 150 charities, faith groups, businesses and unions (including TUC, Church of England, Ben & Jerry’s, and the CBI). People seeking asylum in the UK are effectively prohibited from working. They can only apply to the Home Office for permission to work if they have been waiting for a decision on their asylum claim for over 12 months and even then only for jobs that are on the government’s restricted (and restrictive) Shortage Occupation List. People seeking refugee status can wait years for a decision on their

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asylum claim. Meanwhile, they live on just £5.39 per day, struggling to support themselves and their families, while the government wastes the talents of thousands of people. The UK has one of the most restrictive policies at a time when employers are struggling to recruit the labour and skills they need. No other European country enforces a minimum 12-month waiting period. This is equally true of Canada and the US. If the UK were to adopt a six-

“People seeking refugee status can wait years for a decision on their asylum claim. Meanwhile, they live on just £5.39 per day”

month waiting period, unrestricted by the Shortage Occupation List, it would go from being an outlier to joining the international mainstream. “Removing the barriers to employment faced by people seeking asylum to the UK isn’t just the right thing to do – it would deliver economic benefits and widen the labour pool for employers,” said Sophie Wingfield, REC head of policy. “REC data has found that the availability of candidates for both permanent and temporary roles has declined every month since the start of 2013. At the same time, demand for staff from employers has increased on the previous month, every month since 2010. “With candidate shortages across the UK economy, even before the UK has left the EU, UK business cannot afford to discriminate against such a large talent pool.” 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

It’s not just what you say, it’s how you say it, says

NEIL CARBERRY, REC chief executive

he REC has always taken its role as the voice of the recruitment industry seriously – in the media, with government, with the wider business community. Alongside helping members to grow and developing good practice in the industry, it’s one of the core ways we support brilliant recruitment. The big challenge with this kind of role, though, is how to make sure you are listened to – not just heard. That means having messages that make a difference. Fact-based, but brought to life in the right way and within context. How you tell your story is just as important as the story itself. For us, that means focusing in depth on some key themes that run through all of our work, not trying to have a view on everything – or seeking media coverage for coverage’s sake. When we do something, it should have a persuasive and meaningful outcome. Our four key themes are: • Showing that good work and flexibility go hand-in-hand – The good work agenda is here to stay, so we should show the world how we contribute to it as an industry. • Demonstrating the value of our sector to the UK economy – This is a £35bn industry, but it contributes far more than that when we take the client growth we enable into account. We want to shout about that. • Ensuring a level-playing field – We need to make sure that firms who play by the rules and their clients can prosper. Whether that is on IR35 changes, the Apprenticeship Levy or prompt payment, the REC will stand up for fair treatment. • Leading the way on the future of jobs – The REC will be an important voice for optimism about what can be achieved, and clear-eyed about the challenges to be faced in getting there, whether that is in how we help you to help clients or how we speak to government on your behalf. These four principles will be at the heart of our lobbying and media work and help us to set out what you do in the positive and optimistic light it deserves. Now and in the years to come. And don’t forget, with our AGM coming up on 20 June, members have a chance to vote for council members who will help shape where the REC goes next. Use your vote to help us get the right mix of elected people, with the right knowledge and experience. Those members eligible to vote will have received their online ballots and voting closes on18 June. If you want to keep up to speed with all things recruitment, then follow me on Twitter @RECNeil

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HADLEY ’ S C O MMENT

An environment to thrive At the heart of our campaigning work is a very simple aim: we want the good guys to win! Ensuring a workable regulatory environment and level playing field for compliant businesses is a big part of this. Although Brexit-related uncertainty has occupied minds over recent months, we need to remain on the front foot to meet a number of other external challenges head-on. Here’s the game-plan: • I nfluence the priority issues for recruiters – The focus here is on driving a proactive solution-focused approach to our work with various government departments to achieve workable outcomes on hot topics as diverse as IR35 implementation, immigration policy, public procurement and regulatory changes linked to the government’s ‘Good Work Plan’. • E nsure a fair deal for great recruiters – This is a key focus for our campaigning too, and it means continuing our push for effective government enforcement, as well as driving REC compliance activities and client awareness through the Good Recruitment Campaign. •N avigate the political uncertainty – The core aim of our ongoing regional Brexit workshops and webinars is to pre-empt potential Brexit scenarios and to look beyond the politics at practical ways for recruiters to build more strategic relationships with clients at a time when workforce planning is the number one show in town. As well as positioning our industry’s voice at the forefront of some of the most topical political and social challenges facing the country (inclusion, productivity, growth, automation and the future of work), our focus is on influencing the immediate issues that matter most to recruiters. Data and ‘stories’ are key to making our case which is why the input from REC members will always be the life-blood of our campaigning activities. There has never been a more important time to ensure a strong collective voice for the industry. Together, let’s create the environment for great recruiters to thrive.

the intelligence... Building strategic relationships with clients

ow often do you have strategic conversations with your clients? The ability to do so is essential for remaining competitive and winning new business. Economic and political developments since the Brexit referendum in June 2016 have highlighted more than ever the need for recruitment businesses to be well-informed of labour market conditions, so they can pass that insight on to clients. Employers’ confidence in the prospects for the UK economy has deteriorated in recent months and the outlook on the UK jobs market has remained uncertain. In light of this, an increasing number of clients are asking for advice on strategic planning. From workforce skills transformation and ways to increase productivity, to technological advances and new approaches to candidate attraction, employers seek recruiters’ guidance on ways to overcome challenges and grow their business. Responding to this call, in a survey of REC members in February 2019, the majority of respondents (56%) identified the need to gear up in order to provide more strategic advice to clients as the most important priority ahead of Brexit. Similarly, in another survey in March 2019, three in five recruitment businesses (60%) stressed that building more strategic relationships with clients was their main organisational priority when looking beyond Brexit. Meanwhile, skills sourcing and geographical expertise is of particular significance to employers; according to

TEMP TURNOVER GROWTH SLOWS ACROSS 2018 AND EARLY 2019 12 10 8 6 4

0 Q1

Q2 Q3 2018

Q4 Jan/Feb 2019

Average monthly YoY growth in turnover from temporary placements

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60% the REC’s monthly ‘JobsOutlook’, employers have consistently cited this criterion as one of the most important when selecting their recruitment agency partners. A lack of jobs market awareness and a reduced ability to offer advice on workforce planning to clients would greatly undermine the credibility of a recruitment business with prospective clients, and hinder relationships with existing ones. By monitoring regularly and understanding the implications of

The latest information from Recruitment Industry Benchmarking’s RIB Index shows that the median industry recruiter is seeing a slowing in year-onyear (YoY) growth in turnover from temporary placements. Set into historical context, the average

Nearly two thirds stressed that building more strategic relationships with clients was their main organisational priority when looking beyond Brexit..

changes in the jobs market – including staff availability, skills shortages, flexible work and technology – recruiters can increase their ability to offer strategic advice to clients and compete effectively. Contact us to subscribe to the REC’s monthly ‘JobsOutlook’ and ‘Report on Jobs’ to find out about the latest jobs market developments and how these can affect your recruitment business.

monthly YoY growth across 2017 was 9%, whilst across 2018 it averaged 5.4%. As we await data for the March to complete the Q1 2019 picture, a comparison with just January and February data in 2017 and 2018 shows that 2019’s YoY growth figure was lower than the figures

of 5.1% and 4.9%, respectively, recorded for the preceding years. As market uncertainty is set to continue, the importance of benchmarking performance against other recruiters to maximise performance cannot be underestimated.

Q1 Q2 Q3 Q4 2017

ou can follow Tom on Y Twitter @hadleyscomment

In a survey of REC members in February 2019, the majority of respondents (56%) identified the need to gear up in order to provide more strategic advice to clients as the most important priority ahead of Brexit.

BY THALIA IOANNIDOU, RESEARCH MANAGER

2.30%

the view...

We need to ensure the industry has a strong voice to help the good recruiters to win, says TOM HADLEY, REC director of policy and professional services

56%

www.rec.uk.com

BELINDA JOHNSON runs employment research consultancy, Worklab, and is Associate Knowledge & Insight Director of Recruitment Industry Benchmarking (RIB). 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.

JUNE 2019 RECRUITMENT MATTERS 3

GOOD WORK PLAN

big talking point

CHANGES TO WATCH OUT FOR Itemised payslips From 6 April 2019, all workers (not just employees) have been entitled to receive a payslip. This must document any variation in pay across the time worked.

Championing fair and decent work The government has outlined its plan to future-proof the UK’s world-leading labour market. Here’s what you need to know

t the very end of last year – amid the chaos around Brexit – the Secretary of State for Business, Energy and Industrial Strategy Greg Clark presented a paper to Parliament that should have just as big an impact on recruiters and how they work: the government’s ‘Good Work Plan’. This ground-breaking work puts forward a vision for the future of the UK labour market, which “rewards people for hard work, that celebrates good employers and that is ambitious about boosting productivity and earning potential in the UK”. In it, the government commits to a wide range of policy and legislative changes to ensure that workers can access fair and decent work, that both employers and workers have the clarity they need to understand their employment relationships, and that the enforcement system is fair and fit for purpose. And the government has promised to work closely with business, employers and those representing them to implement the changes.

Why is this happening now? No one can argue that the world of work is changing – thanks in particular to technological advances. New ways of 4 RECRUITMENT MATTERS JUNE 2019

working and doing business are emerging. New employment models are finding their feet. The UK labour market is adapting to keep up. But to stay competitive, it needs to do so effectively. While the government wants to embrace the benefits of change and recognises the strength of the UK’s flexible workforce, it has a keen eye on workers’ rights. That’s been highlighted in the prime minister’s commitment to not just maintain workers’ rights when the UK leaves the EU but enhance them. These dynamics led to the Taylor Review of Modern Working Practices, and four further consultations into employment status, increasing transparency, agency workers and enforcement. The Good Work Plan brings together all this work.

The principles of good work Matthew Taylor was critical of “one-sided flexibility” in the labour market, where some businesses have transferred too much business risk to the individual agency or gig economy workers, sometimes at the detriment of their financial security and personal well-being. But good quality work means different things to different people. Some value flexibility, for others it’s higher pay or the opportunity to progress. To reflect this, the government’s approach follows five principles: • Satisfaction – By providing better jobs, employers will be better able to attract and retain the talent they need; by boosting transparency around job quality, individuals can make better choices about work that suits their needs. • Fair pay – The government has an aspiration to end low www.rec.uk.com

pay. It is also targeting policy around tips and other discretionary payments for service. And of particular interest to recruiters, it is legislating to improve transparency around payment, as well as changes to holiday pay reference periods. • Participation and progression – The government wants to ensure everyone has the basic skills they need to enter the labour market in the first place, but people also need to have a realistic scope for development and fulfilment. • Well-being, safety and security – Happy and engaged employees experience less workplace stress and are more productive. The Good Work Plan emphasises the importance of mental health initiatives. • Voice and autonomy – The importance of employee engagement once again comes to the fore. The government is investing in improving the tribunal system (and raising fines for any aggravated breaches). It is also set to make the Information and Consultation regulations more accessible. These provide a mechanism for employee views to be taken into account on major workforce reforms, such as restructuring. By spelling out these principles, it becomes even clearer that recruiters have a key role in delivering the Good Work Plan, and helping employers play their part. The REC has been engaging with the government from the outset to ensure that the recruitment industry’s voice has been heard. It supported many of the principles and recommendations in the Taylor Review, particularly the emphasis on transparency. Now, as legislation is introduced, it is working to ensure the government guidance is clear and works for recruiters. www.rec.uk.com

The introduction of a key information document From April 2020, employment businesses will be required to provide work-seekers with a ‘key information’ document before terms are agreed between the employment business and the work-seeker. This includes: • the type of contract a worker is employed under • the minimum rate of pay that they can expect • how they are to be paid • if they are paid through an intermediary company • any deductions or fees that will be taken • an estimate or an example of what this means for their take home pay. The principle behind the legislation is to increase transparency for the workseeker on what they will be paid where there are other intermediaries in the supply chain – for instance, when an umbrella company is involved. Swedish Derogation As expected following the Taylor Review, the government confirmed in December that they would abolish socalled Swedish Derogation contracts – which currently allow agency works to trade off equal pay for pay between assignments before terminating the contract – from April 2020. Written statement From April 2020, an amendment to the Employment Rights Act 1996 will mean that work-seekers are also entitled to a written statement about their employment status, days and times required to work, remuneration (not just pay), entitlements such as training, sick leave and maternity/

paternity leave, duration of contract, notice and probation periods, from day one of their employment. Holiday pay legislation and guidance The government is currently campaigning to promote the entitlement to holiday pay and has made guidance available to workers and businesses to assist with calculating holiday pay entitlement for irregular hours. From April 2020, the holiday pay reference period will increase the pay reference period from 12 to 52 weeks (or time worked, if less than 52 weeks). Future Legislation Finally, in the Good Work Plan the government made several proposals for future legislation or regulative changes. These are part of its drive to update employment law in the UK to better reflect and keep up with changes in the labour market and workplace. A number of these proposals are likely to impact on the recruitment sector including the intention to regulate umbrella companies, legislation to clarify and align employment and tax status, and the right to request a more stable and predictable contract. Along with this, we are likely to see consultations on proposals to tackle “one sided flexibility” looking at legislation to enforce payment for cancelled shifts and reasonable notice periods. The REC will continue to update and consult members on all these changes, alongside continued engagement with government.

JUNE 2019 RECRUITMENT MATTERS 5

IR35 CHANGES

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

By LEWINA FARRELL – REC head of legal services

he off-payroll rules were introduced into the public sector in April 2017. The government is now consulting on extending those rules (with some amendments) into the private sector from 6 April 2020. Though draft legislation is not expected until summer 2019, here are some key proposals. The government proposes that the off-payroll rules will not apply where the end user client is a small company. The government is consulting on what tests to apply for non-corporate entities. Where organisations are exempt, the existing IR35 rules (where the intermediary is responsible for applying the rules) will continue to apply. When an organisation becomes or ceases to be

MAKING WORK PAY KAY INGRAM, LEBC GROUP

6 RECRUITMENT MATTERS JUNE 2019

small in an accounting period, for the purposes of the off-payroll rules that change will apply from the start of the tax year following the end of that period. Under the proposals, clients will have to pass their IR35 status decision, and their reasons for coming to that decision, to the off-payroll worker as well as the party they contract with. Where there is more than one agency, each party will have to pass the IR35 status decision down the chain. In addition, the consultation proposes a client-led status disagreement process. We expect that a minimum set of requirements will be set out in the legislation. There are a couple of different points to consider regarding liability. Firstly, where the fee-payer is off-shore, the fee-payer’s responsibilities move up the supply chain to the next UK based entity.

The British Medical Association has highlighted that senior doctors are turning down extra NHS shifts for fear of large tax bills, which mean they would take home less than 33% of pay. This Treasury-inspired own goal has resulted from the complex rules, which tax the pension savings of higher earners. Other public sector workers are affected, as well as many middle and high earners with long service in defined benefit pensions. Those

who get large pay rises in a short period or a high bonus could be caught. Those with an income of £110,000 or more could have their allowance for pension savings reduced from £40,000 per year to as little as £10,000, with a tax bill on savings made above this. Employers need to be aware of this stealth tax so that they and their staff can continue to benefit from the tax relief available without accidentally incurring a tax bill.

BEHIND THE SCENES AT THE INSTITUTE OF RECRUITMENT PROFESSIONALS

JIM BAKER, deputy branch manager,

www.rec.uk.com

Tangent International, on finding diverse tech talent

It’s important to be honest and ethical – whatever industry you’re in – but there’s all the more reason to when kids are involved.

The ‘fourth industrial revolution’ has driven up the demand for tech talent. How is your business delivering?

We’re not scared to lose business. We go beyond the letter of the law to make sure teachers are safe to be in front of a class, before they arrive in a school. We’ve lost teachers and bookings to other agencies because of our strict recruitment policies, but it’s so important to get this right. I also won’t put a teacher in if I don’t

Kay Ingram, director of public policy, LEBC Group kayingram@lebc-group.com www.rec.uk.com

SIMON DEAR, chief executive,

Step Teachers, on ethical recruitment

When I moved into the industry from phone sales, I liked the fact that Step Teachers was founded by a teacher, Marios Georgiou, who wanted to give supply teaching a better name, who had this ethos at heart. And because I’ve got children, I will always treat schools and teachers as if they’re teaching my kids.

The government should reform these perverse disincentives to save. At a time when more pensioners are living longer the prudent should be rewarded not punished. ‘Making Work Pay’ is the rationale behind government benefit reform; it should also be applied to higher earners saving for retirement.

Q&A

Off-payroll rules

Secondly, the government proposes that the liability should initially rest with the party that has failed to fulfil its obligations until such time as it does meet its obligations, at which point liability moves down the chain. However, if HMRC are unable to collect the outstanding tax liability from a party, the consultation proposes that the liability should transfer back to the first party or agency in the chain, and if that fails, then HMRC will pursue the client. The consultation does not propose personal liability for directors, office holders or associates of the fee-payer. Clients should start to assess how they will be affected by these changes. They should also assess who among their contractor population might be affected and decide how to respond to this. Clients must identify who within their organisation should make the status decisions and ensure that those individuals understand how to assess status. Agencies will have to ensure that they have the payroll capabilities to manage payments to contractors (we know from the public sector roll-out that this is not straightforward and some agencies have incurred significant development costs). The proposals raise a lot of questions. REC will run a series of seminars throughout 2019 to look at these in detail.

What I know

legal update

think they’re right for the school. However, with tight turnarounds, I’ll be upfront about who we can deliver within minutes. I’d rather over-deliver, than overpromise.

I don’t make sales calls. I have conversations that build trust and longlasting relationships. I’d like to think of most of my clients as friends, but I treat everyone the same. Winning new business follows the same approach – playing the long game, making sure I have that relationship so that I’m next on their list when their regular agency lets them down.

Communication with the teachers on our books is just as important. I’ll always reply to texts and emails, so they know they’re not just a number, but a valued member of our family.

We’ve always specialised in supplying talent for the communications and IT sectors. As the two have come together with the Internet of Things, it’s been a natural evolution for us to focus on that. We’re good at finding hard-tofind skills – partly through our extensive, global search capability, but also because we have high staff retention. Once we’ve found someone good, we don’t want to let them go.

You also focus on diversity to give you access to wider talent pools… By the nature of what we do, we’ve never really had an issue with ethnic diversity – we work all over the world. Seventy per cent of our own workforce is female. And we’ve thought

quite hard about the company we want to be – putting purpose before profit, and making sure nobody gets left behind. We want to drive that diversity into the industry. It’s the right thing to do – and it’s good for business, as customers are looking at this too. Although tech is traditionally seen as male dominated, 44% of the candidates we put forward are female and our placement numbers are similar. The important point is we measure it – and we encourage it. It doesn’t happen by luck. We’re also a Disability Confident employer, working with local charities to offer workshops for CV writing and interview prep for those with Asperger’s or high-functioning autism, who can be extremely successful in working in tech.

JUNE 2019 RECRUITMENT MATTERS 7

TRAINING

Training for growth When you’re a fast-growing business, it’s easy to push training to one side, says Paul McQue, managing director at MPA Recruitment. But just think about what you can achieve when your staff are firing on all cylinders Tell me a little bit about MPA Recruitment… We’re one of the largest recruitment agencies in Northern Ireland, the largest healthcare provider, and we also have a large number of contracts with the private sector, as well as the National Trust and the Giants Causeway – which employs 200 temps at any one time. In February we were listed in Recruiter’s Fast 50 as the fastestgrowing multi-sector agency in the UK – and came 10th overall. We’re going through an extremely aggressive growth spurt – we’ve trebled turnover in the past three years. I’m extremely proud of our teams throughout our six offices in Northern Ireland. What’s behind your growth? I put it down to an outstanding team and the loyalty of our clients. But this is where the importance of training comes in. The founder, Mary Pat O’Kane, and I reshaped the business three years ago, when I joined as managing director. Over my career, I grew up through the likes of ManpowerGroup and Hays. I believe these organisations have some of the best recruitment training there is. And when you’re

growing as we are here at MPA, you need to introduce new systems, and you need high-level performance and world-class recruitment behaviours. You’ve just put five of your recruiters through the Level 3 Certificate of Recruitment Practice (CertRP). Why choose this route? The breadth of recruitment expertise is so important. I’m talking real in-depth, front-toback, 360-degree recruitment training. And there’s no better place to start than with the IRP and the training you can get through them. With 44 members of staff, we decided to take 10% of them – some of our rising stars who just needed that industry-wide understanding that’s not always easy to come by on the job. These five recruits are the first to go through this course, which covers everything from sales

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 JUNE 2019

and relationship management to operational, legal and ethical requirements. They are studying for it remotely, but I would certainly sacrifice the time if they want to go on and do something else. This is the start of a journey that will see all members of staff doing some sort of training every year – whether that’s the CertRP, leadership training, accountancy, app and website development, and so on. We’ve seen incredible growth, but I want to keep it going. I’m always thinking, how do we double it or treble it again? Training is one of the fundamentals to change. What’s been the reaction among staff to the focus on training? They’re glad to see the company is investing in their future, and the continued success of the business. In a business that’s growing as quickly as ours, it’s important to maintain control over the growth, to ensure that it’s sustainable, so ongoing professional development – through training – is essential for us to ensure that our teams and our business are always prepped for the next level.

When a business stands behind its people, fostering relentless positive behaviours, people can grow careers. I believe that there’s no limit to their potential. And has it been easy to find the time for training? Training is a no brainer. It’s easy to push it to one side as your business grows. You think you’re growing, so you don’t need to worry about it. But there are always pockets in your business that need refining, skills that need brushing up and knowledge that needs expanding. We want the business to continue to grow. We don’t want to settle. So training is at the top of our agenda as we try to take MPA into the next phase in our growth journey. The Institute of Recruitment Professionals represents, educates, qualifies and supports the careers of individual recruitment professionals throughout the UK. Becoming a member of the IRP demonstrates your commitment to professionalism and best practice in recruitment and is signified by letters attached to your title. www.rec-irp.com/

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.