Recruitment Matters March 2019 by Redactive Media Group

THE VIEW AND THE INTELLIGENC E

How innovation can be a force for good P2 BIG TALKING PO INT

Simple steps to promoting gender diversity

LEGAL UPDATE

RECRUITMENT MATTERS

What’s in the government’s Good Work Plan? P6 Issue 71 March 2019

TR AINING

How the IRP can help train your staff P8

I M M I G R AT I O N

Will the new immigration system work? W

hen the latest set of migration statistics is published by the Office for National Statistics (ONS) on the 28 February, it is likely to highlight a further fall in the number of European Union nationals coming to the UK looking for work. And this at a time when REC data shows that candidate availability is declining each month. But this time around, we have a picture of what the government plans to do in the future – when freedom of movement from the EU officially comes to an end. In December, the government published its long overdue immigration white paper. The REC was pleased to see recognition for the importance of ensuring the future system supports a flexible labour market – and that a number of our recommendations had been heeded. Proposed reforms to the Tier-2 visa system – including abolishing the cap on the number of visas issues each month – should make it less bureaucratic and costly for employers. Concern around a salary threshold of £30,000 for Tier-2 visas has been met with the concession of a year-

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long engagement process with business on what the salary threshold should be. The government will also consult on its proposal of a transitional measure to help sectors that would find it difficult to adapt to the new system – a 12-month work visa. This will allow an individual to work at all skill levels, move between employers and won’t require any sponsorship on behalf of employers. However, there will be a 12-month cooling off period, and these visas won’t lead to permanent settlement or allow for switching to another visa. The REC will ensure its members’ views are heard on these issues. However, firms will be dismayed by the proposals that require job roles to be on a government-approved list

“The REC will ensure its members’ views are heard on these issues”

before they can get a visa. “No list will be able to keep pace with the changing demand from employers,” said REC chief executive Neil Carberry. And when investors worldwide want to know Britain will be open for business, and UK ﬁrms need to know that shortages that can’t be ﬁlled by local employment and training can be addressed, it is vital that remaining questions are answered quickly. 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...

Social innovation provides recruiters with the opportunity to lead, says TOM HADLEY, REC director of policy and professional services

Recruiters getting it right makes all the difference, says

NEIL CARBERRY, REC chief executive

he most common thing people outside the industry say to me about recruitment is…. …we could all finish that sentence in different ways! But what has been striking for me since I joined the REC last summer is how often the answer is “…the huge difference it can make”. Those people are right, of course. Recruitment opens up opportunities, and it helps our economy to grow. Done well, the value that recruiters generate is enormous. Clients’ feedback on the industry is on an upward trend. Recent REC data showed that 68% of UK employers were satisfied with the candidates presented by recruitment agencies, with 71% expressing satisfaction with their agency partners. Progress – but there’s always more to do. And for candidates too, good recruitment makes a difference. Late last year the REC produced new research on how brilliant recruitment can help drive diversity in business. By paying attention to issues such as opportunity, flexible working and fairness at work, how we recruit is a driver of what companies achieve. Studies are clear that engagement at work improves competitiveness and productivity – the seemingly elusive goal of every company, as well as the government’s Industrial Strategy. So what we do has never been more important. And clients are responding to this. With over 400 major companies employing more than 3 million people now signed up to the REC’s Good Recruitment Campaign, we are offering clients more support than ever in getting their choice right – and we can bring enhanced levels of client understanding to you. But getting it right is also about doing the right thing. Poor recruitment practice will tarnish our industry if we allow it to happen. And it will strengthen those who see all work that isn’t fulltime, open-ended and directly employed as somehow “bad”. We must stand up to that. Good work is about how people are treated, not the contract they are on. The answer to making sure the future labour market is both flexible and fair isn’t an approach suited to 1973. But it does involve making sure that fair treatment matters. The REC will lead the way in this, too. Our compliance test and code of conduct sets our members apart – a point that more clients are seeing than ever. Good practice starts with us all. And having a care for it is essential to the long-term health of our sector. 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

Show, don’t just tell We need new solutions to meet new employment challenges. AI and automation, political uncertainty, evolving skills needs and sectoral disruption are just some of the external forces at play. And a major part of the REC’s work over the coming months will be to showcase our industry’s solutions to 21st century labour market problems. Campaigning priorities for 2019 include promoting flexibility and fairness (as part of our input into the government’s ‘Good Work’ plan), facilitating career transitions, driving inclusion and boosting progression for all by evolving the Apprenticeship Levy into a broader skills levy. We will also continue to focus on promoting good hiring practices through ongoing compliance activities and the wide-ranging Good Recruitment Campaign, which is now supported by over 400 leading employers, representing over 3 million employees. Social innovation is also a major theme on the European and global level and we will be working with the World Employment Confederation (WEC) to highlight and learn from specific examples, such as the pioneering work of the Dutch federation (ABU) to help agency workers access mortgages. Our own Future of jobs ambassadors initiative – which focuses on harnessing the expertise of REC members to build better links between education and work – was recognised as a further positive example at the recent social innovation conference in Brussels. Speaking at the same event, the European Commission’s Manuela Geleng argued that “economic growth and fairness can go hand in hand” and that “boosting awareness, aspiration and skills is the cornerstone of an inclusive society”. We want to continue showcasing our industry’s role in making change happen. UK recruiters place over 1 million people a year into permanent jobs and ensure that 1.3 million workers are in temporary and contract work in any given week. On the European level, our industry helps 11 million people find work and 2.3 million employers find the right staff and skills. We need to shout about what we do and how we do it. In the words of WEC managing director Denis Pennel: “We cannot address 21st century jobs market challenges with 20th century solutions.” It’s why we’re keen to show rather than just tell as we take the innovation message forward on both the domestic and international stage.

You can follow Tom on Twitter @hadleyscomment

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the intelligence... Recruiters can help to make post-Brexit Britain a success BY THALIA IOANNIDOU, REC SENIOR RESEARCHER

At the time of writing, employers’ conﬁdence in

lmost two years after the EU referendum took place in the UK, the country is now only weeks away from the date originally set for leaving the EU. And the growing uncertainty has been reflected by REC data, which every month has shown employers’ heightened concerns and declining confidence levels in the prospects for the UK economy. Amid the December 2018 deadlock in Westminster and the possibility of a no-deal Brexit looming, the start of 2019 signalled a particularly worrying time for UK businesses. At the time of writing, employers’ confidence in economic conditions further deteriorated by 2 percentage points to net -14. While remaining positive, employers’ confidence in making hiring and investment decisions declined by a notable 5 percentage points. This was the lowest level recorded since February 2018 (‘JobsOutlook’, January 2019). The UK’s economic strength is built on companies being able to do great business. But there are widespread reports that persistent candidate and skills shortages are hampering overall growth. Sectors such as healthcare, hospitality and accounting stand out as areas experiencing most acute skills shortages. Notwithstanding these challenges, the recruitment industry has a crucial role to play in supporting employers identify and maximise opportunities for growth and, in doing so, making post-Brexit Britain a success. Central to the efforts to ensure the long-term health of the UK jobs market are effective workforce planning

Jan-Dec 2017

Median RIB recruiter Lower quartile RIB recruiter Upper quartile RIB recruiter

14.4% 11.5% 17.8%

17.7% 14.3% 27.0%

PERM MARGINS REMAIN UNDER PRESSURE

Jan-Nov 2018

Average invoice as a percentage the permanent placement salary (%), for the median, upper and lower quartile RIB recruiter, Jan-Dec 2017 and Jan-Nov 2018

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economic conditions further deteriorated by 2 and improved workplace training. percentage points to net -14. Whatever the UK’s future relationship competitors with homogenous teams. with the EU and beyond, recruiters In light of the growing shortage of are uniquely placed to support workers, it is essential that employers employers in workforce planning take every action to ensure that and with advice on how to upskill their workplace is inclusive of their existing workforce, as well everyone and make the most of all as establishing close links with the talent available. By excluding the education authorities. participation of any groups in the The rise of AI and automation labour force, businesses risk being is another important area where left behind competitors. Recruiters recruiters can help employers – can help employers evaluate their they can support their clients in hiring practices and reconsider their embracing technological innovation workplace culture to create a more and identifying and developing diverse and inclusive new skills required workforce. among their workforce. Indeed, recruiters are Good use of technology best placed to match will help businesses be talent and skills to the right more efficient in their job. By helping their clients operations and become implement good, inclusive more competitive. practices alongside digital There is ample innovation and evidence that Decline in employers’ investment in more diverse confidence in making infrastructure, they organisations and hiring and can help UK businesses leadership teams, in investment boost productivity and, in terms of gender, age decisions turn, increase profitability. and ethnicity, outperform

The latest real-time information from the RIB Index shows that, having averaged 17.7% across 2017, the average perm fee for the Median RIB recruiter has been recorded as 14.4% across the year 2018 (to November). There was also a

deterioration in the average perm margin among the lower quartile performing RIB recruiters – falling from 14.3% across 2017 to 11.5% this year (to November). Similarly, the average margin fell from 27% to 17.8% amongst upper quartile RIB recruiters.

With total perm billings just 1.1% higher, year-on-year, across the first 11 months of the 2018, December’s performance (in relation to volumes, average placement salaries and margins) holds great importance in terms of how it will influence the final 2018 out-turn.

BELINDA JOHNSON runs employment research consultancy, Worklab, and is Associate Knowledge & Insight Director of Recruitment Industry Benchmarking (RIB) – a strategic partner of the REC. The RIB Index provides bespoke conﬁdential reports on industry benchmarks and trends. See www.ribindex.com; info@ribindex.com: 020 8544 9807.

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GENDER DIVERSITY

big talking point

Closing the gender gap 018 could well go down in history as the year that injected much needed urgency into the debate about gender and the workplace. From high proﬁle examples of poor practice – brought to life through the ‘Me Too’ and ‘Time’s Up’ movements – to the introduction of gender pay gap reporting for large companies, the accompanying calls for progress have grown ever louder. But what steps can recruiters take in 2019 to drive the change that so many of them want to see?

The big picture When 92% of UK engineers in the workforce are men, and only one in 10 executive positions in FTSE 100 companies are held by women, the scale of the problem is clear. And it’s not an easy one to fix – the structural issues and norms that preserve the status quo are complicated to unpick. It’s why the REC is working with the government to drive change from the top and challenge some of the deep-rooted causes of inequality. It is on the Flexible Working Taskforce, for example – a group established by the Department for Business, Energy and Industrial Strategy to promote wider understanding and implementation of inclusive flexible work and working practices. It also sponsored the All Party Parliamentary Group on Women and Work last year, providing evidence for the group’s report, which was due to launch as this magazine went to press. In that, it recommended the government focus on two biggest barriers in the way of female entry into the workplace and their progression: unconscious bias and limited flexible working opportunities.

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Improving gender diversity is not only the right thing to do – it’s good for business. But although many employers understand the theory, they don’t know what to do to make enough of a difference. Recruiters Matters explains the steps to progress

The government and policymakers have a responsibility to set the tone of the debate (among the public, as well as in business), to drive the agenda, commission research and offer the right support. After all, closing the gender gap could add £150bn to the UK’s economy. But good recruitment practices will always be the foundation upon which a fair and diverse organisation can be built – and it’s down to employers and recruiters to get that right.

CHALLENGING QUESTIONS TO ASK EMPLOYERS TO DRIVE CHANGE • Are your business values reflected in the company’s culture, brand and communication? • Are you attracting female candidates to apply for the role? • Is your business a champion of flexible working? • Is your business a champion of enhanced maternity and paternity leave? • Are you confident that the selection criteria used to screen candidates are transparent, impartial and fair? • Do you focus more on experience or on skills and potential of your workforce? • Are hiring managers properly trained and the interviewing panel diverse in composition? • Do you regularly monitor underrepresentation in your organisation?

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GENDER DIVERSITY

10 WAYS RECRUITERS CAN PROMOTE GENDER DIVERSITY 1. Be a diversity champion and raise awareness on gender equality processes

2. Ensure job adverts are written in neutral language

3. Use a variety of advertising platforms to reach a diverse pool of talent

4. Offer ﬂexible working arrangements for all applicants

5. Clearly deﬁne a salary range in job adverts

6. Use name and context-blind recruitment processes

7. Call out bad practice and challenge your clients to address unconscious bias

8. Demonstrate your ability and readiness 9. 10.

Adopting best practice In its latest report, ‘Increasing opportunity, supporting growth’, the REC looks at the role of good recruitment in gender diversity. It offers a series of recommendations for employers, HR professionals and recruitment agencies, alongside practical examples of how progress is being made and of recruiters and employers working together to deliver it. For employers, the emphasis is on strong leadership that promotes diversity and its positive impact. This means setting explicit goals, scrutinising the processes that govern both new hires and progression, and seeking external advice. For recruitment professionals, the focus is on their expertise and the unique position they have to inﬂuence and help drive change in the organisations they work with (see box-out, above right). Recruiters and in-house HR professionals are reporting a wide range of ways in which they had seen employers show bias and use discriminatory and other ill-advised practices in their recruitment pipeline. Whether it’s in the job ad and where it’s posted, how applicants are screened or interviews are conducted, it’s important to call bad practices out. Asking employers the right questions will also prompt change (see box-out, left). Simple questions might not have easy solutions, but they help to identify knowledge gaps, biases and the problems companies are facing. Recruitment professionals can then

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to attract and recruit candidates from diverse backgrounds Set equality targets and train staff in equality processes Introduce new approaches to access different pools of potential talent

work together with employers and their in-house teams to solve them – by putting speciﬁc, ambitious and achievable actions in place to safeguard gender diversity and inclusion during the hiring process.

Working together The good news is that according to a REC survey of 400 HR decision makers, conducted by ComRes in August-September 2018, the majority of respondents are already using a range of inclusive practices as standard when recruiting for a vacancy in their organisation: • 74% ensure the hiring manager is trained in interviewing techniques • 72% assess job advert language • 69% assess whether the role can be advertised as open to ﬂexible working • 62% ensure the hiring manager is trained in dealing with unconscious bias • 60% ensure there is a diverse interview panel. More than a third are also using anonymised recruiting, highlighting that huge change is happening. And importantly, businesses are learning from each other in terms of what best practice looks like. As Bill Richards, UK managing director at the report’s sponsor Indeed, says: “When it comes to diversity and inclusion, there is no competition: we all need to learn from each other.”

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GOOD WORK PLAN

legal update Government’s Good Work Plan By BUNMI ADEFUYE – solicitor and commercial advisor, REC

n 2016, the government commenced an independent review of employment practices in the modern UK economy, which was led by Matthew Taylor. The Taylor report was published in 2017 with 53 recommendations mainly centered around gig economy workers and agency workers. The government has now published the Good Work Plan, which includes three draft statutory instruments and a number of other changes to employment legislation. These include: • Repealing Regulations 10 and 11 of the Agency Workers Regulations 2010 – known as the “Swedish Derogation” contract. • The Employment Rights Act 1996 –

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extending the entitlement to a written statement of employment particulars to all workers and not just employees from day one. • The Employment Tribunals Act 1996 – increasing the maximum ﬁnancial penalty available for aggravated breach of a worker’s employment rights from £5,000 to £20,000. • Employment status – the government will “bring forward legislation” that will clarify employment status together with proposals that will align tax and employment rights. • Continuous service – the relevant break in service for the calculation of continuous service will be extended from one to four weeks. • Holiday pay – increasing the holiday pay reference period from 12 to 52 weeks, and government will also launch a holiday pay awareness campaign. • Key facts document – must be provided to agency

workers conﬁrming who is responsible for paying them, details of their pay rates together with any deductions, how they will be paid, and the type of contract they are engaged on. • The right to request a more predictable and stable contract from the hirer – this is applicable to agency workers who have worked with a hirer for 26 weeks. Workers on zero-hours contracts that have worked for 26 weeks can request a contract that guarantees their hours. • Extending the remit of the Employment Agencies Standards Inspectorate – to cover regulating umbrella companies in the supply chain. • A ‘name and shame scheme’ – for employers who fail to pay Employment Tribunal awards. • Staff gratuities – banning employers from deducting from their staffs’ tips. These proposals and the draft Statutory Instruments represent the government’s “vision for the future of the UK labour market”. Apart from the draft statutory instruments, which come into force in 2019 and 2020, the rest of the proposals don’t have substantial details or ﬁrm dates, so we will continue to keep an eye out for more details.

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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

TOM PICKERSGILL founder

at Redline Group, on attracting talent to the industry

The modern jobseeker has changed, the industry needs to change too

You were named Best Newcomer at the IPR Awards, so what attracted you to recruitment?

In low-margin sectors such as security it’s not sustainable to use a third party for recruitment. By using technology to cut back ofﬁce costs and minimise the legwork required for background checks and regulatory compliance, Broadstone can pass on the savings, provide higher wages and attract more jobseekers to these sectors.

Technology can help drive best practice. A CV doesn’t tell you how reliable or trustworthy someone is or how they

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CHRIS FORSYTH senior consultant

of temporary stafﬁng platform Broadstone on embracing technology

perform, but members of Broadstone’s community can achieve all-star status, unlocking extra beneﬁts if they don’t cancel jobs, They’re used to ordering turn up on time and log an Uber or a Deliveroo. their timesheets correctly. They don’t want to have Likewise employer ratings, to go into the nearest town to look at job ads in based on how responsive they are, for example, a window, or have a long interview, for a temporary, enforces things that haven’t traditionally been low-paid contract. tracked.

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Q&A

What I know

BEHIND THE SCENES AT THE INSTITUTE OF RECRUITMENT PROFESSIONALS

To make the most out of technology you need a clear strategy But you can start small, with the easiest business problem you’re looking to solve. If you can ﬁnd one way to slither 5% off the resources you need over a year, other opportunities will soon become apparent. Getting your team involved to understand what you’re trying to do will deliver better results. Bringing in specialists will ensure you’re on the right track.

I used to run a golf coaching business, then I secured a sponsorship deal which allowed me to play professional golf full-time on the tour. Injury forced my retirement so I had to ﬁnd another career that excited me. I talked to a few friends in the industry, and realised recruitment is quite competitive. The more you put in, the more you get out. I could see the similarities with my golﬁng life.

What were your ﬁrst impressions? My biggest worry was training. Because of my coaching background, I know how important it is to be taught properly. Over my ﬁrst month, I had some intense training, so I could hit the ground running.

What’s been the biggest challenge? Time management. It went really fast for the ﬁrst six months, and I applied myself completely, maybe too much initially. The biggest thing I’ve learnt is to write a plan for each day and stick to it.

What has helped you to succeed? I work very closely with my manager and she’s been brilliant. The other thing is mentality – I felt I couldn’t fail.

How can more ﬁrms encourage more people to switch careers into recruitment? Recruitment needs to be presented in a way that shows it’s not a die-hard sales environment, where you get sacked the moment you don’t succeed. If you apply yourself, demonstrate the right attitude and you’re willing to listen and learn, from my experience at Redline I’ve found you get the support you need to succeed.

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TRAINING

Training matters Staff training is as important in recruitment as it is in any other industry. Recruitment Matters talked to Mark Esom, founder of Fuel Recruitment, to discuss the benefits of taking a more structured approach Q. You’ve recently taken a more structured approach to your training, why? A. The main reason is the attraction and retention of people. Our industry is no different from any other at the moment – we’re all competing for talent. And you can decide not to bother training staff, because you think you might lose them, or you can formalise your training, giving people a specific structure to work to. People want to work for a business that invests in them, and the better you support people, the more likely they are to stay and repay that investment. Q. What structure does your training take? A. We created an internal academy covering the first 12 months of people’s careers with us. We’ve got a very in-depth manual built through many years of recruitment knowledge. We test people at three, six and 12 months against that, using evidence gained from their practical experience. We then give them an accreditation to say they’ve reached a level of competence and are therefore more senior. It’s hard. People have to learn – they can’t just sit there

RECRUITMENT MATTERS

Q. How important was it to get the balance right between internal and external training resources? A. Very. Firstly, it’s about getting the right people to deliver the right concepts. We had quite intensive discussions with the IRP about what we wanted for the

The ofﬁcial magazine of The Recruitment & Employment Confederation Dorset House, 1st Floor, 27-45 Stamford Street, London SE1 9NT Tel: 020 7009 2100 www.rec.uk.com

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and coast. But it’s really helped us with retention. We had hardly any attrition last year. Working with the IRP, we then introduced a leadership programme for our more senior people. It’s designed to improve their knowledge and give them more accountability for the dayto-day workings of the business. In smaller companies leaders end up doing a bit of everything: you need to understand legislation, the workings of your clients, how payrolls and invoicing operate, people management and HR issues, as well as how to recruit. Gaining that breadth of experience is one of the biggest appeals to working in a business like ours, but you need support to do it well. With that training in place, we’re now looking at developing more sales-based training for those that sit in the middle.

leadership programme because I didn’t just want to plug our people into an existing module. I wanted something bespoke. Our business is different to every other business and we’re at a different stage of our journey. We wanted a speciﬁc course that would add value. Secondly, it’s about the time that’s required to deliver that course. Often the greatest knowledge to impart is already inhouse, but you need to remember what you are there for and not end up as a training college. Getting an expert can be quicker and more efﬁcient, even though it costs you a bit a money. Q. What was the hardest part of formalising your training? A. The reluctance of people to accept change. There was initial pushback around testing people on something they were already doing. We needed to explain how it would make them better at their jobs. It’s more about communication than anything. Q. How will you make sure your training doesn’t get stale? A. If training is delivered well – and interactively – it shouldn’t get stale. Use small workshops, get

people involved, and talk about current issues or recent legislative changes. We can look at updating certain parts of it when the time is right but we certainly won’t have to change the whole programme. Q. What advice would you give to other firms looking to formalise their own training? A. Every business is slightly different and will have their own perspective on how to do it. The training that the IRP provides is very good, but you still need to invest the time to apply it in the right way to your own business and ensure your staff buy into it. Training helps to strengthen the culture of a business – it creates a stickier work environment that hopefully encourages more of your people to stay. 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.

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: Senior Production Executive: Rachel Young rachel.young@redactive.co.uk Tel: 020 7880 6209 Printing: Printed by Precision Colour Printing © 2019 Recruitment Matters. Although every effort is made to ensure accuracy, neither REC, Redactive Publishing Ltd nor the authors can accept liability for errors or omissions. Views expressed in the magazine are not necessarily those of the REC or Redactive Publishing Ltd. No responsibility can be accepted for unsolicited manuscripts or transparencies. No reproduction in whole or part without written permission.

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