RM March 2020

THE VIEW AND THE INTELLIGENCE

Recruiters can help fill the gender pay gap p2 BI G TALKI NG POI NT

Call for acঞon on #EachforEqual p4

Recruitment Issue 83 March 2020 Ma ers

LEGAL U PDATE

What you need to know about IR35 p6 PRODU CTS AND TRAI NI NG

How video is revoluঞonising interviews p8

Le er to the Chancellor

REC to Sajid Javid: ‘pause and think again’ on IR35

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ushing ahead with IR35 legisla on could “severely damage the economy, compliant firms, workers and the tax take”, the REC and a number of its high-profile members have warned the Treasury.

In a le er signed by 14 recruitment firms, the REC called for a “more ambi ous and in-depth” review into the impact of the legisla on. It said the government should delay implementa on un l April 2021 to allow for a proper reassessment.

The Treasury announced a review of IR35 in January, following calls from across the industry. However, the REC revealed that this review will look only at how the legisla on will be implemented, not delay it. To meet the 6 April deadline, final legisla on will have to be announced with the spring budget on 11 March. This leaves just 17 working days to prepare for implementa on.

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New research by Harvey Nash, a recruitment firm specialising in technology talent, shows that 83% of businesses think the changes will nega vely impact their industry.

A primary concern is the lack of effec ve regula on of umbrella companies, which the REC warns would create tax avoidance opportuni es.

This would “risk workers and compliant companies losing out to those who might bend the rules”, its le er argues. It also calls for an independent chair and body to conduct the review and to learn lessons from the roll-out of IR35 in the public sector.

“We know from experience that the proposed IR35 legisla on, as it stands, will have unwanted consequences,” said Tom Hadley, Director of Policy at the REC. “Everyone should pay the correct tax. But these reforms would provide the perfect environment

The REC’s le er warned the Chancellor that the proposed legislaঞon will have ‘unwanted consequences’

Making great work happen

for unregulated and noncompliant umbrella companies to thrive. This will come at a cost to ethical businesses and workers who want to play by the rules.

This undermines what IR35 sets out to achieve.”

He added that this is why it is “disappoin ng” that the review won’t look into the legisla on itself. “This makes delaying implementa on, and the need to regulate umbrella bodies, even more urgent. Businesses may have just weeks to make sweeping reforms at what is already an extraordinarily difficult me as Brexit uncertainty and skills shortages take their toll on employer confidence. Ge ng IR35 right and learning from the lessons of the past is cri cal.”

www.rec.uk.com 04/02/2020 12:01

Leading the industry

the view...

It’s Internaঞonal Women’s Day and 50 years since the Equal Pay Act. There’s much more to do… says Neil Carberry, REC Chief Execuঞve

I

loved the film Made in Dagenham, the story of workers at Ford’s Essex plant who were instrumental in the campaign for Equal Pay, both in their factory and in law. That story lies at the heart of a century of campaigning by women workers. And, although the Equal Pay Act is 50 years old this year, there is s ll a gender pay gap.

This year the theme of Interna onal Women’s Day (IWD) on 8 March is Each for Equal – the idea that all individuals can act to create a more equal and inclusive world. This is a powerful observa on. The drivers of different treatment of different groups in work are too complex to be solved by a simple rate for the job, though equality in that is essen al. Real progress and inclusion has to come from an inclusive workplace. A classic example is progress on flexible working, which benefits everyone. Inclusion is a mainstream issue, not a sec onal one.

Recruiters have a huge role to play – not just in challenging percep ons and opening up progression routes, but in suppor ng plans for workforce change and how we u lise technology. More businesses are also realising that inclusion makes business sense. At the start of the year we welcomed the 500th client business into the Good Recruitment Collec ve, a powerful group of businesses commi ed to change.

Employers turn to recruitment agencies to gain expert management knowledge. They want your advice on how to promote an inclusive workplace.

So take the opportunity on IWD to shout about how our expert knowledge can shi the dial on equality.

And here’s a quick quiz ques on: how many countries celebrate IWD as a na onal holiday?

Tweet answers to @REC_Neil

“Inclusion is a mainstream issue.”

If you want to keep up to speed with all things recruitment then follow me on Twi er @RECNeil

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HADLE Y’S COMME NT

Sustainability and AI How can we get to grips with drivers of change, asks Tom Hadley, REC’s Director of Policy and Campaigns

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he jobs market is evolving – fast. Automa on, ar ficial intelligence (AI) and the move to more sustainable regional economies are just three factors. Our latest ‘Future of Jobs White Paper’, in associa on with LinkedIn, focuses on what these forces of change mean for recruiters across the UK.

The regional impact

AI is one of the four challenges iden fied in the government’s Industrial Strategy and its impact is likely to be felt first in regions with more low-skilled workers, such as the Midlands, North and East Anglia.

The REC has consistently called for more agile and effec ve structures to facilitate career transi ons for those affected. In par cular, we are engaging with the Department for Work and Pensions through our Partnership Agreement, which seeks to find solu ons to emerging labour market challenges. Industry leaders and recruitment professionals can feed into this debate and pre-empt future skills needs.

Growth in a green economy

Clean growth is a ‘grand challenge’ in the Industrial Strategy, and Local Enterprise Partnerships have developed projects from an Offshore Wind Sector Deal in the West of England to a coastal arc ecoinnova on partnership for low-carbon energy in the North West. Recruitment professionals’ access to local data and prac cal tools will be pivotal to aid this transi on. This was at the heart of our regional Future of Recruitment Forums with LinkedIn and remains a focus for our Future of Jobs Observatory this year. Let’s take a lead on the future of jobs.

You can follow Tom on Twi er @HadleysComment

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Leading the industry

the intelligence...

23%

A clearer outlook – but drought warnings ahead Thalia Ioannidou, Research Manager, REC A er a year of uncertainty, what should we expect in 2020?

At last the path ahead is looking more predictable. Recruitment ac vity picked up at the end of 2019 and we saw permanent placements rise for the first me in a year. This upturn was linked to increased business ac vity and organisa ons approving new hires a er a long period in which they delayed making decisions.

Temporary billings also rose (‘Report on Jobs’, January 2020).

Employers’ hiring inten ons in the short and medium term were encouraging. Forecast demand for permanent staff in the last quarter of 2019 was posi ve, at net: +21 in the short term and net: +26 in the medium term. Short-term demand for temporary agency workers rebounded by nine percentage points from the previous rolling quarter, while medium-term demand also rose by four

percentage points (‘JobsOutlook’, January 2020).

50% of employers quesঞoned feared too few workers were available for permanent roles.

The number of people coming to the UK to work has fallen since June

2016

Staff and agencies s ck together Average term of employment of full- me recruitment agency staff (months) 60 50

51%

50.3%

40.8%

40 30 20 10 0 2017

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2019

Jan-Nov 2019

Where have all the people gone?

The declining number of people available for new roles remains a concern. December 2019 saw a further reduc on in staff supply as the number of people available for permanent jobs fell faster than for short-term work. Similarly, in a survey conducted by the REC in December, one in four employers (23%) iden fied a lack of suitable candidates for jobs as the main challenge for their business – higher than a lack of skills or experience in the organisa on (12%) and compliance and/or legisla on (12%).

In the last quarter of 2019, half the employers ques oned feared too few workers were available for permanent roles.

The main skills shortages were in the construc on, health and social care, and engineering and Despite ongoing economic uncertainty, the length of me recruitment professionals stay at their firm is holding steady, averaging 50.3 months across January-November 2019, according to the median recruiter in the RIB Index.

of employers iden fied a lack of suitable candidates for jobs as the main challenge for their business

technical sectors. Meanwhile, 27% of employers of temporary agency workers had similar concerns. This may be linked to worries about IR35 reforms.

Eyes on the EU trade nego a ons The number of people coming to the UK to work has fallen since June 2016. Fewer EU ci zens, in par cular, are immigra ng, so how will businesses and public services cope with further reduc ons?

It is vital that the government makes the supply of workers a priority in its nego a ons with the EU. If not, they will fail to reassure businesses and workers or build confidence in the economy.

Note: Data is from the REC’s monthly surveys of employers (‘JobsOutlook’) and of recruitment consultancies (‘Report on Jobs’).

Recruitment agency staff stayed at their firm for an average of 40.8 months in 2017, rising to 51 months in 2018, according to the median RIB recruiter. Economic and poli cal vola lity in the UK appears to have prompted agencies and their

staff to s ck together for longer. The median recruiter billed 2.6% fewer clients in 2019 than in the previous year, so client sa sfac on has become more important – and a steady team generally offers greater service poten al.

Belinda Johnson runs employment research consultancy, Worklab, and is Associate Knowledge & Insight Director of Recruitment Industry Benchmarking (RIB). The RIB Index provides bespoke confiden al reports on industry benchmarks and trends. www.ribindex.com

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Industry trends

big talking point

How #EachforEqual are you?

Despite advances in equality and inclusion at work, gender pay gaps and male-dominated boardrooms persist – damaging both equal opportuniঞes and business performance.

The recruitment industry can help change that

S

unday 8 March is Interna onal Women’s Day and people are being encouraged to post their support and stories under #EachforEqual.

The campaign’s website states: “The race is on for the gender equal boardroom, a gender equal government, gender equal media coverage, gender equal workplaces, gender equal sports coverage, and more gender equality in health and wealth… so let’s make it happen.” We’ve come a long way, but not nearly far enough.

This ma ers – not just to women, but to men, families and businesses. If educa on, training, management or workplace cultures are excluding half the popula on from applying for jobs, then employers are missing out on a vast pool of talent. Of course, the

8.9%

the gender pay gap among full-ঞme employees in 2019 – a decline of just 0.6 percentage points since 2012.

22%

the percentage of girls taking A-level physics in 2017/18.

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issue goes beyond the recruitment industry, but if recruiters can help employers to reach more applicants by adap ng their job criteria and applica on policies and by refreshing their ways of working then they can facilitate change.

“There are more women in the UK workforce than ever before – however, there is s ll a pay and equality of opportunity disparity between women and men at work.

Increasing gender diversity in the workforce is not just the right thing to do – it makes business sense,” argues Ornella Nsio, REC Stakeholder Engagement Manager. “Businesses have been shown to perform be er when they draw on a diverse workforce with a wide range of exper se.”

Nsio believes that recruiters and HR managers are uniquely placed to promote this business case and guide employers on how to a ract and retain talent, as well as to offer support to candidates. “Now is a good me to do so,” she adds.

“With a shortage of candidates and an obliga on on companies to report their gender pay gap, the pressure to make progress is growing. Recruiters who can show exper se in this area will gain a compe ve edge and those who can’t will struggle in this climate.”

Jobs for the boys?

Career aspira ons start early and the government’s commission on gender stereotypes found that stereotyping begins at school. The www.rec.uk.com

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77% Act as an ally

9%

the percentage of girls starঞng STEM apprenঞceships.

34%

the real-terms fall in the the government’s Adult Skills Budget between 2010-11 and 2015-16.

26%

the percentage of women in senior management posiঞons in the hospitality, travel and leisure (HTL) industry.

REC’s Inclusivity and Intersec onality consulta on response, produced last November, suggests that recruiters are in an ideal posi on to provide careers guidance and raise awareness of opportuni es in schools. They are in a prime posi on to dispel myths about ‘suitable’ jobs for women and for men.

The REC’s Future of Jobs Ambassadors ini a ve partners REC members with schools, colleges and universi es, and provides students with work experience placements, jobs, advice and coaching.

Recruiters can also help companies to reach out to schools and colleges to encourage more people to enter their sector and gain the skills they need.

This is necessary because the UK spends just half the EU average on voca onal skills training. The REC believes that extending the exis ng Appren ceship Levy to cover agency workers would help many women break out of the lower skill, low-pay cycle. In its report, ‘Ge ng On’, it found that many temporary workers in key sectors were unable to access or afford quality skills development. Upskilling could give almost one million of these people new job opportuni es.

Some REC members already run programmes to tap this poten al workforce. In 2018, for example, Harvey Nash launched the Future Skills Programme, which used the Appren ceship Levy to help organisa ons cross-train people from outside the tech sector and, therefore, a ract more diverse candidates. www.rec.uk.com

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Recruitment agencies can act as allies to help women progress in work. The government’s fourth Hampton-Alexander Review recognised the role of execu ve search firms as a key agent for change and the REC’s best prac ce guide for execu ve search firms highlights ways they can do this.

For a start, they can help candidates to see where their skills are in demand. Many provide coaching, which can enhance the confidence of women candidates (famously, a Hewle Packard report found that women were unlikely to apply for a posi on unless they met 100% of the prerequisites, while male candidates would apply when they met just 60%).

Women may also be put off applying to work in an organisa on where they see few women working – a vicious circle. Recruiters can encourage diverse candidates to apply for a role, suggest ways to ensure the selec on process appeals to the widest range of candidates and advise companies on how to reduce unconscious bias. Small changes such as anonymising CVs and rewording adverts can have a dispropor onate cumula ve effect. Many employers believe they already do enough, but recruiters can provide an external viewpoint and evidence, and

51%

of women candidates do not ask about maternity packages in case their prospecঞve employer thinks they are pregnant and 31% fear that asking about maternity packages would hinder their career progression.

of organisaঞons in London and the South assess a role for flexible working as standard for new vacancies, compared with 63% in the Midlands and 65% in the North. encourage them to analyse their success. Their unique view on recruitment in specific industries enables them to offer more tailored support in industries such as engineering and construc on that have par cularly low numbers of women employees.

Enabling more flexible ways of working is also likely to increase the number of women (and men) who can apply for a job. The REC’s response to the government’s Good Work Plan supported the proposal that companies should have to disclose their familyfriendly leave and pay policies on their websites, as well as their gender pay gaps.

Once women join an organisa on, networking groups can encourage them to mentor each other and share ps on how to break the glass ceiling. These networks are usually coordinated by businesses, but a growing number of recruitment businesses are using them to promote female talent. REC member WiHTL (Women in Hospitality, Travel & Leisure), for example, runs a network for future female leaders.

Furthermore, while many businesses are promo ng the recruitment of women, few share this good prac ce externally.

The REC’s Good Recruitment Collec ve is a network that enables almost 500 employers to benchmark their recruitment methods and reinvigorate their strategies using the online Good Recruitment Hub. There is s ll much to do. So use this year’s Interna onal Women’s Day to start new conversa ons.

For more, visit www.rec.uk.com March 2020 Recruitment Ma ers

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Off-payroll rules

legal update IR35: 17 days to get it right

By Jane O’Shea, REC Solicitor

R

ecruiters lobbying for a delay to the implementa on of IR35 have not been reassured by the government’s announcement in January that it will conduct a review. They fear that rushing the legisla on, which extends the off-payroll rules in the private sector, will impact businesses and individuals unfairly and affect compliance.

The review looks only at how the reforms can be implemented in prac ce and what support those affected may need to transi on to the new rules. It is not considering a delay or extension.

17 working days to get it right Recruiters have li le me to prepare. Updated legisla on is likely to be introduced with the spring budget on 11 March and

A survival kit for the future Find out more at www.rec.uk.com or or call us on 020 7009 2100

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“Updated legislaঞon is likely to be introduced with the spring budget on 11 March.” the new rules come into force on 6 April. Employment businesses therefore have just 17 working days to study the legisla on in its most recent format, update contracts and terms of business accordingly and, poten ally, implement new business systems – while also preparing for other significant legisla ve changes also coming into force in April.

The REC will update its template contracts once the legisla on is finalised and these will be available for members to download from our website. In the mean me, members must ensure that their business is as ready as it can be: • Con nue to engage with affected clients and contractors in order to clarify before April whether

A

re you a leader who holds back during uncertainty, or someone who isn’t scared to dive into the unknown?

Accelera ng technological advancements, unpredictable economic factors, shi ing client needs, IR35, the dreaded B(rexit) word and new itera ons of recruitment legisla on all form a list to make even Bear Grylls quake.

You’ll need a survival kit to deal with this apocalyp c scenario – and in recruitment your kit consists of your team, their knowledge, their experience and a collec ve mindset to adapt and survive. With these in place, you need to: • Polish up your team’s knowledge with recruitment training: make sure your consultants are up to speed with

roles are likely to be determined as falling inside or outside the scope of the new rules, and plan and communicate with contractors accordingly.

• Ask clients to confirm now whether they will be exempt under the proposed small company exemp ons rules.

• Audit the workforce to iden fy which roles will be affected by the changes.

• Consider payroll op ons – will your business be in a posi on to put contractors on your internal payroll or should you consider outsourcing your payroll? Always conduct thorough due diligence before engaging with any umbrella companies and ensure that they are FCSA-regulated.

These are challenging mes.

The REC advises members to plan ahead, following the steps above.

Stay up to date with the changes by watching for REC updates and reach out to stakeholders before the implementa on date of 6 April.

The REC will update members on developments as they happen and will be the road again with our interac ve seminar ‘Are you ready? Naviga ng April 2020 new legal changes’. See our events page for more details and keep an eye on our IR35 hub for updates.

everything from the latest legisla on to essen al skills to win business • Give your recruiters an extra edge with recruitment qualifica ons: equip them with in-depth understanding and prac cal skills from resourcing to leadership • Grow an ethical and professional mindset with REC Professional membership: learn recruitment best prac ces and achieve recogni on with your clients through postnominal le ers (AREC, MREC and FREC) and industry-recognised awards.

REC Professionals is here to drive standards and empower your recruiters to be brilliant. Sign up your team to become REC Professionals, book a course or enrol them for our government-accredited qualifica ons. www.rec.uk.com

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Inspiraঞon

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Jenna Beard, Sales Manager, VHR, on a racঞng women into engineering

We need to make engineering exciঞng at school.

Q&A

What I know

Behind the scenes with REC Professionals

this job as she may ruin her nails”.

When you have a skills shortage, you can’t focus on gender diversity.

The biggest barrier to recrui ng strong candidates into engineering is that it is s ll not seen as a ‘sexy’ subject.

We need to get a message to schools that engineering is exci ng. In Asia, it is seen as a good career.

Here, kids know what a vlogger does, but not an engineer.

Only two of the senior technical managers I’ve dealt with in 14 years in this sector have been women.

There is such a skills shortage that most firms focus on ge ng any good applicants, regardless of their sex.

Slow improvement.

Posiঞve message.

The sector has targeted training schemes to boost the number of homegrown engineers, but not specifically girls. It has a laddish reputa on and at some sites I will see only one or two women in the building. Things have improved. In the past I heard managers say things like “I wouldn’t want a woman to do

Contractors in their 20s who have done appren ceships can earn £50-£60 per hour and avia on engineers can find contract work anywhere in the world. We need to tell companies if good candidates are being put off, and if a client repeatedly rejects good women engineers we will ask ques ons.

Alfie Blagg, student and flexible worker in London and Cornwall, on what flexibility means to him

What jobs do you do – and when?

I have three jobs in addi on to studying for my geography degree at Exeter University.

Two of these I do in the holidays. In term mes I work at a Spar supermarket and in the holidays I work on the recep on desk at a sports club and do hospitality and waiter jobs via Reed employment agency.

This suits me because I can choose how much I work and when I do it. At the moment I’m doing about 8-12 hours a week at Spar, a li le less than last term.

What are the advantages?

I’ve learnt a lot – not just work skills, but also things like how to deal with difficult customers. You also learn how to work in a team. I’ve met lots of people who like this

kind of irregular shi work. For example, I met a grandmother who fi ed work around looking a er grandchildren.

What has it taught you that you could use in future jobs?

I have become more aware about what I want from an employer. When I was 16, I worked at a gym where the owner was horrible to his manager and the manager took it out on me. It showed me how bad management affects everyone and I quit.

The sports club where I work now is well run and the staff are nice to each other.

Similarly, working in hospitality you see how different managers react under stress.

You learn much more about management than you ever would from a course.

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04/02/2020 12:02

Products & training

As seen on video Nick Kirk, Managing Director UK&I, at PageGroup How is video technology revolu onising recruitment?

In the fast-paced world of recruitment, anything that encourages efficiency whilst enhancing human-to-human communica on is welcome. Therefore, it’s perhaps not surprising to learn that the advent of video technology has been quietly revolu onising the hiring process.

At PageGroup, we’ve been at the forefront of embracing video pla orms such as HireView and Hinterview, and have seen their use by our consultants rise steadily by 25% to 35% each month. The following is what we’ve learned.

How and why is this happening?

The speed and efficiency of these pla orms are the primary a rac ons for recruiters. In recruitment, peer-topeer communica on, assessment and consulta on remain the same. In terms of how things might evolve in the future of recruitment, we’re seeing video interviewing come in a lot more. This could mean recording short interviews with candidates so the client gets a flavour of them, above and beyond their CV, or recording videos of ourselves as recruiters.

We become more than a voice on the phone or a person sending an email.

The need for the human element The technology is exci ng, but there are also reasons to be wary. We need to ensure that video is being used in the

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right way. Recruitment will always be a person-to-person exercise, and although technology con nues to advance the way we work, it is obvious that our people fuel the organisa ons as much as the candidates and our clients do. In terms of white-collar recruitment and more senior roles, it will always be necessary for candidates to meet consultants or hiring managers about career opportuni es and poten al candidates. However, the first contact could be made via video before you schedule a face-to-face mee ng later in the process.

Some people are likely to be more effec ve in front of the camera than others. Younger genera ons have grown up in an era of vlogging, FaceTime and selfies, so may be more comfortable with video. It is important to take this into account when you assess the skills of a poten al candidate using video technology. However, the effort will have to go both ways – recruiters and hiring managers must understand the opportuni es and limita ons of the technology, and candidates will have to evolve their approaches to ensure they can appear at their best via video.

The future for video We predict huge opportuni es for video in the blue-collar recruitment market and the gig economy over the next 10 years.

Combined with ar ficial intelligence (AI), video will become an extremely powerful

tool for hiring managers. For one thing, it will save recruiters and hiring managers considerable me assessing applica ons.

In the gig economy, par cularly, organisa ons o en require large numbers of people on temporary contracts, so it’s easy to see why video interviewing is increasingly popular in this space.

The benefits of different tools The working world has changed hugely over the past 20 years. Email has replaced faxes and the internet has become ubiquitous. Skype has already begun to transform telephone communica ons, and interviewing thorough this pla orm has become more widespread. We predict that it will go further and will act as a tool to show poten al candidates what it would be like to work for a par cular organisa on.

This is already happening on social media channels such as LinkedIn and on some ‘work for us’ areas of websites, where employers use video to outline core beliefs and cultural values.

Businesses need a compe ve edge when it comes to recruitment and a rac on strategies. Using video to enhance and present their employee value proposi on will help to encourage a new wave of workers to apply for their vacancies and aspire to work for their business. Video is a versa le technology and we an cipate it will con nue to grow in years to come.

Membership Department: Membership: 020 7009 2100, Customer Services: 020 7009 2100 Publishers: Redac ve Publishing Ltd, Level 5, 78 Chamber Street, London E1 8BL Tel: 020 7880 6200. www.redac ve.co.uk Editorial: Editor: Ruth Pricke pressoffice@rec.uk.com Produc on Editor: Vanessa Townsend Produc on: Produc on Execu ve: Rachel Young rachel.young@redac ve.co.uk Tel: 020 7880 6209 Prin ng: Printed by Precision Colour Prin ng © 2020 Recruitment Ma ers. Although every effort is made to ensure accuracy, neither REC, Redac ve 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 Redac ve Publishing Ltd. No responsibility can be accepted for unsolicited manuscripts or transparencies. No reproduc on in whole or part without wri en permission.

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