Issue 49 May 2017
RECRUITMENT MATTERS The View and The Intelligence
Big Talking Point
Brexit begins
Scale Up Workbook
p2-3
Legal Update p4
Restrictive covenants, are they still necessary? p6-7
JOBS MUST BE PRIORITY DURING BREXIT NEGOTIATIONS Jobs and prosperity must be the focus of upcoming Brexit negotiations, according to the REC. Prime Minister Theresa May’s triggering of Article 50 in late March began the UK’s two-year withdrawal from the European Union. The REC will be monitoring negotiations and has worked alongside the Migration Policy Institute and Fragomen LLP on an analysis of the UK labour market. REC chief executive Kevin Green says the UK labour market is in a strong position and negotiations should consider the importance of jobs. “The UK labour market has
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performed well since the EU referendum. Employers are continuing to create jobs and employment has reached record levels. As Brexit negotiations begin, we need the government to prioritise a deal which creates more jobs and prosperity,” he says. “The UK has near-full employment and recruiters are saying the task of filling vacancies is becoming more
difficult. EU workers are more likely to fill labour and skills gaps in industries that persistently report unfilled vacancies and skills shortages. We need an immigration system which reflects this
Products and Training TREC 2017 is here
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reliance on workers from the EU. Everyone loses if UK employers can’t hire the people they need.” Since the referendum, the REC’s focus has been on keeping members informed of Brexit related developments and, making the case in Westminster and beyond for a future EU/UK relationship that supports Britain’s flexible labour market and skills needs. The trade body is encouraging members to keep abreast of Brexit developments. “The key message for now is that nothing has changed and it is ‘business as usual’ until Britain formally leaves the European Union in April 2019,” the REC says. “Nevertheless, clients and candidates are likely to have lots of questions about the referendum vote. That’s why we have produced factsheets for candidates and clients to help explain what Brexit means for them.” REC members can keep track on all major Brexit developments at www.rec.uk.com/brexit
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Leading the Industry
THE VIEW
Let’s keep the jobs market strong says Tom Hadley, REC director of policy and professional services
It’s time the industry paid attention to customer excellence, says Kevin Green, REC chief executive
SCALE UP YOUR CUSTOMER SERVICE We have just published our latest Scale Up Workbook all about customer excellence. It’s a seminal piece of work for recruiters who want to grow. The workbook explains why measuring customer satisfaction and candidate experience can provide long term superior financial performance and an effective means of differentiating your business in an increasingly competitive industry. Here are three key questions all recruitment business owners and directors should ask themselves: • How do know how good your service is unless you collect data from your clients? • How good are your consultants at meeting your clients’ expectations? • What do you need to improve to increase loyalty and increase their spending with you? The workbook provides REC members with practical tools to help improve customer and candidate service by focusing on your staff. If your people are totally motivated, fully enhanced and well-led, they
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BREXIT BEGINS
will deliver great customer service and a top notch candidate experience. The workbook includes many case studies from recruiters who are using customer metrics – like Net Promoter Score (NPS) – to measure how good they are and to establish new ways of improving their service offering. For the past two years, our Scale Up campaign has been helping recruitment businesses take advantage of a growing market. The Scale Up Workbook illustrates how to secure the benefits of focusing on customer experience. If you want to find out more about customer excellence, why not join me at our Scale Up in the Round events? We’re in Portsmouth, Manchester, Taunton, Exeter and Newcastle soon. We also have a Scale Up Live event on 25 April dedicated to customer excellence. Join us in upping your game by providing world-class service to your clients and customers. Recruitment Matters takes a look at some of the lessons in the latest Scale Up Workbook on pages 4-5. Follow me on Twitter @kevingreenrec
And they’re off… The triggering of Article 50 set many hares a running but also focused minds on what the postEU landscape might look like. Maintaining a dynamic and agile employment eco-system must be one priority, which is why our core policy mission remains the same: to work with policy makers to build the best jobs market in the world. Access to staff and skills is an immediate concern. REC JobsOutlook shows 51% of employers expecting candidate shortages, with 78% reporting little or no spare capacity. Ramping up UK skills and driving inclusion are part of the solution, but we also need immigration policy to reflect labour market needs. Positioning our voice at the forefront of this debate is at the heart of the work we have just completed with leading law firm Fragomen and the Washington-based Migration Policy Institute (MPI). Evening Standard columnist Antony Hilton recently made the point that, while politicians are focused primarily on Brexit, “there are greater challenges in jobs and education ahead”. This broader debate has been a recurring theme at recent member meetings. Case in point (your honour!) was the REC Legal & Financial Services meeting where specialist recruiters identified automation and AI as a greater threat to agencies supplying qualified legal staff than any post EU referendum uncertainty. Speaking at the latest Interim Management Association (IMA) event, Staffing Industry Analysts (SIA) underlined the potential for increased ‘platformitisation’ and labour market ‘dis-intermediation’. Is this where we are heading? Back in 2007, our Recruitment 2020 project with leading think tank Demos was bullish and concluded that “intermediaries have become hugely important; they tell us where to shop, who to do business with and who to hire”. More recently, a conclusion from the World Employment Conference in New Delhi was that the pace of change will require more people to make sense of this constantly evolving employment landscape which could actually make the role of intermediaries more important. The REC’s aim is not only to pre-empt forthcoming challenges, but to influence the direction of travel wherever we can. In the words of Abraham Lincoln, “the best way to predict your future is to create it”.
You can follow Tom on Twitter nt @hadleyscomment
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1%
THE INTELLIGENCE WITH REC SENIOR RESEARCHER, MARK HARRISON We welcomed the last-minute decision by NHS Improvement (NHSI) to indefinitely pause a ban on NHS trusts using agency staff that hold substantive roles in the NHS. The ban had been due to come into force on 1 April and had the potential to cause chaos for NHS trusts. Agency workers account for approximately 1% of total NHS employment. Whilst 1% may sound small, that is a huge number of people in an organisation of over 1.5 million staff and which is increasingly under strain. Not only would the ban have exacerbated the staff crisis within the NHS, it demonstrates an unwillingness to engage with the reasons many healthcare workers are choosing to work for agencies alongside their NHS roles.
PERMANENT PLACEMENT REVENUES REMAIN CHALLENGED FOR THE MEDIAN RECRUITER With many of the listed recruitment organisations recently reporting that their permanent placement revenues have been challenged – notably so in the second half of 2016 – an examination of the general UK industry trend shows that they are not alone. The latest information from the RIB Index, sponsored by
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A report published in February by the National Institute of Economic and Social Research (NIESR) in partnership with the REC explored the experience of agency workers in the NHS from the perspective of agencies, agency workers, and NHS trusts. Interviewees and focus group participants highlighted not only a shortage of staff within the NHS but a retention problem on top of that. One healthcare recruiter stated: “Nurses are leaving the NHS in huge numbers… As a former nurse myself, I find it exceedingly worrying.” Some trust directors conceded that staff retention is an issue the NHS needs to understand better. Flexibility came through as the main driver for healthcare professionals turning to agency work, followed by poor working conditions and working culture within the
AGENCY WORKERS ACCOUNT FOR APPROXIMATELY 1% OF TOTAL NHS EMPLOYMENT. WHILST 1% MAY SOUND SMALL, THAT IS A HUGE NUMBER OF PEOPLE IN AN ORGANISATION OF OVER 1.5 MILLION STAFF
NHS. Interviews and focus groups with those working in frontline NHS roles highlighted inflexibility from managers, as well as poor people management and a lack of respect for workers’ personal lives. One research participant suggested that NHS managers would ‘dictate’ to them rather than work with them, a feeling that surely would have been aggravated further by the proposed ban on substantive staff working agency shifts within the NHS. An REC survey of healthcare recruiters carried out in March suggests the ban would have exacerbated the staffing crisis within the NHS even further. When asked about the expected impact of the new
Figure 1. Average quarterly permanent billings, versus prior year, for the median recruiter
20%
10%
2016 monthly average for the Median RIB recruiter: -1.4
5%
1.5%
0% -5%
-3.8%
-0.7%
-2.6%
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
Bluestones Group, highlights that, year-on-year, the median industry recruiter saw revenue from permanent placements decline by an average of 1.4% across 2016.
“NURSES ARE LEAVING THE NHS IN HUGE NUMBERS… AS A FORMER NURSE MYSELF, I FIND IT EXCEEDINGLY WORRYING.” rules, less than a fifth thought that candidates would transfer from agency shifts to the NHSrun staff banks (which were also criticised as poorly run in the NIESR report). With the NHS already under increasing pressures, it can’t afford to forego large numbers of agency shifts. To ensure the NHS is fit to meet the needs of the future, NHSI should commit to developing more flexible staffing models and building more collaborative working partnerships with recruiters in order to attract and retain the staff our health service so desperately needs.
average margin improved year-on-year (from 15.4% in 2015 to 16.2% across 2016). As such, we can assume that it is the shortfall in the volume of placements that caused the negative year-onyear growth.
25%
15%
ONE HEALTHCARE RECRUITER STATED THAT
Encouragingly, the average permanent placement salary for the median recruiter was higher, as an average across 2016 (£34,538), than in 2015 (£33,690). Additionally, the
Belinda Johnson runs employment research consultancy Worklab, and is associate knowledge & insight director of Recruitment Industry Benchmarking (RIB) – part of the Bluestones Group. The RIB Index provides bespoke confidential reports on industry benchmarks and trends. See www.ribindex. com; info@ribindex.com: 020 8544 9807. The RIB is a strategic partner of the REC.
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BIG TALKING POINT
SCALE UP WORKBOOK Is customer experience part of your business strategy? It could prove a revenue boon. Recruitment Matters looks at the REC’s new ‘Scale Up Workbook: How to deliver customer service excellence’ A NO-BRAINER It’s a no-brainer that customer service is important. Competitive industries like recruitment are constantly amending their practices to etch out marginal gains. But surprisingly, few agencies are doubling down on customer service. Being clear on the customer journey is one of the key ways recruiters can differentiate themselves, and that could mean money – and good will – in the bank.
A PRACTICAL GUIDE The third part in the REC’s series of publications providing practical guidance to recruitment leaders
seeking to take a bestpractice approach to running a recruitment business, The ‘Scale Up Workbook: How to deliver customer service excellence’ includes key lessons, action plans, and checklists to help recruitment businesses make financial gains by improving interactions with clients. Alongside lessons in the value of customer service in a recruitment setting, the workbook contains insights from HR decision makers, recruitment agencies and thought-leaders to illustrate the everyday challenges and benefits of thinking about customer experience.
“IN THE RETAIL SECTOR, BUSINESSES WITH AN ABOVE-AVERAGE SECTOR SCORE FOR THE UK CUSTOMER SATISFACTION INDEX HAD A SALES GROWTH MARGIN OF AT LEAST 3% ABOVE THOSE WITH A BELOW AVERAGE SCORE” SCALE UP WORKBOOK The workbook finds that only 36% of companies have a strategy in place to link customer service to financial performance, while only 41% say they’re working on it. The UK Customer Service Index shows a correlation between a high index score and scores on customer loyalty, likelihood of
recommendation, trust and reputation. And that means £££ in the bank. REC chief executive Kevin Green says the Workbook is an essential tool for any recruitment business. “For the past two years, our Scale Up campaign has helped recruitment agencies to improve and expand to
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best take advantage of the growing marketplace as well as respond to these new challenges,” he says. “This report outlines all the questions you need to be asking yourself about the customer experience, provides insight from clients about their preferences in a recruitment partner and presents practical steps you can take to ensure you’re on top of your game. It complements our podcasts, masterclasses and services, which are all tailored to give recruitment leaders the key ingredients for success.”
THE COLD CALLS HAVE TO STOP For a recruitment company that hasn’t traversed its customer experience journey, the path may seem daunting. But it’s well worth planning ahead. Response from HR professionals interviewed for the Scale Up Workbook
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“THE COLD CALLS HAVE TO STOP… IT’S NOT A GOOD USE OF THEIR TIME. IT’S NOT LIKELY THAT WE WILL THINK OF THEM AS A PARTNERSHIP” were adamant it’s a must-do. “Take the time to get to know your clients… take the time to train the staff,” said one. “The cold calls have to stop. I realise that they have ridiculous targets and they are trying to hit their targets. But take the time to train staff to build relationships. [Cold calls] are so obvious and it is not a good use of their time. It is not likely that we will think of them as a partnership. We are busy here. It makes zero impact.” The numbers back it up. The Workbook includes a survey of 400 HR professionals who had used an agency. A staggering 60% said they would use an agency if “it understood our business and
brand better,” while 50% were more drawn to agencies “sent fewer speculative CVs”.
WHAT CAN YOU DO? The Scale Up Workbook offers practical advice and steps recruitment agencies can use to bolster their customer experience platforms. It also includes a checklist recruiters can use as a launch pad for articulating their customer experience approach. Here are five of some of the big tips the Workbook offers: 1 Develop a vision of what customer experience means to your organisation 2 Research different approaches to giving feedback
3 Create a long-term strategy (one to five years) to monitor and revisit the customer experience. 4 Devise a marketing strategy which integrates customer experience messages 5 Develop a persona map of your customers The Scale Up Workbook is free for all REC members – visit www.rec.uk.com/ customer. Hard copies are available. Non-members and IRP members can purchase the report from the REC and IRP shops – visit www.rec.uk.com for more.
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Legal update
CONTRACTS
RESTRICTIVE COVENANTS: ARE THEY STILL NECESSARY? By Bunmi Adefuye, solicitor and commercial advisor at the REC Recruitment agencies tend to employ commercially astute individuals who will naturally be thinking about the next step in their career, which could be setting up their own recruitment agency or simply joining a competitor that will pay a higher salary. Agencies spend a considerable amount of time building and maintaining relationships with their clients and candidates but risk losing the benefit of those relationships if an employee leaves and then decides to exploit his/her knowledge of a former employer’s client and candidate database. The damage to any agency if they lose commercially sensitive information, trade secrets and connections could be quite severe. Even though it is an implied term of an employment contract that employees should not misuse confidential information belonging to their employers, the scope of what is ‘confidential’ diminishes when the contract comes to an end so it is very important to have appropriate restrictive covenants in place. The first crucial step when employing staff is to issue a contract of employment that sets out all the relevant terms and conditions including any restrictive covenants that will limit their activities post termination.
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It is best to ensure that the employee is fully aware of such provisions at the outset rather than trying to impose restrictions afterwards which can be quite challenging and, depending on the circumstances, could result in a contentious dispute. Strictly speaking, restrictive covenants are a restraint of trade and have been debated by courts for many years because they are contrary to public policy. Restrictive covenants, depending on the facts of each case, will only be upheld if they are reasonable and protect the employer’s legitimate interests. In addition, they should be set out clearly in writing and not go beyond what is necessary to protect the employer’s interest. The most common restrictions that agencies seek to impose are:
• Non-competition which prevents former employees from entering into similar employment with a competitor for a limited period of time • Non-dealing and nonsolicitation, which prevents former employees from seeking and accepting any business opportunities from their previous employer’s clients • Non-disclosure which restricts the use of the former employer’s confidential information. The enforceability and reasonableness of any restrictive covenant depends on a number of factors such as the nature of the employer’s business, its duration, the scope, its geographical location, the employee’s role and whether such a restriction
is commonly used in that sector. Despite the various challenges the recruitment industry faces, it is reassuring when an agency knows that they have taken the necessary steps to protect their business interests. Restrictive covenants can be an effective deterrent to ex-employees and their future employers who should not deliberately induce them to breach restrictive covenants, otherwise they could face a claim for damages. Although we currently have a stable jobs market, there is still that innovative entrepreneurial trend in our industry and agencies should ensure that they have appropriate restrictive covenants to prevent others from gaining an unfair commercial advantage in a highly competitive sector.
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Inspiration
BEHIND THE SCENES AT THE INSTITUTE OF RECRUITMENT PROFESSIONALS
The View
Lucy Wiltshire is a recruitment consultant with Meridian Business Support
TOP STUDENT Congratulations on being top student in February’s Level 3 Cert RP exam. How does it feel? I’m still in shock, to be honest. After the exam I wasn’t too sure how I’d done and I thought I hadn’t passed, so it was a great relief. How did you find taking the Level 3 Cert RP Fast Track course? When the book came through, I was in utter shock by the size of it. When you’re in recruitment, you think you have a good idea of what’s going on. I found it a lot harder than I thought and there was a lot of material to learn outside the day-to-day world of recruitment. It forced me to think about the bigger picture and how that related to recruitment. It’s been really helpful for me for speaking to clients – you can talk confidently about external factors in the economy and labour market that will affect them. Would you recommend the Level 3 Cert RP to everyone? Yes, I would. It teaches you the correct processes and it helps you become more consultative, have a better business acumen and think about the wider market What do you love about recruitment? I don’t think there are many other jobs that have the variation recruitment offers. There are always new situations, new roles and new companies to learn about. When you’re working with people, you’re always encountering something new and exciting. Recruitment keeps you on your toes. What would you tell yourself on your first day? You have good days and bad days, but the job’s about thinking ahead and knowing you’ll have more good days than bad. There will always be those nice moments where you feel like you’ve made a difference.
erton Natalie Winterton is a resourcer at BPS World
APPRENTICESHIPS How did you get into recruitment? I had previously worked in childcare and found myself in a predicament with nothing on the horizon, but I knew I wanted to do something different. I had applied for a lot of jobs online and read about BPS’ recruitment apprenticeship programme. After I applied, I got a call from BPS’ Learning & Development Manager – she walked me through the programme and I was really excited by the opportunity. I attended the assessment day and the rest is history. How did you find your apprenticeship? After my first night, I went home and went straight to sleep – it was full on – but it’s not every day you get to work with a company whose apprenticeship scheme has won national awards. You don’t appreciate how much knowledge you’re picking up as an apprentice until you’re on the sales floor. I had mentoring at every stage and it pushed me beyond my comfort zone. Around the time of my probation, one of the senior recruiters asked if recruitment was going to be the career for me. I had no idea at the time as this was my first role in a corporate environment but now I can confidently say I love what I do and feel I’ve found my calling. Would you recommend a recruitment apprenticeship? Absolutely! Working for BPS allows me to get the best out of both recruitment and myself. I’m constantly re-evaluating how I can improve on what I do. My apprenticeship has given me confidence in myself and my recruitment abilities. What do you love about recruitment? I love that feeling when you meet someone who’s struggling and unhappy in their job, and place them somewhere that makes them happy and allows them to flourish and grow. There’s nothing better than making a difference in people’s lives.
To keep up to date with everything the Institute of Recruitment Professionals is doing, please visit www.rec-irp.uk.com
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Products and training
THE TALENT RECRUITMENT AND EMPLOYMENT CONFERENCE 2017 ATTRACT, RECRUIT AND RETAIN – FUTURE PROOFING BUSINESS SUCCESS When: 21 June 2017, 9.00am-4.00pm – followed by networking drinks Where: Grange Tower Bridge Hotel, London
ARE YOU READY FOR A DIGITAL REVOLUTION? Dedicated to bringing innovative thinking to the fore, The Talent Recruitment & Employment Conference 2017 (TREC) is a must-attend event for all professionals looking to enhance their expertise in securing the best emerging talent, meeting and exceeding goals, winning clients and achieving longterm posterity. Be part of the revolution by discovering from keynote speakers, Matthew Syed and
Dave Coplin, how through embracing the potential of technology and a mindset of continuous improvement your company can rise above the competition to become a high-performing
industry leader. TREC also offers an invaluable opportunity for those working across the resourcing sector to discuss topical issues such as talent assessment, early careers
and emerging talent, the cost of bad recruitment, employer branding, post EU policies and retention strategies. Visit www.rec.uk.com/ trec17 to book.
APPRENTICESHIPS ARE YOU INTERESTED IN HIRING AN APPRENTICE? The Apprenticeship Levy is here. Using the REC’s recruitment apprenticeship programme makes sense for you and for your business. Our recruitment apprenticeships have been designed with your needs in mind. Built to develop loyalty and effectiveness – there has never been a better opportunity to grow your business, gain new talent and start to make real plans for the longer term. Any training provider can deliver our apprenticeships, but
they have to be approved to do so by the REC. Our providers have already gone through this process and are operating the programme currently. Find out more at www.rec-irp.uk.com/careerdevelopment/employers
RECRUITMENT MATTERS
Membership Department: Membership: 020 7009 2100, Customer Services: 020 7009 2100 Publishers: Redactive Publishing Ltd, 17 Britton Street, London EC1M 5TP. Tel: 020 7880 6200. www.redactive.co.uk Editorial: Editor Michael Oliver michael.oliver@redactive.co.uk. Production Editor: Vanessa Townsend Production: Production Executive: Rachel Young rachel.young@redactive.co.uk Tel: 020 7880 6209 Printing: Printed by Precision Colour Printing
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
© 2017 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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