Recruitment Matters May 2019

THE VIEW AND THE INTELLIGENC E

The productivity puzzle and ways to solve it P2 BIG TALKING PO INT

How to create the next generation of leaders P4 LEGAL UPDATE

RECRUITMENT MATTERS

Changes to right to work checks P6 Issue 73 May 2019

TR AINING

Upcoming training and events P8

I R 3 5 R E FO R M S

Time running out to get the IR35 rules right, the REC warns I

t’s taken longer than anticipated but the government has now published its IR35 ‘Off Payroll Working Rules’ consultation. This sets out several proposals for improving the reform, before the changes come into effect for the private sector in April 2020.

The REC has consistently argued that agencies should not bear responsibility for a client’s decision on who falls into IR35 status. The consultation includes some movement on this, with the government saying that liability for unpaid tax and National Insurance Contributions will rest with the party that did not fulfil its obligations.

Details on this issue include: • Possible legislation to make it mandatory for end clients to share their IR35 determination – and the reason for it – with the worker.

• To demonstrate compliance, all parties will be required to communicate the IR35 determination of the contractor to the next party in the supply chain.

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• HMRC will go after the end client if: • the end client is the one who failed to give the correct determination/provide the evidence for that determination • the end client failed to communicate the IR35 determination of the client to the agency • the end client is the only entity in the supply chain operating in the UK. The government has also proposed that small companies in the private sector should be exempt from having to determine the IR35 status of individuals and is using the consultation to clarify how this applies to non-corporate entities.

This means agencies supplying the contractors are likely to need to systematically check the status of the client they are providing services to.

“Overall, these changes will not be easy to implement by April 2020.”

As both the issue of liability and small business exemption may well add complexities for agencies, the REC has committed to continued engagement with HMRC and Treasury to find workable solutions.

“The clock is ticking on getting the rules around IR35 right so that they work well for individuals and recruitment agencies,” says Tom Hadley, the REC’s director of policy and campaigns. “Overall, these changes will not be easy to implement by April 2020. We hope government does not drag its feet in publishing the final legislation and businesses are given at least six months from the final legislation to prepare. The REC will be working closely with our members and government to ensure the changes are workable and that compliant businesses are not penalised.”

Ornella Nsio, REC stakeholder engagement manager

www.rec.uk.com 04/04/2019 16:31

L E A D I N G T H E I N D U S T RY

the view...

Here’s a question to ponder, says NEIL CARBERRY, REC chief executive: what will recruitment look like in 20 years?

C

hanges in how we work will mean recruiters adapting what we do. More flexibility will be essential, whether we’re working towards securing a candidate their dream job or supporting clients to find the right people for their business to grow.

There is likely to be no one dominant pattern to how people work, and helping companies to explore the possibilities with candidates, in what will be an increasingly candidate-driven market, will be an essential skill for recruiters. Reaching wider in our search for the right person and helping clients construct the right approach will help them retain staff, but also meet their goals on skills development, diversity and inclusion.

How we will manage this kind of change needs to be thought about now. Clients are increasingly asking questions about it.

To help you get there, we’re delighted to invite you to join us at TREC 2019. The REC’s annual Talent, Recruitment & Employment Conference on 4 June is where we bring the sector together with clients to discuss the big challenges and opportunities we share.

It’s the flagship event of our Good Recruitment Campaign, which commits to good practice and the strategic importance of recruitment, and focuses on the long-term value generated by the sector. And now in its sixth year, the day is jam-packed with great speakers, panel sessions and roundtable discussions so that you can share ideas with peers and be inspired to make positive changes.

I’m delighted that Bruce Daisley, vice president of Twitter and best-selling author of The joy of work will be our opening key note speaker. Bruce will be joined by business leaders such as Tony Danker of Be the Business, the organisation set up by FTSE CEOs to address people and productivity, and inspirational speakers like adventurer Bonita Norris.

Some of the hot topics that we’ll be covering include the future of jobs and the changing world of recruitment; looking at ways of creating a positive candidate experience; creating a strong employer brand; embedding HR and recruitment technology; and finding ways of designing the talent acquisition function of tomorrow.

What sets TREC apart from other HR conferences is that it is practical, engaging and focused on the future – you’ll get to have your say and have your questions answered.

I hope to see you there.

To register your interest, visit rec.uk.com/TREC2019 If you want to keep up to speed with all things recruitment then follow me on Twitter @RECNeil

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It’s time everyone viewed flexibility more positively, says TOM HADLEY, REC director of policy and professional services HADLEY ’ S C O MMENT

Flexible work is good work With the jobs market in flux, worker expectations and employer needs constantly evolving, and political scrutiny on employment practices intensifying, now is the time to ramp up one of our core campaigning messages: flexibility and good work go hand in hand.

The Matthew Taylor Review into modern working practices has energised the debate around what constitutes ‘good work’. Taylor himself agreed that ‘two way’ flexibility can benefit both individual and employers.

We agree, and our latest flurry of external meetings with employers, business bodies, trade unions and government departments have been an opportunity to land the core message that flexible work is good work. We will crank this up to 11 over the coming months. Here’s how: • Showcasing ‘good work’ in action – REC members across a range of sectors are providing fantastic support to workers and contractors.

Examples include targeted Employee Assistance Programmes for temporary staff, circulating ‘know your rights’ fact sheets and ‘celebration days’ to recognise individual contributions.

• Challenging negative pre-conceptions – The best way to do this is to amplify the voice of individual workers who choose to work via an agency. As well as producing great data, our research increasingly focuses on telling good and authentic stories from the 1 million plus out on assignment on any given day.

• Driving social innovation – How can we further enhance opportunities for people on flexible contracts? Making the Apprenticeship Levy into a broader skills levy that benefits more workers is a campaigning priority and we will continue to provide government with practical solutions to emerging labour market challenges.

• Influencing client behaviour – A core aim of our Good Recruitment Campaign is to drive good practice in the way that employers manage their contingency workforce. This can be as basic as ensuring better inductions for agency staff – a core theme of our work with the Royal College of Nursing (RCN) in the Health & Social Care sector.

The steady decline in the availability of temporary workers – as flagged in our monthly ‘Report on Jobs’ – has increased the need for client organisations to embrace new approaches. Now is the time for the recruitment sector to lead the way and decisively show that flexibility and good work go hand in hand.

You can follow Tom on Twitter @hadleyscomment

www.rec.uk.com

04/04/2019 16:31

26.2%

the intelligence...

Puzzling productivity

BY JOSH PRENTICE, RESEARCH OFFICER

T

he UK’s jobs market has been incredibly strong over the past few years, with figures from the ONS showing record high rates of employment and the lowest unemployment rates since the mid-1970s.

But while the UK has a relatively strong labour market compared with the rest of the G7, according to comparisons from the OECD, the productivity of that labour is relatively low. According to the ONS, in 2016 the gap between the UK’s productivity and that of the other six G7 countries, in terms of GDP output per hour worked, was 16.3%. The gap widens to 26.2% when comparing the UK with Germany.

What’s more, the UK has been losing ground on most of the G7. According to the same ONS release, the UK’s productivity had grown by just 1.6% between 2007 and 2016 compared with 5.7% growth in Germany and 9.1% growth in the USA. In fact, of the G7 countries, only Italy performed worse during the same period.

The most concerning aspect for the UK is what’s known as the ‘productivity puzzle’. The UK, along with the rest of the G7, experienced relatively strong productivity growth before the financial crisis, but has seen slow rates of growth since then. In 2016, the UK’s levels of productivity were 15.6% lower in reality than they would have been had its pre-downturn rate of growth continued. That gap for the rest of the G7 – its productivity puzzle – was only 8.7%.

So why has the UK’s productivity growth seen such a

AVERAGE DEBTOR DAYS CONTINUE TO NUDGE HIGHER Average number of debtor days: RIB Lower Quartile Recruiter Average number of debtor days: RIB Median Recruiter Average number of debtor days: RIB Upper Quartile Recruiter

64.3 59.7 52.1 42.4 33.2 2015

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52.8

53.2 50.0 44.8 36.0

2016

36.5

2017

16.3%

According to the ONS, in 2016 the gap between the UK’s productivity and that of the other six G7 countries, in terms of GDP output per hour worked, was 16.3%.

The gap widens to 26.2% when comparing the UK with Germany.

slump in the years since from 2007? There are many factors at play, but one issue is the UK’s poor track record of investing Sustained, targeted investment is in training and skills. A recent study needed, both from the government by the Social Mobility Commission and the private sector, if this issue reported that the UK has relatively is to be resolved. Recruiters have a low spending on vocational skills part to play in this. As the experts compared to its main competitors. on their local labour market, they In fact, the UK remains below the EU are in a unique position to provide average on the proportion of GDP information about where the skills spent on training and education, the shortages are and where activity proportion of employees accessing needs to be targeted. The REC training, and spending per supports them in doing this employee on training courses, through comprehensive as well as other measures. research and timely Government spending on data, and its campaign adult skills also appears activities focus to be falling over The growth on empowering time, and this lack in UK recruitment agencies of investment is reflected in productivity the British workforce’s skill between 2007 to upskill the country’s temporary workforce. In turn, levels – England was ranked and 2016 this will allow them to fill the 14th for literacy and 18th gaps in the labour market and for numeracy by the OECD’s boost productivity.

Survey of Adult Skills.

The latest information from Recruitment Industry Benchmarking’s RIB Index shows that the median industry recruiter has continued to experience a rise in the average number of debtor days – up to an average of 52.8 across 2018.

Set into historical context, the average for the median recruitment rose from 42.4 days in

1.6%

2015, through 44.8 days in 2016 to 50 across 2017 – and far from improving in 2018, the figure continued to rise to 52.8. Encouragingly, however, those with a tight rein on debtors – as evidenced by the performance of the lower quartile recruiter – rose from just 33.2 to 37.1 days over the same period. Conversely,

those most challenged by debtor days – the upper quartile – saw the average rise from 52.1 to 64.3.

As market uncertainty is set fair to continue, the importance of benchmarking performance against other recruiters to maximise performance cannot be underestimated.

37.1

2018

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.

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THE LEADERSHIP CHALLENGE

big talking point

How recruiters can help create the next generation of leaders The fast-changing world of work means it has never been more important to find leaders and managers up to the job. But where do you start?

he UK currently has too many untrained managers and leaders ill-equipped to tackle the catalogue of challenges facing business today. Improving productivity and driving business growth; responding to technological change, economic uncertainty and Brexit risks; finding talent and supporting employee wellbeing; they are all dependent on a new approach to leadership.

The REC’s latest Future of jobs whitepaper, ‘Leadership 2025’, explores what this looks like.

What makes a good leader?

When giving evidence to the REC’s Future of jobs commission, the Chartered Management Institute identified specific behaviours that future leaders will need to demonstrate, including the ability to share their thinking, admit mistakes, encourage people to raise issues, and uphold company values. The pace of change firms are navigating also puts a premium on inspirational, high-visibility leaders.

Technology has a role to play in the way expectations of leadership are shifting too. It will automate more and more administrative tasks, and offers the potential to provide data

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on just about anything about an organisation. This will free up managers to focus on areas where human judgement is required. But it puts good judgement skills in the spotlight, and managers will need a more people-centric style and the ability to think ahead.

And the increasing emphasis on project-based work – characterised by collaboration and complexity, innovation and creativity – requires not only strong leadership, but also leaders to be team players.

So how do you find the right people?

The REC highlights that it will become increasingly critical to nurture talent from within businesses, offering clear routes of progression into senior roles and removing the barriers that stand in the way. But, as ever, good recruiters can – and will need to – help them to do so.

Many of the barriers are those related to diversity and inclusion. Inclusive hiring will drive inclusive leadership, as will helping to promote flexible working. And recruiters are well placed to ask the important questions that will prompt changes in hiring behaviour.

Some recruitment firms are going the extra mile to create networks to help improve confidence among candidates and drive best practice among clients, which in turn will help lead to industry wide change.

For example, interim management specialist Green Park has launched a diversity initiative with the ambition to effect an extra 150,000 diverse hiring choices over the next five years. It is doing this by working with organisations across all sectors to understand and share best practice, as well as providing practical tools and guidance.

Similarly, Harvey Nash’s senior women’s network (Inspire) and ethnic diversity programme (Engage) have focused on reaching a wider talent pool to diversify shortlists and

www.rec.uk.com

08/04/2019 10:32

THE LEADERSHIP CHALLENGE

THE LEADERSHIP CHALLENGE AND THE REASONS TO ACT £84bn – the cost of poor management to UK employers, according to the OECD 2.4 million – the number of ‘accidental managers’ – promoted because they are good at what they do, but who have no training and skills to manage people, according to the Chartered Management Institute 43% – the proportion of line managers surveyed by the CMI who rate their own manager as ‘ineffective’ 36% – the proportion of middle managers who say they fully trust their leader 1.5 million – the number of extra women who need to be managers by 2024 to close the gender gap

provide candidates support. Insight from those networks is now being used to help its clients shape their own recruitment and development strategies.

Driving good recruitment at all levels Innovation in senior level recruitment will be as important as ever, so the pressure is on executive search firms to get it right. But recruiters need to drive good recruitment practice at all levels to make a real difference. And that includes working with schools and colleges to create a grassroots talent pipeline.

EIGHT WAYS RECRUITERS CAN HELP 1.

2.

3.

Drive innovation in senior level recruitment

4.

5.

Promote diversity and inclusion

6.

7.

Spread the word on flexible hiring

8.

Work with schools and colleges to create a grassroots talent pipeline

Drive good recruitment at all levels Create networks to drive sector and industrywide change

Use feedback from candidates and those leaving their roles

Practise what we preach to develop great leaders in the recruitment sector

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6% – the number of top management positions held by BAME employees, despite them making up 12.5% of the UK population In response to a key recommendation from the Future of Jobs commission, the REC set up its Future of Jobs Ambassador network. This is designed to build a bridge between education and the world of work, by giving recruiters the opportunity to play a proactive role in providing work experience placements, jobs, advice and coaching. But it needs more businesses to get engaged, and young people still need more visibility of the different jobs and career paths on offer.

Practise what you preach Importantly, recruiters also need to inspire clients to change by being great leaders themselves.

If clients can see recruiters who are genuinely passionate about their role and in it for the long haul, fostering longterm relationships with openness and honesty; if they can see their partners adapting to the changing business environment and embracing best practice, they will listen to the advice they have to offer.

This opens up the opportunity for recruiters to play a genuine consultative role. But to do so, recruiters need to demonstrate their understanding of the sector and their client’s needs. And they should be able to provide the bigger picture around the external political, regulatory and labour market developments that will impact on clients and hiring activities.

Effective workforce planning must become the norm.

And by prompting clients to look ahead, recruiters will be giving firms a fighting chance to secure the future leaders with the right skills to battle any challenge that comes their way.

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R I G H T TO WO R K C H E C K S

legal update

Changes to right to work checks

By PATRICK MILNES – legal advisor, REC

I

n January this year, the Home Office made some key changes regarding how right to work checks can be completed for non-UK nationals by both employers and recruiters. The Home Office guidance contains two significant updates: • Employers and recruiters are now able to use the Home Office’s new online right to work checker to establish their statutory excuse to avoid liability for a civil penalty in the case that a worker is found to be working illegally

ATLAS PAY GTP PARTNERS WITH CARDNO TO FACILITATE PLACEMENT OF CONTRACTORS IN EMERGING MARKETS

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• It is now acceptable to use a short-form birth certificate or adoption certificate as proof that an individual has the right to work in the UK. With regards to the online checks, these are currently only available to non EEA nationals who hold either a biometric residence permit or a biometric residence card, or EEA nationals with a passport or national identity card with settled to pre-settled status.

REC official business partner Atlas Pay GTP has leveraged its international footprint to secure a contract with London based Cardno, an international organisation that supports and facilitates NGOs and large infrastructure projects around the globe. Cardno operates in a range of sectors from international development to mining and sustainable resources.

A core part of Cardno’s business is placing high calibre

The online checking service works by allowing individuals to view and share their Home Office right to work record with relevant parties, which the prospective employer and recruiter will find useful. In order for the check to be sufficient to establish the statutory excuse, the person performing the check will need to retain evidence of the fact that an online check has been done. This can be done by saving or printing the ‘profile’ page of the individual, including their picture, confirming their right to work in the UK and retaining this securely to provide as evidence in the case of illegal working allegations.

The other change means that it is no longer a requirement when using a birth or adoption certificate as part of a right to work check for the certificate to be the long-form version. Employers and recruiters will now be able to also use short-form certificates, but should still note that the certificate alone will not be sufficient evidence of right to work.

In order to be valid, the certificate must be combined with an official document which gives the individual’s UK National Insurance number and their name, and was issued either by a government agency or a former employer.

These two changes came into force on 28 January 2019 and this article is only applicable to checks carried out from the above date.

professionals in a variety of roles supporting international infrastructure projects. This creates numerous challenges relating to the remuneration of contractors and staff, especially in emerging markets.

In response, Cardno tested several payment methods, particularly in countries with underdeveloped financial infrastructure where employees were forced to carry large amounts of cash across borders.

Atlas Pay GTP, which has bank partnerships in over 30 countries, is implementing a prepaid MasterCard programme with Cardno, enabling them to transfer funds to staff and contractors quickly, easily, and securely.

The Atlas Pay GTP programme also gives Cardno increased control over the expensing of those staff, reducing the time and cost required for internal administration.

www.rec.uk.com

04/04/2019 17:00

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

DENIS O’DRISCOLL, founder of

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Q&A

What I know

BEHIND THE SCENES AT THE INSTITUTE OF RECRUITMENT PROFESSIONALS

RICHARD JONES, executive search

interim management specialist Corvin Fox, on releasing business potential

director at Forward Role, on effective executive recruitment

Getting help from experts is as important for your own business as it is for your clients

I realise I’m continually developing, and my team are too. It never stops.

You’ve been recruited to develop the FR Exec arm of Forward Role.

What do you want to achieve?

I supply experts, so I know what value they can add. I get a huge kick out of finding the right interim manager to help in a turnaround or drive new business – and seeing the results.

But when I started my business, my background was in the food and drink industry, which I set out to serve, and I had experience as an interim manager. But I didn’t understand recruitment quite as well as I thought. Getting in a recruitment expert to help made no end of difference to our business performance.

We achieved our five-year plan within a year. We’re now REC accredited and have a lot of training under our belts. And I still have a business coach, because

Success requires personal commitment

Forward Role is already a highly respected brand in the sector, with a mix of high growth private-equity backed businesses and large FTSE clients. I joined because I was impressed by their delivery record, and the way they combine state of the art tech with traditional search methodologies. My remit is to continue to scale the proposition into the transformation and change sectors and wider PE market.

Finding capable leaders in the current climate is difficult. It’s where having a big network is important, as is taking a personal interest in hunting out success stories. But don’t necessarily judge a candidate by their last performance either – different styles suit different jobs. It’s why I won’t put someone forward without meeting them first. CVs can’t beat the personal touch. Getting a sense of what they’re about and how capable they are is vital for getting the right fit for both the candidate and the company.

What’s the best way to help clients find executives to lead their own change projects?

In today’s digital age everybody is looking at some element of digital transformation and change, but technology is just the enabler. The people responsible for making change happen have always

been in high demand.

Some clients talk about transformation and the desire to change, but it’s when a client truly commits to change and can clearly articulate the strategy that they have the opportunity to create the most compelling story for the market and engage with the best change leaders.

You’ve had several roles working in-house as a recruiter, how much does that help?

You should never underestimate the importance of understanding the vision, objective and culture of your client, while knowing your clients’ competition, strategy and the broader market. Working in-house has enabled me to see far beyond a one-off hire and has widened my perspective on offering different solutions, the need to track talent and the importance of becoming a trusted partner.

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TRAINING

Upcoming training The courses over the next two months that will help you to perform at your best, and deliver for your team 1 May

21 May

6 June

19 June

Recruitment Law: Supplying Limited Company Contractors (London)

Balancing Act (London)

Essential Skills for Permanent Recruiters (London)

Advanced Management Skills (Manchester)

11 June Introduction to Recruitment Practice (London)

25 June Successful Account Management (London)

12 June Telephone Sales (Bristol)

26 June Management Essentials (London)

13 June Interviewing Skills (Swindon) Perfect Client Meeting (London)

2 July Customer Service for Recruiters (London)

18 June Start Up Your Own Agency (London) Business Development Planning (London)

3 July Interviewing Skills (London)

2 May Recruitment Law: GDPR (London) Social Media Recruiting, Mastering LinkedIn (Birmingham) 8 May Introduction to Recruitment Practice (Birmingham) 14 May Business Development Planning (Newcastle) Start Up Your Own Agency (London)

23 May Recruitment Law: Supplying Limited Company Contractors (Leeds) 4 June Social Strategy & Branding (Birmingham) 5 June Essential Skills for Temporary Recruiters (London) Management Essentials (Birmingham)

Upcoming events Navigating Brexit series… in Manchester (8 May), Edinburgh (22 May), Cambridge (6 June), York (19 June), Birmingham (27 June) Preparing for IR35 series… in Southampton (16 May), London (23 May, 16 July), Leeds (18 June), Norwich (25 June), Birmingham (2 July), Manchester (10 July)

Webinars: 9 May: Talking Recruitment 5 June: Health & social webinar Sector meetings at the REC, London: 14 May: Construction 15 May: Life sciences 11 June: Industrial 26 June: Professional services 3 July: Education 4 July: IMA

4 July Telephone Sales (London)

TREC 2019 The Talent, Recruitment & Employment Conference What: The flagship event of the Good Recruitment Campaign When: 4 June Where: Grand Connaught Rooms, London

For more information, visit www.rec.uk.com/training-and-events

RECRUITMENT MATTERS

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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

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.

www.rec.uk.com

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