Recruitment Matters September 2014 by Redactive Media Group

Recruitment Matters Issue 28 September 2014

Trade Association of the Year

What’s inside The 2-3 Intelligence and REC Talk

Rex

Interpreting the job stats, good recruitment and self employment

REC raises concerns with David Gauke MP

T&S benefits: time for review The Recruitment & Employment Confederation (REC) is calling for evidence to inform a government review on the way travel and subsistence (T&S) benefits are used. Following a recommendation from the Office of Tax Simplification to review T&S, the government wants to understand how T&S dispensations are used, following suggestions that some may be manipulating the system as a way to avoid tax and breach national minimum wage regulations. It has been estimated that as much as £1.6bn in tax revenue is being lost under the scheme. T&S policies are untaxed benefits open to temporary employees working for organisations for less

than 24 months. They can include travel, food and accommodation costs, but exclude every day expenses. REC head of policy Kate Shoesmith said: “Members have previously raised concerns with the REC that whilst many organisations are using the scheme legitimately, a lack of enforcement and broader changes to the labour market have led to exploitation. We raised these concerns directly with the ﬁnancial secretary to the Treasury David Gauke MP last year, and this consultation is an ideal opportunity to update our advice to government and provide them with speciﬁc examples and case studies of what is really happening on the ground so that they can develop more effective

guidance for employers and employees. “Our priority in responding is to ensure that any future guidance gives all parties absolute clarity on the nature of the beneﬁts and what impact lower NI and tax contributions can have on a worker’s ability to qualify for state beneﬁts, tax rebates and pension contributions.” The REC is asking members to contribute to its submission to government by detailing their experiences of T&S schemes, how they’ve seen them used, and the ways in which they have seen them being positively applied and exploited. Submissions can be sent to REC head of policy Kate Shoesmith at kate. shoesmith@rec.uk.com

i 4-5Putting pupils first Safeguarding in education recruitment

Legal lowdown and business recruitment

Public procurement and Brookson

Institute of 7 Recruitment Professionals Jo Sweetland from Green Park and Harris Keillar at Keillar Resourcing

8 RAC Audited

How can REC Audited help to support you in working with the public sector

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Leading the Industry

the intelligence Fig 1: Average permanent invoice value

Oddity or opportunity?

8 ■ Upper quartile ■ Median ■ Lower quartile

Nina Mguni, senior researcher at the REC, looks behind the latest jobs figures

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Index, sa, 50 = no change 70

% y/y 8

Average earnings inc. bonus

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Fig 2: RIB recruiter placement salaries 50 ■ Upper quartile ■ Median ■ Lower quartile 45 40 £’000

permanent positions higher, the same or lower than one month ago’. In contrast to the data included in the average weekly earnings, the ‘Report on Jobs’ salary index indicates a sharp upturn in salary growth since late 2013. As the Bank of England reported in their Inflation Report in August 2014, ‘the higher pay growth seen by new employees may feed through to other employees’ pay as job churn increases towards pre-crisis rates’. ‘Report on Jobs’ captures starting salaries and the average weekly earnings includes data for existing employees and new starters; the assumption is that pay growth should filter through to the wider workforce in due course. As the Bank of England inflation report notes: “This could be because the pay growth of new employees is more sensitive to changes in labour market slack.” So what does this mean for the recruitment industry? At the beginning of this year, Fortune magazine published an article entitled ‘2014, the year of the “passive” job hunter’. According to the article, talent shortages and higher starting salaries may mean a greater pool of passive candidates who expect recruiters to come to them.

£’000

In August of this year, shortly after the labour market statistics for April to June were released, Duncan Weldon, the new economics editor for Newsnight, tweeted: ‘The UK labour market is really odd right now’. But does this present a problem for the recruitment industry? The Ofﬁce for National Statistics announced that unemployment had fallen to 6.4% and the number of people employed had grown by 167,000 to reach 30.60m. The unemployment rate has long breached 7%, the rate at which the Bank of England would consider interest rate rises under forward guidance version one issued in summer of 2013. The view was that this rate of unemployment would not be reached until after 2016. So why the ambivalent response to the labour market statistics? Forward guidance mark three includes wage growth as an indicator. And as the red line indicates, the rate of wage growth based on average earnings (including bonuses) has fallen for much of this year. This stands in contrast to data that is captured from the REC/KPMG ‘Report on Jobs’. On a monthly basis a panel of recruiters are asked ‘Are average salaries awarded to staff placed in

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Improving job market benefits recruiters The fast recovering economy (in the UK at least), together with falling unemployment, has resulted in a much improved, and very welcome situation for UK recruiters. Median average permanent invoice value has been steadily increasing over the last two years, with the growth rate accelerating at the turn of the year, so that invoices have increased by more than £1k over the last 12 months, from £3,427 to £ 4,453 (Figure 1), an increase of 30%. Upper quartile permanent invoice value has similarly increased, up over £500 in the last year. The lower quartile has, disappointingly, fallen slightly since June last year demonstrating the importance to recruiters of benchmarking themselves against their peers to ensure that they are leaders in their sector. What has driven this welcome increase in invoice value? Figure 2 shows the strong increase in placement salaries, with the median placement salary increasing from around £30k to around £35k in the last 12 months. Both upper and lower quartile placement salaries have increased as well, by 21% and 17% respectively, demonstrating a broad-based recovery in placement salaries.

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KPMG/REC Permanent Salaries Index -4

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• Chris Ansell is Chief Financial Officer at Recruitment Industry Benchmarking (RIB). The RIB Index provides bespoke confidential reports on industry trends. See www.ribindex.com; info@ribindex. com: 020 8544 9807. The RIB is a strategic partner of the REC.

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Leading the Industry

This month the REC’s director of policy & professional services Tom Hadley looks at how the responsible business agenda can help good recruiters to thrive

The View

We were invited to take part in the recent launch of the CBI’s ‘Great Business Debate’. The aim of the campaign is as wide-ranging as it is timely: to help build public confidence in business. The initiative also has a number of implications for the recruitment industry, all of them positive. Pump up the values: Businesses are defined by the people that work for them. The responsible business agenda should, by definition, increase the focus on recruiting individuals on their values and attitude, rather than purely on skills and experience. For example, the last REC JobsOutlook showed that employers placed the highest value (47%) on a young person’s attitude when making a hiring decision, with only 4% saying that specific exam results were the most important factor. Unleash the hire power: As well as impacting on recruitment criteria, the responsible business agenda has implications for the hiring process. For example, a common area of feedback from employers on the steering group of our Good Recruitment Campaign was the need to get better at giving feedback to unsuccessful candidates. Building confidence in business must involve recruitment procedures that are fair, ethical and that help to promote diversity and inclusion within the workplace. Recruitment best practice must also apply to temporary, contract, fixed-term, zero-hours and part-time workers. Supply chain love-in: Boosting the reputation of business must also involve businesses treating each other with respect, in particular through the way that suppliers are managed. Our core message here is that good practice must be embedded throughout the supply chain including where different resourcing models such as RPOs or vendor arrangements are in place. Will we see a supplychain love-in? Maybe not, but the responsible business mantra must lead to some tangible improvements. Eighty per cent of employers are planning to hire new staff over the coming year, according to the latest JobsOutlook. The implication of the Great Business Debate is that there will be an increasing focus on how this is done. Our ‘play’ over the coming months is to ensure that our Good Recruitment Campaign slots neatly into the broader ‘responsible business’ agenda. Good recruitment is good for business.

It’s been very frustrating listening to the debate around self-employment being played out in the media recently. Working for yourself has often been presented as a scourge that is dragging down earnings and holding back improvements in productivity. Some have stated that freelancers, contractors and the self-employed only work this way because they can’t get a permeant role. This gives the impression that flexible working is some kind of second class choice. An REC report published last month called ‘Flex Appeal’ focused on why freelancers, contractors and temps choose to work this way. It built on the data in an Ipos MORI poll for the Resolution Foundation that found that that no fewer than 72% of self-employed people chose to work this way rather than be employed. It’s clear that people choose to be self-employed because it fits around other things in their life, be that caring responsibilities or studying. It’s also becoming clear that older workers are turning to freelancing as they approach retirement, which means the UK is retaining valuable skills and capability in the workforce. Younger workers are also exploring self-employment. This is no surprise as we have seen in survey after survey, millennials are very much more individualistic and selfreliant than previous generations. It’s surely time that the UK celebrated those who choose to go solo and work for themselves, as this is a brave choice that needs to be recognised. It’s important that the 4.5m people who work this way (yes, 14% of everyone in work!) don’t feel patronised or alienated. The number of people who work flexibly will only increase over the next few years. The recruitment industry plays a critical role in helping freelancers, contractors and temps find their next gig – while at the same time helping businesses find the skills they need to compete and grow. The REC will always promote the value of flexible working because not only does it work for the UK economy and employers who are searching for talent, but as importantly for the individuals that chose to earn a living this way. You can download the Flex Appeal report at www.rec. uk.com/flexappeal

• You can follow Tom on Twitter @hadleyscomment

• You can follow Kevin on Twitter @kevingreenrec

Feeding into the Great Business Debate

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The Big Talking Point

Safeguarding: putting pupils first Michael Oliver explores the challenges that schools face in recruiting staff and what the recruitment sector can do to support them

he fall in teacher numbers shows no sign of abating. More than threequarters of the UK’s teaching courses will start the upcoming academic year partially empty. Research by education recruitment expert Professor John Howson of the University of Oxford shows there are major shortfalls in design, technology, and some science intakes, and that the country’s rising school population isn’t being met by an increase in teachers. Professor Howson said: “If getting fulltime permanent teachers is going to be more of a challenge, the need arises to use substitute and temporary teachers to fill those spaces.” More than ever, schools will be looking to fill that void with supply teachers, and efforts are being made to ensure that schools and agencies work together so that safeguarding is paramount. Schools and recruitment agencies find themselves navigating a sea of statutory and regulatory conditions in order to fill classrooms with teachers. With any heavily-regulated industry, varying degrees of knowledge present unique challenges. Recent changes to the way teachers get their Disclosure and Barring Service (DBS) certificates has added to the pressure. With the introduction of the automatic update process and DBS certificates no longer having an expiry date, it’s incumbent on schools and agencies to ensure that staff have undergone the proper checks. As the guide reassures schools, all

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REC recruiters are required to carry out regular checks on all candidates that go above and beyond the basic legal requirements. In a bid to support schools, Professor the Recruitment John Howson & Employment Confederation (REC) has worked with the education industry to fill any knowledge gaps around using agency workers and puts its REC Audited Education recruiters through vigorous checks and standards. In addition to the REC Audited Education standard, and to encourage greater collaboration between agencies and schools, the REC has introduced a fail-safe guide to simplify the process. Putting pupils first: Essential guide to safeguarding and good recruitment practice offers a comprehensive walkthrough for hiring agency teachers and support staff. “After a period of intense change, knowledge gaps permeate the relationship between school teachers and recruitment agencies,” says REC policy advisor David Geary. “Our members confirm this growing vacuum David Geary

and the REC is committed to raising awareness in schools right across the UK.” The guide lays out everything a school should know about the ins and outs of hiring agency staff. It lends particular emphasis to safeguarding, drawing up eight steps both schools and agencies must follow when hiring staff [see the blackboard, p5]. Fundamentals like candidate ID, address and right to work in the UK all feature. But it also covers common trip wires, like how to get a DBS certiﬁcate and what a school should do if a candidate starts work before it arrives. “Risk is minimised when all actors in the supply chain are fully aware of the checks that must be undertaken. It’s more than cross off a checklist – it’s about empowering schools through the provision of concise and thorough guidance,” says Geary But with knowledge comes expectation. Schools will be expected to have vetted candidates each and every time. It’s what Professor Howson says is sorely needed in the industry. In addition to using the new schools guide, schools can get additional peace

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• Verify a candidate’s identity, preferably from current photographic ID and proof of address except where, for exceptional reasons, none is available • Obtain a certificate for an enhanced DBS check with a barred list check where the person will be engaging in regulated activity

are undertaken via a system called ‘Employer Access Online service’ • Verify the person’s right to work in the UK. If there is uncertainty about whether an individual needs permission to work in the UK, then prospective employers, or volunteer managers, should follow advice on the GOV.UK website

• Obtain a separate barred list check if an individual will start work in regulated activity before the DBS certificate is available

• If the person has lived or worked outside the UK, make any further checks the school or college consider appropriate (see relevant sections below)

• Ensure that a potential candidate is not on a prohibited list. Such checks

• Verify professional qualifications, as appropriate

of mind by using an agency that holds the REC Audited Education standard. With the end of the Department of Education’s Quality Mark scheme in 2013, the REC took the reins and developed a more malleable set of standards. REC Audited Education is a thorough assessment of an education recruiter’s business. Not only does it ensure agencies are undertaking all the relevant suitability checks, it assesses its business practices too. It requires agencies to demonstrate they operate best practice in customer service, staff development, diversity, and client management. “It is essential for schools to have conﬁdence in the recruitment agencies

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they use,” says Shaun Wilson, the vice principal of Bishop Challoner Catholic College in Birmingham. “The work of the REC lets schools know that the essential checks regarding identity, safeguarding and right to work have been thoroughly scrutinised and that senior staff can focus their time and efforts in a more effective manner.” The Association of School and College Leaders’ (ASCL) Brian Lightman agrees: “Schools and colleges take the quality of support staff very seriously. It is important that they can rest assured that they are making safe recruitment decisions in sourcing supply staff.” Looking forward to the future, it’s clear this situation won’t be resolved in the

short term. Professor Howson believes fewer students will enrol in teaching courses next year. It means schools and agencies will be reliant on each other for the long term, meaning safeguarding checks need to remain thorough and comprehensive. Putting pupils ﬁrst: Essential guide to safeguarding and good recruitment practice guide provides all the essential information for schools engaging a recruitment agency. It will ensure safeguarding and pupil safety remains at the forefront while enhancing the relationship between schools and agencies. To download the guide, visit www.rec.uk.com/education

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Legal Update

Developments in public procurement legislation Bunmi Adefuye, REC solicitor, takes a look at what recent changes to public procurement mean for REC members Three highly anticipated European public procurement directives were adopted in April this year. All EU member states have two years to implement them into domestic legislation, and the Cabinet Ofﬁce is working hard to implement the new regulations this year. These regulations will replace the existing Public Contracts and Utilities Contracts Regulations 2006 and introduce a directive on concessions. The expectation is that the reforms will assist with the government’s proposal to make public sector contracts more accessible to SMEs by reducing barriers to competition and creating an equal level playing ﬁeld in the market. Certainly REC members have been telling us that they have found public procurement exercises onerous, time consuming and expensive. Unfortunately, some members have been unsuccessful with their tenders for various reasons but hopefully the new directives and the resulting UK regulations will tackle some of these issues. The key principles of the EU Treaty

will still apply, so contracts have to be competed for and awarded in a fair, proportionate, transparent and nondiscriminatory manner. Some key points in the directives are: ● There will no longer be Part A (priority) or Part B (non- priority) services. Instead a light touch regime will be introduced for certain services ie. health, education and social services, where the contract value meets the threshold of over €750,000. The details of how this light touch regime will operate still has to be agreed by the government ● Public authorities will be encouraged to divide larger contracts into smaller lots to boost SME participation ● There will be less reliance on lengthy pre-qualiﬁcation questionnaires and more self-declarations by suppliers to reduce the red tape ● The timescales for completing the tendering exercise will be shortened ● Proof of ﬁnancial standing of the supplier in terms of the turnover requirements will be limited to a

maximum of twice the estimated value of the contract, except in certain cases where it is justified. The government has publically committed to increasing SME participation in public procurement so it remains to be seen what they will in fact deliver by the end of this Parliament. Certainly this is something the REC is keen to see achieved as we have developed good working relationships with various procurement bodies including the Cabinet Office, Crown Commercial Service, London Procurement Partnership and Health Trust Europe and we will continue to make the necessary representations on behalf of our members. We hope the new regulations fulfil our expectations and that we see SMEs having greater access to procurement opportunities and winning more tenders. Further information on the procurement directives is available here, http://bit.ly/1kDYKzj http://bit.ly/1iw45Ef

Business development: Brookson As a specialist accountant for contractors Brookson is proud to be one of the REC’s official business partners providing umbrella employment and limited company accountancy services. For nearly 20 years, 70,000 individuals across a number of sectors have already benefited from our expert accountancy and tax planning advice. Brookson has a dedicated Agency Support Team who is on hand to assist you. So what benefits do Brookson bring to REC? Andrew Fahey, Brookson Commercial Director says: “On the candidate side Brookson bring an enhanced service to the agency’s candidates as we provide a service for every way of working and have rigorous compliance checks. On the other side, Brookson proactively

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engages with agencies regarding legislation updates including MSC, AWR and the offshore/onshore regulations. “Brookson is a member of authoritative bodies such as the FCSA and REC, which shows that we are leading the way when it comes to credibility and compliance.” Beneﬁts for REC members working with Brookson include dedicated account managers, direct access to operational support, tax and legal specialists, compliance updates and workshops, highly competitive terms of business and proactive advice on all legislative changes. For more information about how Brookson can help you, please contact their Agency Support team on 0800 0833 493 or email agencies@brookson.co.uk

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Inspiration

Behind the scenes at the Institute of Recruitment Professionals

IMA winner Jo Sweetland, HR partner at Green Park, won the IMA Consultant of the Year at last year’s IRP Awards Congratulations on your win in late 2013 – how has 2014 been? This year has been an exciting year for me personally with the arrival of my second daughter, Renée, who was born in March. 2014 has also been a good year for Green Park – we have grown our interim business, so much so that we are looking for new additions to the team. You have degrees in geography and history, so what brought you to recruitment? I didn’t ﬁnish university thinking I wanted a career in recruitment – it was something I fell into. I was actually looking to go into marketing as a career and the recruitment company I was talking to at the time asked whether I had ever considered a career in recruitment. Fifteen years later, I can honestly say I still very much enjoy working in recruitment. You’re a senior executive at Green Park – how do you all work as a team? The interim and search teams work closely together. Clients don’t want to work with different providers for their interim and search needs, much like we all want to do our shopping in the same place. Very often, the two go hand in hand. It’s great for the client too; very often they can call upon three or four of us, whether it be the interim consultant, the search consultant, a functional specialist or even our CEO and founder Raj Tulsiani, who still likes to offer an opinion or two. What is the biggest challenge facing the industry right now? Technology. Green Park is making sure we’re at the cutting edge of recruitment technology. Whether it’s a new position alert from an app, getting an urgent shortlist over on the same day or updating your CV from your smartphone or tablet, we need to make sure that every interaction is quick, easy and effective. But the rest of the recruitment industry is some way behind and in danger of being undercut by poor-quality, tech-savvy start-ups. Recruitment ﬁrms need to invest in technology, taking a short-term hit for long-term stability and gain. What piece of advice would you give your younger self on her first day as a recruiter? The main thing is to always listen. From day one you should be listening in order to learn about the job – listening to what clients and candidates want. Even now, after 15 years in recruitment, I am always listening to see if there is a better way to do things.

What I know This month Harris Keillar, MD at Keillar Resourcing, gives his career tips It’s more than money I obviously think I’m a great recruiter, though there are many who are financially more successful. The differentiator is genuinely being interested in both client and candidate, and getting the right person for the role. Don’t just think outside the box – live outside it How can I possibly say no to that! People move for different reasons so it’s important we get as much information on what motivates a candidate, especially if they’re moving to a role that is broadly similar to what they have already. The most important tool a recruiter can have Phones are ideal in a sense because you’re then able to get more information. Someone might see a role advertised and think, ‘Woah, I hadn’t thought of that’ and within a phone call the ball is rolling. Email is fantastic in terms of updating and confirming things, not to mention registering interest, but the phone is absolutely essential. I come into my office some days and it’s like a 1960s typing pool – clakity clak, clakity clak. You could spend hours trying to chase someone over email for a CV, but with a phone call it can be done within two minutes. Linking in on LinkedIn Social media, in particular LinkedIn, is probably our best friend and our biggest enemy. We’re able to access an enormous global database of individuals, but everyone else can use it as well. The quality of a recruitment business’s database used to be the big thing, but it’s not as important as it once was. A sale unlike any other When recruitment is great, it’s fantastic, although it’s a role where your ability to influence is much less than you think – and it’s also the only sales job where the solution can turn round and say no! I don’t have any rose-tinted views of what recruitment was like in the proverbial good ‘ol days, because some pretty rubbishy things happened then, as they sometimes do now. But I think to enjoy the job after 32 years, you have to be interested in both candidates and clients, clients and candidates. You can’t be horrible to one and nice to the other, otherwise it will come back to bite you.

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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Events and training

Stand out in the public crowd Achieving REC Audited standard gives agencies an added advantage above their competitors With increased competition for agencies working in the public sector space it is more important than ever to ensure that you are able to demonstrate that your business is operating to the highest possible standards. Over 100 agencies have achieved or are working towards the REC Audited and Audited Education standards, including Hays and Randstad. Director of public sector at recruiter Fawkes and Reece, Helen Lock (FIRP), said: “We work with public sector organisations who in turn work with groups of vulnerable people where compliance is of the highest importance, including education and social care, and this is why we chose to go for the audit. “Having the REC Audited standard helps us to stand out in the highly competitive market we work in. It is great to be able to show clients and prospective clients that we are fully compliant with the conduct regulations, as well as demonstrating the highest standards of client and candidate

Helen Lock management,” Lock said. “It was fantastic to pass REC Audited and it gave all of the staff a real sense of achievement. Plus, it raises your proﬁle amongst the staff that are working for you so that they take an additional sense of pride in the work that they are doing.” REC head of compliance Angie Nicholls said: “The REC Audited product gives

you the opportunity to prove that you are a cut above your competitors by undergoing our comprehensive audit that ensures that your business is operating at the gold standard in recruitment.” For more information on REC Audited and Audited Education go to www.rec.uk.com/audited or call us on 020 7009 2100.

REC honours school recruitment at the Education Business Awards The REC partnered with the 10th instalment of the Education Business Awards to recognise and honour outstanding achievement in the education sector. The REC sponsored the School Recruitment Award which recognised an educational establishment which has invested in its recruitment methods and processes to ensure a timely intake of appropriate teaching and support staff. This year the award went to the Reach Academy, in Feltham in Middlesex for its involvement with the programme Teach First, which recruits graduates with at least an upper second to teach in schools that serve disadvantaged communities.

Recruitment Matters 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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Given the ever increasing demands placed on schools, it has never been more important to pay homage to those that seek and obtain excellence in the many areas of responsibility for schools. School recruitment is an essential component of school management and I was delighted to present this award on behalf of the REC to Reach Academy, Middlesex Professor Howson, chair of the REC Audited Education steering group

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 Publisher: Aaron Nicholls aaron.nicholls@redactive.co.uk Tel: 020 7880 8547 Consulting Editor: Ed Sexton ed.sexton@rec.uk.com Editorial: Editor Michael Oliver michael.oliver@redactive.co.uk Tel: 020 7009 2173. Production Editor: Vanessa Townsend Production: Deputy Production Manager: Kieran Tobin. kieran.tobin@redactive.co.uk Tel: 020 7880 6240 Printing: Printed by Woodford Litho © 2014 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.