Recruitment Matters May 2014

Recruitment Matters Issue 25 May 2014

Trade Association of the Year

Who are your new MEPs – and what should they do?

As the 2014 European Parliament Elections take place, it feels like a good time to revisit some of the policy points that are most pertinent to the recruitment industry.

Last month the REC sent out a policy briefing to the UK’s 59 MEPs seeking re-election, explaining the important role recruiters play in supporting UK businesses.

“The EU must do more to create jobs and ensure the right conditions exist for businesses to expand and grow their workforce,” said David Geary, policy advisor at the REC. To that end, the REC identified four key areas it felt must be prioritised by the incoming European Parliament – areas that MEPS must strive to address once elected. These priorities are as follows: 1.The EU must remove barriers to service sector growth by extending the scope of the EU Services Directive.

There are still far too many regional and national differences that prevent business growth in Europe.

David Geary, REC policy advisor

What’s inside 2

The Intelligence

How economic confidence can boost employers’ hiring

3 REC Talk

The responsible business agenda and Ciett

Indeed, a recent Eurobarometer survey found that only 8% of SMEs engage in cross-border activities. The REC would like to see reform of the EU Services Directive and its expansion to include recruitment agencies as an important first step.

2. Review restrictions on agency work in line with the aims of the EU Agency Workers Directive.

When proposing the Agency Workers Directive (AWD), the European Commission suggested that it would not only provide equal treatment for temporary staff but that it would also encourage governments to review the restrictions imposed on temporary workers.

However, these restrictions continue to blight the continent and prevent employers from quickly responding to fluctuating demand by creating

jobs. The REC wants the next European Parliament to fully implement Clause 4 and to ensure each nation implements the AWD, as the UK has.

3. Promote an open and dynamic European labour market by expanding the EURES scheme and through effective enforcement of the EU Posting of Workers Directive.

Capitalising on opportunities to work with the EURES portal, which is soon to be opened to recruitment agencies, and seeking effective enforcement of the Posting of Workers Directive will support a thriving labour market.

4. Address youth unemployment and labour market inclusion.

Tackling high levels of youth unemployment across the EU must remain a key priority – careers guidance and vocational training can help.

The Good Recruitment 4-5 Campaign What you should know about one of the REC’s most important campaigns ever

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Business Matters

The legal lowdown and Business Development

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Institute of Recruitment Professionals We speak to Penna’s Jonathan Swain and Kirkham Young’s Tina Young about their career success

Best Events and Training 8 The The REC council elections and the TREC conference

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Leading the Industry

the intelligence Fig 1: Median average invoice value – permanent

Confident to hire?

The intention’s there

4.5

How much can confidence affect employment, asks Nina Mguni, senior researcher at the REC

■ Increase use of agency staff: next three months

90 80 70

■ Increase use of agency staff: next 4-12 months

%

60 50

■ Increase permanent staff: next three months

40 30 20 Oct 13

Nov

Dec

Jan 14

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Feb

Mar

■ Increase permanent staff: next three months

£ thousands

2014 survey. The proportion of employers intending to hire agency workers has shown more muted growth, but growth nonetheless.

If we were to view this data in isolation, it would suggest a tightening of the labour market.

But in April this year, the Bank of England Governor Mark Carney said that there remains “considerable slack” in the UK’s labour market.

In view of this, the Monetary Policy Committee will be looking at earnings growth as an indication of labour market tightening. The BoE’s Monetary Policy Committee has looked at a range of sources, including the REC/KPMG Report on Jobs, to monitor wage growth and starting salaries.

The rate at which salaries increase will also be determined by the availability of candidates to meet the demand for staff. In April, the reported availability of permanent staff fell by the sharpest rate since October 2004 and availability of temporary/contract staff fell by the fastest rate in 10 years, as shown in Report on Jobs.

As 2014 progresses, it will be interesting to see if employer intention to hire leads to action, and just how much they are willing to pay.

3.5

3 Mar May Jul Sep Nov Mar May Jul Sep Nov Jan Feb 12 13 14

Fig 2: RIB recruiter median permanent placement salary 35

32.5 £ thousands

Employers have much to be confident about. The economy grew by 0.8% in of the first quarter of 2014 and 3.1% compared with Q1 2013, although the economy is still 0.6% below the Q1 2008 peak.

In the April edition of JobsOutlook, the confidence barometer hit a high of 42. It is interesting to look at how confidence will impact on hiring intentions in the coming months.

The workforce has grown considerably in the last few years. In April’s official figures the number of people employed stood at 30.39m, an employment rate of 72.1%.

Yet demand for more workers is clearly evident. Every month, the REC asks employers “Do you think that your organisation’s permanent/ agency workforce will increase or decrease?” in the next three months and in the next four to 12 months.

As shown in the graph below, the proportion of employers reporting that they intend to increase permanent staff in the next three months increased from 66% in October 2013 to 76% in March 2014.

Thinking about the medium term (four to 12 months), 52% of employers said they intended to increase permanent workforce when asked in October 2013. This increased to 81% in our March

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Revenues are booming In the last edition of Recruitment Matters, I highlighted the good news that recruiters’ revenues are growing at the highest rate seen in nearly three years, at the same time as the number of job vacancies in the economy is growing in the high teens. This month I am focusing on one of the drivers of the increase in recruitment revenues.

Permanent revenues are pleasingly up 20% year-on-year; an excellent achievement. But what is driving up permanent revenues?

Figure 1 shows that the median average permanent invoice value has been showing a mid-teens percentage increase on a year ago to just under £4,000, driving up permanent revenues.

Figure 2 shows that the increase in average invoice value has been driven by a substantial increase in the median permanent placement salary, which is up 11% in the last year to £33,000.

• 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

The View

Recent meetings with leading employers and business organisations confirmed that the ‘responsible business’ agenda is gaining momentum. The trend is away from corporate social responsibility (CSR) as a bolted-on ‘afterthought’ towards ensuring that values and good practice are embedded throughout. What does the increasing focus on responsible business, brand values and corporate reputation by clients mean for recruiters?

• Hiring criteria. If ‘responsible business’ is the mantra, this will have to be reflected in the criteria used by businesses to hire new staff. Values and ethics will become as important as skills, competencies and past experience. We are also seeing this move towards value-based interviewing in the public sector, in particular within the NHS and the care sector.

• Workforce make-up. Employers are increasingly embracing apprenticeships and shaking up recruitment procedures to promote diversity and inclusion. Recruiters who can help clients meet these strategic objectives will increasingly be sought after.

• Managing suppliers. The responsible business agenda should, over time, mean changes to the way large businesses work with suppliers.

Managing suppliers fairly and with respect has to be one of the benefits of the responsible business agenda. This is something we will continue to promote through specific initiatives such as our Code of Practice for vendor managed services and through ongoing discussions with procurement and HR departments.

• Good recruitment. The responsible business agenda is fertile ground for us our Good Recruitment Campaign to take hold. Leading employers already involved in the campaign have flagged up specific areas such as providing feedback to unsuccessful candidates and embedding flexible working practices.

As ever, the ongoing feedback from REC members will provide a crucial reality check as to whether the positive intentions and rhetoric are being reflected in practice.

As you read this edition of Recruitment Matters I will have just been elected on to the board of Ciett, the recruitment industry’s worldwide federation. This voluntary role, on top of my day job here at the REC, is focused at promoting the recruitment industry globally. In membership are our 47 sister federations in all of the major international market places, and eight corporate members with a global presence.

I’ve been asked by Ciett to lead on the development of the federations across the world. The REC, which is one of the more established and mature federations, is keen to share best practice and help build infrastructure within younger federations, often in developing markets.

The recruitment market is becoming ever more connected and interrelated since the onset of the financial crisis in 2008. It’s clear that we now live in a very different world where people, businesses and economies are more connected and dependent on one another. Labour markets have become more dynamic, integrated and inter-dependent. Many REC members are already operating overseas and this trend will only grow as recruitment and staffing firms seek to support international clients.

Ciett is already a hugely important body but the next decade will throw up challenges as well as opportunities. Ciett will champion the role our industry can play, and promote the economic and social benefits of our industry via the world’s media. We need to do this but at the same time maintain a relentless and robust focus on our own industry’s standards and professionalism at home.

For REC members, Ciett will not only help the industry develop its global reputation, but will also provide practical advice to those that want expand abroad or are already operating overseas.

For more information about Ciett visit www.ciett.org

• You can follow Tom on Twitter @hadleyscomment

• You can follow Kevin on Twitter @kevingreenrec

Good practice becomes the norm Employers are embracing responsible business agendas, says Tom Hadley, the REC’s director of policy and professional services

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The Big Talking Point

What is good recruitment?

As the REC launches the Good Recruitment Campaign with support from 17 well-known employers and 11 business bodies, Francesca Steele asks what good recruitment practice means to them

T

here are several things that are key to fair recruitment processes – and everyone has to do their bit, not just recruiters, but clients, HR and umbrella companies too. The Good Recruitment Campaign – which was launched by the Recruitment & Employment Confederation (REC) last month, provides an ‘aspirational’ charter for employers, asking them to sign up to nine principles of recruitment practice and offering guidance to help improve recruitment standards and candidate experiences.

“It’s a simple campaign,” said the REC chief executive Kevin Green, who described the campaign as the “most important the REC had ever devised” at a time when there are 2.5m unemployed young people, according to figures published recently by the Local Government Association and yet employers are still struggling to find the right talent.

“What is good recruitment practice?” asks Green. “Let’s promote it to businesses.

Let’s give them a tool and a charter to judge themselves against, and let’s share best practice by creating a community of people that are talking about what best practice looks like.”

The campaign has been developed with input from organisations including Dixons, Santander, Royal Mail, Penguin Random House, NHS Employers and the HR Society.

It was also devised in conjunction with professional and business bodies such

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What makes a company great is its people. What this charter is doing is treating the suppliers of talent with the respect that they are owed. It is putting a line in the sand and saying “this is what we aspire to be”. On the day of signing up to the charter we removed a supplier who we didn’t feel was keeping up – they had been forwarding candidates who hadn’t been spoken to and not following procedures we implemented to protect candidates and treat them fairly. The backbone of a good supplier relationship is partnership, and this charter is the building blocks of a good partnership Stephen Reilly, director of talent acquisition, EMEA at AECOM

Arsenal Football Club has always understood that our future success will be defined by our people. This has been at the heart of our approach since our formation in 1886. It is important to our future success that we have skilled and capable individuals, working in ‘The Arsenal Way’ and the Good Recruitment Campaign makes absolute sense. The charter mirrors the Club’s standards and existing approach to recruitment. We fully recognise that how we go about achieving our ambitions is as important as what we achieve Karen Ann Allchurch, HR director, Arsenal Football Club

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G4S is a people business and people are our most important asset. Therefore recruiting and retaining the very best employees are two of our most important core activities. We are delighted to be advisory panel members of the REC Good Recruitment Campaign, which champions best recruitment practice and provides the theory, tools and self-governance to organisations wanting to recruit well in the modern work environment

The REC launched the campaign at Fortnum & Mason last month

Colin Minto, group head resourcing and HR systems, G4S

Dixons Retail are very proud to be on the advisory panel with the REC and to have been a part of the Good Recruitment Campaign.

Dixons fully supports the principles outlined in the charter both from our company resourcing strategy and through the partners we work with Bridget Hutchinson, head of resourcing & employer brand, Dixons Retail

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as CIPD, the CBI and the Institute of Leadership and Management.

“The Good Recruitment Campaign is the perfect vehicle to bring these organisations together to enable employers to benchmark their processes and share good practice and information,” says Steve Othen, head of project management at the REC. “Employers have been excited about the guidance they can receive, free of charge, and have been commenting around the great timing of the campaign as the economy starts to grow and they take on more staff and review their internal procedures. Having this conversation with the business world allows us, and our members, to directly educate employers about recognised recruitment industry standards and this can only be good for our profession.”

It has been great to hear from employers of all sizes and different industries, sharing similar issues around their recruitment procedures Steve Othen, head of project management at the REC

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Legal Update

How to find a work/life balance What are your statutory obligations when an employee asks for flexible working? REC legal adviser Chris Cuckney explains Striving for work/life balance is a goal for many employees and has been a point of political debate for years. As a result, employees who meet certain criteria have the right to request flexible working.

Examples of flexible working requests could include part-time working, flexible hours, working from home and term-time working. The right to request flexible working only applies to employees and therefore will not apply to agency workers engaged under contracts for services.

In order to be eligible an individual must be an employee and: • have a child under the age of 17 (or under 18 if child is disabled); • be the child’s mother, father, adopter, guardian or foster parent (or be that person’s spouse, partner or civil partner); • have worked with their employer continuously for 26 weeks at the time that their application is made; • have or expect to have responsibility for the child’s upbringing; and • be making the request in order to care for the child. or • be or expect to be caring for an adult aged 18+ who is either married to or the partner or civil partner of the employee, or who is a relative of the employee, or who is living at the same address as the employee;

• have worked for their employer for a continuous period of at least 26 weeks at the date the application is made; • be making the application in order to enable them to care for the adult; • not have made another application to work flexibly under the right during the past 12 months.

A ‘relative’ for these purposes includes parents, parents-in-law, adult children, adopted adult children, siblings (including those who are in-laws), uncles, aunts, grandparents and step relatives.

Where an employer receives a request for flexible working they have a statutory duty to consider the request and as such employers must follow a specific procedure (see website link below right).

An employer must request a meeting with the employee within 28 days of receiving the application and make a decision within 14 days of the meeting.

The statutory entitlement is to request

flexible working and an employer can refuse the application for any of the following grounds: • Burden of additional costs • Detrimental effect on ability to meet customer demand • Inability to reorganise work among existing staff • Inability to recruit new staff • Detrimental impact on performance • Insufficiency of work during proposed hours • Planned structural changes.

If a tribunal believes that an employer cannot justify a refusal to allow flexible working, it can award compensation for discrimination and/or recommend that the employer grants the employee’s request.

If the request is granted it will be a permanent variation of the employee’s contract. Should an employer refuse the application, the employee can appeal the decision within 14 days of the refusal.

The government has announced that from 30 June 2014 the right to request flexible working will be extended to all employees, as opposed to only those who meet the eligibility criteria outlined above.

Acas have released draft guidance setting out the changes.

REC members can view the online Legal Guide here: www.rec.uk.com/legal_ guide/legal-guide

Business development: Titans of industry When you’re using an umbrella employer or providing effective back-office solutions, you want to go to someone you know properly understands a recruiter’s needs. Since 1992, giant has offered a range of workforce management solutions for the recruitment industry. From giant strongbox, its umbrella arm which offers great deals, including pension and healthcare plans, and Gap Pay for temporary workers, freelancers and contractors, to giant precision, a range of groudbreaking back-office solutions including a new online timesheet system, these are recruitment solutions created by recruiters themselves. Matthew Brown, managing director of giant,

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says: “All of this software, the self-billing, the credit and reinvoice functions, are things we use ourselves, so you can rest assured it’s as practical and efficient as you could possibly want it to be. At giant, we have worked really hard to strengthen our employment offering by including wide-ranging mutual obligations between ourselves and our employees, in particularly between assignments.” It’s no surprise then that giant has been independently voted Best Umbrella Company by readers of Contractor UK – four times – and REC members can get even better deals than most. For more information go to www.giantgroup.com or call 0844 324 7700

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Inspiration

Behind the scenes at the Institute of Recruitment Professionals

Public spaces This month we speak to Jonathan Swain, director of public sector executive search at Penna, who won Executive Search Consultant of the Year at the IRP awards Congratulations! How does it feel to have won?

It was a very nice surprise, especially since it was the first time I’ve been entered. I was really pleased for my team too – it’s all down to the collective hard work of the team. In the three years I’ve been at Penna we’ve worked very hard in a pretty distressed market.

Which sectors do you cover?

I cover public sector, central government, local government, health, education, housing and police. It’s very varied and even within the same organisations no two campaigns are ever the same. It’s a bit like having a new job every day!

Have you always worked in recruitment?

No, before I moved into executive search I worked in the Cabinet Office and Audit Commission. Penna as an organisation is really unique because we cross the HR/talent spectrum. I knew I’d really enjoy it because of the variety and pace.

You mentioned the importance of the team. How do you effectively manage that team?

I manage 17 people and we have very strong targets that we’re always working towards. You have to have an instinct for taking people forward in a changing world. In the public sector there are elections and things are always changing. You have to be able to move with the times.

Is placing people in the public sector particularly hard?

I would say it’s actually pretty similar to the private sector in ways that people don’t necessarily realise. If you are a chief executive of a local authority you are essentially running a large company. It’s a demanding role.

Tell us something about you that your colleagues might not know.

I used to be a magistrate in my spare time in East London. Most magistrates are lay magistrates actually, who do it part time – you learn pretty quickly when you’re on the bench though. It’s not the judiciary in the way you might imagine. You don’t have to wear a wig!

Things I Know Tina Young, co-founder and director of Kirkham Young, gives us her career tips People often find things through chance I did a degree in biochemistry, then spent two years in the NHS working as a biochemist and then working selling medical equipment for five and a half years, before moving into recruitment via some of the people I’d sold the equipment to. Recruitment tends to be a job that lots of people seem to fall into by accident, which can be a good and a bad thing. It means there is plenty of different experience around which is great, but it would probably be helpful if career advisors could actually tell people a bit about the industry earlier on – at school for instance.

Specialist knowledge can be invaluable I think it gives you credibility with clients. One of the reasons we wanted to set up our own business was to go to specialist trade shows more. If I say I’m a radiologist expert then really I need to go to national radiology exhibitions. Healthcare and IT are growing rapidly too and so we are exhibiting more at shows with new software and technologies.

It’s important to make sure you know what a candidate wants as much as the client You have to think, this person isn’t just a CV, they’re a person with a life and lots of commitments. Do they want to be on the road, or do they want to be at home? Is this going to be the right place for them?

Make your value known One of the biggest challenges to specialist recruiters at the moment is in-house recruitment. I’m not sure employers recognise that many HR specialists might not have the recruitment expertise needed to fill certain roles properly. If you imagine how many contacts my business partner and I have made after this many years in the business... I know radiologists who I helped get into their first job and now they’re very senior. It’s hard for non-specialists to compete with that, so I try to make sure clients understand that.

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

Sign up for the Talent, Recruitment and Employment Conference Listen to inspiring speakers and do some invaluable networking at the Talent, Recruitment and Employment Conference (TREC) in an intensive, one-day format.

With a programme designed and driven by market participants, ensuring topical and genuine debates, and led by senior speakers, participants will meet and discuss recent developments as well as learn about opportunities to plan and forecast developments in the coming year. Speakers and attendees will include senior European professionals from HR, talent, operations, procurement and

Corporate in-house/HR/Talent/Operation/Procurement Professional Complimentary: subject to REC approval Recruitment Professionals

Recruitment Professionals

(REC/IRP member)

(nonmembers)

23 May - 10 June 2014

£299+ VAT

£349+ VAT

£1600+ VAT

11 June onwards

£349+ VAT

£399+ VAT

£1800+ VAT

recruitment. The TREC Conference will take place on 24 June at a London venue.

For more information call 020 7009 2100 or email trec@rec.uk.com

Don’t forget to vote!

The REC council elections are coming up and there are four corporate director and two individual director positions on the REC council to be filled. Online voting will take place between 26 May and 16 June and the results will be announced at the Annual General Meeting on 18 June.

“Being part of the REC council means representing the industry in standards, professionalism and world-class services,” says Neil Smith, the REC chairman. “The range of recruiters we have on our council ensures that we are able to look at our industry from a variety of perspectives and I would encourage all members to seriously think about putting themselves or their colleagues forward.”

Meanwhile, Michael Bennett, managing director at Rethink Group, who joined the council last year, added: “I originally stood for the REC council in 2013 after being recommended to by the Head of the IRP, Richard Charnock. He suggested I get my voice on the council and help to drive certain initiatives or ideas through. The council is very open and gives you that opportunity, as well as being a great place to network with other senior Neil Smith, recruitment folk in the UK.” REC Chairman

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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Service Providers

There are a range of prices available for TREC 2014, dependent on when you book and on your profession. The full set of prices are shown in the table above.

Vote for your representatives on the REC Council of Directors Elect or re-elect up to four corporate directors and up to two individual directors. Following the success of last year’s voting, all REC and IRP members will once again be able to vote online to elect new council members in the lead up to the Annual General Meeting, which will take place on 18 June at 10am at the REC’s London offices. For those people who have not voted online or by post by this time, you will still have an opportunity to vote in person immediately preceding the AGM on 18 June. Full details regarding the voting process and the candidates for election will be posted on the REC website.

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: Francesca Steele francesca.steele@redactive.co.uk. 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.

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