Recruitment Matters- January/February 2023

Ma ers Recruitment

Look to the future

Plan ahead for legal changes in 2023

In 2022, we all got used to expec ng the unexpected when it came to poli cs. However, the Sunak-led Cabinet seems to be se ling in and readying itself to steer through to the next general elec on in 2024.

So what does that mean for our industry in 2023?

For a start, we could see some important changes to legisla on affec ng recruiters resul ng from the government’s programme to remove or replace EUderived law. The Retained EU Law (Revoca on and Reform) Bill introduced last year will enable the government, via Parliament, to more easily amend, repeal and replace retained EU Law.

The good news is that this will open the door to poten al legisla ve changes that provide clarity for recruiters and employment businesses. An example is the Working Time Regula ons (WTR), which sets out provisions for a 48-hour maximum working week. This is tricky for temporary workers who work at mul ple businesses, as the 48-hour maximum is split across all employers. We will lobby for change to reduce the complica ons of balancing shi s across di fferent employers and to make administra on easier for agencies. But we will also be watching the progress of this

legisla on carefully and campaigning to ensure there are no unintended consequences for recruiters, candidates and clients.

In December, the government announced its inten on to introduce the right to request exible working from day one for all employees. Under the current proposals, temporary workers engaged on a contract for services are outside the scope of this right, as they are not classed as employees. However, if a temporary worker is employed via an umbrella company, they will poten ally qualify –which will affect the recruiters and clients who engage them. They will need to be aware that their workers may request exible working and that they have to respond to these requests and plan around them. More guidance from BEIS is available on the REC website.

So, for the industry that never rests, there will be some good opportuni es to affect changes to the law that boost produc vity in 2023 and, as usual, some challenges to deal with and adapt to. The REC is commi ed to bat on your behalf on all of this – and more – as we did in 2022.

Leading the industry

the view...

Welcome to 2023! I hope it is a superb year for you and your business.

There’s a longstanding piece of good advice in Economics, given to those who produce forecasts. It’s this: forecast o en. Embedded in it is the eternal truth that accuracy beyond the very near term is di cult to achieve, even for the most experienced market watchers.

So I approach this first column of 2023 with trepida on! Looking back over the past three years, few things predicted on 1 January have been the case by the end of the year. And yet the industry rises. Just before Christmas, we published our latest industry status report, which highlighted the bounce-back seen by recruitment and sta ng firms since the pandemic year of 2020-21. Growing over 20% in 2021-22 was never simple, but it represented a lot of value created by the 100,000 hard-working professionals in our industry.

While the economic storm clouds gathered more menacingly last autumn and forecasters became real gloomsters (as one former prime minister might put it), demand for our services has remained good – if not as frothy as in the spring of last year. I put that down to big underlying changes in our labour market – from labour supply, to skills needs, and to work organisa on. These seem, for the moment at least, to be suppor ng demand despite a less strong economic outlook in the near term.

At the REC Awards at the end of November, I argued that this situa on creates a chance for us to step up. Clients’ businesses will be under pressure – but they will s ll need to hire. Demand will probably change, rather than fall. If we have the right service mix – offering advice and delivering good candidates – we can thrive.

This is a year to show how great recruiters make a world of difference to clients and candidates. I o en say that recruitment is a technology-enabled people business. Those firms who get both parts of that right, and can truly advise senior teams within clients, are likely to y. All the best for the year ahead. Get out there and smash it!

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

CAMPAIGNS

What the Autumn Statement means for recruitment firms

Shazia Ejaz, Director of Campaigns at the REC

In poli cal terms, 2022 has been quite a year. Four chancellors and various Fiscal Statements, the latest on 17 November. Advance briefs to the media meant it was as expected; a budget of tax rises and spending cuts, rooted in the reality of the country’s economic posi on. However, there was also some welcome focus on growth.

It was encouraging that it addressed some REC campaign requests from our Overcoming Shortages report, including on workforce planning in the NHS and labour market par cipa on, which the Department for Work and Pensions (DWP) is ‘thoroughly reviewing’.

While Appren ceship Levy reform wasn’t men oned, we look forward to working with Sir Michael Barber, the new skills adviser, to ensure we have a system that meets the needs of workers and businesses. With 630,000 more people not working and not seeking work than before the pandemic, the government sees the need to intervene. We’re working with the DWP on workforce par cipa on and will feed into its formal review, due to conclude in early 2023.

Freezing the business rates mul pliers, and relief for hospitality, retail and leisure is also welcome, but high in a on remains a challenge. Rising energy costs and salary bills increase pressure on businesses so the freeze in Na onal Insurance thresholds will need to be watched.

And we need to do more to convince government that our industry has a pivotal role in crea ng growth. Jeremy Hunt’s ‘five growth industries’ do not include professional services, despite its enormous contribu on to the economy (see our latest Recruitment Industry Status Report). Our jobs market is robust, demand for talent is high and candidate availability low. Our sector can provide exper se to support a growthled agenda. The DWP has hosted roundtables on labour shortages, but many departments need to work together to see growth opportuni es and unlock the poten al of the labour market. We will work with government to create a comprehensive plan for jobs.

Predic ons are risky, but the outlook for recruitment is good. Happy new year, says Neil Carberry, REC Chief Execu ve

the intelligence... Leading the industry

The recruitment industry grew in 2022 and is set for more growth in 2023

By Norah Song, Research Manager at the REC

As we start a new year, it’s important to acknowledge the significant contribu ons the recruitment industry made to the UK economy last year. 2022 had its challenges — the UK has experienced one of the worst labour and skills shortages in history. For businesses, recruiters have been vital to source talent in a market where such shortages con nue to make hiring di cult.

Looking back on 2021, the industry’s recovery from the pandemic was par cularly impressive. The latest edi on of the REC’s annual UK Recruitment Industry Status Report 2021/22 revealed that the wider recruitment industry is es mated to have contributed £42.9 billion directly to the UK economy in 2021, a 21.7% increase on 2020. During this period, over 540,000 permanent placements and 22.4 million temporary/contract placements were made.

Insight from the REC’s October 2022 survey of recruiters, tells us the industry can expect further strong growth in 2022.

Businesses expect fees to grow by 7.4% and the volume of clients to rise 14.3% from 2021 to 2022. We can also expect greater margins on placements in 2022. Recruiters reported their average margin on permanent and temporary/contract placements increased by 6.2% and 3.1% from April to September 2022, re ec ng the high demand for recruitment services as businesses struggle to fill vacancies.

However, some businesses were star ng to feel economic

11.1%

UK in a on hit a 41-year high in October

headwinds in 2022 caused by soaring in a on and rising interest rates. According to the Bank of England, UK in a on hit a 41-year high in October, accelera ng to 11.1% on the back of rising energy and food prices. The uncertain economic outlook has made employers more cau ous about hiring.

The O ce for Na onal Sta s cs reported that in August to October 2022, the es mated number of vacancies fell by 46,000 on the previous quarter, to 1,225,000. This is the fourth consecu ve quarterly fall. Nonetheless, the number of vacancies is s ll at historically high levels, sugges ng that demand remains strong and stable as we enter 2023. There isn’t a slowdown in hiring, and recruiters have had to work hard to help employers meet their business demands.

Looking forward, the recruitment industry looks set for more growth and we expect it to contribute significantly to the UK economy in 2023. By sourcing and alloca ng talent in a ght labour market, recruiters are vital to businesses’ ambi on for growth. In a compe ve market, it’s more important than ever for employers to work with recruiters to unlock addi onal produc vity and growth.

£42.9 billion

direct contribu on by the recruitment industry to the UK economy in 2021.

big talking point

Talk, listen, learn

clients on first steps to becoming more neurodiversity inclusive.

When it comes to neurodiversity, even the language is problema c – which is why the new guidance will include a glossary of terms, some of which are frequently misunderstood. Employers (and recruiters) with no personal experience of neurodiversity may make assump ons about the abili es (posi ve and nega ve) of people on different neurodiverse spectrums that are either simplis c or inaccurate. There is also confusion between neurodiversity, mental health and disability, crea ng preconcep ons of an individual’s requirements in the workplace that may be completely wrong.

heavy reports that could easily be produced in a more graphic format.

Inclusivity and diversity are key words right now with good reason. Many organisa ons have made efforts to increase diversity at all levels for many years. However, a global talent shortage has increased their mo va on to look for different groups of poten al employees, and to explore changes they can make at home to a ract more people to join and remain employed with them.

A shrinking talent pool has therefore created opportuni es to understand the barriers to hiring and retaining people from underrepresented ethnic, religious and gender groups, and those with disabili es. Recruiters are in a prime posi on to support these demands and offer advice on workforce planning, crea ng an inclusive workplace and adap ng recruitment strategies.

Neurodiversity, however, remains less well-understood, which is why the REC together, with neurodiversity training specialist Up mize, has produced guidance to help recruiters understand the issues and advise

A further complica on is that most employers are unaware of how many people on neurodiverse spectrums they already employ. People may be reluctant to declare a neurodiverse diagnosis to their employer or poten al employer – and many may not have a formal iden fica on, but merely suspect that they are on a spectrum. Others with, for example, dyslexia, may not consider this a neurodiversity issue, but may have struggled for years to read (or write) text-

Statistics

While it makes sense to help everyone in an organisa on perform to their best ability and to promote those who will bring new perspec ves to management, it’s harder to a ract different kinds of people into an organisa on. Recruiters know the impact of corporate culture here – it is pointless and destruc ve to put a good candidate into a role that will make them unhappy, since they will leave, poten ally damaging their own career prospects and the reputa on and finances of their employer.

Many recruiters talk to clients about

Neurodiversity is a complex, o en misunderstood term, but recruiters who understand the key issues can offer support to clients that will benefit everyone

how they communicate their culture to poten al applicants. However, they can go further and advise employers on ways to create a posi ve reputa on for inclusivity and what it means to be neurodiverse in their workplace. Those that understand neurodiversity may spot barriers in the recruitment process that reduce the appeal of a company or role, or could cause interviewers to eliminate a strong candidate.

Quick wins

Neurodiverse people who are already in the workforce will already have learnt ‘coping’ mechanisms for situa ons that they find uncomfortable, points out Patrick Milnes, campaigns adviser at the REC, who worked on the report. However, ‘coping’ and trying to ‘fit in’ causes stress, exhaus on and, some mes, misunderstandings and con ict that may reduce opportuni es for promo on and cause people to underperform.

The REC and Up mize guidance suggests some quick wins that are a first step to opening employers’ minds and helping them to think more inclusively, he explains. “Neurodiversity is complex and labels should never be used to define a person or their abili es – for example, not all au s c people behave the same way.”

Organisa ons that understand

more about the different forms of neurodiversity can help people to be themselves and to feel more comfortable expressing concerns or preferences. Some ini a ves may be as simple as structuring mee ngs and diaries differently, publishing reports in a variety of formats or providing quiet spaces and headphones. The increase in exible working should make it easier to allow people to work in ways that suit them be er, while finding out why some circumstances create stress for certain people could help to reduce tension and unnecessary con ict among all staff, neurodiverse or not.

If an organisa on wishes to benefit from different viewpoints and ways of thinking about problems, one key issue is to encourage people to express these perspec ves and to listen to them. Someone intent on ‘fi ng in’ is unlikely to come up with a sugges on that will make them stand out.

Prac se what you preach

All this also applies to recruitment firms themselves. A more inclusive workplace and be er opportuni es for different kinds of people was a prime mo vator for Clive Hutchings when he established his own recruitment business, STR, which now comprises five brands. In 2018, he set out to reform the staff culture to the orginal vision of the business that he and

his business partner had established two decades earlier. During the pandemic, he established a full EDI strategy with an EDI board that meets quarterly to iden fy issues that require ac on – from access for disabled people to training on different diversity areas to mental health.

“I know of at least four members of staff who have ADHD and are high performers in our business,” he says. “Recruitment s ll has a Wall Street reputa on, but it’s far more professional now. I want our staff to know that anyone can do well here, but that if they tell us that they are on a neurodiverse spectrum we can put support in place that will help them to perform to their best ability. We want to encourage people to be honest so that we can help them to do well.”

His companies currently employ 155 people and plan further growth, so he wants to a ract people who are commi ed and focused, whether this is because they have a suppor ve and secure background, or because they have been through tough mes.

“Encouraging candidates to be honest and to tell us about past struggles, disabili es or neurodiversity issues is a challenge and calls for skilled interviewers,” he says. “They also need to be honest about the challenges of the job and whether it is right for the interviewee – and you need to employ people who can support staff with different needs. People have to be comfortable talking to you to facilitate these conversa ons.”

Looking a er staff is as important as inves ng in them, he adds, and this is a message he is keen to pass on to clients and trade bodies. “Do they have the support packages in place and are they aware of staff needs? We need to ensure candidates are confident about asking ques ons to poten al employers. What kind of environment do they have? Are they exible?”

Neurodiversity is a complex issue, but encouraging people to be honest about their preferences and needs, listening to what they say and providing a suppor ve, well-informed workplace is good for everyone. People – staff, clients, customers and stakeholders – are neurodiverse, so organisa ons should be too.

Employment law

legal update Holiday en tlement for workers as the leave year ends

By Bunmi Adefuye, Legal Advice Manager, REC

Akey ques on that is o en asked is whether any holiday that is not taken in the leave year will be lost.

Under the Working Time Regula ons 1998, all workers (except those who are self-employed) are en tled to 5.6 weeks (equivalent to 28 days) of paid holiday each year. The holiday year in which they are required to take their leave will typically be specified in their contract, but it is common for businesses to have a holiday year that runs from 1 January to 31 December.

Agency workers may also be en tled to more paid leave when they qualify for equal treatment under the Agency Workers Regula ons 2010, if they have worked for the same hirer in the same role for 12 weeks. The en tlement to extra holiday is applicable only if the hirer provides holiday above the statutory minimum to its own employees.

Whether a worker will lose their en tlement if they do not take their leave before the leave year ends depends on why the worker has failed to take me off. If the reasons are long-term sickness absence or maternity leave, they should be allowed to carry forward the untaken annual leave. Equally, if the worker’s contract allows holiday to be carried forward to the following year, then they will also be able to preserve their leave.

Even if the reason why a worker has failed to take their leave is not long-term sickness absence or maternity leave, they don’t automa cally lose it – the employer must demonstrate they took steps to inform the worker that their leave could be lost if they do not take it. Employers can’t force workers to take leave, but they must be able to show that they have exercised all the necessary

steps to remind the worker and allow them to take paid annual leave.

The obliga on for employers to remind workers to take their leave stems from the 2018 Court of Jus ce for the European Union verdict in the case of Max-PlanckGesellscha v Shimizu. The judgement confirmed that only when a worker has ‘refrained from taking their paid leave deliberately and in full knowledge of the ensuring consequences’ will an employer not be required to carry over their leave or pay an allowance in lieu of this.

Lastly, when the worker’s engagement comes to an end, employers must pay their workers any holiday pay that was accrued, but was not taken.

Plan ahead to beat disrup on and focus on environmental, social and governance (ESG)

What I know Q&A

Disrup on is driving change. Every sector is experiencing massive disrup on. We specialise in execu ve search and the key issues for our clients are diversity and inclusion; growth in mes of macroeconomic stress; technological disrup on; changing business models and demographics; and regulatory change.

Clients are planning ahead. Ever since the Davies Review focused on ge ng more women on to boards, firms have been working more on succession planning and on diversity & inclusion at board level. Many have moved from saying ‘we need a new non-execu ve director now’ to ‘we will need a new non-

execu ve director in two years’ me – who would be the best person for this? What skills, experience and background should they have to complement others on the board and where might we find them? How can we a ract them once we know who they are?’

It’s about longterm rela onships. Businesses that want to a ract more diverse board members must look beyond their normal circles to find them. We offer advice on managing talent pipelines and will facilitate mee ngs with people they should get to know. Senior managers need to know who is in this space and who might be available in future. Senior appointments are always about rela onships.

What is B Corp cer fica on?

A Cer fied B Corp is a company that has voluntarily met the highest standards for social and environmental performance. These standards are set high and across key areas, including governance, workers, community, environment and customers. Unlike tradi onal business models, B Corps look at the triple bo om line (profit, people, planet), using the power of business to be a force for good. We are one of the first exec search firms globally to become B Corp cer fied.

What did it entail?

The ‘B Impact’ Assessment is rigorous. We have implemented a number of ini a ves, including the launch of The Tomorrow Founda on, through which we dedicate

5% of our employees’ me to pro-bono, environmental and charitable projects. We partner with two chari es – City Gateway and Resurgo – to deliver employability coaching. And we have created a Sustainability Group to drive best prac ce for environmental stewardship.

Why did you do it?

We have a clear vision to build the world’s most trusted marke ng headhunters. Our cer fica on solidifies this commitment with our people, clients and communi es. Every member of tml Partners has embraced this mission as a team. It’s about shining a light on the assets and skills of the recruitment industry, and how these can improve performance and help develop skills in society. It’s incredibly rewarding.

Paul Ba ye is chief execu ve at Hoffmann Reed

Charlie Green is managing director at tml Partners

5 tips for providing an inclusive recruitment journey

By Ross Linne , Founder and CEO at Recite Me

Through inclusive recruitment processes, you can unlock a range of business benefits from discovering high-quality staff to drawing from a larger talent pool. Some of the top ways you can break down barriers for candidates are listed below.

Write inclusive job descrip ons

A job descrip on should use plain language to define the job and its requirements clearly. You should avoid using gender-based language terms as well as industry jargon. Someone from outside your organisa on should easily be able to understand what is needed.

Allow for reasonable adjustments

Check whether the interviewee needs any reasonable adjustments before the interview, then make sure these are put into ac on and communicated with the candidate. Examples of reasonable adjustments include providing more me to complete assessments and offering an online interview rather than a telephone one to enable sub tles.

Provide inclusive recruitment training

Training for interviewers is one of the best ways to ensure you are providing an inclusive interview experience. It is vital for educa ng your hiring panel about how to address biases and how to maintain a more objec ve standpoint. Also, training your interview panel will

provide candidates with a be er experience.

Use diverse interview teams

A diverse hiring panel helps you to avoid hiring based on shared biases and to help see candidates from different perspec ves. It can also make candidates from underrepresented groups feel more comfortable about performing in front of a panel where they are represented. Addi onally, it is also the perfect example of ‘prac ce what you preach’ if your organisa on claims that it is commi ed to diversity and inclusion.

U lise assis ve technology

Providing assis ve technology allows users to overcome online barriers that may stand in the way of them researching and applying for a new job. It enables users to customise online content in a way that works best for them.

Learn more about how assis ve technology can help you to provide an inclusive recruitment journey here: reciteme.com/sector/recruitment/

Recite Me is a cloud-based web accessibility assis ve toolbar solu on that allows website visitors to customise a site in a way that works best for them.