TH E VI E W AN D TH E I N TE LLI G E N CE
Supply chain compliance and ethics p3 B I G TALKI N G POI N T
What will be the legacy of Covid-19? p4 Issue 94 Recruitment SeptemberOctober 2021 Ma ers
LEGAL U PDATE
The end of the job reten on scheme p6 D&I AM BASSADOR
Interview with Scarle Allen-Horton p7
Employment law
Campaign success on Right to Work checks T
he extension of digital Right to Work (RTW) checks to April 2022 last month was a big win for the REC and the recruitment industry. This was a key campaign goal for the REC and it will be a huge benefit both to recruiters and hiring businesses over the coming months. This success was hard-won and involved huge efforts by the REC campaigns team supported by, and in collabora on with, REC members. The temporary change to RTW checks was announced in March 2020, and it soon became clear that this brought massive benefits to our industry. Since then, we have been campaigning to make the change permanent, or at least to delay its reversal. We have now achieved mul ple delays – most recently owing to a final push in August. The decision seems to have come down to two things. In mid-August, a group of REC members, along with the campaigns team, met Home O ce o cials and shared their experiences of the digital system and how it has benefi ed them directly, as
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well as the issues they could forsee if we went back to physical checks. Second, the REC sent a le er to the Home O ce on 25 August urging it to extend the use of digital checks un l a permanent digital solu on is in place. This le er again linked RTW checks to the current labour shortages, highligh ng how rapid checks are crucial to ge ng people into jobs quickly. The extension was announced the following day – a reminder that one
Making great work happen
last push on a campaign is always worth the effort. The fight does not stop here. This is an extension and physical RTW checks will come back on 6 April 2022. The Home O ce is developing a permanent digital checking system, and we hope to see progress on that in the six months before April. The campaigns team will con nue to engage with the Home O ce and ensure that members' voices are heard on this issue.
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Leading the industry
the view... Compliance and ethics are vital – especially in periods of intense pressure, says
Neil Carberry,
W
REC Chief Execu ve
elcome to this month's issue of Recruitment Ma ers! I hope you managed a summer break – whether you got away for a few days or joined the stayca on trend. In recent weeks, we've been thinking more and more about recruitment supply chain sustainability. The pandemic put all of this under pressure, but emerging trends suggest that this pressure isn't going to ease any me soon. On one hand, agencies face huge issues caused by labour shortages, par cularly of drivers and workers in the food, hospitality and construc on sectors. Even with furlough winding down, our surveys suggest demand will exceed supply for some me to come. This makes the job challenging – but there are huge opportuni es too. Helping clients with workforce planning, taking a lead on skills and looking at remote-working opportuni es all have their place, but make the supply chain picture more complex. We must also be mindful that when the pressure is on, the risks of cu ng corners grow. Yet agency supply chains are under greater scru ny than ever before, from clients and from the government. The focus on umbrella companies this year is one example, and we all need to be aware of the threat posed by modern slavery. We must keep the industry compliant and ethical, or others will do it for us – and risk damaging the good that the industry does. The commitment shown by REC members who got their compliance test done by the deadline this summer confirmed that many of you agree. Every agency wants to safeguard and protect the workers they place. But this requires businesses to take a long view and invest in exper se and compliance procedures that will pay dividends over me. It means ensuring your processes are robust and up to date, that you pay your suppliers promptly, and that you manage your supply chain e ciently and ethically. In par cular, ensure you’re doing all the correct due diligence on any umbrella companies that you work with – the REC has recently produced guidance to help members with this, which you can find on our website. If you want to keep up to speed with all things recruitment then follow me on Twi er @RECNeil 2
C A MPA I GN S
Addressing labour and skills shortages Shazia Ejaz, Director of Campaigns at the REC
T
he news is full of headlines about empty shelves, food shortages in restaurants and the lack of raw materials. Labour and skills are in short supply in every sector, exacerbated by Brexit and the pandemic, and REC data suggests these di cul es won’t ease overnight. Our latest JobsOutlook showed that employers’ confidence and hiring inten ons remain high. Although that’s a welcome indica on of economic recovery, vacancies are already at record levels. Our Jobs Recovery Tracker revealed that in the last week of August there were 1.66 million ac ve job adverts in the UK, the second-highest weekly figure since December 2020. Our three data reports are a great way to view the labour market in real me, weeks ahead of the ONS sta s cs. The REC is therefore leading a campaign on labour shortages. We want to share members’ concerns and our exper se, and work with the government to find solu ons. To date, we’ve wri en to the Department for Transport and the Department for Work and Pensions about driver shortages; and we’ve reached out to trade bodies in hospitality, logis cs, tech and the food industry to collaborate. We’ve hosted a roundtable with the Department for Educa on on Skills Bootcamps to create a pipeline of skilled workers in specific regions. Parliamentary ques ons have been asked on our behalf, and we will engage with more MPs this autumn. We are also making the case to government that workers in our asylum system could fill many vital roles if the law permi ed. The UK has commi ed to taking 20,000 Afghan refugees. They will have valuable skills and will need help to se le in the UK and to get jobs. Recruiters are well-placed to help – for example, with job searches or CV advice. If you want to get involved, contact us at afghanistan@rec.uk.com
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Leading the industry
the intelligence... Opঞmism gives way to a cloudier outlook for the rest of the year. By Atanas Nikolaev, Research Manager
The economic shock of COVID-19 has affected every part of the country in ways no one could have imagined. But, as restric ons gradually li ed, the economy opened and, supported by the con nuing vaccina on programme, consumer spending flew back up during the second quarter of 2021. This is one of the drivers of the economic recovery that we have seen this year, and the ONS reported an increase in services, produc on and construc on output in the same period. All this contributed to 4.8% growth in the UK’s GDP, which is now only 4.4% below its pre-pandemic level in the fourth quarter of 2019. Data from the REC’s latest JobsOutlook survey also shows that businesses' confidence in the economy rose from net -52 in the final quarter of 2020 to net +18 in May-July 2021, the third month in a row it has been in posi ve territory. Employers’ confidence
1.9
million More than 1.9 million employees were s ll on furlough at the end of June.
Businesses' confidence in the economy rose from net
-52
in the final quarter of 2020 to net
+18
in May-July 2021
in hiring and inves ng in their business has also risen steeply and is now at net +29. Importantly, we’ve also seen this increased confidence being translated into real-world hiring ac vity. In July, HMRC Real Time Informa on data es mated there were 28.9 million employees on company payrolls. This is up by 182,000 (0.6%) from the previous month. Further evidence comes from the KPMG and REC Report on Jobs. As economic ac vity picked up over the past few months, permanent staff appointments and temp billings rose at near-record speeds, while demand for staff hit all- me highs. However, we con nue to see a decline in candidate availability, which fell at the fastest rate since the survey began 24 years ago. Labour shortages are just one reason why ini al op mism has given way to a cloudier outlook for the rest of the year. At the end of September, we will see the end of the Coronavirus Job Reten on Scheme that was introduced as a vital support measure for businesses and employees in March 2020. More than 1.9 million employees were s ll on furlough at the end of June, and it is unclear how many of those people will s ll have jobs when the scheme ends. In August the ONS indicated that only 2% of businesses were planning redundancies in the next three months, but a survey from the
The Bank of England has raised its inflaঞon forecast towards
4%
for Q4 2021
Bri sh Chambers of Commerce put that number at 20%. The di cult condi ons also meant that in the second quarter of 2021 over 105,000 businesses closed down, the second-highest quarterly figure since the series started in 2017. And, in its latest Monetary Policy Report, the Bank of England raised its infla on forecast towards 4% for the fourth quarter of 2021, significantly higher than in its May report. In combina on with low interest rates, this is bad news for savers. We therefore find ourselves in what could be described as the ghtest labour market condi ons since the global financial crisis and, although the economy is recovering, there is s ll some way to go. Recruiters have been working flat out to fill posi ons, and their work supports £86 billion in GVA across the economy, the equivalent of 4.3% of GDP. The industry will play a key role helping workers to find new jobs and keeping businesses afloat in the coming months. September-October 2021 Recruitment Ma ers
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Industry evoluঞon
big talking point
Post-pandemic plans
How has 18 months of Covid-19 changed the recruitment profession? And which of these changes are here to stay?
I
t’s now 18 months since the pandemic struck – locking down economies, disrup ng supply chains and introducing the word ‘furlough’ into everyday conversa on. As we start to emerge from the crisis, what, if anything, has changed? Are any of the changes introduced so rapidly in 2020 here to stay, and what will this mean for the day-today opera ons of recruitment agencies? In terms of business, the answer is that it will vary widely. One key lesson from the pandemic has been that the impact was drama cally different depending on your business, sector and region. People have lost their jobs and struggled with mental health issues caused by isola on, fear and financial problems. Meanwhile, others se led comfortably into working from home, enjoyed me with their immediate family and saved enough money to cause a boom in home improvement and online shopping. City centre economies were devastated by closed o ces and travel bans, while rural towns saw house prices soar and hope that an influx of money and ongoing homeworking will revitalise their high streets. Many businesses are preparing for long-term change. Some have closed citycentre o ces and announced that staff will work from home permanently, while others, such as Apple, want employees to return to o ces, ci ng fears about reduced crea vity. More, including many recruiters, are 4
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hedging their bets and offering ‘hybrid’ working. Increasing numbers of job adverts for professionals say ‘based anywhere – work from home’. New research from Cornerstone Tax found that 24% of Bri sh people – around 4.3 million – will no longer commute into a city for their job even when business returns to ‘normal’. Workers in factories and hospitality who cannot work from home are also affected. The pandemic exposed risk around global supply chains, which is causing organisa ons to reassess their strategies. Restaurant chains and supermarkets, for example, are suffering from supply problems caused by the acute shortage of HGV drivers, and car manufacturers have been hampered by a lack of computer chips. And it’s not just drivers – there are acute labour shortages across almost every sector, which are hur ng both recruiters and their clients. Meanwhile, the number of businesses going bust was below average during the pandemic and KPMG has warned that this may lead to a sharp rise in insolvencies once government support ends.
Team spirits
Recruiters sit at the crux of these changes and uncertain es – not only must they keep abreast of the labour market and shi ing client demands, but they must also look to the welfare and working pa erns of their own staff.
Despite the challenges and stress of the past year, there are clear benefits. “When Covid-19 and the lockdown hit, all the strands of our business and the network companies were pulled more ghtly together than ever before. All our divisions and sectors were collabora ng. It did not ma er which sector you were in, whether you were focused on temporary or permanent posi ons, it was simply about suppor ng each other,” says Lisa Duncan, Director at Pertemps Network Group. “This closer working has con nued ever since. Projects involving mul ple teams that might not previously have worked together have con nued. This new level of integra on will con nue for us, allowing us to make best use of available talent and resource.” The speed with which recruitment businesses adapted to the pandemic – and the lessons they have learned about the resilience, flexibility and reliability of their own teams – is another clear gain. There’s nothing like a crisis to bring out the best in people, and recruiters at all levels demonstrated their ability to innovate and adapt for the good of their colleagues and their businesses. This has led to new opportuni es for those in junior posi ons and to renewed apprecia on from managers, who have had to delegate and trust more than in the past. “We will keep hybrid working because our experiences have shown that we can trust our people and that they will rise to the challenge and work be er for www.rec.uk.com
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Staঞsঞcs
10% of Brits (3,319,000 people) have moved away from a city or urban area in the past year.
44% of Brits (16,468,000 people) feel that the impact of Coronavirus has made living in a city less appealing.
24% of Brits (4,297,000 people) will no longer commute into a city for their job post-pandemic. (source Cornerstone Tax) The total volume of UK online job adverts on 13 August 2021 was
128% higher than the February 2020 average.
The ‘transport/logisঞcs/warehouse’ job advert category remains the category with the highest level of job adverts relaঞve to its pre-pandemic level, at of the February 2020 average.
335%
28% of Briঞsh people believe it will take a year or more for life to return to ‘normal’.
it,” explains Tina McKenzie, Managing Director at Sta ine Group (Ireland). Her company increased its bonus scheme and raised annual leave to 35 days for every member of staff in recogni on of the fact that all had “gone the extra mile” during the Covid crisis. “We should walk the talk and demonstrate what we preach to others www.rec.uk.com
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– you get back what you invest in your people,” she says. This is good business sense. “People are going to move a er the pandemic if you haven’t supported them well,” McKenzie warns. “When a crisis happens, that’s when you must show leadership and your apprecia on of your people.” Training has also changed. “In the
pandemic, virtual training came to the fore. Previously, we favoured the classroom approach wherever possible, but the balance has shi ed,” says Duncan. “Using online or virtual resources, people can do training at a me that suits them and in bite-sized chunks.” Training and support are important given that high levels of stress for recruitment teams are likely to con nue. Acute staff shortages will lead to di cult conversa ons with desperate clients. Recruiters will need to use all the rapid reac ons, collabora ve skills and crea vity developed in the crisis to find new talent pools and help clients find the people they need. Some will undoubtedly see major clients move their opera ons or change their staff requirements as a result of the pandemic and of Brexit. But there will also be new opportuni es to recruit people from further afield for roles that no longer require people to be based locally. This creates a na onal (some mes interna onal) market that local recruiters may not be familiar with, and they may encounter unexpected and increased compe on closer to home. However, the recruitment industry has long used technology effec vely to reach candidates in different loca ons or demographics and many recruiters implemented or improved their solu ons during lockdowns. These may need to be extended to meet post-Covid demand. Not that all recruitment will go online. “We s ll need physical loca ons to offer the best possible service and I believe that will always be the case,” says Duncan. “There are some people and companies who simply cannot work from home. However, technology offers the flexibility to give op ons.” “What’s changed? In some senses nothing’s changed. You will s ll succeed if you put a quality candidate in place and go the extra mile to ensure the candidate and client are happy,” says McKenzie. “This is the reason computers didn’t replace us in 1999 or during the Covid crisis. What people do is form connec ons – it’s all about the non-verbal messages and the rela onships you have with people.” September-October 2021 Recruitment Ma ers
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The Coronavirus Job Retenঞon Scheme
legal update
The end of furlough By Karen Afriyie, Legal & Compliance Adviser
O
n 1 March 2020 the government introduced the Coronavirus Job Reten on Scheme (CJRS) in response to the Coronavirus pandemic. To help reduce the spread of Covid-19, businesses across the country were forced to close their premises temporarily, causing varying degrees of disrup on for companies and workers across the UK, and the economy as a whole. The CJRS was established to help keep businesses afloat, preserve jobs and avoid redundancies caused by the nega ve economic impact of Covid-19. During the pandemic, the CJRS allowed employers to claim wages from HMRC for employees and workers who were unable to work, or who had no work, because businesses could not operate as usual.
Ini ally, the government planned for the CJRS to operate for three months, star ng from 1 March 2020. However, subsequent waves of Covid-19 cases prompted the government to extend the CJRS several mes. The latest of these extensions was announced in the Spring Budget 2021, when the Chancellor said that it would run un l 30 September 2021. The contribu ons have also changed. Last year, the government paid up to 80% of employees' and workers' regular wages up to a maximum of £2,500 per month. From 1 July 2021, the government's contribu ons reduced to 70% of wages with a maximum cap of £2,187.50. As of 1 August, the government reduced pay contribu ons to 60% up to a maximum of £1,875 per month
for the hours that an employee or worker remains on furlough. As the rollout of the vaccina on programme con nues and the UK slowly returns to pre-Covid opera on levels, we do not expect the government to extend the CJRS beyond the current deadline of 30 September 2021. If it does not, then the CJRS will at last end on that date. Employers should therefore use the scheme as much as they can un l this date. They must also ensure that they keep a copy of all CJRS records on file for a minimum of six years for HMRC audi ng purposes.
Improve diversity and inclusion within the recruitment industry As Scarle Allen-Horton, one of the REC's D&I ambassadors, says: “Recruiters are important influencers” in pushing forward diversity and inclusion “both with the candidates and the organisa ons we work with”. But are we doing enough to drive change within our industry? Earlier this year, joint research by the REC and APSCo into D&I within the recruitment and staffing industry found that two in five firms (41%) don't record any informa on about the demographics of their sta . And while survey respondents 6
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generally agreed that a culture of inclusivity exists within recruitment, there was far greater uncertainty about whether sta have access to ED&I training and whether their businesses have an ac ve and evidenced ED&I programme. “Our own firms being examples of good prac ce is central to making progress,” says REC Chief Execu ve Neil Carberry. “E ec ve data collec on needs to spread more broadly across the industry. The REC will be there to help support recruiters on this journey.” www.rec.uk.com
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Diversity
Q&A
Why recruiters should be the ones to ‘spearhead change’ in society and at work
What do you hope to achieve as one of the REC’s Diversity and Inclusion Ambassadors?
My overriding aim is to bring about posi ve change. There is much more awareness about the need for diversity and inclusion in society today, but we s ll need to translate this into real change and I hope that I can help to push this forward in the recruitment industry. Recruiters are important influencers, both with the candidates and the organisa ons we work with. We need to support training and encourage awareness to ensure that every industry is using ethical and fair processes to a ract and retain the best talent. We should be the ones to spearhead change in society and at work.
Why do you feel passionately about this subject?
I’ve worked in execu ve search for the past 10 www.rec.uk.com
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Scarle Allen-Horton, Founder of Harper Fox Search Partners and REC Diversity and Inclusion Ambassador years and I’ve seen how company cultures and expecta ons can limit opportuni es. I was a senior execu ve with no other support and two young children at home and I thought: “Could I be CEO of this organisa on when no one at the top looks like me?” I have two daughters and I want to make sure that they know that all opportuni es are open to everyone when they grow up.
What do you see as the key to creaঞng change?
Ul mately, it has to be about increasing awareness of the need for change and the poten al advantages for everyone in society. Too o en, the consensus of people at the top of industry is “we want someone who looks like this and has this background”. But there has already been an amazing shi in awareness and many organisa ons have
put excellent diversity policies in place. We now need recruiters and their clients to work together to understand how diversity and inclusion can benefit them, what are the main barriers to it, and what they can do to promote awareness and adopt posi ve prac ces. One good new recruit from an under-represented group can significantly influence culture and the viewpoint in an organisa on, so can bring more benefits than simply their own talents. Diverse perspec ves bring in different ways of problem-solving, which is always valuable.
What pracঞcal measures would help?
It’s got to be about reaching out to candidates in every possible way – from social media to networking events, jobs boards to personal
contacts. I believe that the progression from manager to board level needs substan al work. It’s ge ng be er, but people are s ll not reaching the top. Teaching senior managers and recruiters how to recognise and address unconscious bias is important and it’s also useful to consider tools such as blind CVs and simply including more people with diverse backgrounds in the interview process.
If you have one message for recruiters about diversity and inclusion, what would it be?
Be the change you want to see. If you’re not seeing change happening far or fast enough, then support or make the change yourself. If we all did something posi ve to make our organisa ons more representa ve of the society we live in, change would happen.
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Virtual conference
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Recruitment Ma ers September-October 2021
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Membership Department: Membership: 020 7009 2100, Customer Services: 020 7009 2100 Publishers: Redac ve Publishing Ltd, Level 5, 78 Chamber Street, London E1 8BL Tel: 020 7880 6200. www.redac ve.co.uk Editorial: Editor Ruth Pricke . Produc on Editor: Vanessa Townsend Producঞon: Produc on Execu ve: Rachel Young rachel.young@redac ve.co.uk Tel: 020 7880 6209 Prinঞng: Printed by Precision Colour Prin ng © 2020 Recruitment Ma ers. Although every effort is made to ensure accuracy, neither REC, Redac ve 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 Redac ve Publishing Ltd. No responsibility can be accepted for unsolicited manuscripts or transparencies. No reproduc on in whole or part without wri en permission.
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