Recruiter - May 2016

Business intelligence for recruitment and resourcing professionals

May 2016

INCORPORATING Recruitment Matters

Boom and bust The oil & gas talent hokey cokey Brilliant!

NestlÊ’s Lucy Skrzeczkowski

www.recruiter.co.uk

Unethical behaviour Hoogervorst: Is the industry breeding wolves?

THE CISCO KID

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Leader of glob bal talent Kev vin Blair exp plains how w data a is tra ansform ming recruitment att IT giant Cissco

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C R ONT ENT S

ING PORAT INCOR itment Recru ers Matt

COV ER IMAG E | TO M C AMPBELL

A

NEWS

05 Proving SDC status requires ‘layers of evidence’ Tax expert outlines the burden of proof required

by HMRC 06 Saudi Arabia may ban foreign recruiters The Kingdom could fine companies hiring foreigners to recruitment posts

07 SThree trial ‘extra flexitime’ for new parents SThree is softening approach by catering for new parents

07 Thoughts from...

Manuela Montagnana, Nick Davis, John Chaplin

07 Star recruit: Brian Johnson, ex-ACDC singer 08 This was the month that was...

10 Contracts & Deals

B

TRENDS

12 Insight Unethical practice

15

Tech & Tools

D

FEATURES

18 THE BIG STORY The Cisco Kid

Kevin Blair explains how data is transforming talent at networking giant Cisco

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24 Time to fold the umbrellas?

Changes to the law could make umbrella business models unworkable

32 Oil & Gas The low price of oil has badly affected recruiters in the sector

E COMMUNITY 37 Social Network 38 Careers Agency/In-house 41 My brilliant recruitment career: Lucy Skrzeczkowski 45 Business Advice 48 Movers & Shakers 49 Recruiter Contacts 50 The Last Word: Gregory Allen

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Gamification

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17 17

INTERACTION Agency View: James Johnson, Nicoll Curtin Web chat Soundbites

I M AG E S | P E T E R SEA R LE / ISTO C K

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W E LCO M E

UPDATE

WE LCO M E

LEADER

I

s the dust finally settling on the travel and subsistence (T&S) measures that took hold on 6 April? Doubtful, from the looks of it as we go to press.

With the SNP taking up the issue of whether or not T&S expenses should be allowed tax relief, perhaps heavy immigration across the Northern border will follow by both contractors and the businesses that need their services.

We also explore the future viability of umbrella companies in our feature on p24 as the saga of HMRC v the self-employed continues on the march. What do “Sometimes you think? those who The recruitment inspire us give so much there industry lost a is not enough golden child in March, in the form light left for of Helen Stokes, themselves” managing director of Major Players and the 2015 winner of Recruiter’s Recruitment Agency Leader of the Year honours. My memories of Helen will be of a passionate, driven leader who inspired those around her to achieve big, a woman who worked hard and played hard, and as a very real individual who eschewed many corporate trappings in favour of authenticity. At the same time, I was always struck by a seeming vulnerability; in spite of her stunning successes, that surprised me. Sometimes, those who inspire us give so much there is not enough light left for themselves.

And who knows what she could have achieved had she not left us so soon. Her departure is a tragedy for all of us.

DeeDee Doke, Editor

‘Layers of evidence’ required to prove SDC status, says expert COLIN COTTELL

NEW RULES ON travel and subsistence came into effect on 6 April. In consequence, employment businesses and umbrella companies must not only be compliant but also be able to show their compliance in order to legitimately pay their workers T&S expenses tax and National Insurance free.

The new rules require that businesses must be able to prove that those workers are not under supervision, direction or control (SDC) “in the manner in which they carry out their duties”.

Proving a negative is always tough, but as Robert Burton, tax manager, tax controversy & risk management at EY, told a seminar in April, there are a number of practical measures that can help provide evidence that businesses have come to the correct decision.

Burton was previously inspector of taxes in specialist investigation in fraud at HM Revenue & Customs.

“It’s about putting in layers of evidence to substantiate any decision you reach. Is the conclusion you have reached reasonable? And if it is, how have you arrived at that conclusion?”, Burton told the FCSA (Freelancer and Contractor Services Association) seminar in London.

Burton went on to outline some practical guidelines that are likely to satisfy the tax authorities that your decision-making is sound.

Don’t rely on workers ticking a box “Workers ticking a box saying ‘I am not under SDC, I am not being moved around, and therefore I am self-employed’. That is not going to work for you – they will take you to tribunal very easily – it is not going to evidence that SDC really isn’t there.”

Check that the contract reflects the reality on the ground “Do the contractual clauses relate to what goes on on the ground? Are the contractual obligations being followed, or is it a sham?”

Speak with the end client Don’t use the excuse that there is no time to speak with the end client. “There should always be time for that because without speaking to the end client, how are you going to ever ascertain what level of SDC there is?”

Treat each assignment separately Even if, say, an electrician has always legitimately worked as self-employed, it doesn’t mean that “in this particular assignment at ABC they are working without SDC”.

Discuss the role with the worker concerned Having a discussion with the worker is vital if you are to understand their role. “Without having that conversation how are you going to evidence they are not under SDC?” And don’t just rely on that initial conversation at the outset, which “leaves you open to challenge by HMRC,” but continue to check there have been no material changes in their working arrangements. ● WWW.RECRUITER.CO.UK 5

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UPDATE

30,273 FOLLOWERS

Saudi Arabia looks to ban foreign HR workers COLIN COTTELL

The Kingdom has consulted on whether to punish firms employing foreign HR and recruitment workers

SAUDI ARABIA‘S Ministry of Labor is conducting a consultation ending 23 April on a proposed ban on foreign nationals from working in HR and recruitment there.

The Saudi government’s intentions emerged in a statement from a senior Ministry of Labor official and reported in the Saudi media, who said “punitive measures” would be taken against companies that allow foreigners to work in these roles. Punishment would include fines of SR 20,000 (£3,750).

However, recruiters knowledgeable about operating in the Kingdom contend the law would result in limited damage.

The chief operating officer of an employment business in Saudi, who

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requested anonymity, told Recruiter, “It’s all about work-arounds. You are well within your rights to engage somebody on a consultancy basis to work in HR, as long as they have got a degree, or a specialist skill, such as English or Urdu,” he said.

AS OF 14 APRIL 2016

Staffing companies could also operate on a sourcing licence, which is different from HR and recruitment, and then use another company to supply visas. “It is all down to your company registration,” he said. He said it was commonplace for recruitment coordinators in Saudi to liaise with external agents, including UK recruitment partners who could source talent from abroad.

Andy Hogarth, chief executive officer at Staffline Group, which runs welfare to work programmes in Saudi Arabia, through its PeoplePlus division, told Recruiter he was not concerned. “We don’t do recruitment. We do ‘welfare to work’.

But even if we were actually affected, the four years we have been there have given us enough time to train up locals.”

Hogarth said the company employs more than 100 people in Saudi of whom only three are UK nationals. He went on to say that he did not think the ban would cause significant problems for employers in Saudi looking for talent in those fields.

“The locals are getting better, better educated, better experienced and far more competent to do the job,” he said.

Munir Mamujee, managing director of M2R a recruitment consultancy that supplies teachers to Saudi Arabia using local partners in the Kingdom, said expatriates working in HR there are very rare. “This has been the case for years and years,” he added.

However, the people director of a large Western company operating in Saudi Arabia, who requested anonymity, told Recruiter: “I think it would be very shortsighted for them to go down the route of banning all expats in HR. “If you were to ask those who use HR and recruitment how they would feel if tomorrow they had to deal with a HR and recruitment team made up of only Saudi nationals, I bet you would get some choice responses,” he said.

He added that while this idea behind the ban “had been doing the rounds for years, it looks like they could actually implement it this time”. He predicted a best-case scenario of implementation in about a year, and a worst case of almost immediately. ●

Find more daily news stories at recruiter.co.uk/news 14/04/2016 14:38

Family affair: New parents at SThree should find life easier with an extra hour a day

THOUGHTS FROM…

MANUELA MONTAGNANA

“Organisational risk taking in the face of change is the No 1 fear in the UK”

NICK DAVIS

HE A D O F MISHCON DE REYA’S CORPOR ATE DEPARTMENT

“Economic uncertainty divides businesses into the cautious and the brave”

JOHN CHAPLIN

E Y’S E X E CUT IVE DIREC TOR ON NEW RU LES ON THE USE O F PE RSONAL SERVICE COMPANIES’ RU LES ANNOUNCED IN BUDGET 20 16

“It’s got more wrinkles than a newborn baby”

I M AG E | RE X

STA R RECRUIT

KELLY SHOTTON, WESTWAY RECRUITMENT CONSULTANTS, OFFERS INSIGHT INTO A POTENTIAL NEW ROLE FOR AC/DC FRONTMAN BRIAN JOHNSON, WHO HAS LEFT THE ROCK BAND, ACCORDING TO REPORTS With his engaging stage presence and iconic voice, Brian is by no means the shy, retiring type. He certainly knows his way around a microphone and would be a great fit for an auctioneer specialist role.

Captivating an audience, building relationships and achieving results is

I M AG E | G ETTY

V P HUMAN RESOU RCES EMEA , ADP

SThree trials ‘extra flexi-time’ for new parents DEEDEE DOKE

IN A MOVE no doubt welcomed by new parents, professional recruiter SThree is trialling an ‘extra flexi-time’ initiative that will allow employees, who have recently become fathers, to come in an hour later in the morning or leave an hour earlier in the afternoon to support family life.

Currently offered in the UK only, the extra flexi-time is available for the first six weeks after the employees become fathers, a company spokeswoman told Recruiter.

The initiative is an extension of the company’s ‘maternity buddy’ programme, launched globally in 2013 as part of an ongoing commitment to develop a more family-friendly culture at SThree, well-known for its hard-driving approach to recruitment.

Managed by the company’s HR department, the buddy scheme matches up expectant mothers – who are either to give birth or who are adopting a child – with colleagues who have gone through the experience.

“The expectant mothers get practical tips from other working mums about balancing family with workload, setting personal and professional goals, and organising childcare,” SThree HR group diversity manager Victoria Morgan told Recruiter. standard practice to the singer, who has been with In 2015, 84% of SThree women who had taken the band since the early maternity leave in 2014 returned to work, Morgan 1980s. We think he would be very suitable for this said. Those who took maternity leave and returned demanding role. to work included four in senior roles, such as Away from the limelight, Brian, who is also known associate partners, and a business manager for his love of musical and senior business manager. About 20 women theatre, has even worked on a musical version of have been involved in the programme so far.

Helen of Troy. We believe his strong communication Asked if any challenges had arisen in the skills, commitment to a programme to date, Morgan said: “In some project and ability to see things through to the end, regions, there have been no mothers, as the further strengthens his workforce population initially was quite young. potential for the role.

In our assessment, This has meant that in some areas, matching Brian Johnson is truly an people has been difficult, due to the time zones.” ● auctioneer in the making.

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THIS WAS THE MONTH THAT WAS… Here is a round-up of some of the most popular news stories we have brought you on recruiter.co.uk since the April issue of Recruiter was published M A R C H •‒‒‒‒‒‒‒‒‒‒→ TUE, 15 MAR 2016

MAJOR PLAYERS’ STOKES DEAD AT 43

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CULTURAL CHANGE PAYS OFF FOR IMPELLAM GROUP

ADECCO CONTINUES EXPANSION WITH PENNA ACQUISITION

Impellam Group, parent company of staffing firms including Blue Arrow, Carbon 60 and Career Teachers, attributes its increased year-on-year revenue in part to a cultural change programme it has introduced across the organisation.

Group chief executive Julia Robertson said the change is already yielding tangible results for the business, with year-on-year revenue increasing 34.3% to £1.8bn.

According to a statement for the financial year ended 1 January 2016, Impellam is aiming to be a “high-retention” organisation, a cultural change which Blue Arrow people and strategy director Jill Thornton alluded to at last November’s Recruiter Show.

These cultural changes include choosing to work with like-minded clients and introducing its leaders to entrepreneurial and commitmentbased leadership skills.

More: http://bit.ly/1TLX9aX 8 RECRUITER

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Adecco’s £105.3m acquisition of Penna will give the people management consultancy scope to expand its service lines beyond the UK, according to Penna’s current chief executive Gary Browning.

As well as releasing its full-year results, recruitment giant Adecco announced this month the boards of both companies had reached agreement on a deal that values each Penna share at 365 pence. The cash offer was made through Adecco’s indirect wholly owned subsidiary Olsten (UK) Holdings.

Speaking to Recruiter, Browning said Penna currently only has one office outside the UK, in Spain, but because of Adecco’s global coverage, Penna will have the potential to offer its services more globally.

More: http://bit.ly/1VhRCu1

Described by her company chairman as “one of [recruitment’s] brightest stars”, Helen Stokes, managing director of marketing and creative recruiter Major Players, has died at the age of 43.

Major Players chairman Jack Gratton confirmed to Recruiter that Stokes, who won Recruiter’s Recruitment Agency Leader of the Year accolade in 2015, died on Monday 14 March. She apparently took her own life, Gratton said.

Stokes, who built public sector recruiter Morgan Hunt into an £88m turnover business nine years after starting the company from scratch in 2001, had been away from Major Players for “a couple of months” because of personal issues, Gratton said.

“It is deeply, deeply sad,” Gratton said. “She was loved by a hell of a lot of people. She leaves an amazing legacy.”

The Major Players business had “never been in better shape” when Stokes began her recent time away.

“We were really hoping she was going to come back” to fulfil their joint ambitions for the business, Gratton said.

Stokes earned a Master’s degree in leadership and strategy at London Business School during time away from the recruitment industry between 2010 and 2013. At both Major Players and Morgan Hunt, she led her organisations to numerous awards and honours.

More: http://bit.ly/1Mp9iB8

£105.3 MILLION ACQUISITION OF PENNA →‒‒‒‒‒•

FRI, 18 MAR 2016

ANGELA MORTIMER TURNS ITS BACK ON ‘UNWORKABLE’ AND ‘UNSUSTAINABLE’ RPO CONTRACTS Office support recruiter Angela Mortimer has walked away from its contract with a recruitment process outsourcer (RPO), and expects to walk away from six others, after coming to the conclusion these contracts are “unworkable” and unsustainable”.

John Mortimer, co-founder and chief executive of Angela Mortimer, pointed to a number of problems with the current RPO model: ● a focus on price to the detriment of quality ● not allowing direct contact with hiring managers ● RPOs telling ‘expert’ recruiters how to recruit ● suppliers not being allowed to chase money owed ● RPO’s favouring their own candidates at the expense of supplying companies

Mortimer also supplied figures showing that Angela Mortimer’s job placement ratio was one placement for every 1.8 jobs it works on when supplying direct to a client compared to one placement for every 5.6 jobs when providing candidates through an RPO. The figures also showed that the number of CVs presented for each placement was 17.2 via an RPO compared with 6.8 direct.

More: http://bit.ly/1SJ5gAp

Find more daily news stories at recruiter.co.uk/news 14/04/2016 14:39

TUE, 5 APR 2016

Confessions of a cage-fighting recruiter The ability to bounce back from setbacks as well as the drive to succeed are two traits that have served recruiterr and white-collar cage fighter Ricky Granieri well, in and d out of the ring.

Granieri, a marketing recruitment specialist at FiveTen Group marketing recruitment brand EMR, featured as one of the cage fighters on BBC Radio Two’s Victoria Derbyshire current affairs programme. More: http://bit.ly/1qRbOqz

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RETHINK GROUP ANNOUNCES DIGITAL GURUS ACQUISITION

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HMRC TO CLOSE T&S TAX ‘LOOPHOLE’ The government has moved to close what some umbrella companies saw as a loophole they believed would have allowed contractors to continue to claim travel and subsistence (T&S) expenses, tax-free.

Crawford Temple, chief executive of PRISM, a trade body for service providers and payment intermediaries in the temporary labour market, spoke to Recruiter about the move.

He said that some umbrellas had taken the view that by not naming contractors, contractors would not be subject to supervision, direction, or control (SDC) and therefore could continue to claim travel and subsistence expenses tax-free, despite new T&S legislation becoming law this month.

However, Temple said new guidance published

by HM Revenue and Customs made it clear this was not the case.

“The Revenue was aware that some umbrellas saw this as a loophole and have moved to clarify the position. I have heard some people say there is no change and they can carry on as before, but that isn’t the case.”

Recruitment and talent management services provider Rethink Group has acquired specialist digital recruiter Digital Gurus for a mix of cash and equity in a deal inked on 24 March.

Speaking exclusively to Recruiter, Rethink chief executive Steve Wright said talks about a potential deal “got down and dirty” between May and June 2015, with the shape of the deal agreed by last September. “It’s been quite a long time in incubation,” Wright said.

A common link between Rethink and Digital Gurus was recruitment industry entrepreneur John O’Sullivan who has served on the boards of both companies and introduced the parties to each other in October 2014, Wright said.

The deal will have a significant financial impact, taking Rethink Group’s projected 2016 turnover to £140m. It also will see the group’s global workforce expand to more than 200 client-facing consultants across 10 global offices managing over 1,000 clients, a statement from Rethink said.

Digital Gurus has offices in London, Dubai and Sydney, and Rethink has plans to introduce its newest acquisition to Manchester, Birmingham and Bristol.

Wright said the Digital Gurus brand will be retained and grown under the leadership of its founders, Saif Kidwai and Farooq Mohammed, who are remaining with the business. One of Rethink’s founders, Michael Bennett, will project manage the integration.

More: http://bit.ly/25UqV2f

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OIL & GAS RECRUITER WARNS OF CONSULTANT SKILLS SHORTAGE WHEN SECTOR PICKS UP An oil & gas recruiter who was forced to slash his workforce by 75% as a result of the downturn in the oil and gas sector has warned of a talent shortage of consultants when the sector picks up.

Joe Rothwell’s warning followed reports that nine consultants at niche oil and gas executive search firm Maxwell Drummond International’s Aberdeen offices lost their jobs after the company went into provisional liquidation.

Rothwell, managing director of Vitruvian Consultants, a £2m-a-year turnover specialist oil and gas recruiter, told Recruiter: “We have had some consultants leaving the industry completely, which is a shame. When the market picks up and volume increases again, those companies will have a skills gap.”

Recruiters in the sector have been hit hard as the oil price has plummeted from more than $100 a barrel in June 2014 to below $46 a barrel at time of press, triggering a wave of job cuts, with the North Sea being particularly badly affected.

A spokesperson for insolvency specialist Begbies Traynor told energy sector website Energy Voice “the business failure was partly as a result of the downturn in the industry.”

More: http://bit.ly/1Nk5A6U

More: http://bit.ly/23oiHAt I M AG E S | G E T T Y / ISTO C K

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CONTRACTS

CONTRACT & DEALS Cornerstone OnDemand Cornerstone OnDemand has signed a deal to provide international hotelier Palladium Hotel Group with its unified talent management solution. The firm’s talent management suite, Cornerstone Recruiting, Onboarding, and Connect, provides employees with the information and support they need to make better career decisions, and measures employee performance.

Driver Hire The Grimsby office of national transport and logistics franchise model recruiter Driver Hire has been taken on by new franchisees, Michael and Jayne O’Flynn. The office covers Grimsby and Northern and Eastern Lincolnshire.

Meanwhile, Richard Pugh has completed the acquisition of Driver Hire’s East London franchise.

Pugh opened the office in 2007 and has since run the franchise as a joint venture but will now act as a sole franchisee.

Edgar Stewart Selection (ESS) Professional services recruiter Edgar Stewart Selection (ESS) has appointed Scottish consultancy Lynda Hamilton Communications to manage PR and marketing activity across its three Edinburghbased recruitment brands. The contract covers external communications for Edgar Stewart and its other brands Talented and Focus. Talented serves Scotland’s highgrowth start-up and SME community, while Focus concentrates on the food and drink sector.

Gibbs S3 Workforce solutions provider Gibbs S3 has signed a deal to provide US tech giant World Wide Technology (WWT) with its talent management services. The agreement will see Gibbs S3 working with WWT throughout the EMEA region.

National Locums Milton Keynes-based medical recruiter National Locums has been appointed as preferred supplier to two NHS framework agreements.

The frameworks include the Crown Commercial Service framework and HealthTrust Europe – for the supply of doctors, nurses and allied healthcare professionals.

DEAL OF THE MONTH

HAYS Recruitment giant Hays has renewed its global partnership with Premier League football club Manchester City for a further three years.

As the club’s official recruitment partner, Hays has helped the club recruit roles across its legal, finance, HR, commercial, marketing and communications teams in Manchester, London, Asia and the US. The firm’s branding will continue to

appear on the matchday scoreboard when team line-ups are announced.

Hays added it is to work together with the club to develop “new and exciting” digital and social content reaching audiences all over the world.

In 2015, Hays extended its relationship with Manchester City to its sister club in New York, New York City FC, recruiting front office staff for the club.

IS THE NUMBER OF JOBS RESOURCEBANK WILL SOURCE FOR PLUMBING AND HEATING DISTRIBUTER WOLSELEY

REC The Recruitment & Employment Confederation has agreed a deal with contractor, freelancer and recruiter services provider Advance to provide specialist umbrella employment, accountancy and subcontracting solutions to its members and their contractor candidates.

SRI Sports staffing specialist Sports Recruitment International (SRi) has acquired Munichbased sports goods and fashion executive search firm, heads for brands. SRi says the deal will help it achieve its two strategic objectives of expanding its sector expertise and acquiring a Germanbased sporting goods and fashion business.

Recruitive Recruitment software provider Recruitive has integrated its cloud-based service with job board and online community Workingmums.co.uk.

Employers will now be able to post their job vacancies on the Workingmums job board via Recruitive’s multi-poster facility. Recruitive has also integrated its multi-posting technology with UK job site, My People People.

ResourceBank Plumbing and heating distributor Wolseley UK has outsourced its branch recruitment to talent and HR solutions provider ResourceBank in a deal that will see the latter recruit more than 650 people.

The contract covers recruitment of branch colleagues across all of Wolseley UK’s trading brands, such as Plumb and Parts Center, Pipe Center, Climate Center and Burdens. It also covers Wolseley UK’s network of bathroom showrooms.

TeamJobs Specialist recruiter TeamJobs has agreed to sponsor Premier League outfit AFC Bournemouth’s Premier League Kicks youth development scheme. Under the deal, TeamJobs has offered an undisclosed sum, while its staff will also give up their time to support the free, weekly youth football sessions for boys and girls.The program also offers additional packages that enable young people to get involved in volunteering, coaching and to gain qualifications.

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TRE NDS

INSIGHT

IS UNETHICAL BEHAVIOUR GOING UNPUNISHED? The characteristics that keep the recruitment industry performing at its peak could be the very ones that encourage unethical behaviour, claims Dr Niek Hoogervorst DR NIEK HOOGERVORST

The costs of malpractice can be substantial

A

sk anyone to name the dominant characteristics of the recruitment industry, and you’ll likely hear that it is dynamic, fast-paced and competitive. Its leaders have a propensity towards being charismatic, motivational and, more often than not, successful – which can bring lucrative rewards. But research has shown that these conditions can also promote unethical behaviour in order to stay ahead of the curve, and that if these actions are beneficial to the agency’s bottom line, they are more likely to go unpunished.

Together with Pieter Desmet of the Erasmus School of Law, I researched what business factors can most influence a leader’s decision to turn a blind eye to rule-breaking. In a series of studies we examined managers from a variety of disciplines and tested their responses to unethical behaviour. We found that a competitive market environment encourages the use of practical business solutions, rather than those focusing on moral value. Our research shows that when unethical behaviour results 12 RECRUITER

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in organisational benefits, managers become more likely to condone such behaviour, whereas they become more inclined to punish unethical behaviour that proved to be costly for their organisation. Thus, a need to stay ahead of the competition can tarnish ethical decision-making, leading a manager to assess malpractice for its functional or institutional merits and neglect ethical procedure.

Given the competitive nature of the recruitment industry, I believe these findings are highly relevant. One particularly well-known example of unethical activity within recruitment is the practice of ‘rusing’, where bosses ‘turn a blind eye’ or even hire people to get through to those they wish to speak to using fake details and aliases.

Specialist advisor in executive search, Joseph Daniel McCool, stated: “A headhunter once confided that her firm regularly hires unemployed actors to assume false identities to, among other things, get through to a potential management recruit.”

Additionally, practices such as sending candidates confidential feedback to boost their chances of interview success, creating false job adverts to collect CVs, and even

prioritising their own commission over candidates’ perfect fit have been recorded.

Other examples of unethical behaviour plaguing the recruitment industry include – but are not limited to – data theft, poaching candidates who had recently been placed with one client for a second client, taking kickbacks from suppliers for candidate referrals, advertising staff members that don’t exist, taking credit for colleagues’ placements and creating false invoices.

Ironically, though, these often only wield short-term benefits for the agency or agent in question. As the clients’ relationships with the firm and perhaps even internal retention levels are hurt, the recruiter becomes more likely to lose business. And, equally, their malpractice can cause disruption within their agency’s own walls as ethical employees become disheartened and leave, or even start to sacrifice their morals in the name of success by adopting others’ unethical habits to remain visible.

This can set a new standard for behaviour, making the practice acceptable by the sheer number of staff partaking in it. So in the same way IM AGE | ISTOCK

14/04/2016 09:42

some of these employees are seeking to increase their standing at work and obtain bonuses, some of their managers may choose to overlook this behaviour if it means that their agency will perform better than its competition.

Several environmental cues may also be responsible for this attitude.

The use of expressions such as ‘targets’, ‘cut-throat competition’ and ‘budget cuts’ can serve as reminders of the operating environment for business leaders, indicating that instrumental concerns are more important than moral considerations. The recruitment sector in particular is renowned for its strict deadlines, targets, commissions and bonus schemes, which all serve as a signal to managers that the bottom line (profit/outcomes) should be their top concern. This can mean that managers may be inclined to develop blind spots for moral malpractice as long as it also does not hurt their bottom line.

So what can be done to challenge this? One option would be to increase the cost of ethical transgressions – or the toleration of unethical practices – by introducing strict

regulations and increasing chances of getting caught. As managers in competitive industries tend to make decisions from purely economic standpoints, there is a higher likelihood that they will take action if these transgressions hurt their companies’ bottom lines and reputations, resulting in loss of clients or business.

Another option could be to embed morality into the organisation – simply having a code of ethics may not be an effective solution. Ethics training may also not be sufficient when morality is not part of the company’s language.

These ideas need to be integrated into the culture and day-to-day operations of a firm in order to become procedure.

As well as this, managers from the top to the bottom need to communicate the importance of best practice and create a trustworthy environment in which employees are not afraid to discuss ethical dilemmas with them.

Staying ahead of the curve is crucial for organisations in any competitive market, but doing so ethically is a practice that needs to be at the heart of all agencies. Ultimately, the long-term losses from malpractice will always outweigh the short-term gains – and with industry competition so fierce, can you afford to get left behind? ●

↗

“A headhunter once confided that her firm regularly hires unemployed actors to assume false identities”

DR NIEK HOOGERVORST is assistant professor of ethical leadership at the Rotterdam School of Management, Erasmus University

POWER POINTS

1

Our research shows that competitive markets such as recruitment make it more likely for managers to turn a blind eye to unethical practices that keep them ahead of the game

2

Though these practices can often result in short-term gains for the company and bonuses/recognition for the enactor, they are ultimately damaging as the agency may lose business for being untrustworthy

3

Unethical behaviour can also isolate those who wish to work ethically, meaning they either leave or adopt some of these work practices themselves

4

The issue is most likely to be resolved by increasing controls on the relevant sectors, and making divergence from ethical practice both easier to detect and a more serious transgression

5

Alternatively, firms should seek to embed best practice into their ethos and managers from the top to the bottom should ensure that this is always at the forefront of their employee’s minds and dealings.

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T R E N DS

TECH & TOOLS

Gamification More than fun and games SUE WEEKES

DEFINED Gamification is the use of gaming theory and principles in non-game environments. So, for example, you could introduce a game element, such as awarding ‘badges’ to a candidate that completes a task on a competency test. Serious games are games that are designed to be used for non-entertainment purposes, such as in a business function (and are sometimes called business games). An example is L’Oréal’s Reveal, a game specifically built to test an individual’s suitability for a role in which they play the role of management trainee.

The use of gamification in recruitment is still bedding in. Some recruitment campaigns have already been enhanced by games, but these tools have the potential to achieve far more.

“We’re still exploring at the moment,” says Mark Beavan, head of digital at recruitment advertising, communication and marketing agency, ThirtyThree. However, he adds, “some people are uncomfortable as soon as you start using the word ‘game’.”

An Coppens, chief game-changer at Gamification Nation, agrees that organisations can fear they won’t be seen as a serious company if they use games or game techniques. “But that attitude says a lot about the company,” she says. “Those companies that understand gamification, which includes some big brands, have done great things with it.”

F IVE KEY POINTS

➊ WHY GAMES OR GAMIFICATION?

➋ WIDEN THE AGE RANGE

➌ TESTING AREAS

➍ INJECT SOME FUN INTO APPLYING

➎ AVOID A SILO

Using games or gamification for recruitment has to have clear reasoning behind it.

Beavan, who was involved in the award-winning AXA Great Global Adventure game, identifies three main areas of focus: to engage candidates, to assess them or to raise awareness of employer brand.

“As with any piece of work, you need an objective,” he explains.

Sometimes, recruiters and employers can get caught up in the idea that you’re creating a game and lose sight of the purpose of it.

“When people are playing it, they need to know they are playing it for a reason – whether it’s to get some sort of insight, to get competitive advantage, or just to win a prize.”

While gamification is often used for graduate recruitment or campaigns aimed at younger age groups, it can be applicable to a much wider age demographic. “Social media and casual games that people play on their way to work – whether it’s Sudoku, Candy Crush or Angry Birds – have raised the appetite for gamification,” says Coppens. “So it can work equally well for the majority of those in the workplace today – it just depends on how you frame it.”

Assessment and competency testing remains a tried and tested area for games and gamification in recruitment. This could range from a hackathon to an online competency test with game elements built in. “For example, feedback loops built in to competency tests make it gamified, and the candidate can find out whether they would be good or bad in the role,” Coppens explains. “It may highlight flaws they didn’t think they had.” A day-in-the-life game can also work well as a preselection tool. “People can rule themselves out if they don’t think they are a good fit,” she says.

A less obvious use for gamification could be during specific stages of the actual application process.

“Apply gaming rules and techniques to tasks to make the online application more enjoyable,” suggests Beavan. “For instance, do it against the clock and turn it into a timed competition.

Allow candidates to gauge how they compare with other people on such tasks with the use of leader boards or scoring systems.”

Gamification could also be applied at the interview feedback stage, often one of the most frustrating segments of the application process. “Candidates could be rated by interviewers so this part of the process is more transparent; candidates could rate interviewers as well,” he suggests. “That way the organisation could gain really valuable information.”

Recruiters need to see gamification as part of the bigger picture within an organisation. “If you only use gamification in the recruitment process and nowhere else, you’ve raised an expectation but you aren’t consistently meeting it,” says Coppens.

“If you are going to use it in recruitment, you need to use it strategically elsewhere.

The brands that really get it have implemented gamification in a number of different processes such as managing employee benefits and employee engagement. Induction can also be fully gamified.”

I L L UST RAT I O N | ISTO C K

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APPROACH

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C

INTE R AC TIO N

AGENCY VIEW

Business services Why we must overinvest

BY JAMES JOHNSON

f you’re looking at a quick build and exit, don’t bother reading this article. This is not your game plan. This is about building a professional agency for the long term.

My original background is not recruitment. I spent the first half of my career across multiple industries in three countries, while working for a conglomerate, and saw the same pattern again and again: Front office = open wallet, back office = no money here, guys.

At Jardines, I spent my first eight months at Dagenham Motors in their accounts department, above the lovingly annually refurbished sales offices. Accounts had not been touched in 10 years – A not-so subtle sign of who was valued.

In fact, the only time I’ve seen “overinvestment” in business services was in Manila where the managing director had invested in two different accounting systems.

But that was more so he could maintain two sets of books – so probably not a great example!

Most industry leaders in our sector come up through the sales route. So they naturally understand and value sales more highly. And therefore this trend to undervalue what business services can contribute is even more pronounced in recruitment! To grossly oversimplify two common views: “The sales team produces all the revenue, therefore, they’re the most important. Obvious right? I’m just going to have

I

sales people apart from a couple of admin people.

We’re lean!”

“Ok, they’re a necessary evil. I’ll minimise my spend there so I can spend on my sales teams.”

So what are MD1 and MD2 missing? What are the top three reasons, from my experience, that we should “overinvest” in business services?

Risk reduction and control This is not about growth; this is about avoiding death. Someone somewhere in your company is doing a deal that’s losing you money. If you’re lucky it’s one deal. If you’re not, they (and it may even be you) are agreeing to terms that have just killed your company. Accepting 8% with tenure on full pay contract because it gives you access to high volumes of roles? Happy days! Oh wait – your finance manager was too junior/scared to point out that if the economy drops and you lose your perm cover this will exhaust your working capital and you’ll run out of cash. Someone has to be looking out for the iceberg as you speed ahead.

Time and focus We all get that administrators can save consultants time and do those parts of the job better. The same principle applies at senior levels – for example, do you want a sales director on £100k+ doing your training or do you want a dedicated trainer?

Yes, they might be good at it and they might enjoy it but, surely, the most value they bring is being outside winning new business. This increased revenue should then pay for the specialist who will be even better. And that’s what we’re now seeing with Cameron, our head of learning & development.

+ JAMES JOHNSON is chief executive of Nicoll Curtin

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Profitability This seems a bit counterintuitive – spend more but achieve greater profitability! However, in my experience companies with a good balance over all areas both do the right things more often (effectiveness) and get more from what they spend (efficiency). We took on an internal recruitment manager who reduced R2R spend, increased the hiring success rate and reduced churn. According to last year’s P&L, she paid for herself, but the greater future benefits via culture and reducing disruption were even greater.

So if you want a professional agency, and you’re building something for the long term, invest in business services. Be bold and don’t just look at the costs – the benefits will come. ● IM AGE | ISTOCK

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T WEET I N T E R AC T I O N

SOUNDBITES S OA P BOX / W EB CHAT ON THE CHANGES TO IR35 LEGISLATION “The changes to the assessment of IR35 are fundamentally unworkable for the recruitment profession – we do not manage or monitor the day-to-day activities of the workers, making the assessment process flawed. The tax liability is falling on the shoulders of the wrong organisations. The best way forward is for HMRC to equip themselves to more stringently regulate the original purpose of IR35, use the information provided to them under the intermediaries legislation, and apply strict criteria when determining how much tax each limited company should pay.”

PETER HOLLIDAY

CONFESSIONS OF A CAGE-FIGHTING RECRUITER Be interesting to know what shows he [cage fighter Ricky Granieri] fights on? I’ve had numerous professional bouts and also work in recruitment. Would be a good common ground.

ROB HAYWARD

UBER APP CODING GAME TO SEEK OUT ENGINEERS Uber’s recruitment challenge for coders is the latest in a growing trend for companies looking for candidates to fill technical roles. From a recruiter’s perspective, the priority is still to understand the exacting requirements for roles – technical proficiencies etc – from clients, and being able to provide consultancy on best practice approaches to source the perfect candidates.

TOBY CONIBEAR

ANGELA MORTIMER’S ‘INFERIOR STAFF’ CLAIMS REJECTED BY RPOS I am very happy to see that John Mortimer’s presentation has sparked a very interesting debate. Unfortunately this follow-up article seems to be written on behalf of (or by) a number of RPOs and misses many of the more key points of the presentation – e.g. quality of delivery.

For those of you who have read the original article, but not watched the whole presentation I would recommend that you do so. It can be found online (http://bit.ly/1MvCsyC).

Contrary to the article, John quite clearly states that RPO is a growing industry and serves a clear purpose. Unfortunately, this purpose is different to the high quality service that John and the staff at Angela Mortimer provide their clients and candidates. This was clearly demonstrated in the statistics and research that was presented, where Angela Mortimer are three times more effective when working independently of any RPO arrangement.

MARCUS SEATON

How will changes to the National Living Wage affect your business?

ANNA PARFITT H EA D OF H R , OL I V ER BON A S

“The government’s new statutory National Living Wage will have no impact on Oliver Bonas. We are already a Living Wage employer and were the first UK High Street Retailer to be accredited by the Living Wage Foundation.

This means that we pay all our employees a higher rate than the government minimum. This is paid regardless of their age, unlike the government National Living Wage, which only effects those over 25 years old and over. We believe that there is a direct correlation between paying people what they should be able to afford to live on – and their performance and job satisfaction at work. Our commitment as a Living Wage Employer has already reaped rewards for OB, with a higher response to recruitment and a lower employee turnover.”

PAUL ROSS CH I EF EX ECUT IV E, BA RK ER ROS S

“Barker Ross has been involved with manufacturing consultants who have particular expertise in lean manufacturing processes. In turn, we have engaged with a large number of our clients who are looking at Kaizen projects within the manufacturing environment to improve productivity, reduce wastage and measure the impact of training, to enable us to assist in reducing the overall cost per unit. By measuring the impact of the operations, we can start to calculate the true cost of labour and add value to our clients. Barker Ross firmly believes that this is a positive approach to the everincreasing costs for manufacturing wages.”

NICK PEACOCK OW N ER A N D MA N AG IN G D I REC TOR , A S CEN DA N T REC RU I T M E N T

“The introduction of the National Living Wage is a major step toward recognising the value temporary workers bring to the workplace. As a recruitment agency, we’re already very much aware of this, with over 40% of temporary workers securing permanent opportunities through their temporary assignments.

We anticipate that the introduction of the National Living Wage will encourage more people to take temporary work and the opportunities it brings more seriously. This should ultimately result in an increase of quality candidates into the marketplace.”

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14/04/2016 10:49

TH E B IG STO RY KEVIN BLAIR

WORDS: COLIN COTTELL

The leader of global talent and acquisition at internet networking giant Cisco, Kevin Blair, wears his responsibilities lightly. With between 10,000 and 15,000 hires a year, and a team of 200 recruiters, dispersed across the world, this is recruitment on an industrial scale.

And with that scale comes the ambition of being a global player in one of the world’s most exciting sectors.

Advised that four senior executives left Twitter that morning, Blair takes the news in his stride. “Listen, if they are talent we will obviously talk to them.

We have a very effective executive recruitment team here at Cisco, so if they are in dialogue and if they are on the open market, who knows.

“I wouldn’t want to comment on individual candidates,” he adds, “but feel free to send their CVs to careers@cisco.com.” And with that he lets out a hearty Northern laugh.

Kevin Blair is blending innovative technology, data and market intelligence with years of experience to change the face of recruitment at networking giant Cisco PHOTOGRAPHY: TOM CAMPBELL

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SPIRATION

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TH E B IG STO RY KEVIN BLAIR

The affable and ebullient Blair joined Cisco in 2014 after being headhunted from technology company Salesforce. com. He agrees that yes, being responsible for 70-75% of Cisco’s global hires is a big role but “it doesn’t feel like it’s uncontrollable… We make the right investments around us, so from an operational perspective we’re able to run it fairly comfortably.”

One of those investments is a new recruitment dashboard. And it is evidently Blair’s pride and joy.

“I live in the system,” says Blair, as enthusiastically as a kid showing off a new toy at Christmas. He invites Recruiter to examine the squiggle of lines, coloured charts and graphs on his laptop that are, frankly, bewildering to the untrained eye. Developed with the help of the talent acquisition team over the past 12 to 18 months, the system, according to Blair, is changing the face of recruitment at Cisco.

“Let’s look at one of my regions,” says Blair, pointing to a line graph showing how demands on his recruiters from the business jumped suddenly from 87% to 145% of their capacity in the space of just a few weeks. “It’s real-time trend data presented in a very visual way. It enables us to start a conversation 20 RECRUITER

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“Data analytics is becoming more and more important in what we do” on how sustainable this is, and whether we need to make some longer-term investments in the team.”

Blair says the dashboard was inspired

by Cisco’s global head and director of the talent acquisition and people planning operations team, Ian Bailie, as part of his vision to move talent acquisition away from “spreadsheetoriented” recruitment. That’s something Blair says he experienced during his in-house recruitment career and now clearly relishes having put behind him.

“I think a lot of talent acquisition teams use data defensively, to prove they’re doing a good job. We see data as a means to fine-tune and spot trends, such as where time-to-fill is having an impact. We can look at these issues in

detail using a methodology,” says Blair.

“Analytics is becoming more and more important to what we do and it invovles consuming huge amounts of data,” he explains.

Working with data in this way brings several benefits. “We’re a much better partner in being able to talk the same language as vice presidents and senior vice presidents, who are quite comfortable with data. They understand and appreciate this and it hands the power back to us in terms of arming us for those conversations.”

Driving Cisco’s focus on data is the business intelligence team.

Blair says one of its most significant contributions has been the development of talent ‘heat maps’

MAY 2016

12/04/2016 14:33

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11/04/2016 15:31

W H O I S H E?

Kevin Blair February 2014 – present Global talent and acquisition leader, Cisco 2012-14 Senior director, EMEA recruitment, Salesforce.com 2007-12 Recruitment director EMEA, Oracle 2004-07 Recruitment director, Ikon Office Solutions/Ricoh 2002-04 Recruitment manager, Caudwell Group C O M PANY

Cisco ▶ 2015 ▶ $49.16bn (£34.39bn) annual revenue ▶ 71,833 employees ▶ Philosophy of recruitment It’s not just about presenting historical data, but helping the business to make the right decisions and to understand their own talent landscape. ▶ Secret of success I am a very social leader. I have relationships with everyone in the organisation.

for different markets.

“We can say to people ‘this is how we think you’re going to perform over the next six to 12 months. Not only that, but here are some of the challenges you’re going to run into and this is how you should be redefining your recruitment – and also, these are the kind of locations where you might struggle as an organisation’.”

It’s all about competitive advantage and getting ahead of the curve. “What we can then do is take this information and knowledge and pass it to a team that sits ahead of the recruiters, who are able to identify a huge number of individuals en masse. We already know what the talent landscape looks like and we already know some of the people in those markets.

“This allows us to take strategic 22 RECRUITER

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planning down to a very tactical level, because you’ve got the resources in place and the information to hand.

With that setup, you’re less likely to have a big panic if and when a hundred requisitions fall out of the sky. We’re able to absorb these flexes much more readily.”

Blair says the perennial challenge is that “less than 1% of people” who ever come onto Cisco’s radar are right for the organisation. “Part of our further evolution into becoming a sales organisation that wants to be as commercial as possible is to start to look at candidate management through our CRM (candidate relationship management) system.

OK, they might not be right at the moment, but how do we continue to have a relationship with them?

“In many ways, recruitment is about timing, timing for the candidate, and timing for the business. We know what Cisco is going to do from a talent acquisition perspective and we know how candidates make decisions around their life. So, the more data we have and the more we are able to use technology to fine-tune that data, the more effective we are in bringing that talent in.”

Technology also makes life easier for his recruiters, with “the actual burden on the individual recruiter becoming less,” says Blair.

However, he acknowledges that it also puts new demands on them in terms of keeping up to speed. “We’ve moved on a long way from the Rolodex.

But if your ATS (applicant tracking system) and your LinkedIn recruiter

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T H E BI G STO RY K E V I N B L A I R

account are the only things you can leverage going forward, I’m not sure you’re going to remain as relevant in the market.” This is especially the case in the technology sector “where we’re seeing candidates existing in smaller niches.

The dashboard, the talent mapping and the use of global hiring hubs are all elements of the ongoing transformation of Cisco’s talent function, under Blair’s boss, Jill Larsen.

She is the company’s vice president HR – global HR leader for services, talent acquisition and workforce planning, who joined the company in 2013.

Blair says the transformation is continuing as Cisco moves into new “non-traditional markets, where candidates don’t see Cisco as an obvious destination”, such as security, the cloud, and the Internet of Things, where it is facing new competition for talent, for example from software companies.

While technology, data and market intelligence have a crucial role in identifying that talent, Cisco has supplemented this with more investment in its talent brand, particularly through the use of social media.

It comes down to being authentic, says Blair. “Instead of saying simply, ‘we’re hiring’, we try to communicate who we are and what we’re good at.

If someone thinks they’ll thrive in that environment, we invite them to have a conversation because we’ll talk to them if they’re talent.

“The challenge is to communicate this in the right way to allow people to make the decision for themselves in a way that feels informed,” he says.

Blair accepts that running a global recruitment function that operates in countries as diverse as the US and emerging markets poses unique challenges. “One-size-fits-all versus fine tuning: that’s the $64m question,” he says, adding with a laugh, “That’s not my budget by the way”.

“Do I think we need to refine and tell a local story? Absolutely, because not everyone in the company works at our San Jose headquarters, so why would we just tell the San Jose story?”

“I think it is 60:40 in favour of global consistency,” he concludes.

He acknowledges that diversity is now high on the agenda of companies in the technology sector, in particular as a potentially rich source of ‘nontraditional’ talent. However, for someone whose personal approach to communication “tends not to be very dressed up corporate-speak” but more “how it is” he is unusually guarded on how Cisco is performing. “We release the diversity stats in a formal report, so I can’t comment around what our trajectory is,” he says.

That said, he points to Cisco’s executive committee, which is 50% women. “As head of recruitment, it’s great to be able to point to that.”

“When it comes to recruitment, technology has its limits”

However, he cautions about the dangers of focusing on just one figure “as being the measure of success”.

“It’s all about creating the right steps that support a diversity strategy, and that’s leadership behaviour, environment and culture.”

And just as he believes a company’s performance on diversity can’t be boiled down to one figure, Blair says that technology is only part of the company’s changing recruitment strategy. New ways of measuring and driving recruiter behaviour are just as important, he says.

In addition to traditional metrics, such as time-to-fill, every recruiter is ‘scored’, both by hiring managers and by new hires. This is supplemented by a quarterly survey of Cisco’s own executives, which rolls into a KPI (key performance indicator).

“Obviously when you are an organisation that’s pushing towards 80,000 staff, you’ve got to find a way to build in the high-touch humanistic element into this scaled-up environment.

I think we’re getting that right, and we’ll see more of it as we move forward.”

For all of his love of data and his whizzy new dashboard, it seems that even for Blair, when it comes to recruitment, technology has its limits. ●

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ACCO UNTA NCY SERVICES

Recent changes to the law around T&S have made the future look rather stormy for umbrella companies, reports Colin Cottell

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ACCO U NTA N TA N CY SE S E RVIC RV I C E S

UMBRELLA COMPANIES whose business models depend on maximising the take-home pay of workers by paying travel and subsistence expenses tax and National Insurance free, face a stormy and uncertain future. This ‘new world’, as it has been described, has been brought about by a double-whammy of legislation that come into effect on 5 April.

In his Budget speech in March, the chancellor confirmed that from last month [April], agency and contract workers engaged through employment intermediaries were now no longer able to claim T&S expenses for travel from home to work, which will significantly reduce their take-home income.

This has been much discussed and relatively well-documented.

However, some working in this area have warned that people have taken their eyes off the ball, and that another equally important and potentially damaging piece of legislation has slipped in almost unnoticed.

“People have fixated around how to get around the new T&S regulations, which

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ACCO UNTA NCY SERVICES

UMBRELLAS FACING DOUBLE-WHAMMY From 6 April agency and contract workers engaged through employment intermediaries are no longer able to claim travel and subsistence (T&S) expenses for travel from home to work.

The exception is where a worker is a genuinely mobile worker, or not under supervision, direction, or control (SDC) of anyone in the supply chain.

However, even where a worker is not under SDC, sub-section 5b of section 289A of the Finance Act 2015, means that where a ‘relevant salary sacrifice ‘(RSS) arrangement is in place, from 6 April 2016 workers are no longer allowed to receive any expenses tax-free, other than mileage expenses, which are covered by separate legislation. RSS is defined as existing when a worker’s general earnings vary with the expenses reimbursed.

“Umbrellas based their business model on stretching the limits of the rules on expenses to boost their income”

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will enable workers to continue to claim for site-based expenses,” says Barry Roback, director of accountancy solutions provider Anderson Group.

However, according to Roback, “all those efforts add up to nothing” because of another [check] that has “snuck in under the radar”.

The legislation contained in the Finance Act 2015 means that from last month (April), even if they qualify for tax-free T&S expenses under the new T&S rules, workers will no longer be allowed to receive T&S expenses taxfree, where a ‘relevant salary sacrifice’ arrangement is in place. (See above box for more details on the practice) John Sheehan, tax director at accountants UHY Hacker Young, explains the government’s rationale behind the two pieces of legislation.

“HM Revenue and Customs saw the mischief in workers that said ‘Don’t pay me as much salary, but give me

Under the new rules, the following practices operated by many umbrellas are no longer allowed: A worker was paid a salary equivalent to the National Minimum Wage (NMW). Any surplus funds received by the umbrella over and above the cost of employment at NMW were used to reimburse the worker’s allowable expenses, which were tax and NI-free. Where additional funds were left after the reimbursement of expenses, these were paid to the worker as a bonus, subject to NI and tax.

For example, if the cost of employing an umbrella worker on the NMW after national insurance [both employers and employees], tax and holiday pay was £300, and the umbrella received £400 from the agency, this left a surplus of £100. If £50 of this was allowable expenses, these could be paid to the worker tax and NI free, while the other £50, which was paid as a bonus, was subject to tax and NI.

tax-free travel expenses instead’.” A worker normally paid £10 an hour would happily settle for £9 an hour plus £1 in expenses to which tax relief could be added, thereby boosting their net income,” Sheehan explains.

The new rules were also directed at some umbrella companies, who according to Sheehan “were really playing the travel and subsistence game” and based their business model on stretching the limits of the rules on expenses both to boost their own income and to attract contractors by maximising their tax-home pay.

As he explains, under the previous rules, umbrella companies who paid the worker also benefitted by saving on National Insurance (NI), leaving the Exchequer as the only loser, who collected tax and NI on a lower gross amount (£9 rather than the £10 in this example).

Although Sheehan doesn’t see the

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ACCO U N TA N CY S E RV I C E S

new rules as “the death-knell of the umbrella,” he says they spell bad news for umbrellas, some of whose business models “will no longer be viable”.

He predicts that we “will see a drop in the number of umbrella companies offering services.”

Roback takes that point further to contend that the implications of the provisions for ‘relevant salary sacrifice’ will be profound for umbrellas. Based on his interpretation of the new rules, where expenses vary, as they inevitably do in a contracting environment, “there is no practical way for those expenses to be paid tax-free”.

“There is now no strong reason for there being umbrellas apart from outsourcing of payroll, which of course demands a lower fee,” adds Roback.

Amanda Hobson, managing director of payroll and back office services provider EasyPay Services says: “In terms of umbrellas offering PAYE models with T&S via salary sacrifice, that is the end of umbrellas.”

Hobson says umbrellas are taking drastic action in response. “Some are offering PAYE plus expenses paid by the agency or hirer and effectively operating like a payroll bureau. Others are offering CIS (construction industry scheme) models, and others are setting up accountancy services, where they are forming people into personal service companies (PSCs).”

Hobson says CIS models, where workers are being classed as selfemployed, and PSCs are becoming particularly popular in the construction sector, where salary sacrifice arrangements have been common.

This is a dangerous game, Hobson warns, since under the new T&S rules for expenses to be paid tax free, all such workers must be genuinely mobile workers, or not subject to supervision, direction, or control – something that

“There is now no strong reason for there being umbrellas apart from outsourcing of payroll”

she questions is always the case.

However, despite being faced with this double-whammy of legislative changes, umbrellas tell Recruiter they will adapt to the new circumstances and are confident they still have a vital role to play in the flexible labour market.

Matthew Brown, managing director of giant group, an umbrella company, points out that many umbrella workers don’t claim expenses at all – 50% to 60% of giant’s umbrella workers – so won’t be affected.

And further, according to Damian Broughton, managing director of contractor accountancy and payroll firm Danbro, because mileage expenses fall under separate legislation and are therefore not covered by the salary sacrifice rules, mobile workers, say a meter reader who moves from house to house during the course of their daily duties, will still be able to claim mileage expenses tax free for travel during their working hours, though not from home to work.

And while, anecdotally, Broughton says “we have heard of some smaller umbrellas whose business model is no longer commercially viable,” he insists we are “not seeing the demise of the umbrella.

“Contractors still need a vehicle to work through to carry out an assignment or a contract, and that is still potentially an umbrella solution.” And he while accepts some umbrella workers have moved into PSCs, the numbers have been fewer than many were anticipating. The reasons many workers

choose umbrellas, and will continue to do so, go beyond just tax efficiency, he argues. “They are an easier way for them to work, avoiding the further obligations of a PSC, for example of being a director,” he says. Umbrellas have other attractions too, says Brown.

“Agencies are reluctant to have workers on their payroll with all the direct and indirect costs associated with this.

Their margins will materially suffer.”

Crawford Temple, chief executive of PRISM, a trade body for service providers and intermediaries in the temporary labour market, says he is confident umbrellas will adapt to what he terms ‘the new world’. “The Finance Act is a nuisance because umbrellas will have to change their model, and how they work, and it does add a layer of complexity. They might have to change the way they operate, but the umbrella still survives,” he says.

He adds that PRISM has developed two models, which he claims “have been signed off by the Revenue [and] that work for umbrellas and allow their employees to claim expenses tax free.”

The first (referred to by Broughton above) allows some mileage expenses to be paid tax free. Temple says the second model gets around the rule that expenses can’t be paid free of tax where a worker’s general earnings vary in relation to the expenses reimbursed.

However, Roback is not convinced that any of the new models are the answer. “I know they have come up with different new models, but only time will tell whether they work. Our view is they won’t,” he says. “Desperate people do desperate things,” he adds.

Umbrellas have proved themselves resilient and flexible in the past, but the cumulative shock of the new T&S rules, along with the new rules on salary sacrifice, represents perhaps their greatest existential challenge yet. ●

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Expert opinion SPO NSO RE D COLU MN F P S G R O U P

Travel & Subsistence legislation All change for contractor payroll services Matt Huddleston, Managing Director of FPS Group, explores the consequences of the recent travel & subsistence legislation and what this means for the future of payroll services.

What has happened?

With effect from 6th April, HMRC have made changes preventing any contractor who is ‘Supervised, Directed or Controlled’ in their occupation from claiming Home to Work Travel and Subsistence (T&S). This brings contractors closer to the tax position of full-time colleagues, who do not receive tax relief for the costs of their daily commute.

All employees, whether contractors or not, will still be able to claim for other expenses such as business mileage, tools, professional subscriptions and training. Only those clearly outside ‘Supervision, Direction or Control’ (SDC) will be able to claim for their journeys from home to work.

Responsibility for determining whether SDC applies sits squarely with the directors of the intermediary / umbrella company making the payments. They can be held personally liable for any tax shortfall from getting this wrong.

What does the future hold?

HMRC is fully aware of a likely increase in PSCs and has already announced plans to hold agencies responsible for policing the use of such structures in the public sector from April 2017.

Our prediction is that once again industry representatives will object, and once again they will be ignored. HMRC is not

+ Matt Huddleston BSc, FCA Managing Director, FPS Group

ABOUT THE AUTHOR: Managing Director Matt Huddleston BSc, FCA has worked at FPS Group for over 12 years having trained and qualified as a Chartered Accountant with Ernst and Young. Matt attributes the major success that the group has enjoyed in payroll services over more than 20 years entirely to the dedication, hard work and exceptional industry knowledge of the colleagues it is his pleasure to work with.

↗

What are the consequences?

It is really important that agencies know intermediary directors can rely on a defence that an agency or other third party provided them with ‘fraudulent’ evidence about the worker’s status. If successful in making this defence then liability for the missing tax shifts to the agency / third party.

From 6th April, agencies must therefore think very carefully about providing assurances to intermediaries that their contractors are outside SDC and indeed some agencies are already including in their contracts confirmation that SDC does apply to prevent issues arising here.

The rights and wrongs of these changes (and whether they are fair or not) have been much debated. Right up until the 11th hour, umbrella company representatives and some industry bodies were appealing for clemency but to no avail.

The reality of the legislation now in force is an increased motivation for contractors to seek out alternative ways to get paid including a drive back towards self-employment and personal service companies (PSCs). Both of these are perfectly legitimate ways of working if a contractor operates genuinely independently but already carry risks of debt transfer to agencies if used inappropriately.

for turning on this because, unfair as it may be making agencies liable for contractor taxes, it works as a way of deterring perceived tax avoidance.

It worked for False Self Employment, it worked for Offshore Intermediaries and it will work to stop a mass migration into PSCs. It will work in the public sector and then it will be rolled out into the private sector. The future landscape of the payroll solutions sector lies in genuinely outsourced employment relationships. HMRC will continue to close down other avenues to contractors by making them ever more risky to agencies.

With this in mind, FPS Group have launched a new low-cost employment solution called Flex. This compensates contractors for a loss of T&S relief with a substantial reduction in our fees whilst protecting their employment status and rights.

Importantly, as a solution operating full PAYE & National Insurance and treating all workers as subject to SDC, it ensures agencies are entirely free from risk of tax debt transfers. Flex is a fully compliant and risk-free solution for recruiters that allows their contractors to continue to reap many of the benefits associated to being the sole employee of a limited company, without the hassle and worries of running it. It is a low-cost durable solution which will provide peace of mind in an increasingly complex and uncertain world. ●

FPS GROUP Administration Centre, Ramsey, IM8 1GB For further information please visit: www.fpsgroup.com Telephone: 0800 634 4848 Email: sales@fpsgroup.com

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on

Rea s

ount c o t s

on

19 am: # e r t S Pay

A good provider is always prepared.

PayStream, a leading provider of accountancy and payroll services, has been prepared for the T&S changes for some time. Our systems, processes and services went live ahead of time meaning that we have been quoting and joining your contractors in the service that is most appropriate for their circumstances for a few weeks already.

As a company run by qualified accountants and lawyers you can trust us to have the knowledge, expertise and experience to handle any changes that occur in the contractor landscape. By ensuring that your contractors are kept HMRC compliant that’s another reason to count on PayStream.

Call 0800 197 6516 e: info@paystream.co.uk or visit www.paystream.co.uk

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11/04/2016 15:37

Issue 37 May 2016

RECRUITMENT MATTERS The View and The Intelligence

Member of the Month

Legal update and the IRP

Events and Training

The Scale Up Workbook p2-3

Interactive Selection p4

The National Living Wage and Start Up course p6-7

REC AGM and Digital Workshops p8

MYOPIC AGENCY CAP WILL HURT NHS, SAYS REC More than two-thirds of healthcare agencies expect locum doctors and agency nurses to turn to the private sector for work, according to a new survey.

The REC survey found 63% of healthcare recruitment agencies said they expect locum doctors and agency nurses on their books to focus on the private sector in

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response to the latest pay cap, which came into effect on 1 April.

A third said that candidates will leave the profession altogether. Just 3% said they expect candidates to take up permanent roles in the NHS. REC chief executive Kevin Green says the policy will have a huge effect on the health industry.

“Everyone knows that efficiencies have to be made in the NHS, but rather than a considered plan to improve staffing, we’ve seen a policy which is myopic and illconceived,” he says.

“At a time when demand for temporary staff to fill gaps is increasing, locum doctors and agency nurses who have provided a lifeline to the

NHS are having their pay cut to such an extent they are choosing to work outside of the public sector or leave the profession altogether.

“All the evidence suggests the cap is exacerbating the skills shortage crisis rather than alleviating it, and NHS Improvement has so far failed to produce evidence to the contrary. We believe that shifts are going unfilled in hospitals across England as the Department of Health instructs hospitals to put finance before patient safety.”

Demand for temporary staff from NHS Trusts has increased since the caps were imposed. In June 2015, a third of healthcare recruiters (33%) said they received more than 100 requests for staff per week from each NHS Trust they work with. The latest data shows that almost half of healthcare recruitment firms (47 per cent) are now receiving more than 100 requests to fill shifts every week from each NHS Trust they supply.

NHS spend on agency staff accounted for 2.9% of the NHS’s overall annual expenditure in 2014/15.

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Leading the Industry

THE VIEW

Regulatory changes offer recruiters opportunities, says Tom Hadley, REC director of policy and professional services

This is the best time to build an agency, says Kevin Green, REC chief executive

The REC has just published The Scale Up Workbook, which has been developed as part of the successful ‘Scale Up’ campaign.

This cutting-edge research is designed to help those leading recruitment business to grow their organisations at a faster pace than the market.

The workbook includes a set of tools, is evidence based, and is packed full of real-life examples from people who’ve been there and done it themselves.

Defining a clear vision and a unique competitive strategy is advocated in the advice, as well as planning to fund expansion, attracting talent, managing change and leveraging technology to help the business succeed in the long term.

Right now is the best time since the 1980s to be running a recruitment business. The UK’s job-rich economic recovery has enabled the UK recruitment industry to expand rapidly.

Sales grew by £1.8bn to £31.5bn last year (that’s a growth of 9.7%) and the industry is now a whopping £4.5bn bigger than before the recession. The REC’s market forecast shows the industry growing by 22.1% during this year (2015/16) and the next two years. We anticipate industry turnover being £39bn

by April 2018.

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CROSSING THE STREAMS For the past 18 months, our Scale Up campaign has been helping recruitment agencies to Scale Up in the right way so they can best take advantage of this growing marketplace.

The REC’s Scale Up campaign comprises a wealth of tools, research, workshops and seminars to assist you develop your firm. It is based on our collecting wisdom from those who have built successful recruitment businesses.

The REC’s role is to collect this learning and to disperse it in a digestible form to recruitment entrepreneurs.

I would love to see as many members as possible at our Scale Up In the Rounds events at Leeds on 11 May, Manchester on 12 May, Belfast on 3 June and Scotland on the 9 and 10 June. Book your place at rec. uk.com/intheround We encourage you to grasp this fantastic opportunity to scale-up your recruitment business. We hope that by using the Scale Up content you will be inspired and motivated to go for growth. So, here’s to your future success!

If you want to keep abreast of all that’s new about employment and recruitment why not follow me on twitter at @kevingreenrec

Two key streams of activity within the REC’s remit are: a) to help members adapt to external developments; and b) to help members scale up and seize new opportunities. As we learnt from Ghostbusters, crossing the streams can be a powerful force for good...

One area of overlap is regulatory change. Our old friend the Agency Workers Regulations (AWR) is a good example: this was one of the greatest challenges we’ve faced as an industry. But many REC members won business on the back of their ability to work with clients, manage risk and make the necessary changes. Six years on, the marshmallow man of the day is a coagulated lump of travel and subsistence changes, National Living Wage and the apprenticeship levy. The issues may be different but our mission stays the same: provide our members with the support to prepare their business, reassure existing clients and reach out to new ones.

Regulatory changes can open opportunities for recruiters in whole new sectors. I remember the late James Kilbane, co-founder of Grafton Recruitment, telling me how he had originally fallen into recruitment by taking ownership of a dwindling healthcare recruitment business, only for regulations restricting the use of temporary staff in the NHS to be lifted, which opened up a huge new market. There are fears that we’re going full-cycle with the current NHS cap on agency staff, but the point remains: change brings opportunity.

For a recent example, look at the financial services sector where new regulations created demand for compliance staff and a great niche for fast-thinking recruiters. One of the aims of the REC’s 19 sector groups is to flag changes in specific sectors that can provide new opportunities for our members.

A big part of our work with Ciett and Eurociett is to pre-empt and accelerate some of these changes. A final example of overlap is how our work with employers – in particular through lobbying activities and the ‘Good Recruitment’ campaign – can identify priorities, such as an increasing focus on managing supply chain risk. Music to the ears of compliant agencies within REC membership.

You can follow Tom on Twitterr ment @hadleyscomment

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THE INTELLIGENCE DIANA BEECH, SENIOR RESEARCHER, INTRODUCES THE SCALE UP WORKBOOK The REC prides itself on providing access to world-class business support. For the past year, through its Scale Up campaign, the REC has been providing UK recruiters with practical tools and advice to help expand the UK’s recruitment businesses. Now, the is proud to introduce its latest addition to the campaign – The Scale Up Workbook – which is a guide designed to accompany you as you embark on your own scale-up journeys

The Scale Up Workbook, released last month, contains insights from the leaders of some of the UK’s fastest-growing recruitment

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companies, as well as practical advice from industry experts.

Most notably, the workbook features examples from recruitment companies from all the devolved nations of the UK, spanning a wide range of sectors, scales and geographical reaches. So, you are sure to find something to inspire you.

As anyone who has ever done it will tell you, scaling up a recruitment business involves considerable change.

The Scale Up Workbook talks you through each of the key stages in this process – from ascertaining your vision and strategy right through to financing your business growth and marketing your brand.

It provides you with action points, key questions to consider and a personal checklist, which you can use to map your own business success.

While other reports focus on the ‘bigger picture’ of business growth, the Scale Up Workbook tackles recruitment-specific issues,

including advice on getting the right mix of temp/perm business to enhance your company’s growth, as well as tips on finding the best ratio of admin-to-sales staff for your brand.

With an annual turnover of £31.5bn and expected growth in sales of 22.1% over the next three years, the UK recruitment industry is the largest it has ever been. Now is undoubtedly a good time to be capitalising on this success

and thinking about scaling-up the UK’s recruitment firms for the future.

The Scale Up Report (2014) found that boosting the number of British scale-ups by just 1% could generate an extra £225bn for the UK economy by 2034. With The Scale Up Workbook the REC is keen to ensure that a strong and healthy recruitment industry will play a big part in the UK’s scale-up revolution for a long time to come.

The Scale Up Workbook is available free to all REC members. Download it now at www.rec.uk.com/workbook

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Member of the Month

INTERACTIVE SELECTION

GAME ON

David Smith is an IRP Honorary Fellow, MD at Interactive Selection and the founder of Women in Games. He tells Recruitment Matters why diversity is the source of all creativity Recruitment Matters: What makes the games industry such an interesting sector to recruit in?

David Smith: The games industry is such a fantastic place because it changes so much. The challenge for a recruitment company is to stay ahead of that curve. It’s a hit industry, it’s very competitive.

If they don’t have a hit, studios tend to close very quickly. As a recruiter, bearing in mind you’re working with game developers at the cutting edge of technology and creativity, you’re looking for people to work in games that haven’t been created yet. Sometimes, you’re trying to fill a role that doesn’t actually exist.

RM: Industry knowledge

recruiters who have specialist knowledge rather than those who think they can walk into the business and take over. It’s a candidate-driven market, but you still have to deliver the best.

The life of a games developer at a given company isn’t always a long one because the work tends to be projectbased. Someone may work in a games company for 18 months to two years before game development ends, and then they have the choice to stay or move onto another company.

We regularly place people that we’ve placed five or ten years ago because we’ve offered a good service and they trust us. They also know that because we’ve worked with them before, we’ll add real value to their job search.

sounds vital here.

RM: It sounds like you’re DS: Gaming is a nice, enclosed environment. It’s not easy for big multifaceted recruitment companies that work in different sectors to find their way in. We games specialists hold our own because many think it’s just another facet of IT. Candidates in the games industry are fiercely loyal to

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part of the gaming sector’s furniture?

DS: It’s always struck me as obvious that if you’re part of recruitment you want to say you’re part of the industry you recruit for, not the staffing industry. You have to be commercially aware, you

have to be driven to a certain extent, but you do have to be able to get on with people.

Every recruitment situation is different. But I think it’s very difficult to start out in the industry as a graduate and possess the kind of life skills you require to work with the wide variety of people that aren’t just looking for jobs but are hiring.

“WITHOUT EVEN THINKING ABOUT IT, EMPATHY IS THE MOST IMPORTANT TOOL IN A RECRUITER’S TOOL KIT, BUT ALSO MARKET KNOWLEDGE”

RM: Do you recruit for companies outside the UK?

DS: The other interesting thing about the game industry is that it’s very international.

Interactive Solutions has people in 25 contries. We’re just as comfortable finding people in the US or Canada as we are Russia or China.

We have the capacity to find someone from one country and place them in a completely different part of the world.

People who want to work in the games industry with experience are keen to work wherever the best projects are. They’re not so tied down by local boundaries – they’re quite happy to relocate.

RM: Immigration restrictions must be a hassle?

DS: The national visa situation is interesting because many games jobs are on the shortage occupation list. Because games are hit driven, it’s very important for companies to hire some internationally- renowned people who’ve worked on similar titles, genres or technology. It’s sort of common sense that if you’re going to produce your own football game, you want to hire someone who’s worked on a football game.

RM: Do you bring talent into the UK too?

DS: The UK is still one of the best game developing countries in the world and

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careers. Internal recruiters are only working with one company and can only work with one particular job or job option. External recruiters can typically work with 10 companies, looking for a given skill from a much wider choice.

We can give them options they wouldn’t have previously considered.

RM: What’s the most important thing for a recruiter to remember?

DS: Without even thinking

that talent is much in demand.

That’s why recruiters like ourselves are hired to find that best talent. The reality is that while there may have been a brain-drain from the UK to the US, the UK is draining brains from central Europe like Poland and the Czech Republic. The big studios are normally hiring continuously and that’s where external recruiters do a lot of work.

RM: Diversity isn’t a word that’s often used within the gaming industry, but it’s something you’re passionate about.

DS: One of the beauties of the industry now is that there is something for everyone to

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get into. One of my favourite topics is talking about the number of women who work in our industry, which is very small and is growing. Fifty per-cent of game players are female and when you look at the individual stats, women over 40 play more games than men under 18. That’s got to be healthy for the games industry as a whole because now we’re not just reaching a small niche, we’re reaching everybody.

I set up the Women in Games Group not just to help women work in the industry, but to help create more diverse games and bring innovation to the industry.

That way, games companies are more likely to have a hit and hire more people. There’s

a link between diversity, innovation and creativity, which are the core products of a successful game.

It struck me as strange that an industry like ours could not benefit from having a much more diverse workforce.

That’s where I find myself arguably leading an industry in promoting diversity – not for the sake of it, but because it will make the industry more successful.

RM: What can external recruiters offer that internal recruiters can’t?

DS: External recruiters can always offer more than internal recruiters in terms of looking after people’s

about it, empathy is the most important tool in a recruiter’s tool kit, but also market knowledge. If you have both, then that combination is what sorts niche recruiters out from the generalists or the people who think you can apply general recruitment skills across all sectors.

The reality is you can’t recruit in a place where internal recruiters are mopping up 80% of jobs because they’re so easy to sell. There’s always going to be areas for external recruiters but you have to be as professional as possible and you’ve got to deliver a sizable service.

If clients are looking to have a hit game and it doesn’t matter what size the team is, our job is to offer the best people outside of their existing networks. That’s why the most progressive companies tend to work with external recruiters. Those who recruit in their own image aren’t going to be as innovative as those who hire out of a diverse network.

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Legal update

NATIONAL LIVING WAGE

By Lewina Farrell, solicitor and head of professional services at the REC The new National Living Wage (NLW) is payable from 1 April 2016. The NLW, which is £7.20 per hour, is payable to those aged 25 years and over. It should not be confused with the voluntary living wage, which is set significantly higher than the NLW and at different rates inside and outside of London (£9.40 and £8.25 respectively).

Instead the NLW is just another band of national minimum wage (NMW) rates that apply across the whole of the UK. There are no regional differences in NMW. Businesses that are already accustomed to working with the various NMW rates will have the necessary systems in place to deal with this change.

Much has been written about the economic effect on businesses of having to pay

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yet another NMW rate. It is clear that those over 25 years will now be significantly more expensive than those under 25, including in particular, those under 21, for whom employers’ national insurance contributions were removed in April 2015.

This could tempt businesses to deliberately not hire those over 25, or instruct their recruitment business suppliers to supply only those aged 24 years or under, or to terminate their assignments on reaching 25.

Such actions would be direct age discrimination, in breach of the Equality Act 2010 (age being a “protected characteristic”). Such direct age discrimination can only be justified when there is a legitimate public interest, rather than a businessspecific interest, such as seeking to keep down costs.

The government has

already stated its aim of increasing the NMW and NLW rates by the end of the current parliament in 2020.

However, the Low Pay Commission sets the rates usually effective from 1 October, and in March 2016 published its Spring 2016 report that included its recommendations for 2016/17. We know that businesses can expect a further rise to the remaining NMW rates from 1 October 2016. These will be effective for six months, as all of the NMW and NLW rates will rise in April 2017 and every April after that. This amounts to three rises in just 12 months.

Businesses have already been warned about increased enforcement activity, including increased penalties for failure to pay any of the NMW rates. A new team has been set up in HMRC to take forward criminal prosecutions

for those who deliberately do not comply. HMRC/BIS have already stepped up their policy of ‘name and shame’.

Going forward, an even more serious sanction would be disqualification from being a company director for up to 15 years.

Of course, we also know that as of 6 April 2016 travel and subsistence expenses relief has being removed from temporary workers working under the supervision, direction or control of any person.

In addition, the apprenticeship levy will apply from April 2017, calculated at 0.5% of a business’s paybill (applicable to those with paybills over £3m).

All in all, recruitment businesses will have a raft of measures to deal with in the coming 12 months that will require negotiation with their clients.

www.rec.uk.com

12/04/2016 14:36

Inspiration

BEHIND THE SCENES AT THE INSTITUTE OF RECRUITMENT PROFESSIONALS

The View

Vivien Edwards is the founder of Cornerstone42.

She completed the REC’s Start Up course in 2015

ini Emmajane Albertini is the managing director at Elite National Recruiterss

START UP

WHAT I KNOW

Why did you choose to start your own recruitment business?

I had worked as a PA and EA for 19 years and decided I wanted to make a difference and create something new and refreshing. The fact that I had the practical experience and intimate knowledge of the role and the industry gave me the advantage I needed. It was clear to me there was a knowledge and expertise gap in the administration market.

Things are slowing down The growth we saw last year and expected to start again after Christmas has not materialised. The market feels quite slow. That could be due to a lack of confidence, thanks to the referendum. It could simply be the time of year, and maybe we’ll see things recover once the sun comes out again. It’s not the market it was last year.

How did you find the REC’s Start Up course?

It was great – it gave me the confidence I needed to launch my own business. It gave me everything I needed to get off the ground.

What makes EA recruitment so appealing?

A lot of middle management layers were lost during the recession and EAs were given responsibility for things like budget management, people management, public relations and social media. The modern day EA and their responsibilities have changed beyond recognition, and we as an industry need to recognise this and adapt accordingly.

What separates a great recruiter from a good one?

It’s essential to listen to what your candidates and clients want. But sometimes you must challenge clients on the role and the job spec. You also need to attract the right kind of candidate. Building trust is important. If you’re unable to deliver, be honest and say so. Think about your reputation and don’t send a candidate to a client just for the sake of it.

What would you say to anyone thinking of launching their own business?

Figure out what your differentiator is, what separates you from the masses. There are 19,000 agencies in the UK – it’s a saturated market. You must figure out what makes you different and what your mission is going to be.

Great time to plan The great thing about this time of year is it gives you an opportunity to start looking at more detailed ideas about what you can offer candidates and clients, and patching up the gaps between the services you’re supplying. I’ve been talking to a consultancy about looking at our business from an outside point of view. It gives me time to study the gaps and implement things. In a very busy market, I wouldn’t normally have time to do that.

Stay positive Yes, the market isn’t as busy as we would like it to be, but there’s no point in being negative, otherwise it breeds more negativity. The market is still predicted to grow and expand, and we have to be ready when it does.

Good recruitment To me, to be a good recruiter is about personality and personal drive and ambition. If you don’t have that will and ambition to succeed – and to be able to have the personal skills to interact with people – you’re never going to be a good recruiter. Some people are too overenthusiastic and driven and forget to care about the people. I think it’s always important to provide the same level of service, no matter who it is. Regardless of whom you’re speaking to, you should always treat that person with the same level of care and attention. After all, nobody knows what’s around the corner.

To keep up to date with everything the Institute of Recruitment Professionals is doing, please visit www.rec-irp.uk.com

www.rec.uk.com

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Events and training

NOMINATIONS OPEN FOR REC COUNCIL ELECTIONS

OUR COUNCIL OF DIRECTORS DRIVES THE REC It maps our course, moving us towards a more professional and compliant recruitment industry.

We know jobs transform lives, and our members are clear about what they want our industry to be.

Help us build the best recruitment industry in the world by being on the REC’s Council of Directors.

Nominations for the 2016 REC Council election open on Friday 15 April 2016 and close on Tuesday 3 May 2016.

NOMINATION CRITERIA There are six council vacancies to be filled: four corporate and two individual directors.

Corporate members can nominate an individual who is employed by them or acts as an officer for the company holding REC Membership.

Individual nominees must be full members or Fellows of the REC’s Institute of Recruitment Professionals.

Nominations must be proposed by three fullypaid AIRP, MIRP or FIRP

members (excluding student members).

DIRECTOR RESPONSIBILITIES INCLUDE: • Promoting the success of the REC and IRP • Ensuring the REC and IRP are managed for the benefit of members • Exercising independent judgement and reasonable skill and care to the level of

your experience • Commitment of at least 10 days per annum to REC business • Acquainting yourself with the activities of the REC and IRP in order to make an effective contribution We need drive, we need experience, and we need the best to move forward.

Visit www.rec.uk.com/ rec-agm-2016 for more information

DON’T MISS THE SCALE UP DIGITAL WORKSHOPS Join our digital experts, Johnny Campbell from Sourcing Talent and Dave Hazelhurst (aka Google Dave) from PH Creative, to get best-practice insights into how to develop your businesses digital and social strategy.

Featuring their unique presentation styles, Johnny and Dave’s short, focused and punchy sessions will ensure you’ll gain skills that you can implement straight away or use to kick start a new digital strategy.

Topics covered include: • Hear how to leverage the latest sourcing channels, tools and tricks • Understand how to build compelling content to attract and engage candidates and clients • Gain practical tips on how to effectively get your consultants to use social

• Transform your organisation’s employees, clients and candidates into brand advocates • Learn how to leverage your networks to assist you in winning the war for talent • Understand how to use social media to generate business and source hard-to-find talent.

How much is it? £69 + vat for REC & IRP members £239 + vat for non-members Book now or contact info@rec.uk.com for more information.

RECRUITMENT MATTERS

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 Editorial: Editor Michael Oliver michael.oliver@redactive.co.uk. Production Editor: Vanessa Townsend Production: Production Executive: Rachel Young rachel.young@redactive.co.uk Tel: 020 7880 6209 Printing: Printed by Precision Colour Printing

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

© 2016 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.

8 RECRUITMENT MATTERS MAY 2016

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11/04/2016 15:38

O IL & GA S

BOOM AND BUST 32 RECRUITER

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O I L & GA S

The price of oil has plummeted in the last two years and recruiters in the oil & gas industry have been hit hard with thousands of job losses across the sector. Colin Cottell reports

leads to fewer opportunities for agencies and anyone seeking jobs in the market,” he adds.

Oil & gas recruiters tell Recruiter they have been hit hard. “What we had to do as a business was to focus on our costs set against our income,” says Joe Rothwell, managing director of Vitruvian Consultants, a £2m-a-year turnover specialist oil & gas recruiter.

To reduce his cost base, Rothwell says headcount has been slashed by 75%.

WHAT CAUSED THE OIL PRICE COLLAPSE? According to the World Bank, factors that have contributed to the sharp fall in oil prices include geopolitical conflicts, the appreciation of the US dollar (oil is priced in dollars) and a decision

by OPEC (Organisation of Petroleum Exporting Countries) not to cut production in line with the cartel’s new objective to maintain market share rather than target a specific oil price range. The drop was dramatic and precipitous, from more than $100 a barrel in mid-2014 to around $60 in December 2014. The oil price continued to plummet and, in January 2016, fell to less than $27 a barrel. It currently stands at around $46 a barrel.

Mid-2014 100 80 $ A BARREL

As the world economy recovered after the 2008 global financial crisis, recruiters in the oil & gas sector enjoyed boom times, expanding their businesses and growing their profits. Between 2010 and mid-2014, the average price of oil remained at over $105 a barrel, peaking at $115 in June 2104, driving a wave of new investment by oil companies. And with investment came jobs. Lots of them. Then, as fracking – the extraction of oil & gas from shale rock – took off in the US, recruiters rushed to join in what appeared to be the new gold rush.

Compare those heady days with today: the price of oil has slumped to less than $40 a dollar, once-profitable oil fields are no longer viable. In short, those same recruiters face a very different world.

(See box below for an explanation of why the oil price collapsed.)

According to Sir Ian Wood, author of an influential review on the future of the North Sea, the sector is losing 150 jobs a day, with the total numbers expected to fall this year to around 320,000, down from 440,000 at the end of 2014. This is mirrored across large swathes of the petroleumproducing world.

According to the US Bureau of Labor Statistics, since January 2015, 15,700 jobs in oil & gas have been lost in the US. Late last year, before its merger with competitor Air Energi, oil & gas

recruiter Swift Worldwide Resources estimated that job losses could surpass 250,000 before the industry recovers.

“Clients are driving cost reduction exercises at a scale and a speed which has surprised many,” says Stephen Martin, recruitment director at international engineering and technical recruiter Fircroft.

“We have seen the delay and cancellation of a high number of major global projects, which of course

Dec 2014

60 40

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May 2016

20 0

I M AG E S | P E T E R CROW TH ER / ISTO C K

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O IL & GA S

LESSONS LEARNED “We released the recruiters who were doing ok but not spectacularly,” he explains.

Will Atkinson, chief executive at global oil & gas recruiter TEC Group Worldwide, says his company was forced to take similar action, closing two offices that focused on oil – one in Manchester and another in the Midlands. Agency margins have also been a casualty, as clients sought to reduce their costs, says Atkinson. Where agency rates can’t be cut any further, contractor rates have been slashed.

At the beginning of April, it was reported that nine consultants at oil & gas executive search firm Maxwell Drummond’s Aberdeen office lost their jobs after the company went into provisional liquidation. According to the insolvency specialists involved, the business’s failure was due to the industry downturn.

Company finances have also taken a hit. In March, Hydrogen Group acknowledged that weakness in the sector had been a significant factor in a 34% drop in net fee income in 2015, compared to the previous year.

Peter Searle is chief executive officer at global energy, process and infrastructure workforce solutions provider, Airswift. In his view, those companies most at risk are smaller companies who rely too much on borrowing, and who are over-reliant on single markets, and prone to bad debts.

“People shouldn’t be blind to the bigger story, which is a massive shortage of engineering people”

The oil & gas sector is by its nature cyclical, so it pays to think ahead

Use downturns to make your business more efficient and profitable

Don’t put all your eggs in one basket. Take advanatage of consultants’ and candidates’ transferable skills to diversify into new and related markets

However, while recruiters in the sector have undoubtedly suffered, they say they are taking steps to ameliorate the effects and adapt to the new environment. Atkinson says one response has been to switch some resources and staff into other sectors, such as chemicals, nuclear and renewables. Not only does this provide opportunities for the company’s staff, it allows them to continue to place candidates, many of whom have transferable skills, he says.

“Guys that pump stuff out of the ground can pump anything.

Those same engineers can work as well in chemicals or infrastructure as in oil & gas,” adds Searle.

Indeed, according to Searle, “all that is happening is that engineers who were previously attracted to oil & gas exploration because it paid very large sums are either going back to their original industries or translating their skills into other sectors.”

Searle says the drop-off in oil & gas shouldn’t blind people to the bigger story, which is “a massive shortage of engineering people”.

Meanwhile, Fircroft’s Martin says the company is carrying out a full review of its operating model, “and investing significantly in a fully integrated enterprise platform giving us the systems and technology to improve our services and performance”.

TEC Group Worldwide’s Atkinson points to growing consolidation in the sector in the last two years.

Consider partnerships with other recruiters that will enable you to broaden your geographic coverage and client base

One example was NES Global Talent’s purchase of Norwegian recruiter Energy People in December 2014, preceded by its earlier purchase of fellow Norwegian recruiter RC Consultants.

It’s tempting to view the merger of Air Energi and Swift Worldwide Resources in January to form a $1.2bn turnover company as another example

IMAG E | ISTOCK

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XXXXXXXX

of tough market conditions driving recruiters’ strategy.

However, Searle insists it was unconnected with the sector’s current travails, and would have happened anyway. “The merger was to do with synergies, with Air Energi covering Asia, Europe and a small part of Africa, and Swift covering America and the Middle East, with only 5-10% overlap between the two companies,” says Searle.

Paul Andrews, international recruitment manager at Project People Oil & Gas, says there have been no winners. However, he says that amid the carnage, bright spots remain.

Many of the company’s clients are big state-owned oil companies such as Saudi Aramco which is still going ahead with projects. “These companies don’t have the same restrictions as the oil operating companies,” he says.

Searle sees other benefits: “It did clear out a lot of people who moved into the sector half-heartedly seeing it as a quick way to make a profit. Now, the market has returned to those companies with engineering at their core, be it Brunel, Fircroft, AirSwift, which provide added-value services and global mobility of talent. It hasn’t necessarily been a bad thing to have had a bit of a shakeout.”

Atkinson also strikes an optimistic note. “I would like to think that the way clients engage recruiters and recruiters carry out assignments is less erratic and aggressive,” says Atkinson. Another plus is that without the volume to justify their existence, “a lot of oil company RPO (recruitment process outsourcing) companies have gone away, so we are having a lot more direct contact with our clients.

“The current market brings back the old style of recruitment,” agrees Vitruvian’s Rothwell. “It’s about people relationships and networking rather than large-scale accounts with hundreds of positions. We have had to change; I don’t think it will go back to the way it was before.”

However, Atkinson has his doubts.

“My fear is that when and if the oil price goes back up to $100 a barrel, it will just be business as usual,” he says.

In a sector that is by its nature cyclical, the only certainty is that it won’t be too long before we find out who is right. ●

SINCE JANUARY 2015

15,700 JOBS IN OIL & GAS HAVE BEEN LOST IN THE US

VITRUVIAN CONSULTANTS, AN OIL & GAS RECRUITER, HAS SLASHED HEADCOUNTS BY

75% HYDROGEN GROUP ACKNOWLEDGED THAT WEAKNESS IN THE SECTOR HAD BEEN A SIGNIFICANT FACTOR IN A

34% DROP IN NET FEE INCOME IN 2015

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13/04/2016 12:32

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11/04/2016 15:41

CO M M U N I T Y

SOCIAL NETWORK WHAT HAVE YOU BEEN UP TO? GET IN TOUCH! From desert trekking to knitting mits for charity, here’s what some of you have been getting up to outside recruitment...

JEN LITTLE FROM PURE COMPLETES SAHARA FUNDRAISING TREK WITH THE ARTHUR RANK HOSPICE CHARITY TEAM

Recruitment specialist Jen Little from Pure Resourcing Solutions has completed a 75km trek across the Sahara desert to raise money for the Arthur Rank Hospice Charity (ARHC).

Jen was one of eight members of Team ARHC who walked across the desert for several days from 17 March with just their guide and a group of camels for company.

The other team members included the charity’s CEO Lynn Morgan, staff at the hospice and other local business people including Steve Mitcham, CEO of Cambridge Business Society.

She described it as “the most amazing and phenomenal experience”.

THE WRITING’S ON THE (SHOREDITCH) WALL FOR ONLINE IT RECRUITMENT SITE DICE

E

To celebrate the launch of its ‘Hot Tech Talent’ outdoor advertising campaign, IT recruitment website Dice teamed up with Global Street Art earlier this month to create wall art in Shoreditch, East London.

London-based artist Oliver Switch was commissioned to create a graffiti-style caricature of a developer called Kevin, who stars in one of the billboard ads.

The tongue-in-cheek campaign is designed to challenge the stereotypical view that tech professionals are all geeks and to celebrate the tech talent on the market.

However, some members of the public responded negatively to the images, labelling them ‘sexist’.

ST “THE MGO AND AMAZINMENAL PHENO IENCE” EXPER PROFILES CREATIVE TEAM TAKE ON THE MUDDY DOG CHALLENGE James and Chris from boutique recruitment consultants Profiles Creative are doing their bit for charity – with the aid of two dogs, Pudding and Harvey.

LEIGH CRIPPS CELEBRATES 10 YEARS AT RED EAGLE RECRUITMENT This month, Leigh Cripps celebrated 10 years working as a recruitment consultant at Red Eagle, Birchington, where she looks after up to 240 staff every day.

As a reward, Leigh was presented with a certificate, a bottle of champagne and a new iPad, and was treated to a meal in her favorite restaurant. Managing director Wayne Hodsgon said Leigh had long been a valued member of the Red Eagle team was very proud of her achievements.

The Challenge A 5k ‘Muddy Dog Challenge’ will feature a number he of obstacles to challenge the teams. Both humans and dogs will be crawling ping through the mud, jumping over hurdles and balancing on beams.

Because… Battersea Dogs & Cats Home aims to never turn away a dog or cat in need of help, caring for them until their owners or loving new homess w long can be found, no matter how it takes.

FTS RECRUITMENT’S ‘CLOSE-KNIT’ TEAM SUPPORTS ALZHEIMER’S CAMPAIGN Staff at Bournemouth-based FTS Construction Recruitment have reached for the knitting needles to give ‘twiddle mitts’ a try, in support of Bournemouth and Poole Hospital’s recent campaign.

Research shows that these simple knitted cuffs, with their added accessories, provide stimulation and are known to greatly improve the general well-being of people living with dementia.

FTS managing director Jared Lee, whose grandmother suffered with Alzheimer’s disease for many years, said: “We thought we’d have fun learning a new skill while supporting a great cause.”

The event takes place at 12pm on Saturday 7 May in Brockwell Park, in south London. They welcome spectators to cheer them across the finish line – and then presumably into the shower.

*Twiddle mits!*

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@RecruiterMag instagram.com/recruitermagazine/ recruitermagazine.tumblr.com/

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14/04/2016 10:19

E CAREERS CO M M UNITY

Successful strategies For recruiters in candidate-short markets

BY TARA LESCOTT

↗

IN SPECIALIST MARKETS short on candidates, recruiters often act as headhunters – without the benefits usually associated with operating in search.

It’s a difficult situation. With most specialist markets short on skills, many recruiters are having to develop their technique in approaching candidates. However, consultants are often unprepared for the shift in psychology required to manage candidates who have been sought out, as opposed to those that come to the consultant in search of a job.

What most consultants do not appreciate is that this TARA LESCOTT is managing director candidate has a completely different level of commitment of rec-to-rec agency to the process than a candidate who is applying to roles or Recruiter Republic has already actively made a decision to explore new options.

At the same time, the client also lacks commitment to any individual consultant’s process because they are likely working with multiple agencies on a contingency basis.

So recruiters are effectively working a headhunting model to generate candidates without the benefit of a retainer. There’s a reason search companies work on retainers only!

Here are our top tips for operating effectively and efficiently in this environment:

1

ONLY WORK ON EXCLUSIVE VACANCIES You can’t dedicate enough time to fully search for and approach candidates if you are managing too many vacancies with non-committal clients. It will feel strange at first but you really don’t need to be working on 20+ vacancies at a time. Strip it down, work with the clients who will commit to a period of exclusivity. Demonstrate how much more of your time they will benefit from and how much more proactive you can be on their behalf.

After all – the onus is on you rather than them to prove this works. Once you have a strong track record with these clients you will have a better chance of moving to a retainer model.

2

REMEMBER IT’S A SEDUCTION

3

CANDIDATES ARE MORE LIKELY TO DROP OUT

4

The onus is on you to motivate the candidate to first entertain the idea of a new opportunity and then to do what you need them to do in order to be able to represent them to your client.

You can’t just wave a job description at them. You must gain enough useful information about the role to be able to talk to the candidate in more detail than you are probably used to.

You then need to secure their trust in order to guide them through the next steps and motivate them sufficiently to produce a CV for you. The level of communication, feedback and management of your candidate throughout the process will be more in-depth than before as you seek out more detailed information at each stage of the process.

Face facts – candidates who have been approached are more inclined to stay where they are than to move, so expect counter offers and offer rejections. Anticipate this, and plan to increase the number of candidates on interview. Your management of the counter process must be robust. This is easier to do if you are working on fewer but higher quality roles.

HOLD OUT FOR BIGGER FEES The work you produce here is far greater than anything you would have done for your clients before. You will be unearthing more high quality candidates than before, so stick to your guns on top-line fees – you’re worth it!

Take a quick review of your desk. If you’re managing in excess of 10 roles at a time but converting less than two placements per month, there’s room to improve your process. Let’s stop applying 1990s thinking to 2016 – it’s time to move on. ●

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RECRUITMENT JOB ACTIVITY ANALYSIS of data at the end of March on Recruiter Jobs (Recruiter magazine’s job board) reveals a general trend – the number of applications per job is on the rise compared with February.

AP P LI CAT IO N N U M BE R S

Overall the number of applications across the site saw no increase in applications per user in March, compared to February, but a 24% increase in applications per job.

At the end of March, the sector that saw the largest increase in applications per user was the travel sector, up 148%, with no increase on February in applications per job.

The sector that saw the largest increase in applications per job was the retail sector, up 1444% on February.

The sector saw an increase of 13% on February in terms of applications per user.

Across the various regions of the UK, the part of the country that saw the largest increase in applications per user on February was Shropshire, up 203%, where the number of applications per job fell by 100%.

Bristol saw the largest monthly increase in applications per job of 2400% but applications per user there fell by 100% .

Away from the UK, the location that saw the largest increase in applications per user in February was Australia, up 91% and also by 22% in applications per job. The location that saw the biggest increase in applications per job was Asia, up 366% and down 1% in applications per user.

MAY 2016

14/04/2016 09:43

CO M M U N I T Y

CAREERS Find your next move in recruitment on jobs.recruiter. co.uk

E

Sourcecon report US talent trends

BY ANDREW MOUNTNEY

↗ ANDREW MOUNTNEY is founding partner at in-house recruitment specialist Aspen In-House

1444 % Retail LARGEST SECTOR INCREASE IN APPLICATIONS PER JOB

24% INCREASE

Applications per job

203%

Shropshire LARGEST INCREASE IN APPLICATIONS PER USER

UP

I HAVE RECENTLY returned from Sourcecon, a US conference for those in the sourcing industry.

It is the second time I have been and the breadth of attendees and growth of the show demonstrates the development of sourcing and validity of the function in US talent acquisition.

Typically we adopt US talent trends so, if you’re in sourcing or running a recruiting team or agency, here are some of the developments you can expect to see in the next year or so.

Sourcing is a peer of recruiting not a service line ● It’s notable that the result of this is a different crowd. In the UK a group of sourcers is typically wholly made up of junior team members and career research professionals who begrudgingly accept that, bar a handful of major US tech businesses, they will work for a recruitment team not alongside it. ● Not in the US. The sourcing crowd was diverse, from the same group as the UK to recruiters who had chosen to specialise in what they enjoy most (sourcing) to leaders who have taken a step into this world as their specialism seeing it as the point at which they can have greatest impact for their employer by developing these skills across teams.

Hints of changes in technique

2400%

Bristol

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LARGEST INCREASE IN APPLICATIONS PER JOB

● One of the challenges sourcing faces is what’s next? There’s a view that sourcing is a code that can be cracked and automated and this holds back the value as people aggregators could usurp

the function. No sign of that here, the ease of identification of candidates on classic tools is driving many people to close profiles or make them clean of skills. There’s value for the inquisitive sourcer still and this is what they are doing: ◯ Moving from Boolean searching on traditional sites to natural language searches in the wider domain ◯ Using custom built search engine platforms to support their specialism ◯ Getting agile and pivoting on traditional searches using tools such as Similarweb. com or millionshort.com

Identification is no longer the game. Engagement is. ● For a few years the sourcing world loved the debate around what is sourcing. That is over, time and again it became clear that the best sourcers win out (in delivery and salary) because they are also the best at engagement. ● The best speakers and technicians had a similar skill set in this regard. Capable of taking high volumes of candidate data, moving from volume approaches they would cut this to a field as small as 20 for approaches. Highly personalised approaches sent out with high return on interest (75-80%) based on quality of approach and sustained follow up.

Sourcing as a specialism is continuing to evolve. If we follow the US, and we normally do, it’s going to be a career path offering solid long-term prospects and pay.

The question at Sourcecon was what should recruiters do now? ● WWW.RECRUITER.CO.UK 39

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CO M M U N I T Y

CAREERS

E

‘I need to redo the video – I was doing my washing in the background’ BRILLIANT MY BRI RECRUITMENT R CAREER

↗ LUCY SKRZECZKOWSKI, talent acquisition partner at food and beverage company Nestlé UK & Ireland

What was your earliest dream job? Fashion designer. I did fashion at university and ended up working for a company designing for Lonsdale in Australia.

What was your first job in recruitment and how did you come into it? At Office Angels, running the temps desk there for two and a half years.

What do you love most about your current role? I love the variety and the fact I can be creative with it.

What would you consider to be the most brilliant moment of your career? I would say rebuilding all the assessment material at Nestlé for level 1 roles. That’s been done within six months. I’m really proud of that.

Do you prefer a staycation or holiday abroad? Holiday abroad.

Outside the office, where would you like to interview a candidate or be interviewed? In their own home. You’ve got the ability to do video interviews but I would prefer to be interviewed in my own home because it says a lot about me. I’m really house-proud. I love interior design so I think I M AG E S | A K I N FA LO P E / ISTO C K

p49_recruiter_brillcareer.indd 49

Lucy Skrzeczkowski it says a lot about a person and they can answer questions really honestly.

What’s your top job to fill at the moment? We have a HORECA (hotel, restaurant and catering) sales manager role within Nestlé’s Nespresso business, selling that branding to those sectors. It’s a really exciting role but quite difficult to fill at the moment.

Laugh or cry, what did your most memorable candidate make you want to do and why? I had one candidate that video interviewed and said ‘I need to redo it – I was doing the washing in the background’. Then I had another candidate who said in her interview that she was really detailfocused. Her boyfriend edited her CV and she had no idea. He’d written some inappropriate things in there. If you’re going to refer to your CV – make sure you know what’s in it!

What’s the best or worst interview question you’ve ever heard? “What’s your best karaoke song?” Another one was “Out of these two people interviewing you, which one would you slap?”

Make us an offer we can’t refuse Work for Nestlé – it’s a global FMCG company. There are so many different avenues and they really love to develop internally. ●

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12/04/2016 12:53

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+44 (0) 20 7324 2771

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REC.05.16.052.indd 52

11/04/2016 15:46

CO M M U N I T Y

Business Advice

E

ACCELERATING YOUR GROWTH – SOMETIMES IT’S BETTER TO BE THE HARE Accelerating growth is not a synonym for compromising on service or flogging your staff and suppliers. It is about being smart about how you approach your business by making sure resources – both cash and people – are used in the most effective way with a focus on targets and your next milestone.

The more immediate a target, the greater the certainty with which you can make decisions. While there is no way to know the future, your assessment of how the environment will change over months rather than years is likely to be more accurate.The more immediate your target, the quicker you will know whether your assessment was accurate and whether you need to adjust your activity.

Four reasons why companies targeting an accelerated growth plan outperform their peers

Alex Arnot

➊ Accelerating growth requires a plan and targets – companies

that create a plan and execute it generally thrive. They are target-led creating a ‘success culture’ that becomes infectious as opposed to a ‘good enough’ attitude. People in the company feel like winners.

➋ Stretched targets don’t leave space for distractions – many

companies fail to achieve their objectives because they get distracted. Management and recruiters who have challenging but achievable targets do not have time to be distracted and tend to stay focused on the company objectives, plan and their role in achieving (or surpassing) those targets.

➌ Maximise growth through efficiency – while distractions reduce the likelihood of hitting targets, inefficiency means, by definition, that you could perform better. Inefficiency has many roots and when I start advising businesses I see the same ones time and again. Poorly negotiated leases on property, choosing the wrong CRM or multiposting technology are commitments that, having been made, can be hard to recover from. Poor working practices, bad hiring and the wrong training are easier to fix but still impact growth and margin.

Soliciting the insight of people who have already been through the

The SME Coach same things makes a huge difference to performance.

➍ Increased scale brings efficiencies – at a basic

level larger companies benefit from economies of scale around overheads such as accounting, technological investment, marketing, external advisors and so on. But the benefits of growth go deeper: your employees have the opportunity for career progression reducing your attrition rates and, the larger you are, the less your cash flow is likely to fluctuate, so you can invest with more certainty.

Companies that succeed in growing rapidly are agile, decisive and always looking to improve.

But more important than that – they are very focused on cash flow.

MY TOP FIVE TIPS FOR ACCELE R ATI NG G R O W TH

2

3 4

Make your cash work for you – without over-leveraging your business, look at invoice discounting and factoring to free up cash to invest in new talent. The sooner your next employee joins, the sooner they start earning for you.

Invest today to reap the rewards tomorrow – the more money you take out of the business, the less you can invest in growing it.

Keep your top billers engaged – they account for a disproportionate amount of your revenue.

Losing them will set your growth back.

↗

1

ALEX ARNOT is a non-executive director to 18 fast-growth companies

Leverage experience – you will grow faster if you learn from other people’s successes and failures.

You’ll find a wealth of information within your company as well as outside it.

5 Focused leadership and accountability – the business leaders are the most likely to distract the business from its objectives, targets and plans. Keep yourselves focused, ensure there is regular accountability for key functions of the company, and the business will follow.

WWW.RECRUITER.CO.UK 45

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14/04/2016 10:18

E CAREERS CO M M UNITY

A MR OP : The global executive search partnership has appointed 10 partners to its global team of executive search consultants.

Sandra de Bruijn – partner, Amsterdam | Alex Diffey – partner (promotion)London, | Anabel Galarza – partner, Quito | Miguel Herrezuelo – partner (promotion), Madrid | Avril Kellett – partner (promotion), London | Claudia Paladino – partner, Milan | Irma Real – partner (promotion), Panama City | Roland Theuws – partner, Amsterdam | Mircea Tiplea – senior consultant, Bucharest | Masha Yankovskaya – partner (promotion), London.

CARE E R MOVES: The multisector recruiter Career Moves has promoted Alexandra Biagioni from senior account manager to account director.

CHAN GE RE CRUIT MENT GROUP: The Scotlandheadquartered recruiter has promoted Victoria Cameron and Ross Gunn from senior consultant to managing consultant.

DHR I N TE RN AT IONAL: The International executive search firm has appointed Benjamin Lo as partner at its Hong Kong office.

DWP: The Department for

APPCAST: Mark Amdahl joins the pay-per-applicant job ad exchange based in Lebanon, New Hampshire, as vice president of customer success. He is joined by Leah Daniels as vice president of alliances and business development.

48 RECRUITER

MAY 2016

p56-57_recruiter_peoplemoves.indd 56

Work and Pensions (DWP) has a new director general, DWP operations, in the form of Andrew Rhodes.

Multi-sector recruiter Morgan Hunt has appointed Sue Cooper as chief executive.

Cooper joined Morgan Hunt in October 2011 from global recruiter Page Group, where she was a regional director. She was a director managing Morgan Hunt’s education, health and community services divisions, until being appointed managing director in October 2013.

She is joined by new deputy managing directors Dan Taylor and Sarah Wynn.

Taylor joined Morgan Hunt two and half years ago to head up its technical division and was subsequently promoted to the board in 2014.

Wynn joined the firm’s board in June 2014 with responsibility for the firm’s corporate services division.

Taylor and Wynn previously held senior and board positions at recruitment giant Hays and Adecco brand Badenoch & Clark, respectively, prior to joining Morgan Hunt.

FIRCROFT: The technical and engineering recruiter Fircroft has appointed Simon Preston as director of finance.

HYDROGEN: Richard Green, currently non-executive director on the board of a large number of small companies, joins the board as senior independent director and chair of the audit and remuneration committees.

Green succeeds Anne Baldock who is stepping down from the board.

KAYMAN RECRU IT M E N T SERVICES: The specialist recruiter providing sales and recruitment services to the business-to-business market welcomes Darren Turner as director of sales.

LONDON HR CO N N E CT IO N : The HR network has added two new members to its board – Simon Lloyd, the current general counsel and chief administrative officer at banking group Santander UK, and Keith Robson, an interim

Email people moves for use online and in print, including a short 14/04/2016 09:45

HR director with a portfolio of positions including one at insurer Aviva.

S PE CI AL I ST PEOPLE S E RVI CE S: The private equity-backed diversified recruitment group has appointed Neil McManus as M&A (mergers & acquisitions) director as it targets new acquisition opportunities.

STAF F L I N E : Dame Christine

MED IC S P RO: Duncan Thorburn joins the healthcare recruiter as business development manager.

N A K A MA SY DN E Y: Cilla Arnold has left her role as associate director at the global recruiter.

N OVA C ON TRACTI N G:

Braddock is to step down as non-executive director at the staffing services, outsourcing, training and employability organisation.

WE BRE CRUIT: The online

deedee.doke@recruiter.co.uk

tom.culley@recruiter.co.uk

Reporters Colin Cottell, Graham Simons sarah.marquet@recruiter.co.uk graham.simons@recruiter.co.uk

Contributing writer Sue Weekes Production editor (acting) Mike Nesbit, James Richards vanessa.townsend@recruiter.co.uk

Creative director Mark Parry Picture editor Akin Falope

talent acquisition company welcomes Malcolm Carr as head of its energy and industrial practice.

josh.hannagan@recruiter.co.uk

Nike Talent acquisition recruiter Digital, FMCG, HR, retail £competitive Amsterdam, The Netherlands fdu Senior researcher £35k-£45k London

SAGE GROUP: Isabelle Hung

PRODUCTION +44 (0)20 7880 6209 Production executive Rachel Young rachel.young@redactive.co.uk

PUBLISHING +44 (0)20 7880 8547 Publishing director Aaron Nicholls aaron.nicholls@redactive.co.uk

WRI TE RE SEARCH COMPAN Y: The strategic

Bromford Resourcing & talent adviser In-house executive search £26,084 - £30,533 + bens Wolverhampton

Senior sales executive Josh Hannagan Sales executive Joe Elliott-Walker

RECRUITER AWARDS/ INVESTING IN TALENT AWARDS +44 (0)20 7880 6236 Events Rebecca West rebecca.west@redactive.co.uk

joe.elliott-walker@redactive.co.uk

CIRCULATION and SUBSCRIPTIONS To receive a regular copy of Recruiter, the leading magazine for recruitment and resourcing professionals, telephone +44 (0)20 8950 9117 or email redactive@abacusemedia.com • Recruiter is also available to people who do not meet our terms of control: Annual subscription rate for 12 issues: £29.99 UK; £35 Europe and Rest of the World • To purchase reprints or multiple copies of the magazine, contact Abacus e-Media T: +44 (0)20 8950 9117 or email redactive@abacusemedia.com CONTRIBUTIONS Contributions are invited, but when not accepted will be returned only if accompanied by a fully stamped and addressed envelope. Articles should be emailed. No responsibility can be taken for drawings, photographs or literary contributions during delivery, transmission or in the editor’s hands. © 2016 Redactive Media Group. All rights reserved. This publication (and any part thereof) may not be reproduced, transmitted or stored in print or electronic format (including but not limited to any online service, any database or any part of the internet) or in any other format in any media whatsoever, without the prior written permission of Redactive Media Group.

Redactive Media Group accepts no liability for the accuracy of the contents or any opinions expressed herein. The publishers cannot accept liability for any loss arising from the late appearance or non-publication of any advertisement for any reason whatsoever. ISSN 1475-7478

Total average net circulation between 1 July 2014 & 30 June 2015 – 18,667.

Recruiter is also sent to all REC members

For more jobs, people moves and career advice go to ● recruiter.co.uk/jobs ● inhouserecruiterjobs.co.uk ● internationalrecruiterjobs.com

biography, to recruiter.editorial@redactive.co.uk p56-57_recruiter_peoplemoves.indd 57

RECRUITMENT ADVERTISING +44 (0)20 7880 7607 Tom Culley

tom.culley@recruiter.co.uk

A selection of vacancies from recruiter.co.uk

has been appointed director of resourcing strategy and executive recruitment at the multinational enterprise software firm.

EDITORIAL +44 (0)20 7880 7606 Editor DeeDee Doke

ADVERTISING +44 (0)20 7880 7607 Sales manager Tom Culley

YOU R NE X T M OV E

The international executive search firm has appointed Paola Gutierrez Velandia as regional head of board services for Iberia and Latin America.

CONTACTS

recruiter has appointed David Jones as managing director.

Bridget Dickinson is financial controller at the Leeds-based contracting specialist.

P ED ER S EN & PARTN E RS :

Redactive Publishing Ltd 17 Britton Street, London EC1M 5TP 020 7880 6200

Scan here to get your own copy of

14/04/2016 09:45

E THE LAST WORD CO M M UNITY

Gregory Allen How talent professionals can be business leaders

In an age of change, I am interested in how little we adapt to it. For example: I read many articles about the so-called ‘War for Talent’, identified in the early 1990s. Next, I hear this particular internecine conflict is over; but then, just as quickly, it’s back.

Is talent really such an elusive commodity? Or is this the product of how we look at strategy strategically?

We push for HR to have a seat on the board, only to wonder, once it gets there, is it actually influencing the people agenda or the business agenda?

Is strategic workforce planning the sacred cow in all our recruitment strategies? Sometimes, I think perhaps it is.

In my past roles working with recruitment process outsourcing (RPO) companies, I often spoke of how those entities were bought in as the whipping boy for an overbearing and stringent procurement process – ripping out costs while demanding higher performance, quality and talent. On several occasions I evangelised the fact that if you outsource the problem, you’ll just end up with just a different view of the same problem – and pay for it.

Effective people strategies look at where the business is going in the next five to 10 years, and then asks whether the business has

50 RECRUITER

the right capability now?

And while we push on to the new objectives, do we need something else? As [American leadership coach] Marshall Goldsmith says: “What got you here, won’t get you there.”

Organisations transition and flex with both the market and customer trends.

Self-help books focusing on dealing with change Who Moved My Cheese? (Spencer Johnson) and My Iceberg is Melting (John Kotter and Holger Rathgeber) both have people, behaviour and talent at their heart. So why is talent acquisition not credited with achieving transformation and change?

As leaders in resourcing, we need to be challenging the c-suite, through our board members, into thinking not only about the direction and timbre of change, but also about ‘build or buy’ and organic or inorganic growth. Where will talent come from? Are we in the right country?

Should we go East or West?

Should we hire graduates or professionals? And what is the cost of the change?

Recruiters are agents

of change. We red-flag, direct and ward our organisations off the rocks of depleted talent. We have tools that map and can help us navigate our way to achieving corporate objectives, especially in service-based organsations.

We have tools that can identify the behaviours of nervous anarchy, activism and talent leaching, based on social media activity.

This is how we as HR professionals should be challenging the status quo and demonstrating that what got us here won’t get us there… and this is why.

This is no longer a ‘bums on seats’ job – not for agencies, RPOs or inhouse. We need to make a meaningful contribution to the business by identifying whether strategic corporate objectives are deliverable, based on talent, or just an empty promise. ●

+ Gregory Allen is global head of resourcing at Lloyd’s Register and winner of In-House Recruitment Leader of the Year at the 2015 Recruiter Awards

MAY 2016

IM AGE | PET ER SEARLE

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