Recruiter - Special Report Jan/Feb 2021

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2021: The year of the start-up? By Alex Arnot

EDITOR’S COMMENT Welcome to our Special Report: Rethink. Reboot. Reset. A few familiar and some not-so-familiar experts share their thoughts on what is likely to come our way in 2021 and what to watch out for: how recruiters fared in the Brexit deal, what the M&A picture looks like and how 2021 could be the year of the start-up. We also explore how a new organisation with relevance to many has burst into bloom this month and how another is experiencing a reinvention, to continue with our theme. As one interviewee told me that last spring could have spelled the end of a fairly long-running business. Instead, he stated: “We said, ‘No… let’s do something different’, and boom, off it’s gone!” Let us light your fire for a passionate and revitalising 2021.

DeeDee Doke Editor Recruiter/

ood riddance 2020. Welcome 2021. It is time to open our minds to potential new opportunities and revenue lines in 2021. For example, there are now many reasons why members of your team might be looking to go out on their own and set up their own business in 2021. So what do you do, especially if they have been a loyal and successful member of your team for the past few years? Do you try to turn them around? Potentially. But what if that is not what they want? If they do stay, it is unlikely they are doing so for the right reasons, and it’s unlikely to be a long-term successful solution. Immediately after the last big financial shock, more start-ups launched in


2008-09 than at any previous point in history. Anyone who has spent time on LinkedIn over the past six months will have already seen this trend starting up again. And 2021 will see this accelerate. I believe it will be the year of the start-up. If you have a quality member of your team considering starting up, rather than letting them go or threatening legal action, instead why not create an incubator environment where you invest in them rather than lose them? Support them, provide office space if necessary (you may have some of that spare due to the current environment), allow them to use your existing CRM/processes and even a share of your support team etc. Or you could offer them the chance to launch a start-up for you on the same basis, giving them an equity stake in that new

2021 is here, and businesses that have survived the calamitous circumstances of 2020 must rethink, reset and reboot their operations, strategy and vision to take them forward. Take on board the following words of wisdom from these unrivalled business experts COMPILED BY DEEDEE DOKE


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of employees say they are regularly monitored for mental health and wellbeing

ALEX ARNOT is founder of MyNonExec and board adviser to more than 30 recruitment companies ⦁

How to think about culture in 2021 By Professor Damian Hughes ou already know that culture is the single most powerful force driving your group’s performance. The real question is, how does it work? How do you make your group’s culture better? How do you fix one that needs improving? The answer, as with so many other big questions, lies in the ‘how we think about it’. Traditionally, culture is seen as ‘the soft stuff ’ – a special set of characteristics that groups possess. The problem with this approach is: there’s no ‘how’. This is the reason why culture-building can often seem so


mysterious and frustrating. There are no solutions, no plans and no process. There is a better way. It’s called a behavioural model of culture. Here’s how it works. Stop thinking in terms of ‘values’ and ‘mission’ and ‘competencies,’ and start thinking about your group’s culture as a continuous set of three fundamental signals: 1. Everyone knows how to behave – this ensures transparency and removes ambiguity 2. We measure and share accurate information about these behaviours – this provides us with a constant means of orientation 3. We do this with safety and respect – we address the behaviour and not the person. Seen through this lens, culture is not about soft stuff — it’s about behaviour. Your group’s culture doesn’t depend on who you are; it depends on what you do. Culture isn’t magic, it’s about tuning into a series of small moments that send powerful messages: we understand how to behave here; we are psychologically safe to make mistakes; we are headed in this direction.

Professor Damian Hughes is an international speaker and bestselling author


business. This could be a better solution than losing them altogether. In return you can take an equity stake and charge a fee for the use of these facilities that can either build up against an increased equity stake in their company or that they pay back once they start making revenues. With 2021 likely being the year of the start-up – the timing for you to rethink could be right now.


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Finding purpose in 2021


By Becky Willan

of business owners and directors believe more and more recruitment firms understand the benefits of caring for their workforce’s mental health and want to make a difference. 32% of the workforce feel the same way

aving a clear and well-understood purpose encourages business leaders to think expansively about their future, rather than getting stuck in a constant cycle of short-term thinking. Purpose provides long-term direction and a roadmap out of pre-pandemic ways of doing things, enabling brands to start thinking about how they want to set up for the future.


1 Building back better

When it comes to business, the pandemic has challenged everything. Even for those fortunate businesses not

The Brexit Deal: a mixed bag for recruiters By Neil Carberry e have a deal. Like most business voices, the REC welcomed that fact on Christmas eve. It means we avoid a potentially disastrous cliff-edge, and goods keep flowing – if not entirely smoothly. It's a start – a platform we now need to build on. Being struck so late in the year, the deal is not as deep or wide-ranging as businesses had hoped. That's especially true for services which make up 80% of our economy. For



recruiters, the deal is a mixed bag. and more certainty and support are deserved. Key points for recruiters: Access to EU markets: One of our biggest fears was that, without a deal, recruiters would have to set up an office in an EU country to do business there. That would have been impossible for many. But the deal is reassuringly clear that this won't be the case. Travel mobility: Recruiters will be able to travel to the EU on

in a fight for survival, the last year has forced adaptation to the extreme. The traditional corporate structure has been well and truly dismantled, and 2021 will be a time to build back – and some companies will build back better. For those who do build back with purpose at their heart, the rewards in terms of setting up for the future will be great.

2 The activist CEO

Rockstar CEOs will be replaced by activist CEOs, businesss leaders who are passionate about an issue or simply intent on leaving a positive mark on the planet. They aren’t afraid to stand for something, and to have their voice heard. We expect to see a

business for up to 90 days in a 180-day period, generally without needing a visa. Certain activities are restricted though, so recruiters need to consider those carefully. Non-tariff barriers: Some may be allowed under the deal in certain circumstances, such as restrictions on placing agency workers across borders and qualification

requirements. In truth, EU Member States will differ from each other in how services rules apply, so you will need to be clear on how you will operate in each country. Data protection: It’s not confirmed that the EU sees the UK’s data protection regime as equivalent to their own. That’s a problem for recruiters who, perhaps without thinking twice, send and receive vast amounts of personal data to and from the EU. For now, the deal allows for data to continue to flow as normal for up to six months until when an agreement must be reached. This has bought us more time, which recruiters should use wisely. Keep up with plans

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fresh boldness among CEOs and brands when it comes to activism, as a result of the pandemic. Businesses that have managed to evolve in ways they could not have imagined pre-2020 are emboldened.


‘Cancel culture’ isn’t an internet phenomenon that will go away; it reflects citizens’ rising expectations around the world and the increased scrutiny that brands and businesses will face this year. The events of 2020 mark a critical shift in people’s understanding of the role businesses play in society, and consumers expect them to lead by example. But as some brands rush to join the conversation before they’ve put in real plans and concrete action, we’ll continue to see more backlash against anything that suggests ‘purpose-washing’. We


of senior leaders say they have mental health first-aiders in place

employees believe that promoting mental health is done as a PR or ‘tick box’ exercise SOURCE: M ENTAL HEALT H IN RECRUIT M ENT SURVEY REP ORT, DECEM BER 2020: 2, 200 RESP ONSES

Increased scrutiny and backlash from consumers

on alternative mechanisms for data sharing to avoid disruption if an agreement can't be reached. Data adequacy remains a key priority for the UK-EU relationship going forward. Mutual recognition of professional qualifications: No provision. As it stands, UK professionals must comply with qualification requirements in each EU

1 in 4

expect ‘purpose fails’ to be publicly denounced more intensely this year.

sitting firmly on the board 4 Sustainability

If the 2000s saw the emergence of the CTO (chief technology officer) and the 2010s the creation of the CCO (chief customer officer) – then the 20s will be marked by the arrival of the CSO (chief sustainability officer) as the new most important voice at the executive table. We’ve seen the CSO’s rising influence and importance at board level in recent years, and in 2021 we will see sustainability and purpose more fully integrated into the DNA of organisations and being led from the top down.

alliance over the 5 Business common good In 2021, we expect to see more businesses partnering on

member state they want to work in and vice versa. For recruiters trying to place workers across-borders, this is especially problematic. A route for mutual recognition is to be agreed in the future, and we will keep pushing on this. In the meantime, recruiters must establish a process relevant to the sectors you represent on a profession-byprofession basis.

purpose-related issues, sharing agendas and working together to create positive change, following on from 2020, which fostered a spirit of collaboration for common goals. Businesses can deliver positive change, if they come together. We may even see increasing external pressure for these business alliances in 2021.

becoming 6Sustainability accessible

More businesses and brands will provide solutions, which make sustainability accessible for everyone – and it is imperative they do. Consumers being priced out of sustainable choices is unacceptable. Increasingly, they expect to see the cheapest available products made as responsibly as possible.

Becky Willan is co-founder and CEO of Given, the agency for purpose-driven brands

The deal as a whole: The devil is in the detail – or the lack thereof. A bridge is there, but it needs to be widened in terms of services rules, data and professional qualifications. The free trade deal can, and must, be built on to fully benefit the recruitment industry and the wider services sector – 80% of our economy and the area in which the UK’s trading position is

strongest. The coming weeks and months will be crucial.

Neil Carberry is the CEO of the Recruitment & Employment Confederation. Note: The REC will be pushing for an improved deal for recruiters as part of the wider services sector. Recruitment is stronger as one voice, the REC says, so get in touch and let them know what would help you


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M&A: Reason for cautious optimism heading in 2021 By Mark Maunsell hile deal volumes remained subdued through 2020 and on a year-on-year basis are down by more than 50%, it is the positive momentum in the latter parts of Q3 and into Q4 that will lay the foundations for the next 12 months, giving reason for optimism. The deals highlight the resilience and appetite of trade and private equity (PE) to continue engage in M&A in the sector and come against a backdrop of a global pandemic, ongoing Brexit negotiations and impending IR35 changes. Key deals completed in Q3 and Q4



included the merger of Fircroft and NES Global, which saw the number three and five largest engineering staffing players brought together; CPL Resources taken private by Japanese-headquartered Outsourcing Inc; and PE firm Livingbridge exit The Up Group. A further high-profile deal came in the form of Towerbrook investing in ICS, alongside ONEX, although the deal completed earlier in the year. The deals highlight several key trends, which continue to shape the M&A landscape: 1. First, international firms remain interested in the UK & Ireland as leading players look to build out global, more resilient businesses with

exposure to attractive and mature markets. 2. Secondly, PE remains a key force in driving the level of M&A activity in the sector, either through acquiring new platforms in attractive niches or exiting portfolio companies at the end of an investment period. 3. The third trend relates to sector exposure and plays to resilience, with both financial sponsors and trade buyers interested in deploying capital in the healthcare, pharma & life sciences and specialist IT sectors. While these challenges are likely to continue to hamper M&A in the immediate term, business sentiment and performance is improving and this, in conjunction with significant pent-up capital, will lead to a return to a higher level of M&A activity.

Mark Maunsell is director of business services marketing intelligence at Clearwater International.

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Special Report Report Special ADVERTISEMENT FEATURE

PEOPLE, PROCESSES, PROTECTION - HOW TO TURN IR35 INTO AN OPPORTUNITY With the upcoming changes to the IR35 reforms for the private sector just round the corner, Andrew Webster explains how savvy recruitment agencies can steal a march on their competitors and win new business


nough has been said about the IR35 Off Payroll Private Sector Reform. Countless predictions and forecasts have been written but none of them change the fact that in a short number of weeks, it will impact all stakeholders in the contracting chain. Whether end client, agency or contractor, this change is likely to hamstring growth and income if nothing is done to navigate the new rules. However, the changes also bring a huge opportunity. Savvy agencies will not just retain talent that operates through a PSC (and end clients) on their books - they could also win new business. Those with the right knowledge and resources will have a competitive edge over the less-equipped recruiter. Workr Compliance have developed a three-pronged


approach designed to keep agencies profitable and compliant. By prioritising these Ps – People, Processes and Protection – you’ll protect your bottom line, and potentially grow it as well.

People If you want to navigate the reform successfully, you need to know more about IR35 than what’s changing. You need to understand case law and what IR35 compliance best practice looks like. Not to mention make sure everyone involved in managing your contractor books is clued up on an ongoing basis, as HMRC will likely start enforcing across the supply chain. Consultants that understand the Off Payroll IR35 Private Sector Reform will be in a much better position to educate clients – and ensure they make the right decision

on how best to manage contractors post-April. If you don’t, you risk losing contractor books altogether. Without knowing why a client is more inclined to bring all contractors under PAYE, you’re unlikely to be able to convince them otherwise. Nor will you be able to explain to a contractor how you can hope to establish and maintain a compliant IR35 status throughout their chosen career as a contractor or freelancer. What’s more, it’s imperative that all parties within the contractor supply chain understand and are capable of establishing the status of roles. Without this knowledge, end clients are unable to pass with confidence out of scope roles to their chosen agency – restricting them from quality talent. As a first priority, Workr

For all the latest IR35 news and updates you can visit the Workr Compliance IR35 hub (https://workrgroup. com/wc/ir35-hub) by scanning the QR code:

Compliance helps agencies and end clients get up to speed. We have a team of IR35 experts to demystify the legislation and genuinely collaborate to meet the responsibilities. Their advice covers everything from the complications of blanket decisions to custom guidance on the nuances of preparing for the changes and enforcement whilst not affecting operational delivery.

Process You can’t afford a significant upheaval at this stage. Wherever possible you should be attempting to maintain business as usual. In order to

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do this, your methodology and process of issuing a ‘Status Determination Statement’ needs to be seamless. If not, you risk losing more talent than you bargained for – denting your income. Unfortunately, time isn’t on your side. Even if it was, manually assessing each and every contractor on your books is taxing and risks a heavy number of inaccuracies. One proposed solution is the HMRC CEST tool. However, the free-to-use software has been heavily criticised for its unreasonably high standards and lack of consideration for mutuality of obligation. Specifically, most PSCs have

had an issue with the fact that HMRC has reversed decisions when disagreeing with CEST assessments. Thankfully, CEST isn’t the only option on the market. There are a handful of established and proven tools that have been developed by those on the frontline of contracting. That being said, at Workr Compliance, we believe it’s otherwise impossible to be compliant unless using a blend of intuitive online assessment tools and a consultative approach. After all, a blended approach ensures you can quickly process status assessments without

With only weeks to go before IR35 takes effect, can you afford not to utilise the most robust and proven IR35 solution on the market? At Workr Compliance, we apply a genuine understanding of the intermediaries legislation and off-payroll working rules in a commercial context. We’ll collaborate throughout project delivery, assessing the potential impact to each stakeholder in the supply chain of status outcomes. We’ll ensure that compliant and transparent processes are created, implemented and adhered to in order to meet HMRC expectations of reasonable care and, anticipated HMRC enforcement. We’re committed to giving agencies the upper hand, so apply our expertise to your negotiations today and contact Workr Compliance on: or 07827810851

cutting corners...

Protection Perhaps the biggest reason why some recruiters haven’t jumped at the opportunity that comes with the IR35 reform is the risk factor. The new rules put the onus of liability on the agency – as the fee payer, the buck rests with you if HMRC did call your status determination assessment into question or, from investigation, prove that ‘reasonable care’ has

not been met. It’s for this reason that agencies should seek a robust solution that comes equipped with the correct insurance for their employment status tax investigations and, possible tax loss. Only then will you have peace of mind when moving forward with contractor recruitment.

Andrew Webster Founder & Director Workr Compliance


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s RPO continues to move from strength to strength and shapeshift into ever more strategy and technology-driven businesses, APSCo Outsource is starting with a strong foundation: more than 20 founder members representing the crème de la crème in RPO. Few if any practitioners know RPO better than Melanie Forbes, and Forbes has joined APSCo Global to lead APSCo Outsource as managing director. “I looked at it, and thought, it’s got my name all over it,” says Forbes of her discussion with APSCo Global CEO Ann Swain about the new organisation and the role of MD. An enthusiastic RPO advocate, Forbes says she “absolutely loves” the outsource sector, describing it as “more strategic, going up a gear, the sexier side of recruitment. The relationships are different”. The new role will allow her to both operate in the sector she enjoys and knows, and take on the new opportunity to be a voice for industry. “In outsourcing,” she says, “there are fewer providers [than in recruitment/ staffing] – in true outsourcing, maybe 100, everybody knows everyone. My peers are effectively now my customers.” Her vision of APSCo Outsource is as customer-centric as the RPO organisations she has worked in. “I want members to shape what we become, and be governed by them,” she says. Governance will be provided by a member representative committee,




FUTURE A new organisation, a new organisational structure – it’s all about rethinking, rebooting and resetting in this new year. Here we talk to two organisations at two different starting points of the journey into 2021 40 RECRUITER

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THE BLOCK Launched by APSCo Global to provide a voice for the recruitment process outsourcing (RPO) industry, APSCo Outsource is the new organisation on the block for 2021

Expansion into international markets is likely, Forbes says, especially to geographies in which APSCo has already established a presence such

consisting people, isting of 10 peo with their first meeting set ir first for February. The first members’ meeting will follow in March. Membership will be open to RPOs, managed service providers (MSPs) and others in the outsourcing market. APSCo Outsource will lobby government on the impact of legislation and policy on the sector, produce research specific to the outsourcing market and “provide a trusted badge of quality which will

be recognised by end-user b clients as best in class”, an APSCo Global statement has said. Forbes will direct one or two staff, and there will be a dedicated legal help desk, as well as a well-filled event calendar. “I want members to shape what we become, and be governed by them,” she says. Technology companies, which play integral roles in the outsourcing market, will be welcomed as “trusted partner” affiliates, she says.

as Australia, Germany and Singapore. Reflecting on market trends of the past year, Forbes said she had seen MSP, with its focus on contingency workforce solutions, “grow hugely, RPO not so” as Covid lockdowns and more have forced employers to rely more heavily on flexible staffing. As evidenced by the Covid crisis, MSP in particular, she says, “responds very well to opportunity and chaos”. An area in the MSP/RPO world that she sees offers room for improvement is bridging the gap between technology companies and MSPs/RPOs where technology is concerned. The outsourcing organisations “need to find a way to work with them to make sure each customer has a seamless experience”, Forbes says. Illustrating her view of all parties joining together to create the best possible customer experience, she adds, “you need an orchestra”.

APSCO OUTSOURCE FOUNDING MEMBERS Advantage xPO Allegis Global Solutions Avencia AMS Capita Giant Group Guidant Global Harvey Nash Intelligent Resource Kelly OCG LA International Lorien Resourcing

ManpowerGroup Morgan Hunt UK NES Advantage NHS Professionals Page Outsourcing Pro Unlimited Project People Randstad Sourceright Resource Solutions Rullion Sanderson Solutions Volt


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ne could say that Elite Leaders has served as a sort of finishing school for ambitious and committed recruitment business owners, where they would hear talks by great recruitment legends, network with peers, and generally immerse themselves in polishing and honing their skills. But 2021 is beginning with a reset and reboot for Elite with a bit of reinvention, too. The ‘finishing school’ remains intact, but there’s greater variety of offering across a wider spectrum of


needs. Also joining O’Sullivan in the boardroom are new CEO Sid Barnes and new COO Tara Ricks, along with a few other principals (box, right). The new span of offerings can take recruiters from “the bedroom to the boardroom”, the trio joke, referencing the physical starting point where many a recruiter has launched a start-up business. “Elite used to be about members and meetings; for us now, it’s about clients and advisory,” says Barnes during an exclusive conversation with Recruiter. Barnes joined last March. “We had big plans,” he says. “Then, this ‘thing’ happened. Since March, we’ve pivoted… Our stand-out proposition is that we are advisers, and everything we’ve been doing since March has been advisory. That’s where we see we stand out and we add most impact, or benefit, to

ELITE STRUCTURE Executive Board CEO and co-owner Sid Barnes COO Tara Ricks Chairman John O’Sullivan Operating Board Principal, Elite Associates Midge Bennett Principal, Elite Partners (Co-ordination) Adam Jordan Principal, Elite Leaders (Marketing & Comms) Chris Cranshaw

our clients. It’s a fantastic industry, and our raison d’etre is helping our clients grow for the good of their colleagues, and the candidates and the clients in the market.” O’Sullivan says the trio had


FINISHING SCHOOL In the recruitment world, it seems there has always been an Elite Leaders. With different linkages at different times, yes, but the name ‘Elite Leaders’ has been a constant, along with its jovial founder, John O’Sullivan 42 RECRUITER

Service lines Elite Future Leaders (succession support) Elite Associates (ambitious start-ups and fast-growth businesses) Elite Leaders (established medium-sized businesses) Elite XL (management advisory to businesses 12 months from M&A event) Elite Events Elite Meet Elite Partners Elite Experts

worried when Covid hit that its impact would force down numbers of Elite members/ clients. But that’s not what happened. “I’m pleased to say about half of our members have actually grown from where they were then to where they are now.” Spending much more time with their clients/members during the first months of the pandemic “with people allowing themselves to be vulnerable in a horrid marketplace”, says Ricks, led to the discovery that “what we thought was a pivot actually became what we look like as a community… it’s made us realise what the appetite is in the market for that kind of support on a long-term basis”. The three clearly find it satisfying to look back to last March, knowing the path they chose was right for then, for now and for the future. “Last March,” says Barnes, “we were cancelling meetings and that could have been the end. But we said, ‘No, it’s not. Let’s do something different.’ And boom, off it’s gone.”

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Reboot, rebuild, reset 2021 ADVERTISEMENT FEATURE

RIGHT 2021, WHAT’S IN STORE? People Group Services offers solutions to some of the challenges ahead 2 020 – what a year! A pandemic that stopped the world in its tracks and racked up the biggest peace-time deficit ever. 2021 hasn’t gotten off to the best start. Back in lockdown until at least mid February, we’ve a lot of ground to make up. Here are some of the biggest challenges we see coming for recruiters, along with solutions on how to turn them into opportunities.

How is the Government going to steady the financial ship? Going after tax avoiding umbrella schemes is an easy win, so expect a more aggressive regime. This can be a dangerous time for recruiters. Some umbrellas sail close to the wind when it comes to tax loopholes. People Group offers one of the few payroll solutions that has been reviewed and recognised by HMRC. 2021 is the year to sort this out. We offer a free Payroll Compliance Analysis. Find out more here: payroll-compliance-analysis

IR35 (again!) The private sector was given a

year long reprieve on IR35. This ends in People Group Contacts April. Anyone W: engaging long-term E: contractors will need T: 0345 034 1530 put pressure on to get on top of IR35. They LinkedIn: People-group-ltd recruiters’ processes. could be classified as Twitter: @Talk2PeopleGrp Achieving incremental ‘disguised employees’ and efficiencies in admin, subject to a different tax cashflow and how consultants and we’re not just talking regime. When it comes to IR35, are working will positively about Zooming. Because get informed. You should have impact your commercial location isn’t an issue a clear understanding of the performance. anymore, recruiters will be risks. At People Group, we deliver able to engage with a wider You can find our ‘Guide to value by optimising your pool of candidates while at IR35’ on our website payroll and recruitment the same time improving their ( process. One way is through selection with AI. Candidate IR35-Is-your-business-ready. pdf) Hive360’s or for a no customisable, obligation mobile the app,VAT Engage. mitigating features of Management systems will also chat with one of our experts, our PEO product. When the evolve to drive productivity. you can book an worker is jointly employed by But before you strap on your appointment: hello@ us and the agency only 1% of jetpack to the future, bear in our invoice value attracts VAT. mind that you’ll need to This delivers predictable, balance the personal touch Performance through reliable and sustainable cash with automation. Choose your Efficiency & Innovation flow efficiencies. tools and partners with care. According to the International Take Compliance. Our Labour Organisation, nearly Tech Acceleration award-winning Compliance 200 million people around We all know 2020 has product can reduce the time it the world will lose their jobs. accelerated digital takes to get a contractor to This flood of candidates will transformation dramatically work by up to 50%. That’s an easy money-saving and revenue generating tactic that How We Help uses tech to enhance the At People Group we’re in the business of making work easy experience. and more rewarding for recruiters, contractors and hirers. We offer a free Digital This article is a cut down version of a wider content piece. Efficiency audit. Contact us To deep dive into how we see 2021 going, read the full today to organise yours article: efficiencyaudit@ WWW.RECRUITER.CO.UK 43

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