Recruitment Matters November 2012

Recruitment Matters Issue 10 November 2012

Trade Association of the Year

What’s inside

James Crockford – Associated Images

2 The Intelligence The recruitment industry came together at the Grange St Paul’s Hotel in London on 25 October to celebrate the best in the business at the IRP Awards 2012. RM salutes the winners on pages 4 and 5.

Agency in a box Within weeks of its launch interest has soared in the REC’s unique Business Toolkit which is available to anyone looking to start or grow a recruitment company.

Described as an ‘Agency in a Box’, the toolkit includes all the documentation, advice guides and support material needed to run and develop a successful business.

The Toolkit has been produced for recruiters by recruiters and has just undergone a significant review to ensure it has the most up-to-date and relevant documents that all recruitment businesses need.

It includes business and financial plan templates, marketing, HR and credit control advice, negotiation tips and information on how to provide the best service to clients and candidates.

This includes templates for sending out letters to candidates before and after interviews and to clients following visits, candidate registration

forms and job description templates.

“We provide start-up and business consultancy support throughout the year and have worked closely with experienced coaches, mentors and recruiters to ensure our toolkit is the right mix of everything a recruitment business needs,” says REC director of member services Anita Holbrow.

“The advice guides have been written by people who have run successful recruitment businesses for years.”

She adds: “It is simply the most comprehensive product that anyone who is starting or wanting to grow a recruitment business could want, and it will be updated every year to take into account HR and legislative changes.”

The Business Toolkit is keenly priced at £595 plus VAT for members and £995 plus VAT for non-members.

Members can purchase it directly from the REC website www.rec.uk.com/toolkit or by calling 0207 009 2144.

Time to focus on good news and growth, says Recruitment Index Benchmarking’s Chris Ansell and the REC’s Roger Tweedy

3 REC Talk

Tom Hadley on boosting recruitment’s positive image during 2013 and Kevin Green applauds the IRP Award winners and gets tough over standards.

Big 4-5The Talking Point

Posh frocks and prizes at the IRP Awards in London as the industry toasts its amazing talent

6

Business Matters

A legal update on pension auto-enrolment and advice on buying insurance when expanding overseas

Institute of 7 Recruitment Professionals A chat with two of the IRP Certificate in Recruitment Practice’s top students, Caroline Fox from Kelburn and Susan Coshan from Ace Appointments

8 Events and training It’s time to start planning your company’s training needs for 2013

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REC Research

the intelligence Roger Tweedy says the latest Recruitment Industry Trends survey shows continued growth, particularly in the temp market, but pressure on margins remains

Fig 1: Recruiter revenue growth and vacancies 20% 10% 0%

In the 12 months to April, turnover in the UK recruitment industry increased by 4.3% to £25.7bn, according to the latest annual industry report.

The result is slightly ahead of expectations (the 2011 REC Medium Term Forecast predicted growth of 3.5%) and it demonstrates the resilience of the sector in a challenging business environment.

Temp strength The growth came from temporary staffing. Total turnover from this area jumped 5.5%, reflecting a period of strong growth in the first half of the survey period. Turnover from permanent hires contracted by -6.6%.

The survey also covers industry volumes. The number of temporary agency workers now stands at 1,105,894, an increase of 5.4%.

In spite of growth in the first quarter of 2012, the total number of permanent placements made through agencies decreased by -8.9% to 550,448.

Staffing across the industry remained broadly static, increasing by just over 1,000 to 92,446. As usual, there was a shift in job roles within this total, reflecting changing business priorities.

The most significant movement was an increase in administrative and management roles from 25,003 to 28,243.

Margins squeezed The sustained pressure on the industry has had a material impact on margins earned over the period, especially at the higher end of the margin scale. The proportion of agencies earning over 25% halved

2 Recruitment Matters November 2012

for the second year running.

Key Findings for 2011/12: • Overall industry turnover grew to £25.7bn.

• Temporary placements rose to 1,105,894.

• Permanent placements contracted to 550,448.

• Staff employment in the recruitment industry rose to 92,446.

The Recruitment Industry Trends report also includes the 2012 REC Medium Term Forecast which predicts total turnover for the next four years.

The report was published in November together with a separate Working Paper called ‘Back to the Future’ which develops the theme of an evolving recruitment market place and explains how the mix of recruitment channels is changing over time.

It tracks the evolution of the recruitment model since 2004 using key sources (CIPD, ONS, REC) to show the changing use of newspaper advertising, agencies, websites and social media to attract talent. It explains how this balance is likely to develop over the next 10 years. Both reports are available from the REC’s website www.rec. uk.com/research/bookshop.

Roger Tweedy is director of research at the REC and you can follow him on Twitter @:Tweedy_REC

Recruitment industry turnover 2005/06 - 20011/12 30 £Bn 25

-10% -20%

––– RIB median revenue ––– ONS vacancies

-30%

-40% Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug 09 10 11 12

Fig 2: Temp margin 21%

19%

17%

15%

AprJunAugDecFebAprJunOctDecFebAprJunOctDecFebAprJunAug 09 10 11 12

…And now the good news Discussions in recent months have tended to focus on the pressure being put on revenue growth and net disposable revenue margins. Yet there is good news to report.

Figure 1 shows the close correlation that exists between job vacancies across the economy as a whole – as reported by the Office for National Statistics – and top-line revenue growth.

As you can see, growth in vacancies is a good indicator of recruiter revenue growth. The relatively good rebound in the growth in vacancies in recent months hopefully indicates an improvement in recruiter revenue growth over the next few months. We will report back in a later edition on whether our optimism was well-founded.

Figure 2 reveals further good news – a steady increase in temporary margin, that is, the difference between temporary turnover and the associated payroll costs including employers’ National Insurance, divided by temporary turnover. Median temporary margin has increased from its nadir of 15.8% in October 2010 to more than 17.5% in August 2012. That is still 2.5% below the halcyon days of spring 2009 but is a welcome improvement, delivering an 11% increase in temporary net disposable revenue.

20 15 10 5 0 05/06 06/07 07/08 08/09 09/10 10/11 11/12

• Chris Ansell is chief financial officer at Recruitment Industry Benchmarking (RIB). The RIB Index provides bespoke confidential reports on industry trends. See www.ribindex. com; info@ribindex.com: 020 8 544 9807. The RIB is a strategic partner of the REC.

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Leading the Industry

Campaigning to boost our image One priority for the REC Policy & Professional Services team in 2013 will be to change the negative perception the business community can have about recruitment, says Tom Hadley One of the major challenges for our sector is how businesses perceive and use – or choose not to use – recruitment providers. With this in mind, we will drive home our message on quality, safety and sustainability to influence procurement policy in 2013.

We have an excellent relationship with the Chartered Institute of Purchasing & Supply and with employer bodies across all key sectors. The REC’s Managed Services Forum also continues to drive a good practice agenda through the promotion of a Code of Practice for vendor arrangements. The key to making this work is to drive awareness among client organisations so it is pushed down through the supply chain.

We will also drive the equality agenda. The recent ‘Inclusive Recruitment’ event we hosted with Diversity Works and Race for Opportunity brought together recruiters and employers, and produced a route map for future progress on issues such as addressing subconscious bias. There was a ringing endorsement for the positive role recruiters can play in helping clients deliver their diversity and inclusion strategies.

Crucially, we will continue to make a difference on youth employment. A recent report by the CIPD made the business case for taking on young jobseekers. One conclusion was that an increasing number of employers are now reviewing who and how they recruit, and are committed to helping young people get a foothold on the job ladder.

At the same time, many businesses struggle with the administration involved in apprenticeship schemes and other initiatives such as the government’s Youth Contract. This means there is a key role here for intermediaries who can cut through the complexities and make things happen. Recruiters are already making a difference by working with clients on apprenticeships.

Ultimately our aim is to promote the positive role of recruiters within end-user organisations across HR, procurement and line managers. A good example of how we do this was our invitation to speak at the recent Payroll World Autumn Conference in October. Our session focused on auto-enrolment and other pay challenges for the agency sector, including the need for sustainable margins, and was an opportunity to engage with leading employers and payroll professionals across different sectors.

This is something we will continue to build on as part of the ongoing campaign to communicate directly with recruiters’ clients throughout 2013.

• Follow Tom Hadley on twitter @HadleysComment

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The View The IRP Awards are five years old and the event gets bigger and better every year. There were 19 awards this time around and everyone on the shortlist, as well as the winners, are great role models for our industry.

At the start of the ceremony I took the opportunity to convey a serious message.

The REC has been around for 80 years and we have never ducked the tough issues. The REC has always been a champion of standards and ethics.

Over the past month we have had a BBC Radio 5 Live investigation into travel and subsistence schemes, and a Newsnight programme focused on the exploitation of Romanian and Bulgarian workers by some agencies. These programmes asked tough questions so we have a choice. We either embrace being a mature professional industry with robust standards or we will continue to be perceived as wheeler dealers out to make a fast buck.

The REC’s position is clear – our members must obey government regulations and the REC Code of Professional Conduct. From January members must go through our new rigorous online test. I am adamant we will shine a light on all the dodgy operators, be they payroll companies and umbrella businesses or recruiters with dubious practices.

We have no choice but to expose the things that undermine the majority of legitimate recruitment businesses.

REC members will continue to be held to the letter of our Code of Conduct regardless of size or who they are. Many people in the industry say let sleeping dogs lie, but you only have to look at recent newspaper headlines to see what happens when people turn a blind eye to wrongdoing.

This industry is fantastic because it makes a difference to people’s lives every day and the IRP Awards demonstrate that. We have so much to be proud of and we must not let the reputation of our industry be influenced by a few bad apples.

Recruitment Matters November 2012 3

Industry salutes IRP Award winners The UK’s top recruiters gathered together to celebrate the best in their business at last month’s IRP Awards.

M

ore than 450 people attended the IRP Awards at the Grange St Paul’s Hotel on 25 October to honour the professionalism and hard work of their colleagues at a ceremony hosted by BBC broadcaster Huw Edwards.

Christopher Clark, a senior consultant at legal specialists RedLaw, was named overall Recruiter of the Year. Clark also won Permanent Consultant of the Year, with the judges describing him as “outstanding” and someone who really understands clients’ needs and demands.

Temporary Consultant of the Year was Chris Oddy of Real Staffing Group. He was honoured for his expert knowledge of his market and for boosting revenues, while the industry’s Best Newcomer was Advanced Resource Managers’ Sam Ferri.

He is working in a new division for the gaming sector and the judges loved his tenaciousness and how he has become a mentor for others.

Business Leader of the Year was Nicola Mewse of Hales Group, who was described as being “head and shoulders above the rest”. She is a managing director without an office who has introduced a

4 Recruitment Matters November 2012

mentoring scheme and encourages staff to provide her with feedback. She has also overseen a great financial performance.

Trevor Pinder of IT Human Resources was named Business Manager of the Year.

A solid all-rounder, he helps develop those around him, cares about what he does and has led real business growth.

The Best Client and Candidate award went to Paul Hemsworth of Resourcing Group. He was nominated by his CEO for working to tight deadlines to deliver a sizable number of placements for one client. He reduced lead times and therefore costs.

This year’s In-House Recruiter of the Year was Catherine MacDonald of Cosine UK, who delivered an impressive financial performance, generating £377,000 for the business. Meanwhile, Jonathan Benjamin of RedLaw took the Executive Search Consultant award for retaining and growing his client base and the business.

The 2012 IMA Interim Consultant of the Year was Evy Young of RSA Consulting, who brings a personal touch to her role and looks at interims as a bespoke answer to complicated management situations.

All images: James Crockford

The Big Talking Point

The tables and stage are set for a great night. Some of the winners (clockwise from above) Sam Ferri, Empiric Solutions, Nicola Mewse, Christopher Clark, Chris Oddy, Meridian Business Support and Bespoke Recruitment

Finally, The Eileen Simpson Award for Outstanding Contribution went to Steven Bentham Bates from the Regular Forces Employment Association which places military personnel back into work.

The judges described him as someone who puts his life and soul into his work, and does anything he can to help. He sits on voluntary committees, chairs a national community group for veterans and is improving the reputation of the industry.

Company Awards Congratulations to Meridian Business Support which won the Best Company to Work for (more than 250 employees) prize.

The judges said the staff testimonials were real and reflected the passion and vision of those who founded the business in Altrincham in 1989. The company is now the 11th largest privately-owned recruiter in the UK with 80 branches and 340 staff.

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Brooks honoured This year’s Lifetime Achievement award went to Jeff Brooks, chairman of Primesourcing, who is standing down from his vice-chairman role on the REC’s technology sector group after eight years.

Brooks has been working in the public and private sectors for more than 40 years and entered recruitment in 1984. He built two agencies from scratch, Gresham Computer Personnel and Amdahl Resources International, and founded Primesourcing.

He was honoured on the night for being one of the industry’s most active ambassadors and for playing a dynamic role within the REC where he is known as a champion of small businesses.

His friends and colleagues in the industry love his enthusiasm, with the judges describing him as engaging, passionate, driven and a total star.

The Best Company to Work for (up to 250 employees) award went to Empiric Solutions. It was described as being at the cutting edge of its industry and demonstrating everything that is good about professional people in how it serves clients and looks after staff.

Energize Recruitment Solutions stood out in the Best Company to work for category for firms with 21-50 staff. It was judged to be a company which really understands where it is heading, with

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an emphasis on training. It cares for its employees and has a generous benefits package, putting its people at the heart of the company.

In the new category of Best Company to Work for (up to 20 employees), Bespoke Recruitment (Construction) Ltd in Cambridge impressed the judges with a number of external references from large construction clients. The company was praised for its service levels and for investing in staff development.

Human Capital Investment Group took the prize for the Best Back Office Support Team where the in-house support has morphed into an outsource provider which is profitable and making a real contribution to the business.

The award for the Best Contribution to the Community went to Prospectus, which gives its staff six days a year off to complete charity work.

The company with the Best People Development Business Programme was technical recruiter Encore Personnel Services Ltd, which was praised for its graduate academy, graduate training scheme and for upskilling people for future growth.

Well done to all the 2012 winners.

For a full list of winners please visit www.rec-awards.com.

Recruitment Matters November 2012 5

Legal Update

Pension auto-enrolment is here Auto-enrolment for pensions started on 1 October 2012 and will be phased in over the next five years Staging dates for pension auto-enrolment were set on 1 April 2012 based on the size of the employer’s payroll, the largest employers being staged earliest and the final employers being brought in by 2017.

The Pensions Regulator will remind employers 12 months and three months before their staging date. However, employers are advised to start planning at least 12 months before this date.

Employers include employment businesses supplying temporary workers.

From their staging date, employers will be required to automatically enrol ‘eligible jobholders’ into a qualifying scheme, but individuals can opt out of these arrangements. Those who do not opt out will have to make their own pension contributions, to be supplemented by an employer contribution.

Employers will also be required to: •M anage opt-outs for workers who choose to opt out.

• F acilitate opt-ins for qualifying workers.

•C ontribute to the scheme for eligible workers.

•P rovide specific information to different categories of workers.

There are two other categories of worker – ‘non-eligible jobholder’ and ‘entitled worker’ – and workers will fall into a category depending on their age and earnings. All categories have different entitlements and employers must know which one their workers fall into – they may move from one category to another – and what duties they have in relation to those workers.

Employers can postpone automatic enrolment for up to three months from: a) The employer’s staging date; b) The first day of the worker’s employment; or c) The day a worker becomes an eligible jobholder.

A limited company contractor who is a director of their own company is not a worker for the purpose of the employer duties, unless they have a contract of employment with the company and there is at least one other company employee.

If these conditions are met, the company is the employer and will be responsible for employer duties rather than the employment business.

Those working through umbrella organisations will be covered by these arrangements and the umbrella will be responsible for applying the employer duties to its workers. Agencies should check the staging dates of any umbrella business they engage with because, as large employers, they are likely to be staged in earlier than the agency.

Employers must not induce workers to opt out of their entitlements. Importantly, job applicants are also protected so agencies must not, for example, advertise that only those who are prepared to opt out can apply for a role or ask questions during the recruitment process about the individual’s pension provision.

More detailed information is available from the REC Legal team at www.rec.uk.com/legal_guide.

The REC is holding pensions workshops in Newcastle (29/11), Stansted (30/11), London (12/12) and Birmingham (13/12) for members and non-members. Book at www.rec.uk.com/events.

Business development Reduce global risks More recruitment companies are looking to expand overseas as the UK market becomes increasingly saturated.

One of the key factors that companies should consider when thinking about entering a foreign market – but which is often overlooked – is what insurance protection the business will need in any new territory.

Each country has different rules and regulations regarding how and which insurance products are purchased. However, there are some key points to consider.

• S ome countries insist on all insurance cover being placed in their marketplace.

•M ost will insist on compulsory insurances being covered locally such as workers compensation (equivalent to employers liability) and motor (third party cover).

•D epending on the country it may be possible to cover areas

6 Recruitment Matters November 2012

such as professional indemnity from the UK, but most other cover will need to be placed locally.

• All countries will have their equivalent to UK Insurance Premium Tax which can be as high as 25%. It is 6% in the UK. Dallas Kirkland Recruitinsure is an REC Business Partner and looks after 3,000 agencies, making overseas expansion seamless.

“We work with our exclusive insurers including ACE Group, which has offices in 53 countries and agreements in other nations. It means we can help recruiters in 170 countries,” says director Sandy Sharma (pictured). “We are also linked to insurance brokers around the globe.”

He adds: “Recruiters need to get the best advice on local insurance and get protection at a competitive price. We coordinate cover from the UK so there is no duplication.”

For more information on buying international insurance, plus the special REC member offers available, contact Dallas Kirkland Recruitinsure on 0207 444 0010 or info@dkri.co.uk

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Inspiration

Behind the scenes at the Institute of Recruitment Professionals

Top students are loving recruitment Recruitment Matters caught up with Caroline Fox, consultant at Kelburn, and Susan Coshan, senior consultant at Ace Appointments, after they completed the IRP Certificate in Recruitment Practice with top marks How did you get into recruitment?

Caroline Fox: Purely by chance.

I had worked in an estate agency for seven years and decided it was time for a change but I wanted to use the skills I had built up. I posted online and was contacted by a recruitment-to-recruitment agency.

Susan Coshan: I was in the office doing some temporary admin Susan Coshan cover when I was given a lever arch file of clients to try and start filling placements. I got a good placement at one of our big clients and pushed hard for it, which impressed the managing director who was in the office.

What’s your favourite part of the job?

CF: Being able to tell someone they’ve been successful. I like to make money but the personal side of it is so important – finding someone a career they enjoy makes me feel warm inside.

SC: I have built up a base of loyal clients and many of them have become good business acquaintances. On a good week I look forward to figures day and I’m really buzzing, on a bad week I can’t wait for Friday.

Why did you decide to take the Certificate in Recruitment Practice?

CF: Estate agency is unregulated and doesn’t have a formal body or recognised qualifications, which I found frustrating. It was excellent to discover that there were formal qualifications in recruitment to evidence my skills and prove I have the knowledge I need to succeed. Our managing director, Kevin Maughan, is a big supporter of consultants getting qualified.

SC: It’s refined how I work, especially my time management. It has reaffirmed the knowledge I already had and made my job into a career. When I began the course I thought ‘I have been

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doing recruitment forever and this is common sense’, but I have definitely noticed how the Certificate has changed my thought patterns and encouraged me to think about best practice.

Caroline Fox

What advice would you give to anyone else taking the Certificate?

CF: The best advice I was given by my tutor was to look at the marks for each question and make sure I was putting in the appropriate amount of detail.

What I really enjoyed was being able to apply the course material on a day-to-day basis. The material became part of how I was working, not just part of studying, which made it easier to remember.

SC: Make the most of your study coach to get tips and advice. I was told I was too precise because the answer is not always black or white. It is often more about structuring a good argument, making sure you can support it and drawing on your previous experiences.

How did you feel when you found out you were the top student?

CF: I was really pleased. I know my manager has always had faith in my ability but it was great to repay him by achieving this.

SC: I was gobsmacked.

• For more information about the IRP Certificate in Recruitment Practice and to enrol please contact the IRP on 020 7009 2155. Email info@rec-irp. uk.com or visit www.rec-irp.uk.com/qualifications

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

Recruitment Matters November 2012 7

Events and training

Train your way to growth Training will again be at the heart of the REC’s support for members in 2013.

The REC’s head of the Recruitment Business Academy Lauren King (pictured) and her team have spent the last few months ensuring suitable courses and support exist for every aspect of running a recruitment business – from starting out in the industry to expanding internationally.

“We are constantly reviewing and updating the content of our courses so our training remains relevant and up-to-date,” says King.

“What has been exciting over the last few months of 2012 has been the uptake in courses targeted at new recruitment consultants, which shows that recruiters are taking on staff again and more people are coming into the industry.”

Following the review of the programmes and in response to increased demand for REC training, we will be offering a suite of recruitment industry specific courses addressing areas such as sales and

A blog is one inexpensive marketing tool.

Discover more on an REC course

marketing, operational, legal and management.

Some of our most popular courses include Proactive Business Development,

Profitable Candidate Management, Fundamentals of Finance for Recruitment Managers, Creative Marketing on a Shoestring, The Balancing

Act and Introduction to Recruitment.

For more details of courses, tel: 020 7009 2100 or visit www.rec.uk.com/training

If you find the short days and cold weather are draining your energy and motivation, why not give yourself a boost and attend one of our remaining training programmes in 2012 so you can end the year on a high. You still have time to book.

Progressive Sales

21-22 Nov

Leeds

Introduction to Recruitment Practice

21-22 Nov

London

Successful Account Management

27 Nov

Birmingham

The Balancing Act

27-28 Nov

Leeds

Start Up Your Own Agency

27- 29 Nov

London

Telephone Sales

28 Nov

Birmingham

Proactive Business Development

29 Nov

Leeds

Recruitment Law: Understanding the Essentials

29 Nov

London

Essential Skills for Temporary Consultants

11 Dec

Birmingham

Winning Bids & Tenders

11 Dec

London

Telephone Sales

12 Dec

London

The New Manager

12-13 Dec

London

The Perfect Client Meeting

13 Dec

Leeds

Essential Skills for Permanent Consultants

13 Dec

London

The Perfect Client Meeting

18 Dec

London

Proactive Business Development

19 Dec

Birmingham

Negotiate & Close the Sale

19 Dec

London

Lauren King

Recruitment Matters The official magazine of The Recruitment and Employment Confederation Dorset House, 1st Floor, 27-45 Stamford Street, London SE1 9NT Tel: 020 7009 2100 www.rec.uk.com

8 Recruitment Matters November 2012

Membership Department: Membership: 020 7009 2144, Customer Services: 020 7009 2148 Publishers: Redactive Publishing Ltd, 17 Britton Street , London EC1M 5TP. Tel: 020 7880 6200. www.redactive.co.uk Publisher: Anne Sadler. anne.sadler@redactive.co.uk Tel: 020 7880 6213 Consulting Editor: Liz Banks liz.banks@rec.uk.com Editorial: Editor: Steve Hemsley. steve.hemsley@redactive.co.uk. Production Editor: Vanessa Townsend Production: Deputy Production Manager: Kieran Tobin. kieran.tobin@redactive.co.uk Tel: 020 7880 6240 Printing: Printed by Southernprint © 2012 Recruitment Matters. Although every effort is made to ensure accuracy, neither REC, Redactive Publishing Ltd nor the authors can accept liability for errors or omissions. Views expressed in the magazine are not necessarily those of the REC or Redactive Publishing Ltd. No responsibility can be accepted for unsolicited manuscripts or transparencies. No reproduction in whole or part without written permission.

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