Issue 48 April 2017
RECRUITMENT MATTERS The View and The Intelligence
Big Talking Point
Campaigning for the industry p2-3
Legal update and Business Partner
Products and Training
Diversity, Inclusion and Criminal Records p6-7
Product of the Month Our Training your Office
REC SECTOR GROUP TAKES DIVERSITY LEAD Members of the REC’s Association of Executive Recruiters (AER) will lead an industry push to improve ethnic diversity within UK boardrooms. The sector has been tasked by Sir John Parker as part of ongoing efforts to improve board diversity. The development follows a roundtable event in February where AER members hosted chair of the Parker Review Committee, Sir John Parker, and deputy-chair, David Tyler, to discuss strategies to improve the ethnic diversity of UK boards. A report published by The
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Parker Review Committee in November found: • While 14% of the population identify as black and minority ethnic, only 1.5% of directors in FTSE 100 Boardrooms are UK citizens from a minority background. • More than half (53%) of FTSE 100 Boards do not have any directors of colour. The Committee has recommended that each FTSE 100 Board should have at least one director
of colour by 2021, and has identified executive search firms as being key to making this a reality. The AER’s work reviewing the voluntary code to address ethnic diversity will build upon the Davis Review in 2011, to improve the representation of women at board level. The Davis Review resulted in women’s representation on the FTSE 100 boards doubling in less than five years. Sir John Parker says
executive search firms have a vital role to play in improving board diversity. “The boardrooms of Britain’s leading companies do not reflect the ethnic diversity of either the UK or the stakeholders that they seek to engage and represent,” he says. “With 30% of the population estimated to be from a nonwhite background by 2051, it is a commercial imperative that UK business responds to cultural and demographic change, to compete in the global market.” AER chair Sarah Thewlis says the review is a great opportunity for the recruitment industry. “We welcome the recommendations in the Parker Review into ethnic diversity on boards and are delighted to bring the industry together to review the code and help make these aspirations a reality. “As search professionals, we know that jobs transform lives and we are committed to ensuring that everyone, regardless of their background, can succeed and progress to the top,” she says.
www.rec.uk.com 09/03/2017 10:05
Leading the Industry
Recruiters are key to the government’s inclusion agenda, says Tom Hadley, REC director of policy and professional services
It’s time to up your game, says Kevin Green, REC chief executive
The REC’s Scale Up campaign is bigger and better than ever. The campaign is specifically designed to provide recruitment leaders with practical advice, support and guidance on how to grow their business. The Scale Up podcasts (think Desert Island Discs for recruiters) continue to get great feedback. These give you the chance to hear directly from entrepreneurs and their expert advisors who have been there and done it. Please let me know about any advice you have implemented after hearing the podcasts, and keep an eye out for new episodes coming soon. My series of ‘In the round’ sessions for members will focus on how you can up your game, and one element of these participative events will be on how to measure and improve client satisfaction so you deliver superior results. We are conducting research at the moment into how recruiters who use NPS or customer feedback are performing better than the market. We will publish our findings on 25 April at a special Scale Up live event where we will explore the issue in detail. The Scale Up masterclasses are back this year too, with Greg Savage and his brother returning to
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BUILDING A JOBS MARKET THAT WORKS FOR EVERYONE the UK in October to give REC members more straight talking on how to develop your business. The UK recruitment market is continuing to grow, but with that growth comes fresh challenges. In a competitive marketplace it becomes more difficult to find good staff and to define your USP. The long-term winners will be those who invest ahead of growth and who have a clear focus on great client service and candidate experience. The REC’s job is to facilitate learning and best practice. If you invest in your people and measure the perception of those that matter – staff, clients and candidates – you are more likely to beat the market for revenue and profit growth. A robust plan targeted on improving how you treat these three groups will enable you to Scale Up your business. At the REC we’re practising what we preach – I’m delighted that we’ve recently been recognised as one of the 100 Best Not-For-Profit Organisations to Work For in the Sunday Times. This month we’ve also received the Best Social Media Campaign at the European Association Awards – a great achievement by the team. Follow me on Twitter @kevingreenrec
The late Stephen R Covey once said “strength lies in differences, not in similarities”. Boosting inclusion to challenge group-think and widen talent pools is becoming a ‘habit’ of many highly effective organisations. Now is the time to drive this agenda and cement our role within the government’s post EU-referendum vision of a ‘country that works for everyone’. The REC hosted the launch of the government’s Disability Confident initiative alongside Penny Mordaunt MP, Minister for Disabled People, Work & Health last November. We are also represented on the board of the Recruitment Industry Disability Initiative (RIDI) which showcases the positive role that our industry is already playing in this area. Making change happen rather than just talking a good game is key to our underlying aim of positioning our industry at the forefront of the disability and wider inclusion agenda. As well as helping people get into work, the focus is increasingly on helping people progress in work. A good example of this was our recent roundtable with Sir John Parker, who is leading the government’s review into ethnic minorities on UK boards. The fact that only 1.5% of directors in FTSE 100 Boardrooms are UK citizens from a minority background shows that we have a way to go but it was encouraging to hear Sir John explicitly recognise that “executive search firms have an important role to play in bringing about change in the UK’s boardrooms”. How else can recruiters make a difference? Practical measures include signing up to Disability Confident, feeding into the boardroom diversity debate and using our Good Recruitment Campaign to engage with clients. We are also keen to capture case studies and will use our Inclusive Recruitment Forum on 20 April to build our portfolio of ‘inclusion stories’. As well as making our case for a progressive immigration strategy, we will continue to promote our role in helping under-represented groups access and progress in work. The ‘country that works for everyone’ rhetoric is now firmly embedded in government policy; our industry will play its part in building a post-Brexit jobs market that works for everyone. You can follow Tom on Twitter @hadleyscomment nt
THE INTELLIGENCE WITH REC SENIOR RESEARCHER, MARK HARRISON The Office for National Statistics (ONS) last month recorded net migration of 273,000 for the year up to September 2016 – a 49,000 drop on the equivalent figure from a year before. With the recorded figure below 300,000 for the first time in more than two years, some commentators drew a link between this decline and the outcome of the EU referendum. There are a number of reasons not to rush to such firm conclusions just yet. Although this figure includes post-referendum data from Q3 2016, the other three quarters of data predate the EU referendum (bar one week of Q2 2016). A full year of post-referendum data won’t
TURNOVER AND NDR IN NEGATIVE TERRITORY, ACROSS 2016, FOR THE MEDIAN RECRUITER The latest information from the RIB Index, sponsored by Bluestones Group, shows that year-on-year the median industry recruiter saw total turnover decline by an average of 4.5% across 2016. When looking at the performance of the underlying business lines, temp revenues were the most challenged across the year, declining by 5.3%. Permanent billings were also marginally down (-1.4%) on the prior year, whilst contractor billings were the most resilient (+1.4%), buoyed by a strong Q4 performance.
be available until November to give us the full picture of early post-referendum migration change. Secondly, these statistics are largely based on the International Passenger Survey (IPS) conducted by the ONS. Like most surveys apart from the census, the IPS is a sample survey which is answered by a sample of those immigrating and emigrating to give total migration estimates. Whilst these details sometimes get glossed over, the ONS conducts statistical significance tests to see if they can be 95% certain that their survey results reflect a real change on previous results. On this occasion, the figures do not meet this standard. Whilst the recorded data suggests we’re already seeing reduction in net migration, we can’t say that with statistical certainty just yet.
WITH THE RECORDED FIGURE BELOW 300,000 FOR THE FIRST TIME IN MORE THAN TWO YEARS
Where there has been a statistically significant decrease in net migration is from the eight countries of Central and Eastern Europe that joined the EU in 2004 (including Poland, Hungary and the Czech Republic). EU8 net migration fell from +41,000 in the 12 months to September 2015 to +19,000 in the latest figures. Separate data on EU8 citizens registering for UK National Insurance numbers was also lower in every quarter of 2016 when compared to the same quarter in 2015. This includes the pre-referendum Q1-2 as well as post-referendum Q3-4, suggesting that the attractiveness of the UK to EU8 nationals may have been waning before it voted to leave the EU.
Figure 1. Turnover versus last year %: average across 2016 for the median recruiter, by business line and total
More crucially, however, the median recruiter‘s reported NDR/gross profit (£), averaged across 2016, was also down, year-on-year. As such, it was unsurprising to see headcount growth slowing as the year progressed, before moving into negative territory in Q3 & Q4. More adjustments, by way of corrective measures and business development initiatives, are likely to be required, however, due to the
Total turnover -4.5%
continuing strong headwinds. The known challenges from April onwards include new legislation set to dramatically change public sector hiring behaviours and additional costs, heading both hirers’ and recruiters’ way, courtesy of further National Minimum Wage rises and the new Apprenticeship Levy. The impact of Brexit remains the unknown quantity. Regardless, however, recruiters’ ability to
THE OFFICE FOR NATIONAL STATISTICS (ONS) LAST MONTH RECORDED NET MIGRATION OF
273,000 FOR THE YEAR UP TO SEPTEMBER 2016 – A
DROP ON THE EQUIVALENT FIGURE FROM A YEAR BEFORE.
More data releases will be needed before we can call trends with greater certainty. However, early indications from the official data and anecdotal reports we’re hearing from our members are suggesting that migration is set to continue falling even before the UK’s post-Brexit migration system is finalised. Recruiters and employers need to start thinking now about how to maintain successful businesses with reduced migrant worker numbers, particularly those who until now have recruited high numbers of EU8 citizens. swiftly respond to changing market conditions – notably, changes that will be bespoke to each employer rather than universal – will require a new level of adeptness and flexibility from the recruitment industry. In such turbulent times, the importance of benchmarking performance against other recruiters to optimise performance cannot be underestimated Belinda Johnson runs employment research consultancy Worklab, and is associate knowledge & insight director of Recruitment Industry Benchmarking (RIB) – part of the Bluestones Group. The RIB Index provides bespoke confidential reports on industry benchmarks and trends. See www.ribindex.com; info@ ribindex.com: 020 8544 9807. The RIB is a strategic partner of the REC.
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BIG TALKING POINT
FUTURE TALK BRADLEY ANDREWS – TDA RECRUITMENT After completing my A levels in sixth form, I never really wanted to go to uni and get the debts. I was more interested in going out, getting a job and earning money straight away. I enjoy being part of a team, focusing on my own market, and I didn’t really expect the amount of responsibility you had as an apprentice initially, so that surprised me a bit. There’s a lot of things I’ve learnt. Learning how the CRM system works – the database, how to source candidates, through social media or job boards, advertisement, how to pre-select candidates, submit them, manage candidates and clients’ expectations about the process, and ultimately make placements. To any would-be
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apprentice, I’d tell them to research their industry, if they’re going into a certain market such as technology, healthcare, digital; make sure they know the ins and outs of it before they start. Give yourself a little head start. For someone who’s in the same position as me, who wasn’t going to uni and wanted to get a job straight away, there’s potential to earn money – quite a lot of money, if you do it well.
ZAK BRYON – TDA RECRUITMENT I started off playing football fulltime and then my contract ran out and I had to look to a different profession. I wanted to pick out something that suited my personality, something I thought I’d be good at, and the social side and interpersonal skills I thought I had definitely suited a profession like recruitment. With an apprenticeship, you go over every single detail; you seem to understand more, rather than just getting in there and ge be eing in a resultsbeing dr riven position, driven an nd forgetting and al alll the stuff that co omes with it. You comes lea arn the whole learn re ecruitment process recruitment an nd then it allows and yo ou to build on that you w hen you go into the when en nvironment yourself. environment
I’m only 19 and now I think that I’ve got a foot-hold in where I am, being a recruiter, it will allow me to move forward. I have plans over the next couple of years – maybe hiring someone underneath me or being a team leader or something like that.
KIERAN MURNANE – MIDDLETONMURRAY It was always what I wanted to go into straight from school, definitely. I didn’t have any interest in college or anything and it was a no nobrainer. Earn while you learn. I
Apprenticeships are the future of the recruitment industry. Recruitment Matters talked with four budding recruitment apprentices embarking on their career to find their hopes and aspirations for the future
definitely wanted to do an apprenticeship. I wanted to work in an office. I didn’t want to do your general business admin, though, I wanted a more challenging role and recruitment was the one that appealed. I’ve learnt loads. I came straight out of school into an apprenticeship and obviously coming out of school and into any workplace, not just a recruitment workplace, is a huge, huge learning curve. My maturity has had to step up – how I act generally. I’ve
learnt the working world, really, because I didn’t have any idea in school. The school environment and the work environment are completely different. That’s the main thing I’ve learnt during my apprenticeship. Be prepared for all situations. Don’t get complacent. Work hard. Be prepared to work over your contracted hours, definitely. But it is a good career path to go into, because of the commission structure. That appeals to a lot of people.
NATALIE CADAV CADAVID – MIDDLETONMURRAY MIDDLETONMU AY It was an accide accident, but it had the best outcom outcome. I got an email from Mid onMurray MiddletonMurray ek training about their sixsix-week hought: programme an and I thought: “I’ll give it a go.” I went ent to the open day and a I wasn’t dressed for the occasion casion at all – I didn’t realise rea it was a formal affair, so it was as a bit awkward. Once I filled d out the application, I was asked ed to do an interview that day y – I didn’t feel ready, but b I got into
it and came out with the job. Eight months later, I’m having the time of my life. I enjoy the fact I get to interact with young adults. I know that can be a really confusing stage in life, particularly the change from secondary school into further education – your friends are telling you one thing and your family is telling you another, and you have no clue whatsoever. When I left school, I didn’t have a clue about apprenticeships. I thought they were about hair and beauty and mechanics,, but y you can do one in so many industries. I now realise that given the age group of the people I work with, I can offer another route and it’s a fantastic route as well.
It has helped my confidence a lot. I’ve never been one to do presentations in front of a lot of people, so my manager said: “I’ll let you off once, maybe twice, but after I’m throwing you in the deep end.” It has helped me a lot – I can do presentations, talk at schools and career fairs. I’ve learned how to develop my patience because you need that when you’re working with young adults. To find out more about recruitment apprenticeships, visit www.rec.uk.com/ pp p apprenticeships
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DIVERSITY, INCLUSION AND CRIMINAL RECORDS By Ryan Huggett, legal advisor Every day recruitment businesses come into contact with work-seekers from a variety of different backgrounds, some of which may have criminal records. Diversity and inclusion is a major theme underpinning recruitment practice, and recruitment businesses need to ensure that they do not either inadvertently or deliberately exclude such work-seekers from job opportunities. In the UK, the treatment of individuals with criminal records is governed by the Rehabilitation of Offenders Act 1974 (‘the Act’). Under the Act, where an individual has been convicted of a criminal offence and subsequently completes a defined “rehabilitation period” without sustaining another conviction during this time, they will be treated as having been “rehabilitated” and their conviction becomes “spent”. This is however, subject to certain exceptions. The
duration of the “rehabilitation period” will depend on the type of sanction administered or the length of the sentence imposed, and the person’s age rather than the crime committed. Under section 4 of the Act, a person whose conviction is “spent” is treated as if he or she had never committed, been charged with, prosecuted for, convicted of or sentenced for the offence. They are not required to declare any “spent” convictions and can generally hold themselves as not having a conviction. Subject to certain occupations, and activities in the Rehabilitation of Offenders Act 1974 (Exceptions) Order 1975, such as roles relating to regulated activity with children or other vulnerable people, healthcare positions and even roles in the legal profession or financial sector, recruitment businesses cannot ask work-seekers to disclose any “spent” convictions
BUSINESS PARTNER: IR35 – WHAT HAS CHANGED AND WHAT DOES IT MEAN TO RECRUITERS? Public sector IR35 rules are to be introduced from 6 April 2017 under the Finance Bill. These rules will apply to payments made on or after 6 April 2017 and therefore can apply to contracts commenced before that date. It will affect workers providing services through an intermediary to a public authority as defined within: Freedom of Information Act 2000 or Freedom of
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Information Act (Scotland) 2002. From April 2017, responsibility of assessing worker’s employment status will shift to the public authority, agency or third party paying the intermediary. They will be responsible for deducting and paying PAYE tax or NIC. The rules will probably apply where: • The worker is required to work at the end client’s site.
either on registration forms or at interview. Employment decisions cannot be made on the basis of a “spent” conviction, and recruitment businesses should not be taking a “spent” conviction into account when determining a candidate’s suitability unless an exception applies. “Unspent convictions” on the other hand (where a candidate has not completed the rehabilitation period) are treated differently. Recruitment businesses can ask candidates to disclose “unspent convictions”, both on forms and at interview and can take an “unspent conviction” into account when assessing a candidate’s suitability to make employment decisions. Some recruitment businesses may choose to adopt a blanket policy of not providing services to those with “unspent convictions” but this obviously impacts on their job opportunities. Instead,
recruitment businesses should take careful steps to gauge whether a particular “unspent conviction” actually impacts on a candidate’s suitability for a role, and if it does not the candidate should be introduced. Recruitment businesses should also be careful to not rely on information obtained generally via websites or social media, as the information may not be correct and may not even relate to the right candidate. It is important for all businesses to assess information critically and make sure that they have robust procedures in place to ensure candidates are not inadvertently or deliberately excluded from work-finding services. Recruitment businesses could choose to adopt a policy of proactively recruiting exoffenders or could get involved with other initiatives such as “Ban the Box”. All staff should also be trained appropriately to ensure that consistent approaches are applied.
• The worker is supplied with equipment by the end client. • The worker is directed by a manager or other officer of the public sector body. • The worker is leading a team. To be outside IR35, the worker should: • Work mainly from their own office. • Provide their own equipment. • Employ their own staff. • Meet their own costs/ expenses. HMRC has provided an online assessment tool, but it is anticipated that up to 90%
of Single Person Ltd Company workers will be controlled by the public sector organisation, so recruiters need to be aware that they may be responsible for PAYE and NIC. Some public sector organisations like Transport for London have decided not to use Personal Service Companies. Jelf can help in the event of an investigation by HMRC, protecting the company from the fees and any subsequent tax losses incurred. For further details contact Peter.Stoll@ jelfgroup.com or call 0161 245 1215.
BEHIND THE SCENES AT THE INSTITUTE OF RECRUITMENT PROFESSIONALS
Daniel Griggs is the owner and founder of Delta Genesis Consulting Ltd
WHAT I KNOW How did you get into recruitment? I was a CAD Draughtsman working permanently and decided to become a temp to save money to go travelling. That involved visiting CADSearch recruitment, who convinced me to take a role as a sales support consultant with them! How long have you been in recruitment? I started that first role at CADSearch in 1989. Where do you currently work? I founded Delta Genesis Consulting in 2013, offering recruitment advisory services by sharing recruitment knowledge through mentoring, training and executive support. What do you love about the job? Using both my experiences and those I hear from others to solve or avoid an issue, or even to take them on a completely new journey. What keeps you in this industry? The positivity and energy that you experience whenever you walk into a recruitment business. It never fails to invigorate. Can you give us one positive placement story? In 1997 I placed an engineer to do two weeks’ worth of structural assessments and calculations in Antarctica. However, because of the harsh environment and the fact that getting there and back is not a simple task the assignment had to be six months long to coincide with the supply ships timetable. If you also add in the fact that without email, a tablet or a mobile phone it was left to a tea chest of books to provide entertainment, you can probably work out how pleased I was to fill the role. Especially as I was told by the client it was an impossible role that should have been filled in the last weather window the year before. To also learn from my candidate what a truly life changing time he had had was priceless.
Peter Rabey is a director at X4 Group
WHAT I KNOW How has the year started? 2017 has thankfully started as positively as last year finished – lots of new trainees getting promotions and new doors being broken down in terms of new clients. We are hoping to complete on a new office imminently, which would give us over double our current personnel capacity and crucially keep us in our spiritual home of Covent Garden, in London. The plans for growth this year are substantial and we have at least started this part of 2017’s ‘to do’ list in the right way! What kind of business model do you have? We currently operate a 65/35 perm/contract business. We will be looking to get this to as close to 50/50 as we can this year. What challenges are you facing this year? Hiring top talent. I am sure, like many growing businesses, this is the toughest battle we face. Our record was 88 interviews in November/December 2015 without finding someone and we hope not to get anywhere near this number again! We are constantly amending and revisiting our interview process to make sure we find great people that match our organisations culture. What do you look for in a potential recruiter? A desire to make something of themselves. We have seen that all top billers and managers across many companies have vastly different personalities but the one thing that never changes is that each of them have that fire burning. The fundamental skills will never change but in our eyes if you have a habit of winning in life – be it in education, sport, work etc – then you want that habit to continue. Too many people in our industry can talk a great game without being able to back it up. We look for doers, not talkers.
To keep up to date with everything the Institute of Recruitment Professionals is doing, please visit www.rec-irp.uk.com
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Products and training
PRODUCT OF THE MONTH: CRONER SETTLEMENTS & FORECASTS All recruitment businesses need a complete understanding of pay settlements and forecasts to plan ahead. REC members will be able to access Croner’s monthly Settlements & Forecasts report from March 2017. It provides updates on pay trends across a number of sectors and regions. What does it feature? Croner’s Settlements & Forecasts report contains detailed commentary about pay trends on a month-bymonth basis. The report includes analysis from Croner’s team of labour market experts, and earnings movement for
basic and total pay every quarter. • Participants supply details of their last pay settlement and the forecast increase for the next review • Croner Reward’s experts
comment on the current settlement and forecast trends • Comprehensive pay and benefits information and advice from Croner Reward Croner’s Settlements &
Forecasts report will be free for all REC members to download every month from March 2017. Call your account manager on 0207 009 2100 for more information.
OUR TRAINING – YOUR OFFICE Our In-company training has members in mind. If you are looking at ways to stay ahead of the competition, In-company training offers you the flexibility to build a knowledgeable workforce. Some of the key benefits of In-company training are: • We can come to you – any location • Your choice of topics • We can focus on niche market areas • A dedicated trainer • Money saved on travel, expenses and a lower cost per head • Investing in your employees increases employee retention and productivity. With In-company, you can create your own programme by tailoring elements from existing programmes, or we can
start from scratch and work with you to design your own. You can include sector specifics, social media, legislative workshops, coaching and team development. We also offer one-to-one coaching, engaging employees with their work, making them feel valued and fostering commitment. Visit www.rec.uk.com/incompany for more information.
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 email@example.com. Production Editor: Vanessa Townsend Production: Production Executive: Rachel Young firstname.lastname@example.org 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
© 2017 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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