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TH E VI E W AN D TH E I N TE LLI G E N CE

What to expect in the year ahead p2 B I G TALKI N G POI N T

How to build back be‚er in 2021 p4

Recruitment Issue 89 Ma‚ers December 2020

LEGAL U PDATE

Your checklists for IR35 p6 TR AI N I N G AN D E VE N TS

Why governance ma‚ers p8

Rebuilding the UK’s economy

The REC's six step plan for jobs recovery T

he REC has published a plan to help create jobs and promote business recovery. "The same swi and decisive ac on we saw in the spring, including the furlough scheme and other cashflow support, is needed now. We can't pull up the drawbridge. And we shouldn’t ignore businesses in the supply chain of sectors that have to close. This is a unique economic shock – we'll recover more effec vely by keeping businesses going," said Neil Carberry, REC Chief Execu ve. We’re calling on the government to work with the recruitment industry on the following six measures:

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Reduce employer naঞonal insurance contribuঞons. This would have the benefit of slowing redundancies for businesses struggling to maintain their wage bill, while also encouraging businesses to take on more people into new jobs where they are needed.

@RECPress RM_Dec_Jan-FINAL-new.indd 1

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Fund Statutory Sick Pay (SSP) for every worker. Most recruiters supplying temps are ineligible for SSP rebates. Crea ng opportuni es for temps during a pandemic is therefore a big financial risk if workers are required to selfisolate, which could mean fewer opportuni es for work.

Private recruitment experts can support overstretched jobcentres

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Remove unnecessary red tape when finding work. The temporary provision for online Right to Work checks enabled recruiters to get people into work quickly and safely. This measure should be kept. Re-doing, in person, a years' worth of checks would be costly.

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Ensure key sectors can access the people they need, including through the new immigra on system. The points system will mean sectors such as construc on, social care, and hor culture will struggle to recruit. Businesses need the immigra on system to be flexible while our skills system is gearing up to meet the needs of a changing economy.

Open up the Apprenঞceship Levy so people who need to retrain can be supported. The pandemic has hit sectors such as hospitality and the arts par cularly hard. For some, the only way to a new job will be to retrain. Everyone knows the levy isn't working as intended. It must be broadened so employers can offer short, highquality training courses to new starters and temps.

6 Keep up to date with how we're supporঞng members on the REC's Covid Hub.

Making great work happen

Make recruitment experts central to all job finding support services. Jobcentres and employability services will be stretched, but the recruitment industry is able and willing to help. We need a more systema c way of bringing private recruitment experts, par cularly niche local specialists, into jobcentres.

www.rec.uk.com 19/11/2020 12:24


Leading the industry

the view... Keep going, says Neil Carberry, REC Chief Execuঞve

T

he advent of ghter restric ons has been a challenge but the end of 2020 is near! Just like the NHS, businesses are be er prepared – trading through more than shu ng down. The focus at the REC has been helping members to do just that. Taking a longer view, 2020 has taught us a lot. Long-term trends like remote working have embedded in a really short space of me. Agility will be the difference between thriving and surviving in 2021. What's your client thinking? Strategies are changing. Businesses are focusing on what they can grow. The people you're used to working with client-side may be no clearer than you on the path ahead. Recruiters need to think about who it’s best to talk to on strategy and what allies can help you connect. Clients need a new people plan, you can be their trusted advisor. All our senior client guests on the REC podcast have made this point – bring ideas that solve our problems, not just candidates. Candidate experience ma‚ers more than ever. As Lewis Iwu said at our REC2020 conference, Covid has made candidates reassess what's important. Purpose and a sense of belonging will be key mo vators. Clients are aware of the risks of ge ng this wrong, with ques ons on supply chain transparency focusing minds in boardrooms. This is an opportunity to offer a professional, values-led service. Being sharper with tech will be a big theme. Recruiters have done well, moving lock, stock and barrel online. We're doing business remotely, interviewing online, and earlier this year the REC was pleased to secure digital Right to Work checking. Keeping this innova on is a priority. We'll also be upping our game on tech advice in 2021 with our new Business Support team – watch this space! As was experienced at Eid, Rosh Hashanah and countless important events this year, the Covid impact can feel most personal when we are meant to be with family. Whether together, or planning some Christmas crea vity over Zoom, on behalf of everyone at the REC I wish you all the peace of the season and a prosperous New Year. If you want to keep up to speed with all things recruitment then follow me on Twi‚er @RECNeil 2

POL I C Y

Visa disrupঞon

The new immigraঞon system must not put recovery at risk, says Sophie Wingfield, the REC's Director of Policy

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f it wasn’t for Covid-19 the changes to the immigra on system would have stood out in the news and come under more scru ny. The rule changes total some 500 pages and come into effect on 1 January. They put EU ci zens on par with the rest of the world when it comes to living and working in the UK. This will disrupt the labour market considerably. The new Points Based System is exactly as you might imagine. Applicants must gain enough points ahead of a visa being granted. Factors including salary, educa on, and whether the job is on the Shortage Occupa on List (SOL) all accrue points. Under the scheme there is no route for so-called "low skilled workers" – even those currently facing candidate shortages, such as LGV and forkli drivers and care workers. While some reforms will be welcome, we are raising concerns with government about the poten al mismatch of skills and candidates with the jobs available. The new immigra on rules must not put the fragile economic recovery at risk. We are asking government to ensure the new system meets three tests: • It must be flexible to changing economic needs, not subject to poli cal whim. • The SOL must be frequently reviewed by the Migra on Advisory Commi ee and include jobs at all skill levels. • There need to be routes for SMEs to sponsor individuals from abroad. This should go hand-in-hand with the UK’s skills strategy – suppor ng people who are currently unemployed to gain the skills they need to transi on into growth industries. Evolving the Appren ceship Levy so it can be used more flexibly by employers to train temporary workers could significantly boost skills in industries like construc on and care. We will be following the impact of the new laws closely so we can represent the concerns of our industry.

Recruitment Ma‚ers December 2020

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Leading the industry

the intelligence...

1.28m

million acঞve job posঞngs at the beginning of October,

What the trends tell us about the year ahead By Thalia Ioannidou, Research Manager

The jobs recovery The jobs market has shown signs of recovery since the shock crash of March. Unemployment is rising, but businesses are crea ng new posi ons all the me. As our Jobs Recovery Tracker shows, there were 1.28 million ac ve job pos ngs at the beginning of October, 33% more than three months earlier. There is a clear disparity in staff demand across regions, sectors and occupa ons as restric ons and local lockdowns have had different effects on workforce needs. This is likely to con nue in 2021 as regions recover at different speeds. Learning from these trends and focusing on growth areas of business will help recruiters get ahead. Recruiters are specialists in facilita ng career transi ons and suppor ng people to get jobs. We know temporary work is cri cal in any recovery – businesses turn to temps to help them meet demand while the future looks uncertain. At the same me, it enables people to find work quickly. Past recessions show that temporary work bounces back more quickly – it is one of the labour market’s

biggest strengths. Recruiters have a huge part to play in mobilising the temporary workforce and ge ng the economy moving again.

2.7

million people claimed unemployment-related benefits in September

Employer confidence Employer confidence in the UK economy’s prospects plummeted at the start of the outbreak. This was mainly driven by a dive in sen ment among small businesses, which have been hardest hit by the pandemic. As a result, overall staff demand dropped significantly – in April, the number of vacancies fell at the fastest rate in the 22-year history of our Report on Jobs survey, while the ONS revealed the number of vacancies had halved at the peak of the pandemic. A total of 9.6 million jobs had been supported through the Coronavirus Job Reten on Scheme (CJRS). Nonetheless, redundancies rose at the sharpest rate since 2009 and 2.7 million people claimed unemploymentrelated benefits in September. The Claimant Count increased by 1.5 million since March. According to our Report on Jobs data, the

Jobs Recovery Tracker 140 130 Thousands

It has been a year of unparalleled economic disrup on and recruiters, as jobs experts, have been in the thick of it. 2021 will bring new challenges. We can't see around corners, but understanding the trends we've experienced over the past 12 months can help us to be agile as this health crisis unfolds and the impact of Brexit becomes apparent.

120 110 100 90

March

April

May

Jun

Jul

Aug

Sep

Oct

33%

more than three months earlier marked increase in the availability of staff to fill vacant posi ons had far exceeded that seen during the global financial crisis. Encouragingly, as ini al lockdown measures eased and more parts of the economy reopened in July, the overall posi vity toward the labour market improved. Following a record low in April-June, employer confidence in making hiring and investment decisions increased gradually and the REC’s JobsOutlook showed sen ment toward short-term hiring returning to posi ve territory. Similarly, our Report on Jobs survey signalled a sharp increase in hiring ac vity in September with temporary billings expanding at the quickest rate since December 2018. But a challenging winter is now upon us, with the drama c rise in Covid-19 cases and the new lockdowns and restric ons that have come with it. And that's before we even consider the impact of Brexit. The effect of this uncertainty on employer confidence, and the knock-on effect on the jobs recovery, will define the challenges we'll face in 2021. Recruiters have proven they play a vital role in mes of crisis – supplying staff to cri cal sectors and in suppor ng businesses to plan their workforce effec vely to reopen. They will con nue to do so in 2021 as they ac vely support the recovery of the UK jobs market. December 2020 Recruitment Ma‚ers

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Looking to growth

big talking point

New year, new business opportuniঞes But how do you build back be‚er?

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y the me it’s all over, Covid-19 will have le a permanent mark on the recruitment industry. The jobs available. The way people are hired. What people want from work. How recruiters connect all the dots. Even as the second wave and local lockdowns hit, there was acceptance from recruiters – and employers – that they needed to work through the crisis, look to the future and adapt. The situa on has moved on from doom and gloom to accep ng change is happening and seizing the opportuni es. For the most ambi ous among us, that might mean star ng up your own business, opera ng on a leaner cost base, targe ng a gap in the market. The REC has seen that trend reflected with new members. For others it will making the best out of the new trends and following where the jobs growth is happening (as iden fied by REC’s Jobs Recovery Tracker). For many more it will be about stepping up to the plate to support clients – and indeed the government – to help shape the employment recovery. Collec vely, there’s a once in a life me chance to build on the upheaval of 2020, challenge “the way things have always been done” and cement the value of the recruitment industry as an indispensable and highly skilled professional service. 4

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www.rec.uk.com

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Here are just four ways to build back be‚er in 2021:

1.

Invest

When the economy has taken a ba ering and business has been hit, it’s not easy to take the plunge and invest. But doing so can give you a serious compe ve advantage at a me when others are s ll focused on damage control. But what to invest in? Of course, there may be a bargain to be had for a sensible acquisi on to strengthen or diversify your business. But for most industry leaders, it boils down to three areas: people, training and technology. When it comes to technology, Covid has simply but drama cally accelerated change that was already happening. Recruiters, clients and candidates have had to adapt to online ways of working – and they need the tools to do so e ciently and effec vely. The benefits of video interviews as part of the recruitment process have now been established, for example. And the unfortunate deluge of CVs for each and every opening will drive greater acceptance of, and innova on, in AI too. Likewise, the importance of training in response to skills gaps was clear even before the pandemic le millions in need of help to get back into work. According to a report from the CBI, nine in 10 UK employees will have to reskill by 2030 as a result of the pandemic accelera ng changes to the world of work. Recruiters are well placed to iden fy requirements, connect the dots to government assistance, and refocus on making a real impact on people’s lives.

2.

Think about the recruiter experience, not just that of the client and candidate

For all the talk about technology, the human touch remains essen al. But for a recruiter to care about their clients and candidates enough to foster long-term, consulta ve rela onships, they have to be engaged and cared about. “Stop overinves ng in technology and underinves ng in staff,” said Lisa Jones, www.rec.uk.com

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Founder at Barclay Jones, at REC2020. “For us to come out of this with a bit of a slingshot, we need to look at our staff and take the opportunity to fix some of our processes with really good training.” For best effect, staff should also be consulted on what technology is bought in and how it can help them. They may also need support in adap ng to it. Take the enforced shi to remote working – research commissioned by social learning pla orm FutureLearn discovered that 37% of recruiters have found it more di cult to find the right talent and 25% feel they are not prepared or trained to shi to the new way of working. The pla orm has recently teamed up with the REC to launch a new course to support remote hiring and onboarding. Away from technology, pu ng the focus on recruiter experience gives rise to plenty of other ques ons business leaders should be asking. Do your recruiters have the access to data they need so they are in a posi on to take on a more advisory, more highly valued, role? Are they incen vised in the right way to focus on D&I now that it’s quite rightly high on clients’ agendas?

3.

Focus on talent, not locaঞon

And what about the new employment rela onships to be nego ated in 2021? One thing is for sure: fewer people will be ed to the o ce in quite the same way. In a survey by Right Management, almost half (47%) of employees believed the pandemic marks the end of full- me work in an o ce environment. Physical boundaries have been blown away in terms of how far people are prepared to commute for the occasional o ce trip. What that means for salaries, team structures, KPIs, and so on, remains to be seen, but savvy recruiters who can keep track of the data, stay on top of the trends and make sense of it all will be an invaluable support for their clients. These new dynamics will also afford recruiters the opportunity to think more about the diversity of the talent they are tapping into. But they’ll also have

to overcome the challenges of how to access different networks, with more limited face-to-face events and more geography to cover.

4.

Don’t be afraid to do things di@erently

With all that 2020 has thrown at us, people have either forgo en what “normal” looks like or want to avoid slipping back into old habits. As Michael Smith, CEO of Randstad UK and Ireland, says, it’s led to a widespread acceptance of change and the opportunity to do things differently. At one end of the scale, businesses have come out commi ed to be er working prac ces on diversity and inclusion, taken a stand on other societal issues (from mental health to climate change), or decided to work more closely with their own communi es. By doing so they are aligning with values that are more commonplace a er lockdown than they were before, and not just among younger genera ons. At a more granular level, the recruitment process itself is ready for a shake-up – something discussed in detail at our REC2020 digital conference. Throughout 2021, and because of the support it has offered the jobs market in the pandemic, the government will remain interven onist. There will be an emphasis on fair work and recruiters will be held to high standards. Services will be in demand. Clients and candidates will need more support than ever before. Ongoing turbulence means businesses need to be adaptable. Against this backdrop, Mark Essex, Director of Public Policy at KPMG, advised recruiters to “challenge every assump on and make every decision as if you’re star ng out anew”. “It’s temp ng to just react to what’s going on now but it’s really important to have a vision of how you’re guiding and shaping what’s happening, to move towards a be er future,” added Jus ne Lu erodt, Director, Centre for Synchronous Leadership. December 2020 Recruitment Ma‚ers

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IR35

legal update

Are you ready for the IR35 changes? By Lewina Farrell, Head of Legal Services, REC

O

n 6 April 2021, the o@payroll rules will apply in the private sector changing how contractors will be taxed. Although Covid has been recruiters' top priority, it's ঞme to get the house in order for IR35. Here are some ঞps to help you get ready: Who's exempt? Clients who are small or wholly overseas will be exempt from the o@-payroll rules. This means contractors will conঞnue to manage IR35 themselves. But don't guess if your client is exempt and don't assume that because you deal with an overseas oLce that the client is exempt. You should ask your clients to confirm their status in wriঞng. Assessing roles Find out if your non-exempt clients have started to assess roles. You should make sure you are confident that clients have the correct processes in place to make accurate IR35 status decisions.

Reviewing your IR35 relaঞonships By Peter Stoll from Marsh Commercial – REC’s recommended insurance broker.

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How will you pay? For ‘inside IR35’ decisions, will you conঞnue to pay contractors through their PSCs, or will you pay them through your own payroll or through an umbrella company? If through an umbrella company, have you done full due diligence? As a minimum REC recommends that agencies deal with FCSA members only. If you engage with an umbrella company (or another intermediary) check that they will employ the individual and not pay them through another intermediary (such as their PSC) and ignore the client’s inside IR35 status decision. You don't want them to pay the PSC gross or you could be liable for unpaid tax and naঞonal insurance. Have you got the right contracts in place? Put new contracts in place at the right ঞme – the new rules apply to work done on or a[er 6 April 2021 so for ‘outside IR35’ engagements you can change contracts any ঞme before then. For ‘inside IR35’ engagements, you will need to manage transiঞoning to new contracts carefully. Also, can you do another pay run as close as possible to 5 April 2021 to encompass work done up to and including that date?

With just a few months to go unঞl the revised implementaঞon date for IR35 in the private sector, recruiters should take this ঞme to undertake reviews of any Personal Services Company’s (PSC) tax status and assess their own potenঞal tax liability. Agreement with the hirer is needed on who will pick up the addiঞonal tax charge, or whether the PSC should be expected to reduce their take home pay. So, what should recruiters be doing now? 1. Engage with the hirer immediately. They can use tools such as Check Employment Status for Tax (CEST) to determine the PSC’s IR35 status

Check the indemnity clauses in your contracts. If o@ered any tax liability insurance read the policy carefully. What are the condiঞons of cover, what is the level of cover? Don’t just relabel your recruitment services as ‘statement of work’ contracts. If there is an agency in the supply chain, HMRC will assume labour supply unless you can prove otherwise. A statement of work contract involves delivering a whole service and not just contractors to do the work. If you are presented with other ‘soluঞons’ to the IR35 changes, you must understand what those soluঞons are. HMRC will look for contrived arrangements. Visit the REC's IR35 hub for advice and materials to help you get ready

2. Idenঞfy any PSCs whose contracts extend beyond 6 April 2021 3. Assess the potenঞal tax liability facing the recruiter 4. Agree who will carry out the assessment 5. Decide if insurance is required to protect tax invesঞgaঞon costs and potenঞal tax liability 6. Keep updated records of any change to a PSC’s contract 7. Deal with any challenges to the decisions 8. Keep accurate records for any future claims rec.uk.com/marsh-commercial www.rec.uk.com

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Inspiraঞon

Q&A

Behind the scenes with recruiters on the front line

How has Royall responded to the Covid crisis?:

As with all recruiters for the creaঞve services industry, Royall were hit hard when lockdown started. We furloughed our team to protect our future as a business, ready to spring back into life when demand started picking up, which it did in August. Since then, we have seen a paradigm shi[ towards interim/contractor talent as clients get back to business. We have also seen new opportuniঞes in sectors such as HR, Markeঞng and Finance. So as a small, agile business we diversified to service these, knowing we had senior team members with the right experience. Businesses have been downsizing and restructuring. Demand, though lower, is for talent that is versaঞle and resilient. Human qualiঞes and 'discreঞonary e@ort’ are now key, with the need to fully understand who a person is – their vibrancy and energy, as much as www.rec.uk.com

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Jenny Royall, Founder of Royall, on how taking a selfl ess approach to recruitment will pay o@ long term. their skill and experience, coming into play.

How did the team manage when returning from furlough?

There was a strangeness in working again, a[er such a long ঞme away from the oLce, and finding a new normal was challenging. We’ve always had an agile, flexible culture, so we were used to working remotely. We all have di@ering family/life commitments and recognised that presenteeism doesn’t guarantee performance. Trust and good engagement are far be‚er moঞvators. We did all miss the team support and energy of our vibrant the oLce. So re-entering lockdown restricঞons again was a blow. We have tried to overcome this by dramaঞcally improving the way in which we engage. For example, we have regular team meeঞngs online which always li[ our spirits and fuel momentum and performance.

What are you most proud of?

We’ve idenঞfied and answered a need at opposite ends of the recruitment spectrum. One in invesঞng our ঞme in young talent, as young people have been hit hard by the pandemic; the other in launching a new arm to the business, called Resolute, to help senior execuঞves be‚er engage talent and acঞvate organisaঞonal purpose, and build their businesses through their people. We are excepঞonally proud of our focus on youth employment and talent development, which is not only vital but enormously saঞsfying. Through lockdown 60% of our e@orts were spent providing coaching to our younger candidates, improving their personal branding, knowing that discreঞonary e@ort is vital for talent to succeed in this climate.

What advice would you give others?

Firstly, listen to talent and to clients and hear their

ambiঞons. Listen to the advice of others. Listen to your execuঞve directors. Listen to podcasts and webinars. Listen, listen, listen! You’ll hear what your clients and candidates need most, and you can adapt accordingly. Shi[ the tone away from commerciality and sales towards support, altruism and nobility. You have to take a selfless approach to helping your clients get through the crisis, o@ering them whatever support you can, even if far from your usual sphere. It makes you a true partner and someone they will return to and be grateful for. Most of all, set goals and put ঞme aside to focus on them. This is a ঞme for many to learn new skills, improve their knowledge base, be commi‚ed to their own self-advancement. This is the key to discreঞonary e@ort. It’s not about being perfect, it’s about e@ort. When you implement that e@ort into your daily life, that’s where transformaঞon truly happens. December 2020 Recruitment Ma‚ers

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Governance

The benefits of outside influence I

n October, Sarah Thewlis, Managing Director of execuঞve search firm Thewlis Graham Associates, took over as Chair of the REC. Her appointment at the head of a newly structured board puts the importance of governance in the spotlight and recognises how valuable it can be to look outside your own business to understand what could be coming next. Thewlis’ own career covers commercial, recruitment, not-for-profit and charity work. She’s joined by four non-execuঞve directors from outside the industry. We caught up with her to find out why that could give the REC the edge it needs in challenging ঞmes.

How important is governance as a topic for anyone in recruitment? Governance is really important. When things have gone wrong in organisaঞons, it’s o[en because people siমng around the top table either haven’t seen it coming or they’ve not thought about it. I’ve been in recruitment for long enough to know that the industry can be quite inward looking. Recruitment is so important to the UK. Pre-Covid, the industry made over 1 million permanent placements each year, and 1 million people were on temporary assignments every single day. But it needs to be be‚er at promoঞng itself to the outside world. It needs to posiঞon itself be‚er as the experts on the window of the world of work. And when so much is changing, it needs to learn as much as it can wherever it can.

Recruitment Ma‚ers

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

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It’s good that REC has had a really good look at governance over the past year. We’re now clear about who the top table is. We have a smaller group of elected recruiters siমng around it. We’ve also brought in four non-execs from outside the recruitment world to broaden the way we think about things, whether that’s immigraঞon, Brexit or new ways of working. Are you expecঞng very di@erent perspecঞves from the four non-execs? I think we are. In Jon Sibson, Pro ViceChancellor of the Faculty of Business at the University of Greenwich, you’ve got somebody who has had three di@erent careers, and is at the crossover point between higher educaঞon and business. Jane Rumble, Interim Deputy Group Director, Consumer and External Relaঞons Group at Ofcom, has a really strong customer services background within the regulatory world. Sakhila Mirza, Execuঞve Board Director and General Counsel, London Bullion Market Associaঞon, brings an alternaঞve perspecঞve from within a professional body. Dr. Gopa Nair, Chief Operaঞng OLcer, NHS Unit Croydon, has done a really interesঞng mix of internaঞonal work as well as supporঞng the public sector. They’ll bring fresh thinking on commercial development, digital transformaঞon, inclusion and standards. This is all the more crucial given the economic challenges we all now face.

And it supports the idea that diversity of thought is an important aspect of diversity and inclusion… It does. When you’re looking to appoint people rather than relying solely on an elecঞon process, it’s an opportunity to make some very posiঞve statements about D&I. Our board is very mixed, in terms of ages and geographical diversity too. Geographical diversity shouldn’t be overlooked. I’ve been really impressed with the acঞon the REC has taken to support members since Covid hit. This seismic event has prompted us into new ways of thinking more quickly and members are sঞll grappling with that. But every area will be experiencing the latest trends di@erently and I’m keen to see the REC focus more and more on the regional variances as it gets even closer to its members. Helping them to understand what’s happening in their locality, and how that relates to retraining and reskilling needs. That’s so much more powerful than a one-size-fitsall model. I want all recruiters to be seen as experts in their field, but there’s a lot they need to know. When you put the emphasis on high standards, recruitment is a complicated business. We can help.

Membership Department: Membership: 020 7009 2100, Customer Services: 020 7009 2100 Publishers: Redac ve Publishing Ltd, Level 5, 78 Chamber Street, London E1 8BL Tel: 020 7880 6200. www.redac ve.co.uk Editorial: Editor Pip Brooking Pip.Brooking@rec.uk.com. Produc on Editor: Vanessa Townsend Producঞon: Produc on Execu ve: Rachel Young rachel.young@redac ve.co.uk Tel: 020 7880 6209 Prinঞng: Printed by Precision Colour Prin ng © 2020 Recruitment Ma ers. Although every effort is made to ensure accuracy, neither REC, Redac ve Publishing Ltd nor the authors can accept liability for errors or omissions. Views expressed in the magazine are not necessarily those of the REC or Redac ve Publishing Ltd. No responsibility can be accepted for unsolicited manuscripts or transparencies. No reproduc on in whole or part without wri en permission.

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