Recruitment Matters July 2019

THE VIEW AND THE INTELLIGENC E

Why there’s opportunity for good recruiters P2 BIG TALKING PO INT

Why the apprenticeship levy needs to change P4 LEGAL UPDATE

RECRUITMENT MATTERS

The dos and don’ts of rolled-up holiday pay P6 Issue 75 July 2019

TR AINING

Dates for your diary P8

FU T U R E O F J O B S

Recruiters can respond to government calls for better jobs I

n May, the Work and Pensions Secretary Amber Rudd called for a new government focus on helping people better themselves in work, moving to higher paid, higher skilled roles.

The REC was invited to host the speech, reflecting the shared commitment to making sure the Future of Work delivers for workers and building on their long-term partnership in this area.

“Thanks to globalisation, digital technology, automation and connectivity, the world is being transformed,” Rudd said. “And there are huge opportunities for all of us: new and flexible ways of working, better services, and more inclusivity.”

Rudd focused on three guiding principles behind the government’s labour market strategy for the 21st century: “First, better access – so everyone who can work is able to get that vital first job, wherever they live and whatever their background.

“Second, better opportunities to

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“We need a safety net and a springboard to support people as they navigate the changing labour market”

succeed and progress in work – we don’t just want people to get a job, we want them to get a good job, with opportunities to progress.

“Third, better protections for those who will struggle to manage these changes. We need a safety net and a springboard to support people as they navigate the changing labour market.”

Rudd also recognised the role REC members play in helping clients with innovative and inclusive recruitment.

The REC is committed to continuing its work with the DWP and other government departments, particularly around flexible working and how to support people through career changes.

“Having the speech hosted at REC HQ was great recognition for the industry’s role and voice on jobs,” said Neil Carberry, REC chief executive. “The REC is all about brilliant recruitment, because it offers people opportunity and generates economic growth and prosperity. Building a progression nation is a vital part of this – addressing skills needs, gender gaps and regional disparities.”

He added: “Flexibility and good work go hand in hand. Driving the good recruitment agenda across all sectors can remove existing barriers.”

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L E A D I N G T H E I N D U S T RY

the view...

There’s all the more reason to be the best, says NEIL CARBERRY, REC chief executive

J

ust getting on with it. That’s the sense I get from recruiters across the country right now. Never mind the Brexit furore – there is business to do. Clients to support. Workers to help with new opportunities.

That’s not to say our new Brexit D-Day of 31 October isn’t in people’s minds – REC is running well-attended practical sessions around the country to help firms find their way. But there is a sense that the difference we can make is by being the best recruitment industry we can be in uncertain times.

This is my view, too. There is a lot we can achieve that is good for Britain and good for REC members.

Our studies show that client demand is reasonably robust at the moment, albeit stronger for temps than permanent roles. And with fewer than half of potential client firms using the sector to recruit, there are still big opportunities out there for firms who get things right.

On 4 June, REC hosted our annual TREC conference with agency and internal recruitment leaders from all over the country. And this theme of opportunity and the step-change in delivery we can drive stood out across the day.

It’s increasingly clear that high employment and lower labour supply (driven by there being fewer young people to replace the baby boomers as they retire) is creating more of a candidatedriven market. Hiring is getting tougher and candidate journeys matter ever more.

But client needs are also changing as new technology reshapes jobs – and firms use how and who they recruit as a tool to deliver on their goals on productivity, inclusion and corporate culture.

This ought to be music to the ears of the brilliant recruiter – a chance to become a trusted workforce adviser with a deeper, more strategic relationship with clients. At REC, we’re here to help – our pioneering Good Recruitment Campaign is now helping almost 500 major firms recruit better from REC members.

These changes also underline how important it is we hold ourselves to high standards. We’ve recently removed a few dozen members from the REC who haven’t met our compliance standards – and we won’t hesitate to hold the line on that.

The new recruitment industry is high-skill, high-value professional services. Let’s work together to deliver it!

If you want to keep up to speed with all things recruitment, then follow me on Twitter @RECNeil

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Brilliant recruitment is at the heart of economic growth, says TOM HADLEY, REC director of policy and professional services HADLEY ’ S C O MMENT

Fuelling the UK’s business engine Enhancing perceptions of recruitment as a discipline will enhance its perceptions as an industry. So how to do we shift the dial? Building the link between good recruitment and productivity and using our Good Recruitment Campaign to talk to the client side are just two priorities.

Below are six ways that the UK’s £35.7 billion recruitment sector is already supporting business growth across the economy.

1. Providing strategic support According to JobsOutlook, 80% of employers cite ‘expertise’ as a determining factor when choosing a recruitment partner. Helping clients identify and meet future staffing needs to drive future growth is an example of this.

2. Understanding evolving business needs As business models evolve, skills and management requirements do too. For example, 40% of employers predict growth in project-based activity which will further fuel the need for specialist project managers, according to a recent survey by the Association of Project Management (APM) and PwC. 3. Taking a lead on inclusive growth There is increasing recognition that diversity is a key characteristic of high-growth businesses. By delivering inclusive recruitment practices and promoting flexible hiring, recruiters are driving the necessary change.

4. Building leadership capability Effective leadership and management are key to productivity and growth. This underlines the key role of executive search professionals. But access to interim managers and high-end contractors is just as important.

5. Looking at the longer term Recruitment professionals can inspire the workers and leaders of tomorrow who will drive future growth.

Just under 200 REC members are already registered as Future of Jobs Ambassadors and working with local schools and colleges to build better bridges between education and work.

6. Practising what we preach In a recent poll, a significant number of members (22%) flagged building future leadership capability as a main strategic imperative. Good to hear; this is key to driving productivity and growth within the recruitment sector itself.

This is just a starter for six. Every day, REC members are fuelling the UK’s business engine and we will continue to showcase the importance of effective hiring practices. Let’s demonstrate that brilliant recruitment is at the heart of economic growth.

You can follow Tom on Twitter @hadleyscomment

www.rec.uk.com

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26%

the intelligence...

The future of jobs, skills and training

In the UK just 12% of jobs could be completely automated in the next 15-20 years. However, a further 26% could change significantly, creating both new methods for completing tasks and new jobs.

BY JOSH PRENTICE, RESEARCH OFFICER

R

ecently we have seen two interesting reports come out of the OECD. Both give us valuable insight into how the world of work looks right now and how it could look in the future. The first, the Employment Outlook on the Future of Work, touched on a wide variety of topics relating to how technology, demographic change and an evolving labour market are affecting the world of work, and how the dangers of these changes can be mitigated.

This report stresses that we should not be bracing ourselves for a jobless future, estimating that in the UK just 12% of jobs could be completely automated in the next 15-20 years. However, a further 26% could change significantly, creating both new methods for completing tasks and new jobs. Alongside this, innovation and disruption from new businesses, as well as the changing preferences of workers, mean that more flexible ways of working are becoming more prevalent: over a third of workers are now in non-standard employment. When we add in the UK’s ageing population, it becomes clear that the labour market could look very different in a generation’s time.

This transition will undoubtedly come with a number of challenges; some are already affecting us today. Many people will have to be retrained or upskilled, either because their role has been automated or just to keep pace with the changes to their current role.

Worryingly, the Employment Outlook found that six in

AVERAGE TENURE OF AGENCY STAFF INCREASES

40

50.1

38.2

60 50

51.8

70

30 20

Worryingly, the 10 workers Employment Outlook currently lack basic found that six in 10 workers currently lack IT skills, which are basic IT skills, which essential for many are essential for many emerging jobs. emerging jobs.

In addition, the OECD’s Skills Outlook, published in May, found that only 37% of workers in the UK have good literacy and numeracy skills, ranking it 16th out of 29 countries behind Estonia (11th) and Slovakia (9th).

The Skills Outlook also found that 14% of UK workers are in jobs at high risk of automation and need access to training if they are to transition to a lower-risk position – that’s compared to an OECD average of 11%. Both reports stressed that lower-skilled workers, older workers and people

The latest information from Recruitment Industry Benchmarking’s RIB Index shows that the average tenure of staff working for the median industry recruiter continues to increase. In Q1 2019, it was recorded as 51.8 months – or around 4.3 years.

Set into historical

from working class backgrounds tend to be at a higher risk of automation in their roles, and yet it is these groups who are least likely to participate in training and adult learning. Research from the Social Mobility Commission in the UK backs up these findings.

All this points to a worrying state of affairs, but as the Employment Outlook indicates there are measures we can put in place to mitigate the dangers. It is essential that all workers have more opportunities for training and retraining throughout their careers, but adult learning and training must be targeted at those who are in more vulnerable positions, for example by incentivising employers to train groups who are more at risk.

We must also tackle unequal access to training for people in non-standard work, including agency workers: the REC is continuing to push for reform to the apprenticeship levy to allow recruitment agencies to do just that.

context, the average tenure of median RIB recruiter staff across 2017 was 40.8 months (c. 3.5 years) whilst across 2018 it averaged 51.0 (c. 4.25 years). In contrast, the average tenure in lower quartile RIB recruiters was 37.3 months (just over 3 years) – up from 29.5 months (c. 2.5 years)

in 2017, but down from 41.8 months (c. 3.5 years) recorded last year. And among RIB recruiters in the upper quartile, the average tenure was 66.9 months (just over 5.5 years) in Q1 2019, up from an average of 58.4 months (just under 5 years) across 2017 and 60 months (5 years) in 2018.

10 0 Q1

Q2 Q3 2017

Q4

Q1

Q2 Q3 2018

Q4

Q1 2019

Average quarterly tenure of staff in the Median RIB Recruiter, in months

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BELINDA JOHNSON runs employment research consultancy, Worklab, and is Associate Knowledge & Insight Director of Recruitment Industry Benchmarking (RIB). 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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APPRENTICESHIP LEVY

big talking point

Why the apprenticeship levy needs to change The latest statistics from the REC reveal the scale of the problems recruiters face when spending what they have paid in

pril 2019 marked a significant point in the REC’s campaign to transform the apprenticeship levy into a more flexible training levy. It was the date when, 24 months after the scheme was launched, the first tranche of unused funds in employers’ digital accounts was wiped.

From then on, companies stand to lose tens of thousands of pounds each month if they aren’t able to use their funds because of the current restrictions in place. The latest research from the REC shows that many recruiters are finding themselves in that boat.

Frustratingly, the payments made by buisnesses with payrolls of over £3m are only able to be used for apprenticeships, which by their very nature and structure do not lend themselves to short-term contracts. And for those

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agency workers who do remain in post for more than 12 months (fewer than 10%), the time specified for off-the-job training is at odds with the very reasons they are employed – to meet peaks in demand, cover leave or absences and access key skills in the short term.

As such, the recruitment industry continues to pay a disproportionate share of the levy while the nearly 1 million people out on assignment on any given day are automatically cut off from the training and development opportunities the levy provides.

More than nine in 10 levy-paying REC members place agency workers, and for nearly two-thirds of them, doing so constitutes the majority of their business. So it comes as no surprise that nearly half have not been able to use any of the funds they have paid into their accounts. And when 90% of these businesses are SMEs, the wasted opportunity is particularly hard to take, especially in a time of candidate and skills shortages.

The chance for change When the apprenticeship levy was launched, the government declared its intention to support 3 million more apprenticeships by 2020. That target is unlikely to be met, and in the 2018 Budget the Chancellor announced the levy would be reviewed post 2020.

At the time, the REC welcomed the opportunity to reshape and reset the levy so that it works better for workers, businesses and the wider economy.

And the organisation is not alone. The Matthew Taylor Review into modern working practices also called for the broadening of the apprenticeship levy – highlighting it as a way to boost progression opportunities for all workers irrespective of what type of contract they are on.

By enabling recruitment businesses to use unspent funding on training programmes for temporary agency workers, the upskilling and progression opportunities provided to these workers could be substantial. In turn, the

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APPRENTICESHIP LEVY

Recruiters face a disproportionate hit: 1 in 25 levy payers are REC members With short-term contracts, most agency workers fall outside the levy’s remit… yet 94% of levy-paying REC members place agency workers, and for 64% of them temporary assignments account for at least 75% of their placements … leading to levy money going unspent 95% have been unable to use funds on apprenticeship programmes for agency workers due to current restrictions 47% have been unable to use any of the funds paid into their account And only 10% have been able to use more than half of the funds in their account The picture for the current financial year doesn’t look all that much better 37% anticipate they will not be able to spend any of the funds in their account 38% expect to spend only up to a quarter of funds available. www.rec.uk.com

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WHAT IS THE APPRENTICESHIP LEVY • All employers with a payroll of over £3m are taxed 0.5% on that pay bill • The levy applies to anyone you pay via PAYE – permanent staff, as well as any contingent labour on your payrolls • Business pay into the levy on a monthly basis and from April 2019 will begin to lose money that has been in their account for longer than 24 months • The levy can only be spent on accredited apprenticeship programmes, which are a minimum of one year long and demand 20% offthe-job training

introduction of a flexible and inclusive training levy scheme would support businesses by addressing skills shortages and boosting productivity.

What the money could be used for Employers and recruiters participating in the REC’s monthly surveys have reported persistent skill shortages in both permanent and temporary roles as a major concern. And when it comes to temporary staff, its Report on Jobs highlights occupations repeatedly in short supply across an array of industries including accounting/financial, blue collar, construction, hotel/catering, engineering, IT/computing and nursing/medical/care.

And although they can’t yet spend their levy funds in this way, members have identified a range of skills and relevant qualifications required to meet demand of temporary staff. For instance, a flexible training levy could support the provision of shorter training courses, including: • Teaching assistant training courses and supply teacher qualifications • Healthcare assistant training courses • Training for HGV and forklift truck drivers in logistics • Catering courses in hospitality • Health and safety courses for those who work in construction or transport • Manufacturing and production management courses.

Employers and recruiters recognise the importance of training to beat the skills gap, promote career progression for all, boost productivity and support economic growth. But the statistics from the REC’s latest research speak volumes about why the current levy needs to change.

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IR35 CHANGES

legal update

Rolled-up holiday pay

By EMMA CLAPHAM – Legal adviser, REC

T

he Working Time Regulations 1998 (WTR) made under the Working Time Directive 2003 (WTD) entitle a worker, including an agency worker, to 5.6 weeks of statutory annual leave each year.

Can the pay relating to holiday pay be added to the hourly pay rate as an additional percentage, known as ‘rolled-up holiday pay’, or should it be paid at the time the worker takes annual leave?

Prior to 2006 conflicting case law existed on whether rolled-up holiday pay was lawful under the WTD. Marshalls Clay Products v Caulfield

LOOKING AFTER THE MENTAL HEALTH OF THE RECRUITMENT SECTOR RICHARD GOULD

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2003 approved rolled-up holiday day pay but MPB Structures Limited v Munro 2003 003 determined that rolled-up holiday pay was as unlawful and should be paid when holiday is actually taken under the accrual method.

A referral to the European Courts of Justice in Robinson Steele v RD Retaill Services and Others 2006 established the current authority that rolled-up holiday pay is unlawful under the WTD and holiday pay should be paid when annual leave is actually taken. However, it held that sums already paid under a transparent rolled-up holiday pay arrangement could be offset against a claim for unpaid

Mental health is becoming an increasing priority for the recruitment industry. Research has identified the sector as the most stressful working environment with 82% of consultants claiming to be stressed.

Triggers include heavy workloads, long hours that threaten work/life balance and pressure to meet targets. So what can businesses do to help?

• Boardroom buy-in is essential.

Seek out a senior sponsor to champion your wellbeing

holiday pay. Transparency required, for example, agreement from the worker to the arrangement and for the amount to be clearly itemised on their pay slip. But the decision to offset does not apply to arrangements after the Robinson Steele decision – you cannot now continue to roll-up holiday pay and try to rely on the offset provisions of Robinson Steele.

The Robinson Steele decision relates to statutory annual leave entitlement not to additional annual leave. This means that pay for holiday entitlement above the statutory minimum could be rolled-up and paid in lieu of physical ttime off provided it is done in a transparent manner. man Note, under the Agency Worker A Regulations 2010, R parity rights after the qualifying period others, annual leave include, among other physical time off. This pay and the physica means that despite being able to roll up holiday pay rrelating to leave above the statutory minimum if done transparently, you will still need agency worker to ensure that the ag receives the physical time off.

Despite the above information the REC advises members not to roll up holiday pay for either statutory or additional annual leave entitlement but instead pay the amount due as and when the agency worker takes annual leave.

strategy from the outset.

• Create a culture where employees can talk about their mental wellbeing without stigma. This is often the biggest challenge but Mind offers free resources to help.

• Understand your data, including the make-up of your workforce.

Identify the specific challenges your employees face. It’s the only way you can create an effective strategy. This might include training or first aiders, Employee Assistance Programmes,

signposting to available resources and letting people know that ‘it’s ok to not be ok’.

• Involve your employees at every step in the design and roll out of your strategy.

Addressing mental health issues in their early stages is best way of preventing them escalating. It pays to have a long-term strategy in place.

Richard Gould, director of commercial, Howden Employee Benefits and Wellbeing

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I N S P I R AT I O N To keep up to date with everything the Institute of Recruitment Professionals is doing, please visit www.rec-irp.uk.com

TRACEY GEORGE, chief operating

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KIERAN MCCORMICK, director of

officer at TPP Recruitment, on working in the third sector

operations at Balmoral Healthcare, on the importance of reputation

Preconceptions about working in third sector recruitment need to be challenged.

How are you dealing with the challenge of the nursing shortages?

Salaries and chargeable fees in the sector are as competitive as they are for recruiters in the commercial sector. It’s also a relatively robust sector when it comes to economic downturns.

It’s a dynamic sector to get involved with. The diversity and variety of clients you get to work with – whether that’s in terms of the type of charity, the company structure or the influence of younger trustees on boards – it’s miles ahead of what I experienced in the finance & accountancy sector, for example. It’s also often a lot easier to open doors – people are friendly, organisations are willing to engage and they value the human touch.

www.rec.uk.com

Q&A

What I know

BEHIND THE SCENES AT THE INSTITUTE OF RECRUITMENT PROFESSIONALS

People – especially younger generations – increasingly want work that has social purpose.

In the third sector, they can directly see how their work impacts on the organisation’s ability to deliver its valuable services. We give all our staff five volunteering days so they can feel part of it, and better understand client needs in the process.

We can learn from clients as much as our clients can learn from us.

Because we’re so immersed in the third sector, we’re aware of the importance of flexible working, diversity and inclusion and mental health. We embrace these best practice approaches, just as we can help our clients understand how to tackle skills shortages by looking for transferable skills from the commercial world.

We have to be creative around retention. We provide our services to the NHS under tender, so we can only pay our staff the rate that’s in the contract. So we currently offer free training and free uniform, and are considering providing free CRB/Access NI checks and reimbursement for annual registration fees. A £35 fee can be a lot of money for some people.

Our clients obviously care about the quality of the people we provide – but by investing in staff, and helping them upskill, we’re ensuring they have what they need to do the job well, which is important to them as professionals too.

As hospitals are increasingly dependent on agency staff, the flack on the

recruitment industry around cost and quality grows – what do you think is the answer?

It’s frustrating when we’re a compliant agency, and a long way from being the most expensive. We value ourselves on the quality of service we provide. I know that if our agency provides a nurse, they can perform everything that is expected of them – and as a nurse myself, I know there is nothing worse if they can’t.

Our clients know we’re one of the best, and that’s ultimately what matters most.

So how important is that reputation for your business?

Given the current climate, our reputation – built up over 20 years – has greatly influenced the sustainability and growth of this business. It’s a very powerful thing to have.

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TRAINING

Upcoming training The courses that will help you to perform at your best, and deliver for your team before the summer is out 2 July - Customer Service for Recruiters (London) 3 July - Interview Skills (London) 4 July - Telephone Sales (London) 9 July - Business Development Planning (Leeds) - Essential Skills for Temporary Recruiters (Bristol) 10 July - Consultative Selling (London) - Essential Skills for Permanent Recruiters (Bristol) 11 July - Candidate Sourcing & Management (London) - Recruitment Law: Understanding the Essentials (London) - Social Media Recruiting: Mastering LinkedIn (London)

16 July - Balancing Act (London) 18 July - Develop and Win: Tenders and Large Contracts (Manchester) 6 Aug - Social Strategy & Branding (London) 13 Aug - Introduction to Recruitment Practice (London) - Successful Account Management (London) 15 Aug - Telephone Sales (London) 20 Aug - Business Development Planning (London) 21 Aug - Essential Skills for Temporary Recruiters (London) 22 Aug - Essential Skills for Permanent Recruiters (London)

4 Sept - Management Essentials (Glasgow) 10 Sept - Essential Skills for Temporary Recruiters (Aberdeen) - Telephone Sales (Belfast) 11 Sept - Essential Skills for Permanent Recruiters (Aberdeen) - Perfect Client Meeting (Manchester) 12 Sept - Interviewing Skills (Leeds) - Telephone Sales (London) 15 Sept - Essential Skills for Temporary Recruiters (Newcastle) 16 Sept - Essential Skills for Permanent Recruiters (Newcastle) 17 Sept - Social Media Recruiting: Mastering LinkedIn (London)

Upcoming events Preparing for IR35 series… in Birmingham (2 July), Manchester (10 July), London (16 July), Glasgow (10 Sept), Edinburgh (11 Sept), Bristol (24 Sept), Cardiff (25 Sept)

Webinars: 14 August: Talking Recruitment Sector meetings at the REC, London:: 3 July: Education 4 July: IMA 10 Sept: Drivers 17 Sept: Education

- Introduction to Recruitment Practice (Leeds) 18 Sept - Balancing Act (Birmingham) 19 Sept - Recruitment Law: Understanding the Essentials (London) - Successful Account Management (Leeds) 24 Sept - Business Development Planning (Manchester) - Management Essentials (London) 25 Sept - Recruitment Law: Understanding the Essentials (Cambridge, Enhanced 2 days) 26 Sept - Candidate Sourcing & Management (Bristol) - Recruitment Law: Supplying Limited Company Contractors (Edinburgh, pm)

REC Masterclass with Greg Savage & Chris Savage A must for any recruiter who wants to grow and futureproof their business and career 17 Sept: Glasgow 18 Sept: Manchester 19 Sept: London

For more information, visit www.rec.uk.com/training-and-events

RECRUITMENT MATTERS

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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

Membership Department: Membership: 020 7009 2100, Customer Services: 020 7009 2100 Publishers: Redactive Publishing Ltd, Level 5, 78 Chamber Street, London E1 8BL Tel: 020 7880 6200. www.redactive.co.uk Editorial: Editor Pip Brooking Pip.Brooking@rec.uk.com. Production Editor: Vanessa Townsend Production: Production Executive: Rachel Young rachel.young@redactive.co.uk Tel: 020 7880 6209 Printing: Printed by Precision Colour Printing © 2019 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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