THE VIEW AND THE INTELLIGENCE
Prepare for recovery p2 BI G TALKI NG POI NT
How to support employee mental health p4
Recruitment Ma ers
LEGAL U PDATE
IR35 on hold: what are the next steps? p6 Issue 85 May 2020
ARTI FI CI AL I NTE LLI GE NCE
Ways to avoid unconscious bias p8
Global pandemic
REC welcomes Chancellor’s Covid-19 package W
hen the economic impact of Covid-19 became clear in mid-March, the REC moved quickly along with other business organisa ons to secure largescale ac on from the Treasury to protect jobs. Within days, the Chancellor announced a £350bn package of support for businesses. This includes a job reten on scheme to support staff salaries, the deferral of VAT and other taxes as well as the postponement of the IR35 tax changes, plus grants and interest-free loans to help businesses to overcome cashflow challenges. In his speech the Chancellor praised the collabora on and “construc ve discussions” of business groups.
@RECPress RM_MAY 2020-v1.indd 1
The package was, according to Neil Carberry, CEO of the REC, “the big ac on the REC and many other business organisa ons have been working hard to achieve… cashflow support, VAT deferment and wage payments are the exact radical measures that were needed. The REC has successfully lobbied government to introduce digital right-to-work checks so that members can place key workers in jobs where they are needed quickly. We con nue to ask for Statutory Sick Pay (SSP) to be expanded,” he said. SSP support is currently offered to employers with fewer than 250 employees. Many recruitment businesses have a small internal team, but o en look a er hundreds of agency staff, leaving them out of its scope.
The Chancellor’s £350bn package for businesses included cashflow support, VAT deferment and wage payments
Making great work happen
“I’m pleased to say that Government wants to con nue this collabora on with us and other sector bodies, so we will go on working together throughout this crisis,” Carberry said. “Recruitment professionals have a pivotal role in helping people to get jobs where they are most needed at this me, such as in healthcare, logis cs and the food sector. We will get through this and, when we do, recruitment will be central to the recovery.” All details are correct at me of prin ng, but events move fast, so check the REC’s Covid-19 hub.
www.rec.uk.com 07/04/2020 12:25
Leading the industry
the view... Let’s use this ঞme of crisis to prepare for recovery, says Neil Carberry, REC Chief Execuঞve
P
icture the scene. You’re a recruitment professional. It’s early 2020. You’re thinking about how recruitment can help businesses to overcome their biggest problems – produc vity, staff engagement and adap ng to new technology. Skills shortages, Brexit uncertainty and IR35 tax changes dominate the debate in our sector. Then a pandemic strikes. There’s a lockdown, client demand drops in most sectors, but rockets in a few. Big policy changes come in instantly, and your business goes digital. Things change with lightning speed. I don’t know how things look as you read this, but here are a few observa ons. This too, shall pass. This isn’t a slowdown caused by economic problems. To protect our fellow humans we must pause the economy. It’s a choice – that’s why governments are suppor ng firms. When the storm passes, the bounce-back is likely to be substan al and quick. Use the me now to prepare for that. Resilience ma ers. Our mental and physical health is paramount. Let’s look a er each other and our businesses. We’ve all been focusing on managing cash, and the REC has been working to help you by campaigning for government support, and offering informa ve podcasts and briefing webinars, but this outbreak might lead all of us to think differently about how we structure our organisa ons in future. Pride in our industry – and hope for the future. Recruiters are making huge contribu ons to the na onal effort – staffing hospitals and supermarkets, volunteering and caring for people looking for work. That’s living our values. But we also need to prepare for the upswing – ge ng people back to work.
“Prepare for the upswing – geমng people back to work”
If you want to keep up to speed with all things recruitment then follow me on Twi er @RECNeil
2
HADLE Y’S COMME NT
For his final column before leaving the REC a[er 15 years, Tom Hadley, REC Director of Policy and Campaigns, looks at what recruiters can learn from the Covid-19 pandemic.
Lessons from the crisis A
midst the Covid-19 crisis, some important lessons come into focus. These will leave a legacy as we contemplate what the ‘comeback trail’ looks like for our economy and jobs market. • Who is a key worker? A big part of our work on immigra on policy and skills has been to underline the importance of workers in a range of roles and sectors who don’t fall within the government’s ‘brightest and best’ tagline. The contribu on of those in care, health, logis cs, agriculture, food manufacturing, cleaning and facili es management is there for all to see. • Leadership. Our ‘Leadership 2025’ White Paper iden fied two key a ributes of future leaders: the ability to deal with disrup on and an approach that focuses on people. The pandemic is the ul mate test of both. It was good to see 86% of recruitment leaders flagging the wellbeing of staff and workers as the priority. • Our role. The way recruiters helped people to transi on into roles and sectors where they were most needed in the crisis has been a great example of what our industry is all about. The sector must also be at the forefront of the postCovid-19 comeback. • Our voice. Our work with government and business organisa ons helped to shape radical support packages. Insight from recruiters in the front line was crucial – and will be crucial to future labour market policies and rebuilding. My career at REC began with the Agency Workers Direc ve furore and ends with the biggest crisis we’ve ever known. A constant throughout my campaigning work for the industry has been the support, energy, exper se and op mism of REC members. It’s been an honour and a pleasure. You can follow Tom on Twi er @HadleysComment
Recruitment Ma ers May 2020
RM_MAY 2020-v1.indd 2
07/04/2020 12:26
Leading the industry
the intelligence...
The cost to UK businesses of mental health and musculoskeletal condi ons could be
Good mental health can increase produc vity
£87.8bn
By Thalia Ioannidou, Research Manager at the REC As workers across the UK selfisolate to deal with the coronavirus outbreak, ensuring those working from home receive mental health support has become even more important. This year’s Mental Health Awareness week starts on 18 May, so take the opportunity to focus on how you can reduce the damage the crisis is doing to employees and efficiency. It is not surprising that losing your job is bad for your mental health, but many people in work also suffer from mental distress. This can be caused by unfair treatment, anxiety about job status or being asked to work in a new way. It has a knock-on effect on mo va on, performance and organisa onal effec veness. The rising cost of mental distress The cost to UK businesses of absenteeism and reduced produc vity because of mental health and musculoskeletal
19%
Companies that increase their people management performance from the lowest levels to the UK average can secure a 19% producঞvity gain.
7%
If the UK improved its performance on people management by 7%, £110bn could be added to the country’s income (CBI, 2019).
Data confirms drop in employer confidence because of coronavirus By Josh Pren ce, REC Research Officer 30 20 10 0 -10 -20 -30 -40
Oct 19
Nov 19
Dec 19
Jan 20
Feb 20
Mar20
Do you think economic condiঞons in the country as a whole are geমng be er/worse? In view of the economic condiঞons, do you/does your organisaঞon expect confidence in hiring and investment decisions to get be er/worse?
condi ons could be as much as £87.8bn by 2025, according to the Centre for Economics and Business Research. That is a £14bn increase on present figures. However, you can alleviate this. For instance, inves ng in specialist early interven ons for mental health condi ons could save businesses an es mated £38.1bn by 2025. These findings add to the importance of helping workers to manage mental distress and providing adequate mental health support at work. Leadership is key Line managers and business leaders generally know that caring about people’s experience in the workplace boosts produc vity. This is crea ng an increasing sense of responsibility for staff wellbeing. Great managers and leaders are commi ed to raising awareness of, and addressing, mental health challenges. The Covid-19 pandemic caused business confidence in the economy to plummet in March, according to the REC’s JobsOutlook survey (conducted between 2 March and 20 March). Confidence levels had been improving since November 2019, when the winter elec on provided poli cal clarity. But the impact
Companies that increase their people management performance from the lowest levels to the UK average can secure a 19% produc vity gain. Similarly, if the UK improved its performance on people management by 7%, £110bn could be added to the country’s income (CBI, 2019). Embrace new ways of working Businesses can support workers by offering flexible working, training on personal resilience and financial wellbeing and mechanisms to deal with staff complaints. Added benefits, such as support with travel and childcare, also help. Central to this is con nuous communica on within and between teams – which is par cularly vital while Covid-19 keeps employees physically apart.
of the pandemic caused confidence to drop from net -1 to net -23. However, firms are s ll taking on staff. While demand for permanent staff has fallen, it remains posi ve (a net figure of +17) both in the short and medium term. Indeed, shortterm demand is higher than average for technology workers and drivers.
Similarly, demand for temporary agency workers jumped by 15% between February and March, as many employers looked to flexible workers. These people are vital to the UK’s labour force in a crisis. The REC will con nue to work with government to ensure that agency staff are not le without support in the lockdown. May 2020 Recruitment Ma ers
RM_MAY 2020-v1NEW.indd 3
3
08/04/2020 09:59
Mental health at work
big talking point
Supporঞng our mental health P
eople across the UK are falling sick and the NHS is struggling to diagnose or treat them. Many try to hide their symptoms, fearing the reacঞons of others, or lost work and income. Hiding it generally makes it worse. Sadly, if not treated, it can be fatal. The soluঞon, unlike for Covid-19, is definitely not self-isolaঞon. Poor mental health is one of the biggest challenges faced by society, the NHS, and the workplace. The coronavirus pandemic has raised important quesঞons about how we can look a[er the mental health of ourselves and each other, especially older and vulnerable people. In January, when the virus was sঞll largely confined to one region of China, the World Economic Forum’s Global Risk Index for 2020 predicted that noninfecঞous illnesses were more of a threat today than infecঞous ones. Last year there were many indicaঞons that the UK’s mental health medical provisions were under strain and, o[en, inadequate. The coronavirus demonstrates that, while governments, scienঞsts, doctors and society rally to deal with a physical disease emergency, long-term condiঞons, parঞcularly mental illnesses, rarely a ract such a enঞon. Employers need to do as much as they can to support employees who are struggling with mental health condiঞons. This is essenঞal at a ঞme when medical provision is o[en available only for the most acute mental health problems, and the naঞonal focus is on dealing with a pandemic. And, of course, drasঞc social and economic measures, fear of infecঞon, social distancing policies, increased working from home and other consequences of the virus will all compound many mental health condiঞons. 4
Recruitment Ma ers May 2020
RM_MAY 2020-v1NEW.indd 4
Coronavirus raises important ques ons about how we look a er our mental health in a me of social distancing and self-isola on. With one in four people worldwide suffering from a mental disorder at some point in their lives, and as mental health week approaches, what can recruiters – as employers and as advisers – do to help?
Good mental health is good for business
And while coronavirus is puমng many businesses and livelihoods at risk, mental illness also has a business cost. According to a recent report by Deloi e, UK poor
mental health costs employers £45bn a year, a rise of £6bn a year since 2016. The OECD puts the figure higher at £94bn a year No demographic is ‘safe’ – in fact, young people appear to be parঞcularly vulnerable. Research
£45bn
– the cost of poor mental health to employers each year.
$US1trn
– the cost of produc vity losses caused by mental illnesses to the global economy each year.
8.3%
Employers lose the equivalent of 8.3% of the salaries of those aged 18-29 as a result of poor mental health.
3x – ‘presenteeism’ costs three
mes more than
sick leave.
25%
of the popula on worldwide will experience mental health problems at some point in their lives.
50m people in the EU are affected by mental health problems.
65% of Bri
sh workers say they lose sleep because of stress.
300,000 people with a long-term mental health problem lose their job each year.
www.rec.uk.com
08/04/2020 09:59
What can recruiters do?
shows that employers lose the equivalent of 8.3% of the salaries of those aged 18-29 as a result of poor mental health. Young people are less likely to disclose mental health problems and more likely to use holiday instead of sick leave. Moreover, the Covid-19 lockdown is likely to compound mental problems that are affected by isola on and for people who struggle to switch off from the workplace – an issue familiar to recruiters who depend on close personal contacts and being always available on mobile devices.
Mental health in the recruitment industry
Recruitment is already one of the most stressful jobs in the UK, with 81.8% likely to suffer from workplace stress – which is likely to increase in the lockdown. “Our research finds that, while an increased use of technology can enhance working prac ces, having the ability to work outside of normal working hours can add to the challenge of maintaining good mental health, and make it hard for some to disconnect from an ‘always-on’ culture,” said Elizabeth Hampson, Partner at Deloi e. www.rec.uk.com
RM_MAY 2020-v1.indd 5
Despite posi ve changes in workplaces, including greater openness about mental health and more support, costs are climbing. This is a ributed largely to a significant rise in mental-healthrelated ‘presenteeism’, where employees work when they are not at their most produc ve. Mentalhealth related absenteeism and staff turnover add to the costs. Meanwhile, the World Health Organisa on (WHO) includes mental disorders on its list of workrelated illnesses and says that people exposed to chronic stress at work have a significantly higher risk of developing symptoms such as depression or anxiety. It points to contribu ng factors such as poor leadership, a lack of input in decision-making and excessive stress, adding that nega ve experiences at work can lead to isola on and estrangement. But it’s not all doom and gloom. Work can also be a source of mental strength and can contribute to mental wellbeing. “With good leadership and a suppor ve work environment, work serves as a ‘health resource’ that can help prevent mental illness or make it less common,” the WHO says.
“Smart, forward-thinking employers are inves ng in staff wellbeing, and those who do tend to save money in the long run,” says Paul Farmer, Chief Execu ve of mental health charity Mind. The World Economic Forum agrees. In January, it urged employers to take mental health seriously: “For companies, it is important to proac vely support the mental health of employees – not just for economic reasons, but also to ensure inclusion and preven on in the workplace, par cularly since some triggers for mental disorders can o en be found at work.” So what can recruiters, as employers and business advisers, do to help? Check out our top ps. • Early warnings: create a culture in which people can talk about mental health concerns early, before they become worse. Research indicates that you gain a higher return on investment from early interven ons, such as organisa on-wide educa on, than from support once a person is struggling. • Reduce ‘presenteeism’: unwell staff who spend me at work not only hurt themselves, but tend to be unproduc ve. “As presenteeism costs three mes more than sick leave, we need to look at suppor ng employers to change the culture so their staff feel able to take me off when they are unwell,” says Farmer. ‘Leaveism’, where people fail to take holidays is a similar sign of a damaging culture or workload. • Invest in health: according to Deloi e, for every £1 spent on suppor ng mental health, employers get an average of £5 back in reduced presenteeism, absenteeism and staff turnover. • Switch off: conscien ous staff can struggle to disconnect. Employers should make sure staff are not under pressure to remain connected at all mes and that they do not reward behaviour that could prove damaging in the long term. • Engage with staff: highly engaged employees seem to struggle less with mental health. Teamworking and a posi ve workplace culture are important. Individuals should feel able to talk about mental health concerns, but managers and colleagues should also be alert for signs and able to raise concerns in a sympathe c, non-threatening way. • Promote inclusion: the WHO makes it clear that people who find their work unchallenging or uns mula ng and have li le say in decision-making are as at risk as those under constant physical or mental stress. Enabling staff to express opinions and contribute to their environment can help. The REC has partnered with Punter Southall Health & Protec on to create a free guide for members with prac cal ways to support mental health in the workplace. Download your copy at www.rec.uk.com/ business-support/business-partners/businesspartners/Punter-Southall-Health-and-Protec on May 2020 Recruitment Ma ers
5
07/04/2020 12:26
IR35 on hold
legal update Delayed, not cancelled: the next steps for IR35 By Lewina Farrell, Legal Advisor at REC
O
n 17 March 2020 the government answered the REC’s call to delay the IR35 tax changes un l April 2021. This means the current rules, in both the public and private sectors, will apply up to and including 5 April 2021. So, if you’re dealing with a client in the private sector, they don’t have to do anything about IR35 at the moment. If the client is a public authority, the rules that took effect in April 2017 remain in place. Some businesses have already prepared for IR35. And some private sector clients have decided that some roles are ‘inside IR35’. So what should recruiters do?
From a legal perspecঞve The rules aren’t changing
Don’t lose sight of standards – especially at a ঞme of crisis sign up at www.rec.uk.com/ membership/how-tojoin 6
Recruitment Ma ers May 2020
RM_MAY 2020-v1.indd 6
un l April 2021. Neither the client’s obliga on to provide a status determina on statement (SDS), nor the fee-payer’s obliga on to deduct tax and na onal insurance, apply for the me being. So, even where a client has determined that a role would have been inside IR35 from 6 April 2020, there is currently no obliga on on the fee-payer to make any deduc ons before paying the Personal Services Company (PSC).
“The current rules will apply up to, and including, 5 April 2021.”
From HMRC’s perspecঞve HMRC said that SDSs made before 6 April 2020 will have no standing. It also said that it will not consider any SDSs made if it opens an inves ga on into a contractor in the mean me. Coronavirus may have rocked our economy, but this is no excuse to lose sight of our standards and the importance of compliance. Calami es like these are an opportunity to showcase your commitment to best prac ce and professionalism to help the economy back on its feet. When candidates and clients are worried, they will be predisposed to working with those they can trust. REC Professionals have to abide by the REC’s Code – the founda on for ethical and transparent recruitment prac ces. Since the dawn of Covid-19, we saw our members rise to the challenge, to support the people who have been affected the most. By signing up as an REC Professional, you’re also signing up to become a brilliant
Some contractors may want to con nue to work through their PSCs. Agencies and clients can agree to this, but some may choose not to. The agency can con nue to pay the PSC gross and will not be liable for their failure to comply with IR35 unless, under exis ng legisla on, it can be shown that they are facilita ng tax evasion. Blanket decisions Some businesses decided not to allow contractors to work through PSCs past a certain date. They may con nue with this ban, or may now allow those contractors to work through PSCs un l the changes in 2021. Some contractors may choose to stay on PAYE if, despite the lost income, they decide it is more beneficial to be en tled to rights such as sick pay and holiday pay. Note that this is a delay, not a cancella on. All other legal changes resul ng from the government’s Good Work Plan came into effect on 6 April. Agencies and clients will s ll have to implement the IR35 changes by April 2021. The REC will support members to do this and our IR35 hub on our website is there to help our members.
recruiter, while con nuously progressing in your career. Signing up is easy. Depending on your experience, you will become an Affiliate, Member or Fellow REC Professional (recognised by the industry as AREC, MREC or FREC respec vely). You can also claim 20% off all future recruitment training courses, exclusive lifestyle benefits and networking opportuni es. Your REC Professional membership will become a way of life as you climb up your career ladder. To become an REC Professional, contact Joseph Solich at joseph.solich@rec.uk.com or sign up at www.rec.uk.com/membership/ how-to-join www.rec.uk.com
07/04/2020 12:26
Inspiraঞon
Q&A
What I know
Behind the scenes with REC Professionals
REC charity partner St Giles Trust on the value of helping the UK’s most disadvantaged people Good work can help people to get back on their feet. Good work is o en the final stepping stone on the road to independence. Most of our clients have many barriers to overcome before they are ready for employment. These include homelessness, mental and physical health issues, substance misuse, a criminal record or long-term unemployment. We work with people to help them address these and increase their skills, confidence and mo va on.
New ways to help vulnerable people cope with Covid-19. We work with some of the most vulnerable people in society and the
www.rec.uk.com
RM_MAY 2020-v1.indd 7
Covid-19 pandemic could have a terrible impact on their fragile lives. We are working hard to limit the impact. We have turned Brewbird, our social enterprise cafe, into a food distribu on centre, allowing our clients access to affordable, healthy essen als during this crisis. We have also established an appeal for funds on www.stgilestrust. org.uk to help us address the longterm needs of our clients resul ng from this situa on.
The value of each posiঞve impact. We typically help around 25,000 people annually. The help we give each one has a posi ve impact on them, their families and friends and on wider society.
Kellie Gordon, director,
Appoint-Ed
What is Appoint-Ed?
Why are you in recruitment?
A recruiter solely for school technicians, admin, facili es and leaders.
I started as a Hays trainee in 2008. Five years ago, I formed Amnis with three other directors. I’m proud of this, but I wondered what I could achieve on my own. I meet great people and solve problems daily and I get a kick out of building my business and shaping my future.
Why set up a new business in this market? I have a hear elt interest in the future of educa on and it’s the people who make the difference. We all remember a teacher who made an impact, but there are opera ons staff also doing great things every day; from securing funding to se ng up an ‘Aha! moment’ in Science. I set up Appoint-Ed to give these roles and staff the a en on they deserve.
Where will the business be in five years’ time? I want to see na onwide growth in five years and an increase in headcount in 18 months. I’ve had to adapt because of the Covid-19 crisis, but when the schools open, I’ll be more than ready.
May 2020 Recruitment Ma ers
7
07/04/2020 12:26
Arঞficial intelligence
Indiscriminate robots
How to avoid human and machine bias in recruitment Human bias, unconscious and conscious, in the recruitment process is a major blockage for any business trying to achieve a diverse workforce. From the job advert to the faceto-face interview, the recruitment process is li ered with opportuni es for bias, which limits career progression. According to ‘Gaining Momentum’, a global report by the Interna onal Labour Organisa on, five of 14 barriers to women’s leadership were related to discrimina on and unconscious gender bias. This is a problem not just for the candidate, but also for the employer, who may miss out on an opportunity to diversify their team. There’s plenty of research that shows diversity is good for the workplace. It increases produc vity, enhances problem-solving, and can increase profits. The business case for workplace diversity is clear, but achieving diversity is more complex. Recruitment professionals can help employers to evaluate their recruitment prac ces and advise them on the necessary changes they can make to help eradicate bias and increase diversity.
Women’s chess club captains need not apply The REC’s ‘Future of Jobs’ report has iden fied technology as the biggest disruptor in recruitment. In a bid to inject more diversity into an organisa on, employers are increasingly turning to ar ficial intelligence (AI) and algorithms
Recruitment Ma ers
8
Recruitment Ma ers May 2020
RM_MAY 2020-v1.indd 8
The official magazine of The Recruitment & Employment Confedera on Dorset House, 1st Floor, 27-45 Stamford Street, London SE1 9NT Tel: 020 7009 2100 www.rec.uk.com
to eliminate bias in the hiring process. The use of algorithms in recruitment is not new. Algorithms have long been used by online recruitment boards to promote job adverts to par cular candidates and to shortlist CVs by scanning the text for specific words. However, the use of algorithms in recruitment to help reduce human bias is fairly new. Employers are now using AI tools such as Applied to reduce bias in the early stages of the recruitment process. Applied helps employers to write compelling and inclusive job descrip ons with gender neutral language. Other tools, such as TribePad’s Applicant Tracking So ware, remove all personal and demographic informa on from the hiring process so hiring managers can assess candidates on ability alone. However, employers should be cau ous. Algorithms rely on humans to provide the informa on they base their decisions on. This means AI is only as unbiased as the informa on it uses. Last year Amazon’s AI recruitment programme was found to be systemising gender biases on a huge scale. The tool, which was designed by AI experts at Amazon, was trained using successful CVs submi ed to the company in the past. Unsurprisingly, the majority of these CVs came from men, so the tool began to discriminate against women by penalising CVs that referenced them. One person was rejected because their CV said she was a “women’s chess club captain”.
Dealing with the biases of humans and robots Late last year the REC hosted a series of roundtable debates with members and the Centre for Data Ethic and Innova on (CDEI) to discuss how the recruitment industry can tackle algorithm bias. One of the key recommenda ons was for employers to be diligent about the data sets they use for algorithms. Employers need to check they are supplying the tools with as much unbiased informa on as possible and should test them regularly to ensure there are no glitches. While there are pros and cons with using algorithms to help reduce unconscious bias in recruitment, employers must not rely solely on machines to change workplace behaviours. There are several tac cs they can use to reduce unconscious bias that don’t even require WiFi. For example, using nameblind CVs and having a diverse interview panel will help to reduce opportuni es for unconscious bias. The REC has created a toolkit offering ps for employers on reducing unconscious bias in their recruitment process. This can be found on the Good Recruitment Collec ve sec on of the website and accessed by signatories of the GRC. Signing up to the GRC is free and includes access to research reports and training events. You can sign up at www. rec.uk.com/good-recruitment-campaign
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: Ruth Pricke pressoffice@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
© 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.
www.rec.uk.com
07/04/2020 12:27