Recruitment Matters July 2013

Recruitment Matters Issue 17 July 2013

Trade Association of the Year

What’s inside The 2 -3 Intelligence and REC talk Kate Shoesmith considers the skills deficit, and Tom Hadley and Kevin Green discuss youth employment strategies Dr Deirdre Hughes (2nd left), chair of the National Careers Council, and Matthew Hancock, minister for Skills, with delegates at the launch of ‘An Aspirational Nation’.

Skills for the future: new report offers advice to the careers sector Last month a report focusing on the skills gap among young people was launched by the National Careers Council, formed last year to advise the government on careers matters following two years of cuts to careers support.

The report, entitled ‘An Aspirational Nation’, suggests that there is still plenty of work to be done by businesses, the government and educators if young people are to acquire the skills and attitudes needed to fill the many positions currently left vacant by employers looking for the right people to fill them.

Skills minister Matthew Hancock said: “Last year we created the National Careers Service to provide professional advice, and give schools and further education colleges a powerful new responsibility to secure independent careers guidance for their students.

“This report sets out an ambitious new path for how careers guidance needs to progress – to inspire, motivate and inform.”

Among the recommendations made by the NCC were several encouraging the greater involvement of the employment sector, including the volunteering of staff to give job presentations at schools and colleges, and a new scheme aimed at promoting character and resilience in a successful working life.

As our investigation on pp4-5 shows, the recruitment sector can contribute hugely to this type of careers support by helping to give young people the skills they need to get ahead, by giving presentations, teaching potential employees about how the jobs market works and encouraging employers to do the same.

Dr Deirdre Hughes, chair of the council and writer of the report, said: “It falls to the careers sector to make sure that both young people and adults get the help they need. Together we can create a movement to bringing about a much needed culture change in careers provision for young people and adults.”

Getting the 4-5 message out there We look at how recruiters can help engage with young people

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Legal Update and Business Matters

The legal lowdown on employing young people and specialist accounting

Institute of Recruitment 7 Professionals We speak to Trevor Pinder, winner of Executive Search Consultant of the Year at the IRP Awards, plus tips from Katie Bancroft, managing director of Exceptional Solutions

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The best events and training

The best in-company training and the Recruitment Business Toolkit

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Leading the Industry

the intelligence Centre have estimated that we will need 104,000 graduates and 56,000 technicians in STEM subjects (science, technology, engineering and manufacturing) by 2020. This led the Social Market Foundation to forecast that one in five of all young people would need to go into engineering between now and 2020 to meet future demand.

If we are to meet these challenging targets, we need to encourage more young people into these sectors. As our Youth Employment Taskforce found, this means better careers guidance from an early age, preferably before 14, and a school curriculum that really engages young people in these industries. A particular issue here is how we encourage more girls into the sector – Engineering UK reported late last year that the UK has fewer female engineers than the rest of Europe.

The second part of the challenge is making sure the training delivered while at university or on an apprenticeship is relevant to industry. Labour market information, like that provided by ‘Report on Jobs’, should be part of that equation so that training programmes are adapted to meet the current needs of industry, not yesterday’s needs.

Demand for staff 50 = no change on previous month 75

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Fig 2: Median permanent placement salary 90

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This month’s ‘Report on Jobs’ highlights once again why it is so important to address our skills deficit in the UK. Demand for permanent and temporary workers has continued to rise steadily, and once again the strongest growth was in the private sector. A similar picture was reported by the Office for National Statistics, which reported job vacancies up 8.6% on an annual basis in the three months to April.

So it seems that the green shoots of economic recovery are emerging at last.

At the same time, however, we also saw that there was a marginal decline in the availability of candidates for permanent positions in May. Those industries where demand was highest were hardly surprising – engineering, healthcare professionals, and IT topped the list once again. Whilst average demand for permanent placements was a healthy 54.3 on the vacancy index in May, in engineering it was far higher at 61.4.

Those with the right qualifications and skills are highly sought after and this is a trend that is likely to be exacerbated in the future.

The Royal Academy of Engineering and the Big Innovation

£000s

Kate Shoesmith, head of Policy & Public Affairs at the Recruitment & Employment Confederation (REC), considers the skills deficit

£000s

Fig 1: Annualised turnover per employee

Mind the gap

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10 ■ NDR per employee growth 40 ■ Median NDR per employee 20 Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr 09 10 11 12 13

Increasing productivity This month I want to look revenue productivity, or ‘revenue per employee’.

Figure 1 shows that median annualised revenue per employee in April this year was at its highest level for nearly three years – since August 2010 to be exact.

As the red line shows, median annualised turnover per employee is now 10% higher than a year ago – an excellent performance in the current challenging economic climate.

Figure 2 shows that median net disposable revenue (NDR) per employee is only slightly higher than a year ago.

However, we need to understand why NDR margin is falling. Temp is the best performing revenue stream for recruiters at the moment, but because it has the lowest NDR margin due to the recruiting company paying the temporary workers, this is diluting the overall recruiter NDR margin.

In conclusion, recruiters are demonstrating their own wise business acumen by controlling their own headcount in these challenging economic times, to increase their revenue productivity and maintain profitability.

• Chris Ansell is chief financial officer at Recruitment Industry Benchmarking (RIB). The RIB Index provides bespoke confidential reports on industry trends.

See www.ribindex.com; info@ribindex.com: 020 8544 9807. The RIB is a strategic partner of the REC..

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Leading the Industry

Youth Avengers, assemble!

Tom Hadley, the REC’s director of policy and professional services, takes a look at the successes of the Youth Employment Taskforce

The View

The priority now is to build on the progress made. The recent REC ‘Skills Summit’ was the latest milestone and we are gunning for a target of 500 members signed up to our Youth Employment Charter by the end of the year. The input and drive of REC and IRP members will ensure that our industry remains at the forefront of the youth employment debate. Nick Fury would be proud!

We were delighted to launch Apprenticeships in Recruitment at the Skills Summit last month after an extensive year-long development project. This is a hugely important move by the REC on behalf of the industry.

Firstly, attracting more bright young people to the industry has been a long-term objective for the REC. Recruitment is a people-based sector and so attracting high calibre talent to the industry is a critical component of growing our businesses. We have also long aspired to reposition our industry as part of the professional services community and so making recruitment a career of choice is an important stepping stone towards this aspiration. As an Ofqual-registered body we give young people a robust qualification as well as rigorous on the job training and the scheme is also a great way for you to help your business grow and develop.

Secondly, it builds upon our Youth Employment Taskforce, which recommended that as an industry we should set up an apprenticeship programme so that we could play an active role in getting some of the one million young people currently not in work or training into employment. This demonstrates to all our stakeholders that we are playing our part in alleviating the youth unemployment crisis.

We are developing a training provider network to deliver our new apprenticeships. This gives us the geographical coverage needed to support your organisation in taking on a new apprentice. I hope you seriously think about bringing in some young talent to your business and that together we can hire the recruitment capability to take our industry to the next level over the next decade.

I am always keen to visit members, if you want me to meet your staff or clients just drop me an email on Kevin.green@rec.uk.com. Also if you want the inside view of what’s going on in recruitment then follow me on twitter.

• You can follow Tom on Twitter www.twitter.com/@hadleyscomment

• You can follow Kevin on Twitter www.twitter.com/@KevinGreenREC

In 2010 we launched our Youth Employment Taskforce – a kind of ‘Avengers Assemble’ dream-team of employers, recruiters, academics, think tanks and education experts, chaired by Baroness Prosser. Three years on, it is time to take stock of how our work on youth employment issues has benefited the industry as well as individual recruitment agencies.

1. Making a difference on the policy front Progress has been made, for example, in promoting apprenticeships. But huge gaps remain in areas such as careers guidance and employer awareness of initiatives such as the Youth Contract. We will continue to put forward practical solutions through our ongoing dialogue with the Employment Minister Mark Hoban and monitor what is happening on the ground.

2. Driving industry recognition Positioning the industry as a voice on youth employment has helped to create a step-change in recognition from government, business and the wider community. Being proactive and positive on key issues of the day builds credibility.

3. Showcasing the positive role of recruiters REC members have been working with local schools and colleges to help raise awareness of the world of work. Over three hundred members have signed up to our Youth Employment Charter, which showcases some of the specific activities and initiatives currently being taken forward.

4. Boosting client relationships For individual agencies, being a youth employment ‘activist’ can create direct benefits in terms of deepening client relationships. A number of recruiters are already working with their clients to deliver apprenticeships and to review current recruitment procedures and criteria in order to provide more opportunities for young jobseekers.

5. Bringing new talent into recruitment As well as working with clients to attract new generations of talent, recruiters are increasingly keen to attract young jobseekers with the right mind-set and skills into our own industry.

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The Big Talking Point

Getting the message out there Careers advice is ‘on life support’, says the CBI. How can recruiters help, asks RM editor Francesca Steele

“T

here is no security in life, only opportunity,” wrote the author Mark Twain. For young people entering the British workforce in recent years, a lack of security will certainly have occurred to them – but many will feel that the opportunities are sadly lacking.

The latest figures on youth employment, show that nearly one million people aged 16 to 24, not including those in higher and further education, are not in work. In fact, this figure – 950,000 young people, according to the Office for National Statistics – has fallen by 43,000 in recent months – but, as the definitive report released recently by the National Careers Council shows, there is still much work to be done.

The study, ‘An Aspirational Nation’ (we report on its launch on page 1), suggests strongly that solutions to the problem are to be found not just in government measures but in the whole of the employment sector coming together to educate and encourage young people so that they acquire the right skills and attitudes needed by employers. Despite so many young people looking for work, employers say they are nonetheless struggling to find people to fill roles.

According to a survey by the Confederation of British Industry, 39% of employers admitted they were struggling to recruit workers with the advanced

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scientific, technical, engineering and maths (STEM) skills they needed. A further 41% expected to face these difficulties within the next three years.

Communication, and therefore careers advice, say experts, is at the heart of the problem. Speaking at a schools conference recently, John Cridland, the CBI director general, said the educational careers advice support system was “on life support” and that young people were being hit by a “double whammy” of slow economic growth and a rapidly changing labour market.

But what can recruiters do? Nick Chambers, director of the Education & Employers Taskforce, says acknowledging that this skills gap exists is the first step.

“It’s very easy to blame young people and assume that they are not doing enough,” says Chambers. But they are entering a very tough jobs market.

Not only are they competing with experienced workers for fewer jobs but the range of jobs and of educational options, or apprenticeships or training

Case study: Ben Mannion, strategic development director at Hewitt Recruitment We have been heavily involved in a local scheme called the Rotec Academy, which will be run by Rotec Engineering, in association with South Worcestershire College and the local council, and which will take on young people giving them training on the job. They will spend two and half days in college, and the rest of the week learning on the shop floor from experienced engineers. It is anticipated that the students will then fill one full-time job and two part-time positions each year. We are helping to promote the scheme to local employers. The overriding response has been very positive. The benefit for the employers is two-fold. Not only are they helping to train people in skills they very much need – they are also introducing young people to the world of work so that they understand the work place before they start full time. One of the things we hear most frequently is how illprepared young people are for the workplace in terms of attitude. So this helps enormously with that side of things.

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and so on, is far greater than it was in their parents’ generation.

“They are facing a very complex series of choices, some of which of course have financial considerations, like university, and it can be very difficult. Obviously the fact that there is a greater range of jobs is a good thing in many ways. But for young people it can be very difficult to know what to do.”

‘An Aspirational Nation’ has suggested an expansion of the National Careers Service, which was set up last year, calling for face-to-face advice to be available for all pupils from the age of 12, rather than providing advice via a phone line or website. The careers service itself is described in the report as a “well-kept secret”, with many youngsters not aware of the help available.

There were 34,000 phone calls received by the helpline service in the year to March 2013 and similar numbers of emails, web chats and texts, from an

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age group of more than four million youngsters.

Face-to-face advice from the National Careers Service is not available to young people and is only offered to adults.

This, says Chambers, is something that recruiters can get involved in.

“Good recruiters really understand what employers are looking for, so if they can go into schools and universities and tell people what they are looking for, that’s invaluable.” Many recruiters have, of course, already contributed – the REC’s Youth Employment Taskforce has been running since 2010, encouraging recruiters to speak at schools, assign a youth employment ‘activist’ at individual agencies, and so on. But further communication is still needed, as one REC member, Isobel Brown, head of Scotland at DP Connect, outlines below.

In addition, experts say, recruiters must clarify with prospective employees and job-hunters specifics such as potential fees and the precise skills employers are likely to need for specific roles. A recent survey by Pearson, the education group, shows that young people have unreasonable expectations about skills and pay, with a third of all secondary school pupils surveyed (37%) used television programmes to help them decide what jobs they might like to do.

Recruiters can take advantage of existing programmes to help in this regard, either by offering advice themselves or by encouraging employers or employees to participate. Inspiring the Future is a free service co-ordinated by the Education and Employers Taskforce, with volunteers from all sectors and professions going into state secondary schools and colleges to talk about their jobs and sectors. Anyone can volunteer, be they an apprentice, graduate recruit or an experienced chief executive. Under the youth contract scheme launched last year, the government also offers incentives worth £2,275 if employers recruit young people – the take-up has so far been underwhelming, but recruiter can help make clients aware of the possibilities available.

Isobel Brown (she gives us her tips

How to give good career advice • A lot of graduates come out and have preconceived ideas about salaries. Be realistic with them about what’s out there.

And the skills they will need to start.

• People need to know how to present their CVs. Lots of people just put their education and exam qualifications but don’t give details about the exact nature of their courses. They might have done placements or practical days that they can include. In a competitive market people need something to differentiate themselves.

• Tell people about emerging markets.

For example, in IT, there are lots of great opportunities working in Cloud programmes (mobile data sharing) that people could develop better skills for if they knew about it in advance. There are lots of similar things, in IT and engineering in particular. Those markets move so quickly that it’s important to advise prospective employees correctly so that they don’t spend two years learning a skill that is soon to be redundant or far less lucrative.

• Some recruiters are too client-driven and focus less on the candidates because they don’t pay the bills. For me it’s all about the three C’s: clients, candidates and colleagues. Anyone who ignores one of those things will struggle later down the line when that becomes the bit that’s in demand.

Isobel Brown, DP Connect

on career advice above right) recently contacted all the major Scottish universities to arrange to offer free career advice to its undergraduates. She only heard back from one.

“I think possibly it’s a breakdown in communication,” she says. “Sometimes educators don’t think beyond the qualification in question and not on to their pupils’ futures. That’s why it’s so important for recruiters to help. For many businesses the problem is as much about attitude – getting to work on time and good teamwork – as it is about skills.

Recruiters can really help explain that.”

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Legal Update

Are there any specific legal requirements when it comes to employing young people and children?

Chris Cuckney, REC Legal Advisor, explains There are specific rules relating to the employment or engagement of children and young people. ‘Children’ are defined as being under the minimum school leaving age and ‘Young persons’ are workseekers under 18 but over the minimum school leaving age (ie. aged 16-17).

The main provisions are found in legislation that dates back to the 1930s.

However, local authorities can pass bylaws that place further restrictions on the hours and working conditions for children and young people. It is therefore advisable to always contact your local authority to check the local bylaws before employing or engaging a child or young person.

Anyone wishing to employ or engage a child will need to contact their local education authority to see whether they will grant a work permit; this permit will specify the employment conditions that must be observed.

Health and safety The Management of Health & Safety at Work Regulations 1999 (MHSWR) states that risk assessments must be carried out before any individual under the age of 18 starts work; and the risk assessment

Chris Cuckney

must take particular account of: • the inexperience, lack of awareness of risks and immaturity of young persons; • the fitting-out and layout of the workplace and the workstation; and • the extent of health and safety training provided or to be provided to young persons.

Whether you are employing children and young people or supplying them out to clients as temporary workers, you must take particular account of the above three factors. Where an employment business is supplying young workers to clients, it is imperative that they work closely with the client to ensure they meet their respective statutory responsibilities and that a young worker works safely.

Certain types of work are prohibited for workers under the age of 18, including work which is beyond their physical or psychological capacity or where there is a health risk from extreme cold, heat, noise or vibration.

Working Time and rest breaks Under the Working Time Regulations 1998 (WTR), young workers (who are defined under the WTR as being between the ages

of 15 and 18 and over the compulsory school leaving age) cannot ordinarily work more than eight hours a day and 40 hours a week. Unlike adult workers, these hours cannot be averaged out and there is no opt-out available. Similarly, daily and weekly rest periods for young workers are different to those of adult workers.

Pay Young workers are also entitled to a lower national minimum wage rate.

Currently workers aged 18-20 must be paid a minimum rate of £5.03 an hour, and workers aged 16-17 a rate of £3.72.

Similarly apprentices are entitled to a rate of £2.68.

Under the Conduct of Employment Agencies and Employment Businesses Regulations 2003, where a work seeker is under 22 years old, the employment businesses must keep a record of their date of birth.

Ultimately this is a very quick run through of the issues surrounding the employment or supply of young workers and further guidance will be required. REC corporate members can contact the legal team to discuss these issues.

Business development: A more individual accountancy service Working as a contractor can be rewarding but it can also require more specialist knowledge that many people are aware of. PlanIT Services is a chartered accountancy firm dedicated to contractor services.

“The specialism has become important increasingly as employment law and tax law and the interaction of the two have become more complex,” says Adrian Learer, managing director (pictured above). “There’s now so much to know but there is still a lot of ignorance and inefficiency in non-specialist firms.”

The typical high street accountant, he adds, wouldn’t offer a

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range of services only the traditional model. “The starting point for us is to speak to the contractor, and advise them as individuals. What works for one person may not work for another. It is a very different approach.

“Say you have someone who goes to a more traditional accountant, and says I want to run my own company. They then offer them the exact solution they have requested. But we look at all their circumstances to find out whether the scenario they have suggested is in fact the most efficient for them. “ There is no price for an initial consultation.

• For further details visit http://www.planitservices.co.uk

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Inspiration

Behind the scenes at the Institute of Recruitment Professionals

View from the top This month we speak to Trevor Pinder, who won Executive Search Consultant at the 2012 IRP Awards Name: Trevor Pinder Agency: ITHR Group Years in recruitment: 16 years Specialism: Contract and Technology How did you get into recruitment?

I left school with no qualifications, went travelling and then started on a building site. Recruitment found me really – and then I developed a passion for it as I went along.

Has it changed much since you started?

Completely. In something like technology, someone with a skills set that was useful three years ago could well be obsolete now. And certainly over the period of time that I’ve been working, the type of consultant has to be a hundred times more professional than they did then.

Why do you think the judges picked you?

One of the things they said was that I was prepared to sacrifice my own success for the benefit of the company. My ethos has always been that my team is an extension of myself. For example, I’ve developed a modular training plan. I give two training sessions each week, where I mentor and coach junior managers.

What do you teach in the sessions?

Topical things. For example, we analyse where we’ve been strong and where we’ve been weak. You should have a framework when you’re teaching but never a rigid blueprint.

What is the biggest weakness you notice in team-members?

The biggest weakness, in general, is that decent billers who get promoted to management level then try to create a team in their own image. But building a team is like putting together a jigsaw: no two pieces are the same. You’ve got to respect people’s own way of doing things sometimes.

What would you do if you weren’t in recruitment?

I’ve got a passion for training and developing people so I’d probably have been something like a football coach for children or a teacher.

Things I Know Katie Bancroft, managing director of Exceptional Solutions, talks about her career and tips for the industry Recruitment isn’t about fees; it’s about people We try to really listen to what clients really need. We don’t commit to things right away. We go away and work out what they need, before presenting them with a list of how they could change. Some people want us to be on site; others don’t. It’s a very unique offering that is always tailored to the individual.

Clients understand us better than the public I think clients are slowly being re-educated about how useful recruitment can be, but by and large, recruiters are still seen as a bit of a headache. They think it’s about making quick money and not about listening. Whereas actually the reverse is often true because good recruitment is where growth starts.

Working for yourself is never how you imagine Most people probably presume that anyone setting up their own business wants to be quite dicatatorial. But I try never to talk down to people in my team. It’s important to me that we are all sort of equal and I consult other people a lot. Of course, then sometimes you have to change tack if someone takes advantage of your attitude and doesn’t pull their weight. It can happen.

The biggest mistake I’ve ever made was doubting myself You have to believe in what you’re doing. If you get up every day and don’t enjoy what you’re doing, it comes across to everyone you’re dealing with.

The biggest problem with young people is core values All the clients I work with are committed to giving young people opportunities. But the thing they see consistently is people with unrealistic outlooks, not wanting to work harder and so on. It’s not just about skills but about attitude.

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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Don’t move – we’ll bring the courses to you The REC runs in-company training courses, where you pick the courses, the location and the date, and the REC then tailors the course to your needs. Here, some REC members tell us about their experiences

Huw Martin, managing director, Head Resourcing “We’ve used the REC for a number of years for training up our recruitment teams. It used be a bit ad hoc but now we’ve made it part of our formal people management. I always know we’re going to get better results when our employees have attended a course. We do Proactive Business Development, Recruitment Essentials and Essential Management. As long as people implement and follow up they do always improve. Before, training felt like ticking a box to me, but because we now have follow-up sessions with individuals to work out how to implement the lessons they’ve learned, we’re actually seeing demonstrable results. We’re trying to upscale our team with the right values rather than just sell more.

Ella Snowball, managing director, Recruit4health “Andrew Carr from the REC comes to train our staff every quarter.

He knows our company inside and out. One of the courses we do involves learning negotiating and telephone skills, which is really useful for us because we are candidate-led and do a lot of work on the phone. We learn how to ask open questions, to let people talk rather than bombarding them with lots of questions. Our employees are given homework: they have to win someone over after the course and then come back and explain how they did it. We always notice a difference after Andrew has been in – our figures often peak two weeks later!”

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

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Corbis

Events and training

Everything you need to run your recruitment business in a box The Recruitment Business Toolkit has been created for recruiters, by recruiters and contains all the key documentation, templates, advice guides and support materials to help you run, grow or start-up a successful recruitment business.

The REC has worked closely with experienced consultants, mentors and recruiters to make sure that the toolkit is just the right mix. With something for every step of the way, it includes: business, policy and financial templates; marketing and credit control advice; negotiation, process and business development guides; legal and HR policies, and all the critical information you need to be on track and thrive.

And over the summer we are running a special promotion on the toolkit with REC Members being able to purchase the Toolkit for just £250 (normal price £595) and non REC Members for £595 (normal price £995)*. Offer ends 30th August 2013, call quoting RBA RM Summer Offer to get yours today.

• Call 020 7009 2100 for details. * All prices exclude VAT

Who is it for?

• Start-Ups – Crucial information and templates, leaving no stone unturned • Branch managers – Essential resource focused on all aspects of running a branch • Business owners – Must-have set of documentation to establish robust and comprehensive business systems for all parts of the company

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 Publisher: Anne Sadler anne.sadler@redactive.co.uk Tel: 020 7880 6213 Consulting Editor: Ed Sexton ed.sexton@rec.uk.com Editorial: Editor: Francesca Steele francesca.steele@redactive.co.uk. Production Editor: Vanessa Townsend Production: Deputy Production Manager: Kieran Tobin. kieran.tobin@redactive.co.uk Tel: 020 7880 6240 Printing: Printed by Southernprint © 2013 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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