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Issue 29 September 2015

RECRUITMENT MATTERS The View and The Intelligence

Savage Truths

Legal update and the IRP

Events and training

Recruitment talent, promoting the industry and planning for growth p2-3

Greg Savage predicts a golden age for recruitment p4

How to handle introduction fees and inside the IRP p6-7

Kevin Green’s IRP Awards tips and a new Member Directory p8

RECRUITERS ENJOY PAY BOOST SAYS REC SURVEY REC ‘Planning for growth’ survey finds industry on the up More than half of all UK recruiters and managers enjoyed a pay rise during the last financial year, according to new REC research. The REC’s annual ‘Planning for growth’ survey found 52% of consultants received an average pay rise of 4.9%, up from 3.7 in the previous year. The REC also predicts the UK’s recruitment industry will grow by 18% over the next two years, with the post-recession boom to continue.

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Chief executive Kevin Green says it’s a great time to be in the industry. “For business leaders, the focus has to be on attracting and retaining talented people so they can take advantage of the opportunities available. Our research describes what motivates recruiters, and it’s clear that it’s not just about pay – they want progression and the benefits of working in a meritocratic industry, as well as the social

and cultural perks,” he says. The survey also found 51% of consultants and managers were satisfied with their pay and reward, while 24% were dissatisfied. Companies whose staff are happy with their pay packet have seen an average of 7.5 staff leave in the past year, compared with 8.6 staff from those reporting dissatisfaction. The survey also drew on salary data from jobs website Indeed. Its VP EMEA

4.8% 3.7% Gerard Murnaghan says staff turnover remains a big concern for companies. “Skills shortages are already having an impact and as the UK economy expands we can expect businesses to come under more pressure when it comes to finding and hiring people. Never has it been more important for employers to attract quality candidates to the positions which help them drive revenue and growth for their businesses,” he says. For more information The ‘Planning for growth’ report is based on a survey of 750 consultants and managers. REC members can download a free copy at www.rec. uk.com/recsalary2015

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Leading the Industry

THE VIEW

It’s time recruitment’s voice was heard, says Tom Hadley, director of policy and professional services at the REC

Talent will fuel the golden age of recruitment, says Kevin Green, REC chief executive

It’s a great time to work in the recruitment industry. We are forecasting at least 25% market growth between 2015 and 2017. I also hear from many recruiters that have experienced double digit growth year-on-year. One of the critical challenges for our industry over the next years is how to attract and retain talented people into the industry so that we can meet this growing demand. This is already proving difficult and will only become tougher. It’s the same for recruiters in all sectors and across every region – where do I find talent and how do I keep the people I’ve already got in my organisation. The REC has been working for some time to help attract young people to the industry. Through our youth employment charter we have helped over 20,000 young people in schools, colleges and universities with careers advice and CV writing. At the same time we have been positioning recruitment as a career of choice.  To supplement this, two years ago we created our apprenticeships in recruitment, to help members attract new people to the industry, and giving them high-quality training and REC-accredited qualifications at the start of their career. As

TAKING IT UP TO 11 of today we have 347 apprentices working in recruitment business and we expect this to grow to over 800 by the end of this year. Our latest piece of research has been designed to help recruitment leaders with this massive people challenge. ‘Planning for growth’ is all about how to attract and retain recruitment talent. Perhaps the most startling statistic in the report is that only 51% of recruiters and recruitment managers are satisfied with their reward package. What’s more worrying is that 28% are actively dissatisfied. This is a potential iceberg for the industry – just as recruiters need to attract new staff, they may not be able to hang on to the capability they already have. We hope that this report will enable our members to benchmark their people strategy. Are you paying enough, do your incentives stack up, are you investing enough in development, does your culture attract talent? For me as an HR professional it always comes down to your frontline leaders. How good are they at inspiring, motivating and coaching your consultants? This research can help you to get the people side of your business right; and if you can do that you’ll be able to make the most of the golden age of recruitment.

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You can follow Kevin on Twitter @kevingreenrec

How can the government deliver full employment? What does the new political scene mean for the jobs market and how are we positioning our industry? The REC recently spoke at the IntoWork Convention, hosted by the Centre for Economic & Social Inclusion (CESI). It was an opportunity to identify the core challenges and promote the role of our industry. Work really matters – It’s always good to remind ourselves just how much. The employment minister Priti Patel opened her speech by saying: “How can we work together to boost employment and transform people’s lives? We should never underestimate benefit of work for the mental and physical well-being of individuals and its overall value to society.” David Hughes, CEO of NIACE, agreed that for many people “getting a job isn’t just about the pay or the position; it’s about reintegrating into society”.  Inclusion and progression are top of the agenda – Achieving full employment means doing more to bring under-represented groups into work – in particular, by halving the disability employment gap. Recruiters have a leading role to play in this and I’d recommend finding out about the Recruitment Industry Disability Initiative (RIDI). Boosting opportunities for progression was also a major theme, with CESI chief executive Dave Simmonds arguing that “it’s not only about making working pay; it’s about building careers that pay better”. Recruiters are already doing a huge amount to help people through the ABC of labour market progression (A job, Better job, Career).  Good recruitment can unlock the door – Our JobsOutlook report shows that 74% of employers are planning to hire permanent staff in the next three months. Demand is strong but hiring procedures can create a barrier for under-represented groups. A core aim of our Good Recruitment Campaign is to encourage more employers to work with their recruitment partners to shake things up. It was good to hear the minister recognising the importance of this good practice agenda. This is a great time to amplify our industry’s voice (up to 11!). It’s all part of building the best jobs market in the world.   You can follow Tom on Twitter @hadleyscomment

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10%

THE INTELLIGENCE What do recruiters think of their pay, asks Nina Mguni, senior researcher at the REC When asked, ‘what do you want to do when you are older?’, I am sure not many people raised their hands and said ‘I want to be a recruiter’. There are more than 96,000 people working in the recruitment industry, but how many of them knew about the careers on offer when they were at school? And yet recruitment offers a lot of the things people say they want out of job. It offers a chance to make a difference to people’s lives. According to our survey for Flex Appeal, 34% of GB adults had secured a temporary agency, freelancer or contractor role through an agency. The industry is entering into boon times. Confidence in the economy has caused an uptick

STILL GROWING STILL SLOWING Last month I talked about how recruiters have been seeing welcome continuing revenue growth, but that in April, RIB recruiters saw revenue growth slowing to single digit growth – the first time it was not in double digits since December 2013. Single digit revenue growth continued in May this year, slowing slightly from 8.4% in April to 8.2% in May

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in the recruitment industry. The industry went from £19.7bn in 2009/10 to £28.7bn in 2013/14. Revenue is forecast to grow at 9% in 2014/15 and a further 9% in 2015/16. Our recent survey on salary and rewards shows that the recruitment industry has shared these gains with consultants and managers. One in 10 people have received a pay rise above 10% in the last year. Between April 2014 and April 2015, consultants and managers received a pay rise of 4.93%, which followed on from a 3.72% pay rise in the previous year and 2.9% in 2012/12. This wage growth exceeds the national average, and accumulated growth suggests that salaries have grown by over 10% in the last three years. On average, a manager receives a bonus of £1,850 a month, while a consultant receives a bonus of £1,010. This figure varies depending on

ON AVERAGE, A MANAGER RECEIVES A MONTHLY BONUS OF

£1,850 A CONSULTANT RECEIVES A BONUS OF

£1,010 ONE IN 10 PEOPLE HAVE RECEIVED A PAY RISE ABOVE 10% IN THE LAST YEAR

length of time in the industry and time in current role. The industry rewards loyalty and experience, with increments in pay and bonus clearly evident with length of time. But our survey suggests that only half of consultants and managers (51%) are satisfied with their total pay and benefits. A significant proportion are dissatisfied or neither satisfied or dissatisfied. This presents a challenge for HR professionals and owner managers in the industry.

Figure 1: Recruiter turnover growth 40

■ Upper Qtile ■ Median ■ Low Qtile

30 20 10 0 -10 -20

Jul 13

Aug

Nov

Feb 14

(Fig 1). We should not be depressed at slowing growth; median revenue growth has now been over 8% for 17 consecutive months. When inflation is near zero, that means more than half of recruiters are seeing

May

If demand for recruitment continues to grow, demand for good recruiters will also grow. We know that this year alone, there are 12.8% more employees in the industry compared to last year. Holding on to staff and attracting new staff will be difficult. The good news is that our research shows that pay and rewards is just one factor that recruiters take into account when thinking about whether they stay or leave a company. Opportunity for career progression, the work environment, the culture of an organisation and leadership within the organisation all entice recruiters to stay or join.

the last two years, with the exception of February this year, which showed small growth of 0.3%. This extreme divergence in revenue growth demonstrates the importance of benchmarking performance against other recruiters to maximise performance.

%

PLANNING FOR GROWTH

Aug

Nov

Feb

May 15

excellent, sustained levels of growth. However, despite this excellent performance the bad news is that a quarter of recruiters have seen their trailing 12-month revenues shrinking every month for

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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The BIG talking point

INTERVIEW

SAVAGE TRUTHS

Australian recruitment guru Greg Savage e is heading to the UK in October. Boasting more ng than 35 years’ experience, including selling uitment three big global brands, he says the recruitment g. industry is on the brink of something big. Michael Oliver asks him to explain

Michael Oliver: You say recruitment is on the verge of a golden age – what do you mean by that?

Greg Savage: I’m of the view the next five years will be the best in our industry. Typically you hear old-timers talk about the ‘good old days’ and you hear people say agencies are under threat from in-house teams and social media. Those things are a threat, but only if companies don’t adapt. In niche areas like the technology sector, we’re in for cataclysmic skills shortages. The beauty of that is clients are going to find it harder to find the right candidates. The opportunity is there for recruitment companies to

become world champions at finding niche talent, and they’ll make money like never before. But if they don’t, they’ll go bust.

taken steps to achieve that?

recruiters as little more than free advertising. There needs to be a sea change – we’ve got to swim the other way and come up with something clients really, really want. And what they want is hard-to-find talent.

GS: The problem with the UK

MO: That’s easier said than

ms are no better In-house teams than agenciess for finding ecruiters in them. Most recruiters dulging in the UK are indulging e bottom the race to the – who can gett a CV to r, who a client faster, first can get there fi rst. Our industry just isn’t investing in innovation

is that the market’s changed. There are skill shortages, but the industry has hardly changed since the recession and that’s a big problem. Our industry has been dumbed down with clients seeing

done – how would you go about doing that?

MO: Does that mean being

GS: If I owned a recruitment

savvier on channels like LinkedIn, Twitter, etc?

MO: Has the UK industry

“IF YOU’VE GOT A COMPANY OF FIVE OR MORE AND DON’T HAVE AN IN-HOUSE DEDICATED MARKETING PERSON, YOU’RE LOSING OUT”

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company in the UK, I would be going into an industry with hard-to-find candidates.

GS: LinkedIn is important, don’t get me wrong, but it’s becoming a circus. The issue is that most recruiters are relying on one, two or three channels. LinkedIn in particular is swarmed by recruiters spamming the best candidates.

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“EV “EVERYBODY IS A CANDIDATE. TH THE VAST MAJORITY OF PEOPLE AR AREN’T LOOKING AT JOB BOARDS BEC BECAUSE THEY’RE NOT LOOKING FO FOR A JOB. BUT IF I CALLED YOU WIT WITH A JUICY OPPORTUNITY, YOU WO WOULD LISTEN” MO: What’s one mistake M y see business owners you m make over and over?

MO: What role does marketing have to play? GS: Recruitment

It’s not targeted, it’s not sophisticated and it’s seen as spam. Recruitment is an art, it’s a seduction. That’s why recruiters need to get back on the phone. The vast majority of people aren’t looking at job boards because they’re not looking for a job. But if I called you with a juicy opportunity, you would listen. Everybody is a candidate and that’s why we need a variety of new skills to get their attention.

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companies should operate as digital marketing agencies, that’s how important it is. If you’ve got a company of five or more and don’t have an in-house dedicated marketing person, you’re losing out. Most recruitment databases are candidate graveyards because they don’t engage with them. If they used marketing techniques – like building a brand – and are willing to work at it, then they’re on the right track.

GS: They hire the wrong GS peop they hire yesterday’s people; heroe they live with longheroes; term mediocrity; they don’t unde understand how important it is to build digital capacity. They seem to gravitate like lemm lemmings to old-school tactic and when they don’t tactics, work they’re encouraged to keep doing it. It’s like this: peop tell me social media is people trivia whereas a telephone, trivial; howe however, can be used to save a life, propose marriage or close a £10m deal. It all comes down to the user. Yes, you can post pictures of your bacon sandw sandwich on social media but c also use that to build you can mu a multi-million dollar brand. It’s not the tool that’s trivial, it’s the user. MO: Talent acquisition is a big thing in the UK recruitment industry – what should owners and managers bear in mind when they’re hiring new people?

GS: We need to hire digital natives, people who are familiar with online arenas and are prepared to learn. As well as that, I would be hiring

people who have empathy, and good connections in an industry. Business owners have also got to think of the next rung of leadership. If they sell up and go, their client base goes with them because they’re the brand. If you build up leaders, you ensure the longevity of your brand.

MO: What’s in store for your masterclasses in London and Manchester this October? GS: Recruiters will get a kitbag of tools that will help them build their billing and a reinvigoration for why this business is important. Managers will get a clear understanding of how to build an asset and swim against the tide. A lot of training is a waste of time because it doesn’t enthuse people into making changes. My goal is to have someone email in a year and say “That was the best £200 I spent.” It’s not just hot air, there are gems in there based on my own experience.

For more information The Greg Savage Masterclasses are coming to London and Manchester on 19, 20 and 21 October. To book your space, visit www.rec.uk.com/savage

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Legal update

INTRODUCTION FEES By Lewina Farrell, solicitor and head of professional services at the REC

The REC Legal Helpline regularly receives calls from members who are in dispute with their clients about introduction fees. Employment agencies and employment businesses must comply with the Conduct of Employment Agencies and Employment Businesses Regulations 2003 in their dealings with clients and work-seekers. Interestingly, those regulations do not require employment agencies supplying individuals for direct engagement by a client to agree terms with that client. However, it makes good commercial sense to do so in order that all understand what service will be provided, the fees for that service and the payment terms. Of course, basic contract law requires that to claim an introduction fee, the agency must show that there is a contract between the client and the agency. First the business must send terms to the client – the REC recommends that

agencies send the terms as soon as a client approaches them with a possible instruction (simply attach a PDF to an email). There may be some negotiation about rates and payment periods but once terms have been agreed these changes should be incorporated into the terms. The agency then needs to know that the client accepts the terms, and the easiest way to do this is by getting signed terms from the client. In the absence of signed terms, the agency should get an email acknowledging acceptance of the terms. Without any acknowledgement the agency

will have to argue that there is an implied contract with the client and that can be difficult. Too often agencies send CVs having sent terms either late or not at all. If this happens and the client takes the individual on directly, the agency will have to demonstrate that it is the effective cause of the engagement. That means were it not for the agency’s involvement the client would not have engaged the candidate. This is more difficult when clients instruct more than one agency, accept direct applications or source candidates via LinkedIn or other social media sites. An agency can show it is the effective cause by showing further instructions from the client to produce a shortlist, arrange interviews, check out references etc. Where the client does this it is clear they require the agency to provide a service. Again, however, without signed terms it can be

difficult to prove either that terms were agreed or what those terms are. To summarise: • Send your terms at the earliest opportunity – do not wait until you have already sent CVs, or worse when invoicing the client. • If you agree to vary the terms ensure that these changes are incorporated into the terms. • Chase the client to sign the terms but if you cannot get a signature chase acknowledgment that the client accepts the terms. • Know if the client has instructed more than one agency – agree what will happen if more than one agency submits the same CV. It is not just first past the post. For more information REC members can contact the legal helpline on 020 7009 2199 or legal@rec.uk.com

NON-STANDARD CONTRACTS: ARE YOU COVERED? Non-standard contracts give recruiters an increased responsibility, essentially allowing potential employers to pass the blame onto the recruiter if any issues arise. This means recruiters bear a greater level of risk with any non-standard contract placed, which they need to protect themselves from. As you might expect, this increased risk leads to higher insurance

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premiums, so recruiters need to be cautious when seeking insurance. One particular issue that needs to be investigated closely is the way that an insurer determines where liability lays in the case of workers using a nonstandard contract. Peter Stoll, director of recruitment at Jelf Insurance Brokers, tells us that for some insurers

“covering non-standard contracts is considered an extra on recruiter policies”. This means that the recruiter has no choice but to seek legal advice for each non-standard contract it places – costing time, resource and of course money. He goes on to explain that as the preferred insurance partner of the REC, Jelf has no such contractual liability

exclusions, and that it is included within the cost of the policy itself. This means that if a recruiter enters into a non-standard contract (either intentionally or otherwise) there is no restriction to cover. Peter and his colleagues go that extra mile to check each contract, so their clients can avoid having to seek legal advice and the potential costs involved.

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Inspiration

BEHIND THE SCENES AT THE INSTITUTE OF RECRUITMENT PROFESSIONALS

The View

Ceri Pryce is Impellam lam Group’s learning & ger development manager and was the top vel student in May’s Level 3 Cert RP exams

Amanda Franks is a director at Frankly Recruitment

TOP STUDENT

WHAT I KNOW

I understand you have a role with training recruiters – what areas do you cover? I am one of three Learning and Development specialists supporting the development needs of seven of the brands within Impellam Group. My responsibility is supporting delegates with more than six months’ experience, and I also deliver the Leadership Academy, a year-long programme developing the future leaders of our business.

We need to start attracting the best I think it’s about properly trained people. I still don’t think there are kids in the playground or at university saying “I want to be a recruitment consultant”. There’s a job of work there in harnessing great people. Then you can talk about training and qualifications that will raise the profile of the industry.

Why did you choose to complete the certificate? Impellam Group is part of the REC’s Accredited Induction Scheme, which means we deliver our own in-house training that has been designed to cover the content of the Certificate syllabus. I have responsibility for delivering this to recruiters wanting to complete this qualification. It was therefore important to practise what I preach, sit the exam and support delegates from a position of understanding what it is like to go through the process. The fact that I achieved top student is a bonus as this helps to gain buy-in from my delegates; it tells them that they are in good hands! How did you find the course and exam?  The course is packed full of invaluable processes, approaches, concepts and skills that every recruiter needs to be successful in their role. There is a lot to learn in preparation for the exam, which does take dedication, especially when you have commitments outside of work, like a two-year-old child! I found that revising in small chunks and taking any opportunity to pick up the learning materials, including my commute to and from work, really helped. Would you recommend the course?  Absolutely! Gaining the qualification helps you to differentiate yourself from others in your industry, it shows a commitment to working to high standards and I guarantee that you will learn from the materials written by leading industry experts.

Audited recruiters are the future I would picture a world in a few years where major companies only use supplier recruitment companies who are properly audited and professionally accredited, and invest in their staff. I can’t help but feel the recruitment industry – right now – has a huge opportunity to professionalise itself. I think we’re still regarded out there as a lower service offering than we are. The industry needs to keep talent There is no doubt that the number one issue for recruitment companies at the moment is finding their own talent. Many, many people left this industry during the last recession. Suddenly, every recruitment company has a three to four-year growth chart underpinned by finding, securing and retaining the best people. I don’t know anybody who is really cracking that well at the moment. A great recruiter is more than its database A recruitment company’s deliverable is not just its ability to deliver a list of people, it’s the ability to harness those people and get them to join the companies they’re working for. All technology has done is make a global database. I think clients will no longer pay big money for punting a CV along from someone they could easily find themselves. A great recruiter brings the ability to influence those candidates and to work in a consultative way and make the two match up.

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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Events and training

IRP AWARDS

THREE REASONS TO ENTER THIS YEAR’S IRP AWARDS WITH REC CHIEF EXECUTIVE KEVIN GREEN 1: GETTING RECOGNITION FOR YOUR PEOPLE I think it’s really important that your people get recognised. Recognition for a job well done but also recognition for being best in class, whether that is temp consultant of the year or perms consultant of the year or actually just recognising that you’ve got

some great people in your back office team.

2: DIFFERENTIATING YOUR BUSINESS FROM YOUR COMPETITORS Clients are really interested in this competitive market with working with the best recruiters and I don’t think that there is any better way

to differentiate your business from your competitors than winning the award. Not just any award, but an award backed by the REC, your professional body, your trade body. So I think that getting an IRP Award will help you market, promote your product, your services, your organisation to your clients.

“CLIENTS ARE REALLY INTERESTED IN THIS COMPETITIVE MARKET WITH WORKING WITH THE BEST RECRUITERS AND I DON’T THINK THAT THERE IS ANY BETTER WAY TO DIFFERENTIATE YOUR BUSINESS FROM YOUR COMPETITORS THAN WINNING THE AWARD. NOT JUST ANY AWARD, BUT AN AWARD BACKED BY THE REC”

3: GETTING RECOGNITION FOR BEING GREAT We are all in the business of attracting talent. People who work in the recruitment business want to work in the BEST recruitment business, so why don’t you get recognition for being a great organisation to work for, one that develops their people, that actually incentives them and awards them effectively. The submission deadline is on 1 September, enter today! For more information please visit www.rec-awards. com and follow us on Twitter @irpawards

NEW MEMBER DIRECTORY SETS BAR FOR RECRUITMENT SEARCH The REC has relaunched its online Member Directory, featuring a number of improvements. It now offers candidates and clients more options when searching for recruitment companies to work with. REC head of marketing Chris Howard says the new directory offers unprecedented access to

REC members. “We wanted to make the Member Directory as easy as possible for candidates and clients to get access to. The functionality we’ve embedded includes a tie-up with Google Maps, as well as a filtering system based on region or sector,” he says. “Users will also be able to undertake a search based on the proximity to their own

location, as well as finding REC Members who have achieved our REC Audited status, are members of our IRP Advocacy scheme, or have won one of our IRP Awards in the past.” Howard says the new Directory is a win-win-win for members, clients and candidates. “For us, this was about giving REC members the

best possible platform to shout about their REC membership and the filters help candidates and clients find exactly what they’re looking for as quickly as possible.” For more information Check out the new Member Directory at www.rec. uk.com/directory

RECRUITMENT MATTERS

Membership Department: Membership: 020 7009 2100, Customer Services: 020 7009 2100 Publishers: Redactive Publishing Ltd, 17 Britton Street, London EC1M 5TP. Tel: 020 7880 6200. www.redactive.co.uk Editorial: Editor Michael Oliver michael.oliver@redactive.co.uk. Production Editor: Vanessa Townsend Production: Production Executive: Rachel Young rachel.young@redactive.co.uk Tel: 020 7880 6209 Printing: Printed by Precision Colour Printing

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

© 2015 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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Recruitment Matters - September 2015