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CNA International
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HOW’S YOUR LUCK?
Staffing industry figures give their take on 2009 and look forward to the year ahead in recruitment.
There is no doubt that everyone’s situation has been different within recruitment in 2009. Recruiters have disappeared altogether while others have consolidated, merged or streamlined to keep up with a drop off in many sectors. And while many commentators are predicting much of the same for the first quarter of 2010 there are many positives on the horizon. Here, four industry figures give their take on the ghosts of 2009 and the light at the end of the tunnel in 2010.
Ann Swain – APSCo chief executive
On the Agency Workers Directive “2009 has been the most crucial year from a legislative perspective this decade. Whilst it is pleasing that the Government has taken onboard our concerns about the timing of the Agency Workers Directive and deferred implementation until 2011, there is still some uncertainty as to the scope of the Regulations. Limited company contractors are currently not within the scope of the Regulations as long as they are genuinely self-employed, but those utilising umbrella companies are generally in.
This is potentially problematic as the employment status of contractors is often unclear.
This means that end users won’t necessarily be able to tell whether contractors are in or outside the Regulations before they engage them. APSCo has raised this issue in its response to the draft Regulations.
Recruiters are being asked by end users to indemnify them against any claims which are brought by workers under the Regulations. This would mean that recruiters have to pay up in the event that an end-user controlled process triggered a claim. This will give end users little incentive to abide by the Regulations, and potentially impose significant costs on the recruitment industry.”
On the points based immigration system and intra-company transfers “More than three times as many IT workers entered the UK on intra-company transfers last year than during the dot com boom. We have made significant headway on this issue in 2009, culminating in APSCo being asked to submit evidence to a review which recommended tougher checks on companies importing foreign workers. APSCo will be keeping a careful watch on how this and the next Government respond to these recommendations as demand for overseas labour recovers with the economy in 2010.”
On conduct Regulations – retention of the opt-out “The campaign to retain the opt-out from the Conduct Regulations for contractors was a major win for the industry in 2009. If the opt-out had been removed, staffing companies would have faced significant additional costs of having to automatically comply with the Conduct Regulations. The Government has vowed to look at this issue again in 2010, but APSCo will once again put the case on behalf of the professional staffing industry.”
On ‘pay when paid’ clauses “The insidious rise of ‘pay when paid’ clauses accelerated during 2009. These clauses, which allow RPO providers to withhold payment from recruitment suppliers indefinitely, have become increasingly prevalent in the industry. They are threatening many recruiters with financial ruin as they restrict their ability to borrow against the value of invoices not yet paid – a common practice in the industry. APSCo has flagged this issue up with the major RPOs and lenders. The response has been positive and there is every chance that a sustainable, long-term solution to this problem will be found.”
On licensing of the recruitment industry “Licensing of the recruitment industry will be the big debate in 2010. The Government is looking at licensing and we could certainly do with raising barriers to entry and professionalising the industry. APSCo will drive the debate on this and allow the recruitment profession to decide for itself.”
Tom Hadley director of external relations REC
“2009 will go down as one of the toughest ever for most recruiters with the industry facing a perfect storm of economic meltdown and regulatory showdown. The REC’s annual industry survey showed a 20 per cent hit in terms of overall turnover and
the priority for most agencies has been to dig deep and learn the lessons from previous downturns. The demand practical support and guidance was confirmed by the 100,000 hits to the red button of the REC’s online HELP campaign.
“The most recent REC/KPMG Report on Jobs confirmed that the jobs market is starting to show signs of life in terms of demand for both temporary and permanent staff. The new Jobs Outlook survey – which looks ahead at hiring intentions – has confirmed improving employer confidence, although inevitable cuts in public expenditure could counter-balance expected improvements in the private sector. A key priority is to limit any negative impact on public sector recruitment – for example by underlining the contribution of agency staff to the delivery of crucial front line services.
“2009 was the year that industry’s voice really came to the fore on some of the key debates of the day such as skills and the general outlook for jobs. As well being a key commentator in the national and regional media, the recruitment industry is now seen as an important partner by Government. For example, the Department for Work and Pensions (DWP) and Jobcentre Plus have tapped into the expertise of professional recruiters to deliver jobsearch support for newly unemployed professionals.
“In difficult economic times, one of the challenges for the industry has been to continue focusing on standards and ethics. Within this context, it was extremely encouraging to see that even in the current climate over 700 new members have joined the REC and signed up to the Industry Code of Practice. The launch of the Institute of Recruitment Professionals was a significant milestone and has been extremely well received by employers as well as by the vast majority of recruiters.
“On the regulatory front, 2009 was the year of the AWD. This was an exercise in mass mobilisation as over a thousand agencies fed into the REC’s responses through a series of summits, surveys and sector group meetings. A key element of the campaign has been to build strong alliances with other business organisations – in particular through the work of the REC’s Agency Work Commission. Achieving consensus between providers and users of agency staff will help to make new equal treatment measures for temporary workers workable and a significant initial outcome was the Government’s agreement to delay implementation until October 2011.
“Other campaigns have involved fighting the industry’s corner on issues as varied as new vetting requirements, pensions reform, public procurement, new equality legislation and the review of the Conduct Regulations. Continuing to build a strong collective voice on these and other issues will help to ensure that the regulatory climate is one that enables the industry to bounce back quickly when the upturn really kicks in.”
Richard Doherty, group vice president of solutions at Jobpartners.
On social recruiting becoming mainstream “Social media will play an increasingly important role in attracting and engaging with top talent. In 2009, it was the early adopters who were using social networking sites, such as Facebook, LinkedIn and Twitter, as recruitment tools. Very few companies had actual strategies and were taking a ‘suck it and see approach’ towards social recruiting. In 2010, there will be significant investment from brands into social recruiting. Corporate recruiters will be following what many recruitment agencies are already doing and using social networks to provide company information and set up interest groups to source candidates. This means that organisations will be more proactive in attracting both active and passive candidates and sourcing referrals in the future.
Key to the success of social recruiting will be to ensure that it is aligned and integrated with an organisation’s existing recruitment processes and technology. For example, existing applicant tracking systems can be extended to search through social networks.”
On Generation Y “2010 will be the year that businesses start to take Generation Y seriously. With employers facing the reality of older talent moving on or retiring over the next 5 years, companies will need to ensure that they are properly engaging with Generation Y so that that they aren’t left with a talent shortfall in years to come.
“Generation Y is adaptable and quick to learn new skills, so companies should look to harness such talent and enthusiasm to benefit their business. In order to attract and engage Generation Y, employers need to ensure that their application processes reflect the fast-changing online environment. Generation Y expects to be able to apply for jobs - in the first instance online - and then receive prompt feedback from employers about their application meaning renewed pressure on delivering the best possible candidate experience. This should not be deemed as ‘bending to the needs’ of Generation Y, but instead as modernising and automating the application process in line with social and technological advancement.”
On Increased career development budgets
“Most HR managers would agree that in a downturn one of the most difficult and important tasks is to keep up staff motivation levels. This is easier said than done when many staff have been asked to take pay cuts or work 4 day weeks in order to keep their job but achieve the cost savings the business requires in such a challenging climate. As we come out of the downturn and the job market becomes more buoyant, employees may feel the need to look elsewhere for the career progression and development they require if they cannot see potential at their current employer.
“With this in mind, 2010 will be the year when companies will look to spend more time and budget on employee development as they look to counter employees’ disengagement, and avoid a damaging exodus of talent.”
Talent management becomes a board-level issue
“In 2010, as the economy recovers, HR and talent management will become an increasingly strategic issue for many businesses, as their future success will be based on the success of their people. Companies tried to listen to their customers during the economic downturn in order to retain them, and the same principle should now apply to employees.
Successful businesses are all about good products/services and motivated/aligned employees. You can’t have one without the other, so HR and talent management needs to step up and be counted, engage the executive board, sell the vision of an engaged workforce and the bottom line benefits they will bring the business.”
On HR software becoming more personal and self sufficient “Software as a Service (SaaS) will continue to grow in popularity in 2010 as it reaches the level of maturity where large organisations are comfortable using it and can see the benefits. Traditional ERP talent management modules can be expensive and time consuming to deploy, whereas SaaS is much more economically viable, as its service-based pricing means that your entry costs and implementation times are much lower.
“Additionally, software solutions will begin to adapt to allow companies to become increasingly self sufficient when it comes to managing HR software. Managers will soon be able to customise and configure their own existing solutions to meet both their technological and employer brand requirements.”
On the financial sector taking the lead in talent management “The financial sector has really suffered during the economic downturn, however because of this it is now the sector that is taking the lead when it comes to talent management, as companies have realised that it is a ‘people business’ where human capital is key.
“Consequently, many large international financial services organisations are looking at making significant investments in talent management in 2010 as we come out of the recession.”
On reward schemes becoming truly ‘transparent’ “2010 will be the year companies start to no longer simply pay ‘lip service’ to greater transparency in their reward schemes. The recent economic climate has highlighted the overwhelming need for reward strategies to correlate to business performance and demonstrate value.
“With this in mind we will see more organisations looking to align performance management and rewards. By aligning the two and showing greater transparency, organisations can develop effective and justifiable remuneration policies that are consistent with compliance and risk management.”
Keith Potts, managing director Jobsite
“The economic doom and gloom of 2009 has been well documented and unfortunately the recruitment industry was directly hit by this. Vacancy numbers suffered at the hands of recruitment freezes and companies, large and small, going into administration. In turn, the increasing number of candidates looking for work made competition for each role fierce and companies saw the number of applications per position rise considerably. The days of the candidate centric marketplace were long gone.
“However, for all the bleak headlines, recruitment was by no means dead and there were still vacancies needing the right candidates. Whilst not at the levels we’d had back in 2008, Jobsite still had an average of 35,000 new vacancies advertised each week. This was a message we kept trying to communicate to the disillusioned candidate base. Yes, job hunting may be tougher but there are still opportunities around so please don’t feel that it’s hopeless.
“The interesting thing about a recession is watching how organisations innovate and diversify to achieve their aims. For us, 2009 saw projects such as Jobs-by-Twitter, our Johnston Press partnership, launch of our news centre Insider and our behavioural targeting service. These projects were all new ways for us to attract candidates, increase vacancy numbers and applications and make job-hunting and recruitment quicker and easier.
“The economic climate also inspired us to launch JobAid in November of this year, which provides free vacancy advertising for charities or organisations looking to fill voluntary positions. This will help them to reduce their operating costs and focus more of their resources on the important work that they do.
“To demonstrate our commitment to finding the right candidates for our clients’ vacancies we continued our brand campaign through 2009, with the second burst of our TV advertising in January, our adverts showing at Take That’s tour dates in June and becoming the main sponsor of Premier League football team Portsmouth FC in July.
“Attracting new candidates from all regions and sectors remains a key focus for 2010 with our adverts returning to TV in January, supported by print and online advertising. Alongside this we’ll also be making changes to Jobsite, which will continue to make job-hunting quicker and less frustrating.
“Whilst it would be incredibly optimistic to predict a full recovery in 2010 I think we’ll see a gradual increase in vacancies as the year progresses and for us it’s a key time to make advances so that we’re well placed when things do start to return to pre-recession levels. For example, within the group there will be site re-designs, new products and services, international expansion and new partnerships.”
Ann Swain – APSCo chief executive
On the Agency Workers Directive “2009 has been the most crucial year from a legislative perspective this decade. Whilst it is pleasing that the Government has taken onboard our concerns about the timing of the Agency Workers Directive and deferred implementation until 2011, there is still some uncertainty as to the scope of the Regulations. Limited company contractors are currently not within the scope of the Regulations as long as they are genuinely self-employed, but those utilising umbrella companies are generally in.
This is potentially problematic as the employment status of contractors is often unclear.
This means that end users won’t necessarily be able to tell whether contractors are in or outside the Regulations before they engage them. APSCo has raised this issue in its response to the draft Regulations.
Recruiters are being asked by end users to indemnify them against any claims which are brought by workers under the Regulations. This would mean that recruiters have to pay up in the event that an end-user controlled process triggered a claim. This will give end users little incentive to abide by the Regulations, and potentially impose significant costs on the recruitment industry.”
On the points based immigration system and intra-company transfers “More than three times as many IT workers entered the UK on intra-company transfers last year than during the dot com boom. We have made significant headway on this issue in 2009, culminating in APSCo being asked to submit evidence to a review which recommended tougher checks on companies importing foreign workers. APSCo will be keeping a careful watch on how this and the next Government respond to these recommendations as demand for overseas labour recovers with the economy in 2010.”
On conduct Regulations – retention of the opt-out “The campaign to retain the opt-out from the Conduct Regulations for contractors was a major win for the industry in 2009. If the opt-out had been removed, staffing companies would have faced significant additional costs of having to automatically comply with the Conduct Regulations. The Government has vowed to look at this issue again in 2010, but APSCo will once again put the case on behalf of the professional staffing industry.”
On ‘pay when paid’ clauses “The insidious rise of ‘pay when paid’ clauses accelerated during 2009. These clauses, which allow RPO providers to withhold payment from recruitment suppliers indefinitely, have become increasingly prevalent in the industry. They are threatening many recruiters with financial ruin as they restrict their ability to borrow against the value of invoices not yet paid – a common practice in the industry. APSCo has flagged this issue up with the major RPOs and lenders. The response has been positive and there is every chance that a sustainable, long-term solution to this problem will be found.”
On licensing of the recruitment industry “Licensing of the recruitment industry will be the big debate in 2010. The Government is looking at licensing and we could certainly do with raising barriers to entry and professionalising the industry. APSCo will drive the debate on this and allow the recruitment profession to decide for itself.”
Tom Hadley director of external relations REC
“2009 will go down as one of the toughest ever for most recruiters with the industry facing a perfect storm of economic meltdown and regulatory showdown. The REC’s annual industry survey showed a 20 per cent hit in terms of overall turnover and
the priority for most agencies has been to dig deep and learn the lessons from previous downturns. The demand practical support and guidance was confirmed by the 100,000 hits to the red button of the REC’s online HELP campaign.
“The most recent REC/KPMG Report on Jobs confirmed that the jobs market is starting to show signs of life in terms of demand for both temporary and permanent staff. The new Jobs Outlook survey – which looks ahead at hiring intentions – has confirmed improving employer confidence, although inevitable cuts in public expenditure could counter-balance expected improvements in the private sector. A key priority is to limit any negative impact on public sector recruitment – for example by underlining the contribution of agency staff to the delivery of crucial front line services.
“2009 was the year that industry’s voice really came to the fore on some of the key debates of the day such as skills and the general outlook for jobs. As well being a key commentator in the national and regional media, the recruitment industry is now seen as an important partner by Government. For example, the Department for Work and Pensions (DWP) and Jobcentre Plus have tapped into the expertise of professional recruiters to deliver jobsearch support for newly unemployed professionals.
“In difficult economic times, one of the challenges for the industry has been to continue focusing on standards and ethics. Within this context, it was extremely encouraging to see that even in the current climate over 700 new members have joined the REC and signed up to the Industry Code of Practice. The launch of the Institute of Recruitment Professionals was a significant milestone and has been extremely well received by employers as well as by the vast majority of recruiters.
“On the regulatory front, 2009 was the year of the AWD. This was an exercise in mass mobilisation as over a thousand agencies fed into the REC’s responses through a series of summits, surveys and sector group meetings. A key element of the campaign has been to build strong alliances with other business organisations – in particular through the work of the REC’s Agency Work Commission. Achieving consensus between providers and users of agency staff will help to make new equal treatment measures for temporary workers workable and a significant initial outcome was the Government’s agreement to delay implementation until October 2011.
“Other campaigns have involved fighting the industry’s corner on issues as varied as new vetting requirements, pensions reform, public procurement, new equality legislation and the review of the Conduct Regulations. Continuing to build a strong collective voice on these and other issues will help to ensure that the regulatory climate is one that enables the industry to bounce back quickly when the upturn really kicks in.”
Richard Doherty, group vice president of solutions at Jobpartners.
On social recruiting becoming mainstream “Social media will play an increasingly important role in attracting and engaging with top talent. In 2009, it was the early adopters who were using social networking sites, such as Facebook, LinkedIn and Twitter, as recruitment tools. Very few companies had actual strategies and were taking a ‘suck it and see approach’ towards social recruiting. In 2010, there will be significant investment from brands into social recruiting. Corporate recruiters will be following what many recruitment agencies are already doing and using social networks to provide company information and set up interest groups to source candidates. This means that organisations will be more proactive in attracting both active and passive candidates and sourcing referrals in the future.
Key to the success of social recruiting will be to ensure that it is aligned and integrated with an organisation’s existing recruitment processes and technology. For example, existing applicant tracking systems can be extended to search through social networks.”
On Generation Y “2010 will be the year that businesses start to take Generation Y seriously. With employers facing the reality of older talent moving on or retiring over the next 5 years, companies will need to ensure that they are properly engaging with Generation Y so that that they aren’t left with a talent shortfall in years to come.
“Generation Y is adaptable and quick to learn new skills, so companies should look to harness such talent and enthusiasm to benefit their business. In order to attract and engage Generation Y, employers need to ensure that their application processes reflect the fast-changing online environment. Generation Y expects to be able to apply for jobs - in the first instance online - and then receive prompt feedback from employers about their application meaning renewed pressure on delivering the best possible candidate experience. This should not be deemed as ‘bending to the needs’ of Generation Y, but instead as modernising and automating the application process in line with social and technological advancement.”
On Increased career development budgets
“Most HR managers would agree that in a downturn one of the most difficult and important tasks is to keep up staff motivation levels. This is easier said than done when many staff have been asked to take pay cuts or work 4 day weeks in order to keep their job but achieve the cost savings the business requires in such a challenging climate. As we come out of the downturn and the job market becomes more buoyant, employees may feel the need to look elsewhere for the career progression and development they require if they cannot see potential at their current employer.
“With this in mind, 2010 will be the year when companies will look to spend more time and budget on employee development as they look to counter employees’ disengagement, and avoid a damaging exodus of talent.”
Talent management becomes a board-level issue
“In 2010, as the economy recovers, HR and talent management will become an increasingly strategic issue for many businesses, as their future success will be based on the success of their people. Companies tried to listen to their customers during the economic downturn in order to retain them, and the same principle should now apply to employees.
Successful businesses are all about good products/services and motivated/aligned employees. You can’t have one without the other, so HR and talent management needs to step up and be counted, engage the executive board, sell the vision of an engaged workforce and the bottom line benefits they will bring the business.”
On HR software becoming more personal and self sufficient “Software as a Service (SaaS) will continue to grow in popularity in 2010 as it reaches the level of maturity where large organisations are comfortable using it and can see the benefits. Traditional ERP talent management modules can be expensive and time consuming to deploy, whereas SaaS is much more economically viable, as its service-based pricing means that your entry costs and implementation times are much lower.
“Additionally, software solutions will begin to adapt to allow companies to become increasingly self sufficient when it comes to managing HR software. Managers will soon be able to customise and configure their own existing solutions to meet both their technological and employer brand requirements.”
On the financial sector taking the lead in talent management “The financial sector has really suffered during the economic downturn, however because of this it is now the sector that is taking the lead when it comes to talent management, as companies have realised that it is a ‘people business’ where human capital is key.
“Consequently, many large international financial services organisations are looking at making significant investments in talent management in 2010 as we come out of the recession.”
On reward schemes becoming truly ‘transparent’ “2010 will be the year companies start to no longer simply pay ‘lip service’ to greater transparency in their reward schemes. The recent economic climate has highlighted the overwhelming need for reward strategies to correlate to business performance and demonstrate value.
“With this in mind we will see more organisations looking to align performance management and rewards. By aligning the two and showing greater transparency, organisations can develop effective and justifiable remuneration policies that are consistent with compliance and risk management.”
Keith Potts, managing director Jobsite
“The economic doom and gloom of 2009 has been well documented and unfortunately the recruitment industry was directly hit by this. Vacancy numbers suffered at the hands of recruitment freezes and companies, large and small, going into administration. In turn, the increasing number of candidates looking for work made competition for each role fierce and companies saw the number of applications per position rise considerably. The days of the candidate centric marketplace were long gone.
“However, for all the bleak headlines, recruitment was by no means dead and there were still vacancies needing the right candidates. Whilst not at the levels we’d had back in 2008, Jobsite still had an average of 35,000 new vacancies advertised each week. This was a message we kept trying to communicate to the disillusioned candidate base. Yes, job hunting may be tougher but there are still opportunities around so please don’t feel that it’s hopeless.
“The interesting thing about a recession is watching how organisations innovate and diversify to achieve their aims. For us, 2009 saw projects such as Jobs-by-Twitter, our Johnston Press partnership, launch of our news centre Insider and our behavioural targeting service. These projects were all new ways for us to attract candidates, increase vacancy numbers and applications and make job-hunting and recruitment quicker and easier.
“The economic climate also inspired us to launch JobAid in November of this year, which provides free vacancy advertising for charities or organisations looking to fill voluntary positions. This will help them to reduce their operating costs and focus more of their resources on the important work that they do.
“To demonstrate our commitment to finding the right candidates for our clients’ vacancies we continued our brand campaign through 2009, with the second burst of our TV advertising in January, our adverts showing at Take That’s tour dates in June and becoming the main sponsor of Premier League football team Portsmouth FC in July.
“Attracting new candidates from all regions and sectors remains a key focus for 2010 with our adverts returning to TV in January, supported by print and online advertising. Alongside this we’ll also be making changes to Jobsite, which will continue to make job-hunting quicker and less frustrating.
“Whilst it would be incredibly optimistic to predict a full recovery in 2010 I think we’ll see a gradual increase in vacancies as the year progresses and for us it’s a key time to make advances so that we’re well placed when things do start to return to pre-recession levels. For example, within the group there will be site re-designs, new products and services, international expansion and new partnerships.”
