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Recruitment Watch - September 2012

Welcome to the latest edition of Mishcon de Reya's Recruitment Watch, prepared by the Firm's Recruitment Services Group.  Its aim is to provide those involved in the recruitment sector with a snapshot of what has been happening in the world of recruitment in the last month.

News

A quarter of the accountants who have resigned this year have been offered a pay rise to stay with their existing employer, says research by Marks Sattin, the accountancy and finance recruiter. Last year, it was fewer than one in eight. On average, accountants are being offered 15 per cent rises in base salary to stay – more than the 5 per cent being offered in 2009, but less than the 20 per cent many say is needed to prevent them leaving. The poll of 540 UK accountants found one in four felt no pay rise of any size would tempt them to stay. Dave Way, managing director of Marks Sattin, says: “Money isn’t the be-all and end-all, so wage hikes are rarely a long-term solution. By the time people have decided to move, they’ve made a huge mental shift and offering more money simply papers over the cracks. Using counter-offers as a retention tool can also be destabilising for a workforce as a whole.”
Peter Whitehead, Financial Times, 13 Sep 2012

Retaining staff is also a key concern for UK chief finance officers and finance directors, says research by Robert Half, the recruitment firm. Two hundred finance leaders were surveyed, with two thirds saying they were concerned about losing top performers in the next year. More than one in three believe that up to 20 per cent of their new finance and accounting employees leave within a year – in contrast with the expectation they will stay for an average of four years. Phil Sheridan, managing director of Robert Half UK, says: “Companies need to focus on areas that are important to employees, such as work-life balance, career progression and training. It is also surprising to see 32 per cent of new employees leaving due to their inability to meet employer expectations, showing that a lot more needs to be done during the initial hiring process.”
Peter Whitehead, Financial Times, 13 Sep 2012

Good news on jobs is being widely reported: the Reed Job Index shows UK job opportunities in August grew by 1 per cent month-on-month and 14 per cent year-on-year; the Recruitment and Employment Confederation (REC) and KPMG Report on Jobs for August shows the decline in permanent placements easing; the REC’s August edition of Jobs Outlook shows most employers hope to increase permanent hires slightly in the next three months; and according to Astbury Marsden, the financial services recruitment firm, the number of jobs created in the City of London continued to stabilise in August.
Peter Whitehead, Financial Times, 13 Sep 2012

Market

Recruitment companies have reported an easing in the decline of permanent staff appointments in a further optimistic sign for the jobs market. The finding, in a survey of 400 job agencies by the Recruitment and Employment Confederation and KPMG, comes ahead of Wednesday’s official unemployment figures. Economists expect the jobless rate to remain stable at 8 per cent of the workforce, according to a Reuters poll. Unemployment has fallen in the past five sets of monthly data, creating a puzzle because it has come at a time when official indicators of output have fallen. The REC and KPMG said that, although staff placements had continued to fall in August, the drop was modest and the weakest in a three-month period of decline. Recruitment agencies also reported a slight rise in the hiring of temporary staff for the first time in nine months.  Bernard Brown, head of business services at KPMG Management Consulting, said: “With question marks still hanging over the long-term state of the economy, it would be easy to suggest that an upward curve in the jobs market is nothing more than a blip. But the truth is that, in some parts of the country, we are actually seeing a growth in the number of companies recruiting and where there is a decline it is now virtually insignificant.” He added: “It may be slow, but perhaps we are witnessing the first signs of recovery?” Kevin Green, REC chief executive, said the rise in temps was a sign that last year’s changes to agency worker regulations had not had a significant negative impact on the temporary labour market.
Brian Groom, Financial Times, 10 Sep 2012

Growth should return to the UK economy towards the end of the year, and pick up a little pace during 2013, but unemployment looks set to peak at 2.7 million next year, according to the CBI’s quarterly economic forecast.

The CBI is forecasting GDP growth in 2012 to be -0.3%, below its previous forecast in May of +0.6%. This reflects a more negative first half-year and a more modest rate of growth in the second half than was expected in May.

The CBI expects some improvement in GDP growth late in 2012, with a bounce-back from the Jubilee effect and inflation falling a little further. In the third quarter of 2012, quarter-on-quarter growth is expected to be +0.6%, followed by +0.2% in the final three months.

In 2013, the CBI forecasts GDP growth of +1.2%, revised down from its previous forecast of +2%, mainly reflecting a smaller contribution from net trade, given a weaker rate of global growth than previously forecast. But the risks for this forecast are on the downside given on-going global uncertainty.
David Woods, HR Magazine, 31 Aug 2012

Trends/Practice

The global research and advisory firm Everest Group has suggested Recruitment Process Outsourcing has now evolved to a new strategic level. Terming the new offering as ‘RPO 2.0’ the Group believes the technique of outsourcing recruitment has now shifted in order to help HR leaders achieve clear business impact through their talent acquisition and management practices. The company has written a paper entitled: Paradigm Shift in RPO Value Proposition. The paper challenges RPO buyers and providers to no longer solely rely on process efficiencies as a measure of solution success but, taking this benefit for granted, to focus instead on increasing the rate of internal hiring, reducing new hire attrition and reaching out to new, non-traditional talent pools to enable organisations to react quickly to rapidly changing marketplaces. In some instances, the company claim this new approach to RPO is achieving up to 20 per cent more financial value than traditional models. “HR leaders are required to drive true business results in addition to their traditional role as a support function,” says Rajesh Ranjan Vice President of Business Process Outsourcing research at Everest Group. “Perhaps the greatest advantage that RPO 2.0 can provide is to turn the dream of aligning workforce planning with overall business strategy into a reality.”
The Global Recruiter, 21 Sep 2012

A new report from the Recruitment & Employment Confederation argues that flexible working must be encouraged throughout UK business. The chair of the commission putting together the report says flexible working has already softened the blow of job losses suffered during the recession. The REC’s Flexible Work Commission’s report has been published today following interviews with 29 businesses and employer bodies in both the UK and overseas. Among its key recommendations are:

  • Businesses must engage workers in designing flexible roles, and reinforce that the whole workforce can be involved in flexible work, not just certain groups
  • Recruitment agencies should advise employers and challenge assumptions about flexible work possibilities
  • Businesses must do more to train leaders and managers, giving them the confidence and skills to lead flexible teams effectively.

David Frost CBE, former director general of the British Chamber of Commerce and chair of the REC’s Flexible Work Commission, says: “Whilst unemployment in this country stands at over 2.5m, it is still significantly below levels experienced during previous recessions. “A key reason for this is that business has adopted a range of flexible working practices that have enabled them not only to sustain their companies but also, and importantly, to hold onto their employees. This flexibility was not seen in previous downturns. “There is an opportunity to create a real positive legacy from the recession if we can share the knowledge and experience from organisations who have successfully used flexible work arrangements to improve their businesses with more employers throughout the UK.” REC chief executive Kevin Green adds: “The UK has a competitive advantage in its flexible labour market, and by enhancing and promoting the benefits of flexibility to all, we can leverage this advantage to create more, and better, jobs in the UK.”
Recruiter, 20 Sep 2012

UK men typically earn between £4907 and £7491 annually more than women, according to a survey released yesterday. The salary survey was carried out by online finance tool, MySalaryCalculator.co.uk and the results analysed by Dr David Fishwick, head of maths at Bradford Grammar School. It found that the gender pay gap in the UK is typically over £4,907. The results showed that the median salary was £29,120 for men and £24,000 for women.

In its 2011 annual survey of hours and earnings, the Office for National Statistics (ONS) found that the pay gap had been reduced to less than a 10% difference and said it demonstrates gender pay equality was still an important issue.

Fishwick commented on the survey: "Although men are generally better paid, they also have a wider range in salary. There is less variety in women's salaries."

Dr Catherine Hakim, Professor of Social Science at the Social Science Research Centre in Berlin, confirmed this across Europe: "It is well-established that women work in a narrower range of jobs than men. Now we know that their earnings are also heavily clustered around the average, whereas male workers include lots of high-earners and also lots of low-earners."

The EU recognises the problem of workplace gender inequality and plans to enforce gender quotas in a bid to increase the number of women on boards of business, as reported by HR magazine last week. The proposals, however, have faced strong opposition from the UK. Four days ago it managed to gain enough support from EU member states to block the proposal to impose a 40% female quota on company boards.

MySalaryCalculator.co.uk collected online salary data from 4,578 participants between July and September 2012.
HR Magazine, 21 Sep 2012

Companies

Leading UK recruitment and training company Acorn Group has been commended for the role it plays in helping to get young people into work. The Welsh-headquartered business was singled out for praise by the Recruitment & Employment Confederation (REC), which described Acorn as a “shining example of how dedicated recruiters can make a real difference to the lives of young people.” Acorn has signed up to the REC Youth Employment Charter to help build better bridges between the recruitment industry, education and employers to prepare young people for the world of work.

With more than one in five people aged 16-24 currently out of work in Wales, the Youth Employment Charter commits the recruitment industry to playing an active role in helping to prepare future generations of workers. The Charter is aimed at driving increased co-operation with schools and charities, enabling recruitment and employment experts to share their expertise directly with young people – including developing links with schools, promoting apprenticeships and internships and providing opportunities for young jobseekers to work with recruitment agencies. It also aims to harness the knowledge and expertise of recruitment professionals within Acorn and other recruitment agencies who are in a unique position to raise awareness and build the necessary bridges into the world of work.

Tom Hadley, REC Director of Policy and Professional Services, said: “Youth unemployment is one of the biggest issues this country faces. Agencies like Acorn, signatories of the REC Youth Employment Charter, are playing an active role in helping young jobseekers. Recruiters, as experts in their local labour markets, are perfectly placed to reach out to the next generation of workers and reduce local youth employment. “The work of Acorn is a shining example of how dedicated recruiters can make a real difference to the lives of young people. Their work on apprenticeships and partnerships with organisations such as Careers Wales to develop a network of employers looking for keen, motivated people who want the opportunity to learn and contribute to the workplace, is leading the way in this field.”

Acorn’s Group Managing Director, Matt Southall, said: “As a business we are committed to helping tackle the problems of youth unemployment and play an active role in helping young jobseekers. We conduct our business in order to have a positive impact on our people, the communities we work in and the wider environment. “As part of the company’s backing for the Youth Employment Charter, Acorn has produced a six-point Q & A case study targeted at employers and people in the education sector, offering advice and support.”

Established in 1992, the Acorn Group has 35 branches across Wales, the West Country, the North West of England, London and the South East, placing up to 5,000 people into around 850 different client companies every week and securing 1,400 permanent placements each year. In 2012 Acorn celebrates 20 years as one of the leading recruitment and training agencies in the UK and aims to mark the anniversary by raising £20,000 for 20 different charities across England and Wales.
Recruitment International, 11 Sep 2012

Mishcon de Reya

Mishcon de Reya's Recruitment Watch is published by the Firm's Recruitment Services Group, established to meet the demands of our clients within the recruitment sector. The cross departmental Group is made up of specialist lawyers who have extensive experience within the sector and a proven track record in being able to meet the growing demand for a one-stop service amongst their recruitment clients.