Impact Report How we made a difference in 2014 2014 Report and Accounts and 2015 Trading Update
About us The Recruitment and Employment Confederation (REC) is the professional body for the recruitment industry representing the interests of the UK’s £28.7 billion private recruitment industry to government, business and media in both the UK and Europe. The REC represents business through our corporate membership scheme and individual members through the Institute of Recruitment Professionals (IRP). All corporate members abide by a code of professional practice and individual members abide by a code of ethics and professional conduct. Above all, the REC is committed to raising standards and highlighting excellence throughout the recruitment industry.
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REC Impact Report
Our purpose To lead a successful and respected recruitment industry that is recognised for its positive contribution to UK plc.
Our formula for success Voice of the industry
x
Professionalism
x
World Class Products & Services
Welcome
Chair’s welcome Throughout 2014 the REC has continued to deliver on its strategic objectives, as defined in our four year strategy. I am delighted to be able to take this opportunity to share the results in this year’s impact report. We have ensured that the industry’s voice remains at the forefront of the key political debates in Westminster and Brussels, as we highlight the critical role recruitment plays in creating a dynamic and agile labour market. We made a big stand during 2014 on compliance, ensuring REC members demonstrate their adherence to our Code of Professional Practice through our online Compliance Test, resulting in 193 recruitment businesses being declined membership. The REC has shown that the badge is a real mark of distinction. This report highlights some of the big developments in 2014, including the launch of the new website and the new member events and webinars which saw more than 1,200 members participate. We have continued with proactive campaigns on youth employment, flexible work and gender representation on FTSE boards. The economy and the labour market performed well over the last year. This has led to the industry surpassing its previous turnover peak of £27bn in 2007/08 by achieving an industry turnover of £28.7bn during 2014. The outlook for the recruitment industry in 2015 is very positive, with both employment growth and job fluidity strengthening. Businesses will be looking to hire more staff and continue to fine-tune their resourcing strategies. The REC will continue to modernise its services and help our members take advantage of these growth opportunities, which is why we have launched the Scale Up campaign. I am extremely proud of the progress made in employer engagement
through the Good Recruitment Campaign – members said this should be a critical objective for us and we have turned this into a reality. Since its launch in April 2014, the campaign has been led by an Employer’s Advisory Panel, incorporating a broad spectrum of organisations, including the CBI, CIPD and FSB. At the end of 2014 more than 60 organisations, such as Kellogg’s, npower, Santander, and Arsenal FC had signed up to the Good Recruitment Charter. We also delivered the inaugural Talent, Recruitment & Employment Conference (TREC) in June last year, bringing together HR directors and key resourcing decision makers together with recruiters. The REC is a dynamic, forward-thinking trade body, and I have been very privileged to have been Chair over the last three years. In fact I have been involved in helping to make the REC what it is today for more than nine years. I have had the pleasure to see first-hand what an innovative and dedicated team we have working on behalf of our members. I leave this role knowing that the REC is in safe hands with an experienced team and dedicated council. I would like to take this opportunity to thank all the staff at the REC, and my fellow council members, for all of their hard work during my time as Chair. I wish the REC and the new Chair well. To the industry - it’s onwards and upwards!
Neil Smith, MBE, ACA, FIRP Chair Recruitment & Employment Confederation REC Impact Report
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Our impact in 2014
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Contents
Voice of the industry
10 Good
Recruitment Campaign
11
REC media profile
4
REC Impact Report
Welcome
12-15
Member engagement
16-17
Increasing professionalism
18-19 IRP
20-21
Forward looking 2015-2016
22-31
Report and Accounts
REC Impact Report
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Our impact in 2014 Our governance structure 2014 saw the ongoing implementation of the REC’s four year vision and strategy which guides the organisation through 2013 – 2016. It also guides the development of the annual business plan and work programme. Our main aims for the year were focused on continuous service improvement for members, raising professionalism and client awareness and in delivering our own business. We implemented a number of changes and returned a surplus back into reserves. Our performance in all of the areas we set out to deliver for our members is set out in the following pages.
Industry turnover
£28.7bn 16,653 Incoming queries to our legal helpline
33,256
Incoming queries to our customer contact centre
49,909 answers given
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REC Impact Report
Our Impact in 2014
2.1m
visitors to the REC website in 2014
82%
1,261
New REC & IRP websites launched in 2014
new IRP members during 2014
476
new REC members during 2014
Market share (by turnover) of recruitment industry in REC membership
Over
70
1,000
recruiters logging into our live webinars with over 1,900 subsequent views on youtube
member events and webinars delivered
Over
1,200
recruiters benefiting from our free events
Over
100
meetings with parliamentarians & civil servants including 5 government ministers and 3 Shadow Ministers
7,020
individual members from all areas of the recruitment profession
193 recruitment businesses declined membership as a result of the REC’s Compliance Test
REC Impact Report
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Voice of the industry We said we would positively promote the recruitment industry to government, clients, the media and the wider business community. We aimed to give the recruitment industry a stronger voice.
The REC’s policy and lobbying work ensures the industry’s voice remains at the forefront of the key political debates in Westminster and Brussels. Proactive campaigns on issues such as youth employment, women on boards, flexible work and compliance are at the centre of our raising perceptions of the industry. The aim is to provide members with a regular ‘heads-up’ that can inform conversations with clients
The REC’s Manifesto sets out a bold vision for the next government: How to build the best jobs market in the world. I have reviewed the “Manifesto for Jobs” and congratulate REC on its overarching commitment to enhancing the recruitment industry and the quality of the labour market. As you are aware I have also signalled my support for the “Good Recruitment Campaign” and am keen to consider how the Department can play its part in promoting both initiatives and the other work that you are developing.
jobs the best Building the world in marketmanifesto for jobs C’s
The RE
Dr Stephen Farry, MLA, Minister for Employment and Learning, Northern Ireland Executive
1,000
members actively involved in policy work through our policy committees, regional forums, sector group meetings, webinars and written consultations.
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REC Impact Report
100
meetings with parliamentarians and civil servants including 5 government ministers and 3 Shadow Ministers
90
policy newsletters, briefings and sector group updates sent to members to ensure that member views are collated, necessary changes can be made and clients can be briefed
56
consultation responses At least 4 submissions to government per month
Our Impact in 2014
Impact in 2014 Representation on key external forums and committees such as HMRC’s IR35 Forum; GLA’s labour provider labour user liaison group; DWP Strategy Forum; Welsh Employment & Skills Board; CBI Trade Association Council; Youth Employment UK board; BIS employment status review employer meetings; DfE stakeholder group; DWP Older Workers Business Champions Forum; Eurociett board; Eurociett public affairs committee & European Commission Sectoral Social Dialogue group and the CCS Contingent Labour One review group. Regional Voice met with 24 local MPs to share key messages from our Manifesto for Jobs. Ongoing dialogue with Welsh Assembly Government, Department for Employment & Learning Northern Ireland and the Scottish Parliament as well as with Chambers of Commerce and Local Enterprise Partnerships in other regions across GB. Ongoing dialogue with all stakeholders within our circle of influence – for example, CBI, CIPD, Chambers of Commerce, FSB, TUC, Crown Commercial Service and Local Government Association.
Specific policy wins during 2014 include: Enforcement: we campaigned jointly with the TUC to ensure that the Employment Agency Standard Inspectorate was maintained within BIS. This has now been expanded which is a step in the right direction as effective enforcement is key to maintaining a level playing field and enabling compliant recruitment businesses to thrive. Travel and Subsistence schemes: Following REC meetings and briefings, the Chancellor committed to reviewing travel and subsistence in the 2014 budget. Late payment: Following our submission to highlight the specific challenge that late payment creates for recruiters, the government
has announced plans to crackdown on late payments in its Small Business ENterprise & Employment Bill. Supply chain compliance – Slavery Bill: Following our evidence to the Modern Day Slavery Bill joint committee, the bill will take forward proposals to simplify and strengthen the criminal conviction system, better enable whistle-blowing and allow for top-down management of the entire supply chain. Diversity & Inclusion: The government has revised the Voluntary Code for Executive Search following our work and dropped proposals for all-women short lists. We continue to request more effort when it comes to publishing short and long lists. REC Impact Report
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Good Recruitment Campaign We said we would raise awareness about the value that high quality recruiters bring, and also tell employers about the work the REC does to raise standards and promote best practice in our industry. In response to REC members calls for a campaign to
raise awareness across all employers and business bodies about the value high quality recruiters bring and the work REC do to raise standards and promote best practice in our industry, the REC developed and launched the Good Recruitment Campaign.
Impact in 2014
Impact to you in 2014
• Launched the Good Recruitment Campaign in April 2014, which promotes good recruitment and, the importance that it plays in organisational success
• Provided you with research and insight from employers into new, innovative recruitment practices, so you can stay ahead of the game
• Launched the REC’s Good Recruitment Advisory Panel. Its 22 members help drive the campaign • 60 signatories to the Good Recruitment Charter • More than 90 key HR decision makers attended the inaugural Talent Recruitment & Employment Conference (TREC) 2014 • REC spokespeople have presented at more than 30 HR meetings and conferences
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REC Impact Report
Supporters of the Good Recruitment campaign
• Helped you demonstrate your compliance to the REC’s Code of Professional Practice and your consultants’ compliance to the Institute of Recruitment Professionals’ – IRP Code of Ethics • Helped you engage clients in a conversation about what good recruitment looks like, which is backed by key business organisations • Provides you with the right tools to promote good recruitment
Our Impact in 2014
REC media profile Our media presence continued to grow in 2014, in both national print and broadcast media. We have provided expert insight on all employment and recruitment issues, and use our media profile to influence policy matters and politicians on the importance of a flexible labour market to our nation’s prosperity.
Radio
Broadcast media
Newspapers and magazines
2,836
52 interviews by REC spokespeople on broadcast media in 2014. An average of 4.3 appearances per month.
TV
Spokespeople interviewed on all major TV channels and programmes including:
Spokespeople were interviewed on:
references in newspapers and magazines, averaging 236 every month and more than 7 mentions every day of the year.
Social Media
17,452
Twitter followers
REC Impact Report
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Member engagement For 2014 we said we would focus on providing more value to corporate members. • Giving members easier access to essential tools and information to make their jobs easier
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• Refocusing our account management provision to deliver a more customer-focused experience and encourage greater member engagement across all sectors
• Delivering targeted and more integrated research projects, which includes making data and insights more accessible and useable for members
The quality of research from the REC is exceptional. This is communicated weekly via Meridian Matters, Meridian’s weekly staff e-newsletter. It is also used for client information, which has been greatly received and helps to maintain Meridian’s position as an industry leader within the markets we operate.
The support and guidance you receive from the REC is outstanding plus the knowledge you gain from going through this process (REC compliance test) is invaluable to the day to day running of your business
The Legal helpline support provided by the REC is second to none, the advice has helped our business, as well as keeping our costs down
The new Audited Education is great recognition of our high standards and levels of professionalism…it will help us to continue to attract the highest calibre candidate for our clients
Meridian Business Support
Academy Recruitment
Rullion Group
Hays
REC Impact Report
Our Impact in 2014
Impact in 2014
Sector highlights
• Launched our new website
• REC Sector Groups enable us to drive targeted policy campaigns, promote the contribution of specialist recruiters and provide members with legal updates and market intelligence
• Launched extended opening hours for the Legal Helpline (Mon-Fri, 8:30am-5:30pm) • Differentiating our offering and communications according to member agencies differing sizes, turnover and lifecycle stage lifecycle stage and sector specialisms
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• Refocused our account management provision to deliver a more customer-focused experience
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key research publications launched, including Recruitment Industry Trends, Flex Appeal, Chain reaction making recruitment supply chains work and Room at the Top
33%
Being in the top 33% of European service providers for consistently high levels of member satisfaction (measured via the TNS TRI*M satisfaction index)
ent Recruitm Trends Industry2013 /14 Survey ium-Term Med And REC Forecast Market
In association
Sector specific events and webinars for over 700 members
with:
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pealractors Flex ap cont se ancers,
Making work chains
Why freelcy workers choo and agenthis way to work
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Engaging with more than 100 representative bodies, external stakeholders and government departments across different sectors.
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ment & Recruit ment Employ eration Confed
ment & Recruit ment Employ eration Confed
ment & Recruit ment Employ eration Confed In association
ment & Recruit ment Employ eration Confed
with:
Impact to you in 2014
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policy meetings held with more than 200 members, including policy committees, roundtables with JobCentre Plus, UK nations meetings in Scotland, Wales & Northern Ireland.
• • • •
Badge of quality to show to clients Competitive advantage Part of a membership network Adapt to changes in the sector quickly and effectively
REC Impact Report
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Member engagement Specific sectorial campaigns and key developments last year include: Childcare
Education
Engineering
Successfully obtained agreement on annual safeguarding checks for members following the scrapping of term limits on DBS certificates in April 2014.
Published Putting Pupils First – simplifying the relationship between schools and agencies. This was sent to every school in the UK and promoted by key associations such as the NASBM, ASCL, NAHT and Safer Jobs.
Submitted oral and written evidence to the All Party Parliamentary Group on Migration’s inquiry into the closure of the Post Study Work Visa with the body publishing our blog on their website and highlighted the impact of a restrictive policy on developments in this sector.
Promoted sector awareness of the update service and expanded the number of agencies that now mandate subscription to the service. Worked with the Department for Education and 4Children on the establishment of Childminder Agencies and advised members on their development. The REC was successful in obtaining advance notice of developments throughout the development stage of this model.
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REC Impact Report
Established annual safeguarding checks for members following the scrapping of term limits on DBS certificates to ensure high standards in safeguarding. Improved the relationship between the REC and key stakeholders including the NUT. Promoted awareness of the sector to government and the new Education Secretary. Successfully lobbied Hampshire Council to mandate membership of the REC and REC Audited Education (or equivalent) for all agencies appointed to its £32 million framework.
Developed closer relationships with key industry stakeholders including Engineering UK and EEF. Promoted members value to schemes such as STEMNET and internally sought to raise the profile of STEMNET Ambassadors.
Our Impact in 2014
Technology
Health and Social Care
Industrial
Published the Security Clearance Code of Practice in conjunction with IPSE and the Cabinet Office.
Developed relationship with major framework providers to include commitments to tendering workshops for members. This work helped increase awareness of the REC compliance regime, as did our presentations at a series of client events for framework providers (NHS and Local Authority).
Secured place on DEFRA’s SAWS Transition Working Group following effective contribution to the Sub-Group on Employment and Skills (including drafting Job Centre Plus guidance on agricultural careers).
Submitted oral and written evidence to the All Party Parliamentary Group on Migration’s inquiry into the closure of the Post Study Work Visa with the body publishing our blog on their website. Responded to the Migration Advisory Committee’s partial review of the Shortage Occupation List where we made a strong case for the inclusion of technology roles in the list. We also worked with key technology sectors which saw techUK endorse our submission. Formed closer relationships with key industry stakeholders including techUK and Tech London Advocates.
Represented members views in 10 major public consultations, on topics such as the implementation of EU Procurement Directives and Language controls, Nursing Revalidation and the implementation of the Care Act 2014.
Maintained close working relationship with the Association of Labour Providers and the Gangmaster Licensing Authority (GLA). REC recommendations on future GLA board governance were included in the GLA’s ultimate submission to the Home Office.
Positioned REC as the voice of recruitment and procurement reform, in developing new stakeholder relations with and collaborating with: UNISON, LGA, LGIU, NMC, RCN, and UKHCA.
REC Impact Report
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Increasing professionalism - Corporate Membership We said we would promote the importance of completing the Compliance Test early, ensure that members were contacted and talked through the test, raise awareness of the support mechanisms in place for any member not currently able to demonstrate their compliance.
Compliance is an essential part of being an REC member and we insist existing members and those wishing to become members pass our online Compliance Test. The REC continued to drive forward our compliance regime to ensure all members demonstrate an enhanced and robust level of compliance with relevant industry legislation and the REC’s Code of Professional Practice.
12 Compliance workshops attended by over 200 members
Impact in 2014 – Compliance Test • New applicants or unqualified members have up to six months or three attempts to pass the test, limiting access to some benefits and not allowing applications to use the REC logo until the test is passed • The first two year cycle deadline was December 2014 • We introduced sectorial staging dates early in 2014 • We improved the range of support around our compliance framework, including training tests, compliance workshops, webinars and links to support information and a team of compliance executives
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REC Impact Report
Results for online Compliance Test
95% 193
of members have passed the test
recruitment businesses declined REC membership as a result of the Compliance Test
Our Impact in 2014
Impact in 2014 – Legal Services
Impact in 2014 – Audited
• Increased the opening hours for the Legal Helpine
• REC Audited goes way beyond just compliance, requiring agencies to demonstrate that they operate best practice in areas such as customer service, staff development, diversity and client managements
gal Helpline Le
• Enhanced the online legal guide to improve member experience
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Mo
• Provided updated briefing notes for members on key issues, including, da holiday pay, DBS y-F 5.3 guidance and DFE rid a y, .3 0 a m8 safeguarding guidance, employment law such as the extension of the right to request flexible working to all employees, introduction of shared parental leave • Advised HMRC extensively on ITEPA tax changes
• Significant engagement with procurement bodies, including the Crown Commercial Services (CCS), Health Trust Europe (THE) and London Procurement Partnership (LPP) on a range of procurement issues particularly in the health care and interim management sectors
• REC Audited Education focuses on safeguarding young people, and demonstrates to your clients that you undertake all relevant checks when recruiting and vetting school staff
110
REC members have achieved REC Audited accreditation status
REC Impact Report
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Institute of Recruitment Professionals (IRP) We said would continue to build the institute as the pre-eminent membership body for recruitment professionals in the UK, while creating an active community engaged with the IRP brand, and place emphasis on professional development through IRP qualifications. We said we would help recruiters demonstrate their commitment to best practice, world-class recruitment standards and provide the best possible services to clients and candidates.
Impact in 2014 New IRP website
• Engaged with the employer panel representing recruitment apprenticeships with the future development of apprenticeships • Received high levels of member satisfaction, with IRP ranked in the top 33% of European service providers (measured via the TNS TRI*M satisfaction index) • Engaged with key stakeholders, including BIS, NAS, Skills CFA, Welsh Assembly and Ofqual reagrding apprenticeships, Trailblazers and qualifications • Re-launched a direct debit option for membership payments
295,000 142% increase in downloads
22%
growth in IRP membership in 2014 7,020 members
Most popular: Qualifications prospectus, Diploma and Certificate brochures and the IRP Code of Ethics sion
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REC Impact Report
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ertRP p.uk.com/C www.rec-ir t Excellencethe REC ed by Recruitmen Defining cation is award This qualifi
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visits
Our Impact in 2014
It was a great year for IRP qualifications with more students increasing their professionalism within the recruitment industry
2,609 86%
hours of exams taken in 2014
In 2014, our exams were sat in more than 20 different UK venues, and also in Abu Dhabi, Dubai, Gibraltar, India, Iraq, Saudi Arabia, Spain and the USA
students passed An increase of 12% in students sitting the REC qualifications from 970 in 2013 to 1,087 in 2014
• Launched a brand new industry apprenticeship at level 2 aimed at recruitment resourcers • Launched two new qualifications expanding the number of units from 44 to 69
158
Units of Diplomas taken in 2014
28%
increase in social media followers More than 8,500 people
78,744
visits to the IRP Career Development area which houses the student hub
REC Impact Report
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To improve the REC and IRP member experience
Forward looking 2015-2016
To improve standards, compliance and professionalism across the recruitment industry
To be the largest and most representative recruitment body in the UK
Our goals Our strategic goals include:
To be a great place to work
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REC Impact Report
To be the voice on jobs and the recruitment industry
Vision & Strategy
Our Purpose To lead a successful and respected recruitment industry that is recognised for its positive contribution to UK plc
Our focus and key deliverables for 2015 These include: Improving REC corporate member engagement: • We have made significant progress on member engagement in recent years. We know that members who use REC services tend to be those that have higher levels of satisfaction. We have developed an extensive set of activity for 2015, all focused at improving both customer service and deepening our relationship with all members Institute of Recruitment Professionals (IRP): • Grow IRP membership to 8,000 by the end of 2015. Activity for 2015 includes increasing the opportunities for apprentices, a new level 5 qualifications and a new online CPD tool Good Recruitment Campaign: • 2015 will see phase two which will involve the campaign’s flagship event TREC 2015. We plan to double the number of signatories to the charter by the end of 2015
Scale Up campaign: • Launching a new campaign called Scale Up which will be targeted at helping REC members to grow their recruitment businesses sustainably. The campaign will include research, social media events and growth masterclasses, regional and sector specific events, a new Scale Up Business Toolkit guides and podcasts Voice of the Industry: • Throughout 2015 we will work on your behalf to continue to raise the profile of the REC as your representative body and the voice of the industry. We will build on our growing presence in a range of print, broadcast and online media as we talk publicly about the main events and issues that impact the industry and our members Raising professionalism: • We will continue to support existing members when completing our online Compliance Test and will deliver a support programme for the next two-year cycle. We will introduce a new online CPD tool for IRP members to demonstrate their commitment to best practice and world-class recruitment standards
REC Impact Report
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Report and Accounts: Directors’ Report For the year ended 31 December 2014 Principal activities
Company information
Auditors
The principal activities of REC are:
Directors The following directors have held office since 1 January 2014:
On 1 July 2014 Arram Berlyn Gardner was incorporated as Arram Berlyn Gardner LLP. Arram Berlyn Gardner LLP are deemed to be appointed as auditors and will be proposed for reappointment at the forthcoming Annual General Meeting.
• Representation of members’ needs and views in Whitehall, Brussels, and to influential organisations and individuals in UK and overseas. • Provision of members services and benefits and individuals able to meet strict entry criteria, and to confirm to the REC Code of Best Recruitment Practice, including offering legal advice helplines. • Provision of vocational qualifications and training courses for those who work in the industry, or wish to find employment within the industry. • Research and distribution of information demonstrating the social and economic contribution of the recruitment industry to the UK economy.
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REC Impact Report
J Brooks N C Smith S Noakes M Evans K Green S Gallagher T Evans S Ankrett L Jarvis G Latham M Cooper C Kenny D Bradbury H Benjamin K Forsyth L Hewett M Brook
G Irvine R Handford P Higgins J Hilton N Gupta S Thewlis M Bennett C Moore J Barrowcliffe D Martyn
(Resigned 9 September 2014) (Resigned 12 March 2014) (Resigned 12 March 2014) (Resigned 10 December 2014) (Appointed 18 June 2014) (Appointed 18 June 2014)
Reserves policy The directors have adopted a reserves policy. This recognises that it is prudent to hold appropriate reserves to enable the company to properly plan its activities and to protect itself against business risks including the loss, or serious curtailment of one or more income streams and of serious business interruption. In addition it is felt necessary to maintain a ‘fighting fund’ to employ expert advisors to protect the interests of members as and when the need arises. It is the intention of the Board to build reserves over a five year period representing the equivalent of four months overhead expenditure. To achieve this it will be necessary to achieve surpluses on average of 3% of turnover over these years. The Board reviews the reserves policy and the level of reserves at least once a year in the light
Report & Accounts
of current and anticipated levels of income and the company’s planned activities.
Statement of directors’ responsibilities The directors are responsible for preparing the Directors’ Report and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the surplus or deficit of the company for that period. In preparing these financial statements, the directors are required to: • select suitable accounting policies and then apply them consistently; • make judgements and accounting estimates that are reasonable and prudent; • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s
transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Statement of disclosure to auditors So far as the directors are aware, there is no relevant audit information of which the company’s auditors are unaware. Additionally, the directors have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditors are aware of that information. This report has been prepared in accordance with the special provisions relating to small companies within Part 15 of the Companies Act 2006. By order of the board
D Vallance, Secretary
[email protected] 0207 009 2100 REC Impact Report
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Independent Auditors’ Report For the year ended 31 December 2014 To the members of the Recruitment and Employment Confederation We have audited the financial statements of The Recruitment and Employment Confederation for the year ended 31 December 2014 set out on pages 5 to 10. The financial reporting framework that has been applied in their preparation is applicable law and the Financial Reporting Standard for Smaller Entities (effective April 2008) (United Kingdom Generally Accepted Accounting Practice applicable to Smaller Entities). This report is made solely to the company’s members’, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members’ those matters we are required to state to them in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members’ as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors As explained more fully in the Directors’ Responsibilities Statement set out on pages 1 - 2, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with
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REC Impact Report
applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.
Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the company’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
Opinion on financial statements In our opinion the financial statements: • give a true and fair view of the state of the company’s affairs as at 31 December 2014 and of its surplus for the year then ended;
Report & Accounts
• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice applicable to Smaller Entities; and • have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matter prescribed by the Companies Act 2006 In our opinion the information given in the Directors’ Report for the financial year for which the financial statements are prepared is consistent with the financial statements.
• the directors were not entitled to prepare the financial statements and the directors’ report in accordance with the small companies regime. Paul Berlyn Senior Statutory Auditor for and on behalf of Arram Berlyn Gardner LLP Chartered Accountants Statutory Auditor 30 City Road, London EC1Y 2AB
Matters on which we are required to report by exception We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: • adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or • the financial statements are not in agreement with the accounting records and returns; or • certain disclosures of directors’ remuneration specified by law are not made; or • we have not received all the information and explanations we require for our audit; or
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Income and expenditure account For the year ended 31 December 2014 Notes
26
2014 £
2013 £
Turnover Cost of sales
6,290,928 (1,307,682)
6,024,589 (1,227,021)
Gross surplus Administrative expenses
4,983,246 (4,769,519)
4,797,568 (4,614,536)
Operating surplus Other interest receivable and similar income
2 3
213,727 8,027
183,032 5,712
Surplus on ordinary activities before taxation Tax on surplus on ordinary activities
4
221,754 (1,605)
188,744 -
Surplus for the year
9
220,149
188,744
REC Impact Report
Report & Accounts
Balance sheet As at 31 December 2014 Notes
2014 £
Fixed assets Tangible assets Current assets Debtors Cash at bank and in hand
Creditors: amounts falling due within one year
5 6
7
Net current assets Total assets less current liabilities
£
2013 £
408,854
£ 516,257
617,376 1,362,397
846,000 862,378
1,979,773
1,708,378
(1,031,332)
1,087,489) 948,441
620,889
1,357,295
1,137,146
1,357,295
1,137,146
1,357,295
1,137,146
Capital and reserves Income and expenditure account Members’ funds
9
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies' regime and the Financial Reporting Standard for Smaller Entities (effective April 2008). Approved by the Board for issue on 18 March 2015 N C Smith, Director Company Registration No. 03895053
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Notes to the financial statements For the year ended 31 December 2014 1
Accounting policies
1.1 Accounting convention The financial statements are prepared under the historical cost convention and in accordance with the Financial Reporting Standard for Smaller Entities (effective April 2008). 1.2 Turnover Turnover represents subscriptions receivable from corporate members, subscriptions received from individual members, fees from professional training and qualifications, insurance commissions, sales of literature, event fees and grant income, net of VAT.
Subscriptions from individual members are recognised on a receipts basis.
Income from grants for specific projects is matched against related expenditure.
1.3 Tangible fixed assets and depreciation Tangible fixed assets are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, as follows:
Land and buildings Leasehold – Over the term of the lease Fixtures, fittings & equipment – 20% to 33% straight line
1.4 Pensions The company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund.
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REC Impact Report
1.5 Taxation The company is liable to taxation on its investment income and other income derived from non-members.
2 Operating surplus 2014 2013 £ £ Operating surplus is stated after charging: Depreciation of tangible assets 254,188 212,014 Auditors’ remuneration 14,500 14,000 Directors’ remuneration 261,804 263,137 The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2013 - 1). 3 Investment income Bank interest
2014 £ 8,027 8,027
2013 £ 5,712 5,712
4 Taxation Domestic current year tax U.K. corporation tax Total current tax
2014 £
2013 £
1,605 1,605 -
Report & Accounts 5 Tangible fixed assets Cost At 1 January 2014 Additions Disposals
At 31 December 2014
Depreciation At 1 January 2014 On disposals Charge for the year
Land and Plant and buildings machinery etc £ £ 222,400 - -
Total £
687,792 910,192 146,785 146,785 (115,836) (115,836)
222,400
718,741
941,141
65,713 - 44,695
328,222 (115,836) 209,493
393,935 (115,836) 254,188
At 31 December 2014
110,408
421,879
532,287
Net book value At 31 December 2014
111,992
296,862
408,854
At 31 December 2013
156,687
359,570
516,257
6 Debtors Trade debtors Other debtors
2014 2013 £ £ 277,166 412,233 340,210 433,767 617,376 846,000
7 Creditors: amounts falling due within one year 2014 2013 £ £ Trade creditors 198,959 124,568 Taxation and social security 246,066 247,301 Other creditors 586,307 715,620
1,031,332 1,087,489
8 Pension costs Defined contribution
2014 £
2013 £
Contributions payable by the 64,100 56,024 company for the year 9 Statement of movements on profit and loss account Income and expenditure account £ Balance at 1 January 2014 1,137,146 Surplus for the year 220,149
Balance at 31 December 2014
1,357,295
10 Financial commitments At 31 December 2014 the company was committed to making the following payments under non-cancellable operating leases in the year to 31 December 2015: 2014 2013 £ £ Operating leases which expire: Within one year 1,677 Between two and five years 261,983 270,000 11 Capital commitments At 31 December 2014 the company had capital commitments as follows:
263,660 270,000 2014 £
-
2013 £
Contracted for but not provided in the financial statements
27,000
12
Limited Liability Each member of the company undertakes to contribute to the assets of the company in the event of a winding up, such amount as may be required not exceeding £1.
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2015 trading update The UK economy is expected to have been the fastest growing major economy in Europe in 2014. The IMF is predicting growth in 2015 at 2.7%. The recruitment industry has been very strong again, with further evidence that REC members have significantly grown in turnover. The impact on REC has seen growth in revenue, both from membership subscriptions and paid-for products and services such as training and qualifications. REC continues to engage on a regular basis with external stakeholders such as the main political parties and government departments. We also have increasing exposure through the media with frequent requests for REC spokespeople to take part in radio and television interviews, as well as being quoted in national newspapers. Our research is also used more extensively with both David Cameron and Mark Carney (Governor of the Bank of England) referencing REC research in recent months. We have now completed the first two-year cycle of the compulsory compliance test for corporate membership and despite 193 companies being removed from membership for failing to complete the test, retention rates are still high and in line with recent years. We also continue to attract new members at a high rate. IRP membership growth is continuing into 2015. Enrolments for our various qualification programmes have also grown and we are exceeding volume expectations. The increasing demand for our higher level standard (REC Audited) shows employers and candidates that they are dealing with a
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REC Impact Report
recruitment agency that adheres to the highest standards. This, along with the compulsory compliance test, means that REC members exhibit higher standards than ever before. REC continues to invest in improving customer service (e.g. the legal helpline) and member engagement, whilst keeping tight control on its cost base. We have again set budgets that enable us to implement our stated Reserves policy, and are on track to achieve our target of the equivalent of four months overhead costs held in Reserves by the end of 2016.
Update on the position at March 2015 Income is currently on track compared to 2014 and budget. Forward expectations are however higher, as we have a good level of forward bookings and a stronger sales pipeline than at the same point in 2014. Renewal rates are currently above target, and we anticipate achieving above-budget income from this, our major income stream. Both training products and qualifications are performing well, with the new apprenticeship scheme launched late in 2014 having a particularly high take-up. Costs continue to be well controlled, and are within budget, so our forecast is that we will again exceed the budgeted surplus (£100k) in 2015.
Report & Accounts
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AT I O N
7,444
IRP Members (as at end March 2015)
Scale Up campaign Launched in January 2015, this flagship campaign is designed to help REC members to grow and evolve their recruitment businesses. Some of the activities delivered to date include six Scale Up Live events attracting more than 300 recruiters and more than 2,000 downloads of our four recruitment leaders podcasts
summary of legal and topical news. We’ve delivered two to-date with over 1,100 documents downloaded. Four more Legal Bitesize bulletins will be delivered in 2015
REC Manifesto for Jobs Sets out a bold vision for the new government: How to build the best jobs market in the world. Sets out practical solutions to some of the major labour market challenges of the day
• More than 100 HR Directors & key resourcing decision makers due to attend TREC 2015 in June 2015
Legal Bitesize Continuous improvement to the services available to members saw the launch of a new bi-monthly Legal bulletin which provides REC members with a brief
Compliance Test From January 2015 we entered into a new test cycle where members will be given staged deadlines in which to take the test
Good Recruitment campaign • On track to get 100 signatories to the Good Recruiter Charter by the end of 2015
• Held our first employer branding workshop with over 25 senior employer branding decision makers
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About The Recruitment & Employment Confederation • Recruitment’s biggest lobbying voice • The source of recruitment knowledge • Raising recruitment standards • Developing successful careers in recruitment • Exceeding members’ expectations through business support. The Recruitment & Employment Confederation (REC) is the professional body for the recruitment industry. The REC represents 3,242 corporate members who have branches across all regions of the UK. In addition, the REC represents 7,020 individual members within the Institute of Recruitment Professionals (IRP). All members must abide by a code of professional practice. Above all, the REC is committed to raising standards and highlighting excellence throughout the recruitment industry.
Recruitment & Employment Confederation Dorset House First Floor, 27-45 Stamford Street London SE1 9NT T: 020 7009 2100 F: 020 7935 4112 E:
[email protected] Twitter: @RECpress www.rec.uk.com
© REC 2015 . All rights reserved: no part of this publication may be reproduced, stored in an information storage and retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the written permission of the REC.
