Build the best local jobs market through partnerships and SME access. 4. Enhance our position in the .... skilled worker
Building the best jobs market in the world The REC’s manifesto for jobs
Foreword The UK jobs market has proved its resilience during the worst downturn in living memory. We now have 30.7 million people in employment – the most since records began. However, challenges remain. The priority for the next government is to build the best jobs market in the world, one that provides opportunities for all, helps our businesses access the skills they need, and makes the country more prosperous. The world of work is changing fast. Technology, changing consumer expectations and globalisation are the driving forces. The challenge is to ensure that policies on education, skills and employment keep pace with the velocity of change. The next government can learn a lot by listening to recruitment professionals, who are on the front line of the UK jobs market. Last year our £28.7 billion industry was responsible for placing over 630,000 people into new permanent roles and for ensuring that over 1.1 million people were on temporary or contract placements on any given day. As the professional body for the industry, the REC will continue to raise professional standards and develop practical solutions for the ever-changing employment landscape. We want to work in partnership with policy-makers to nurture an agile jobs market that enables everyone – individuals, businesses and the nation – to grow. We are totally committed to playing our part in building the best jobs market in the world and present this manifesto as our initial contribution to achieving this goal. Kevin Green Chief Executive December 2014
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www.rec.uk.com
Introduction
Executive summary Only by business and government working together can we achieve growth and create even more jobs in the next parliament. In order to build the best jobs market in the world, the next government needs to deliver in four key areas:
1. Give everyone the chance to succeed through work. 2. Accelerate business growth and job creation through skills. 3. Build the best local jobs market through partnerships and SME access. 4. Enhance our position in the global marketplace. This manifesto provides practical recommendations to help the next UK government deliver the best jobs market in the world.
We want the next government to: Give everyone the chance to succeed through work, by:
Build the best local jobs markets, by:
• Preparing individuals for the jobs of the future by giving everyone access to world-class careers advice, labour market information and lifelong learning;
• Delivering an effective industrial strategy that stimulates local demand;
• Making employability a core element of the school curriculum and enhancing the take-up of vocational qualifications; • Supporting networks for individuals who work flexibly; • Facilitating career transitions and opportunities for older workers through ‘all age’ career advice.
• Connecting LEPs with recruiters and harnessing their detailed understanding of local jobs markets; • Prioritising good recruitment practice in the public sector and in the procurement of products and services; • Building on existing partnerships between public and private sector employment providers.
Accelerate business growth and job creation, by:
Enhance our position in the global marketplace, by:
• Creating a comprehensive skills strategy which develops a world-class workforce;
• Unlocking the full potential of the EU internal market by staying in the EU and increasing the benefits for UK business and the wider population;
• Putting in place an immigration system that helps businesses source the talent they need to grow; • Creating a level playing field by redesigning the UK tax system so compliant businesses can grow and create jobs.
www.rec.uk.com
• Enhancing the role and resources of UKTI to ensure the UK fully takes advantage of opportunities in overseas markets; • Build international awareness and language skills amongst future generations of workers so they can support UK business expansion.
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Priority 1
Priority 1
Give everyone the chance to succeed through work Everyone should have the chance to work and achieve their full potential. This means giving individuals of all ages and backgrounds access to the education, advice and information needed to succeed in today’s jobs market.
Careers advice should be available at every stage in life Young people entering the jobs market have limited exposure to the realities of work and potential career pathways. Establishing an understanding of the world of work early is crucial to help young people make informed choices and will also boost the take-up of vocational qualifications and social mobility. Government must make employability a core element of the school curriculum, make sure work experience is provided for all and create a world-class careers service that gives all young people access to the ever-changing jobs market. Helping individuals succeed through work and facilitating social mobility must also focus on boosting access to the professions and dismantling latent barriers. Professional bodies are already playing a key role here. Encouraging employers across all sectors to review current hiring procedures and become advocates of the REC’s Good Recruitment Campaign is starting to make a difference.
36%
Career paths are increasingly ‘non-linear’ and it is crucial to provide better ‘allage’ guidance to help those returning to the labour market, starting a business or making a career transition. A referral scheme enabling Jobcentres to harness the expertise of specialist recruiters is one way forward.
OF PEOPLE IN GREAT BRITAIN HAVE WORKED AS A CONTRACTOR, FREELANCER OR AGENCY WORKER AT SOME POINT IN THEIR CAREER AND 41% ARE CONSIDERING WORKING THIS WAY IN THE FUTURE.3
Flexible working must work for all A world-class jobs market is one that fully embraces different ways of working. Last year, recruiters helped 634,608 people find a new permanent job and helped the 1.15 million people in temporary and contract employment on any given day.1 Flexible work has become an important feature of the UK’s labour market, with more individuals than ever before working on a temporary, freelance or selfemployed basis. However, we still do not collect sufficient data on people choosing to work in different ways, which means policies often fall short. Employment flexibility offers numerous benefits for individuals as well as businesses. The notion that flexible work always represents a ‘casualisation’ of the workforce must be challenged. 59% of those who have been temporary agency workers now have a permanent contract, 40% of people who currently earn £30,000 or more have worked as an agency worker, contractor or freelancer, and 22% of those who earn more than £50,000 pa have been an agency worker.2 Many individuals who want to work on a part-time, temporary basis are attracted to this option at certain times in their lives: younger people, those approaching retirement, people with caring responsibilities and individuals with niche, specialist skills are those most likely to want to work this way.
634,608 NUMBER OF PEOPLE THAT RECRUITERS HELPED LAST YEAR FIND A NEW PERMANENT JOB IN THE UK.4
We believe the next government needs to prioritise its support for individuals who choose and need to work flexibly.
1. Recruitment Industry Trends Survey 2013/2014
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2. REC Flex Appeal, Jul 2014
3. REC Flex Appeal, Jul 2014
4. Recruitment Industry Trends Survey 2013/2014
www.rec.uk.com
Our call to action The REC calls upon the next government to: 1. Prepare young people for the jobs of the future, by: •
Developing world-class careers advice which taps into the expertise of employers and recruiters to inspire future generations of workers;
•
Making employability a core element of the school curriculum and boosting the take-up of vocational qualifications;
•
Reintroducing work experience for all school students.
2. Boost social mobility, career transitions and progression, by: •
Establishing an ‘all ages’ careers advice service as an extension to Jobcentre Plus which taps into the expertise of specialist recruiters;
•
Working with professional bodies and employers to provide fair access to the professions and addressing barriers to social mobility, such as unpaid internships;
•
Promoting inclusive hiring practices and good recruitment across all sectors of the economy.
3. Invest in better support networks for individuals who work flexibly, by: •
Commissioning an independent body to review income protection insurance and financial products to help temporary workers, contractors and the self-employed access the benefits often only available to permanent workers;
•
Evaluating Universal Credit to consider if a tapered benefit system supports those who are looking to work flexibly and does not disadvantage those people who need the most support;
•
Expanding the range of data collected by the ONS to include part-time, temporary, freelance, limited company contractor and self-employed workers;
•
Protecting the independence of the Low Pay Commission in setting the National Minimum Wage so that it properly reflects independent advice and analysis.
4. Simplify the tax system to help workers, by: •
Bringing National Insurance Contributions and income tax together to give much needed clarity to workers;
•
Ensuring that guidance used to determine employment status is clear, taking on board recommendations from industry experts and existing channels such as HMRC’s IR35 Forum;
•
Monitoring, exposing and penalising tax avoidance by employment intermediaries to ensure a level playing field for the vast majority of workers and agencies who play by the rules.
www.rec.uk.com
20,000 RECRUITERS HAVE HELPED OVER 20,000 YOUNG PEOPLE WITH ADVICE AND GUIDANCE THROUGH THE REC’S YOUTH EMPLOYMENT CHARTER
Case Study: Recruiters are stepping up F1 Recruitment is an REC member in the marketing and media industries. Their ‘F1 Academy’ connects students with work experience and apprenticeships – over 75% of participants have gone on to work with the businesses where they were placed. F1 also helps businesses respond to staffing challenges in ways that boost opportunities for young workers. One client struggled to retain staff in a challenging £70,000 role. F1 suggested splitting the job into three separate, entry-level positions with opportunities for promotion, thus creating new opportunities for three young people willing to grow and learn. Three years on, all three are still working with the happy client.
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Priority 2
Priority 2
Accelerate business growth and job creation through skills After the worst recession in living memory, the UK is finally getting back to work. The next government must now focus on how it can work in partnership with business to deliver the workforce employers need to thrive. To build the best jobs market in the world we must ensure that the supply of skilled workers meets the increasing demand from business.
Skills are now the critical issue for business growth In June 2012, UK recruiters identified 16 areas of skills shortage; by October 2014 this had ballooned to 54 areas.1 Sectors consistently suffering from a shortage of skilled workers include engineering, IT, accounting and medical care. This shortage is holding back the recovery by impeding business expansion and job creation. One long-term solution to the UK’s skills crisis is encouraging more young people to pursue Science, Technology, Engineering and Maths (STEM) careers. The business community has led the way through initiatives such as Tomorrow’s Engineers, STEM Ambassadors and the REC’s own Youth Employment Charter. To build on these schemes, the next government needs to create a comprehensive skills strategy to underpin industrial policies and identify the skills required for the jobs of tomorrow.
Immigration must reflect business needs Training tomorrow’s highly skilled workers is a long-term process, yet business growth is being constrained right now by a lack of suitably qualified workers. A fair and sensible immigration system provides an interim solution to the UK’s skills needs but businesses are hampered by the cost, complexity and uncertainty of current processes. Enabling UK businesses to tap into highly skilled global talent pools will accelerate the recovery and also create more jobs for British workers. The next government must fix the immigration system to maintain our reputation as a preferred location for international businesses and for the high-skilled workers most in demand.
Tax and regulatory systems must support flexibility and good business practices Flexible working helped UK businesses retain employees during the downturn and is now helping them access the talent they need to grow during the recovery. Flexibility helps businesses manage peaks and troughs in demand, and access the skills they need, when they need them; 68% of employers use agency workers to provide short-term access to key strategic skills.2 Organisations that implement flexible arrangements also see increased staff satisfaction, retention, productivity and output.3 However, many businesses that embrace flexibility struggle with complex and outof-date tax and regulatory regimes. We have reached the absurd situation where a worker can be self-employed for one purpose and employed for another. The next government must commit to simplifying the existing tax and regulatory regime to reflect modern working practices. Effective enforcement of existing regulations is also crucial to create a level playing field and ensure that compliant businesses can thrive and create more jobs.
1. REC & KPMG Report on Jobs, Oct 2014
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2. REC Jobs Outlook, Nov 2014
87%
OF EMPLOYERS INTEND TO HIRE NEW PERMANENT WORKERS IN THE NEXT THREE MONTHS AND 46% INTEND TO HIRE AGENCY WORKERS IN THE SAME PERIOD4
Industries and professions currently suffering from skills shortages: • IT • engineering • construction • nursing • logistics • drivers • architects • chefs • sales
3. REC Flexible Work Commission Report, Sept 2012
4. REC Jobs Outlook, Nov 2014
www.rec.uk.com
Our call to action The REC calls upon the next government to: 1. Develop a comprehensive skills strategy, by: •
Coordinating industrial, regional and educational policies by developing a single Department for Learning and Work, which brings together the relevant parts of BIS, DfE and DWP;
•
Incentivising students to take up STEM subjects by expanding employer-led, higher apprenticeship opportunities in high-demand sectors such as IT, engineering and life sciences;
•
Involving recruiters in careers advice services so they include practical information, such as salary ranges and job opportunities;
•
Ensuring that new training needs can be met quickly – small-scale training funds could help thousands of people get into work and ‘earn whilst they learn’ in sectors such as construction and logistics which are in urgent need of staff and where rising training and licensing costs are preventing new entrants.
2. Put in place an immigration system that helps businesses source the talent they need, by: •
Reinstating the two-year post-study work visa for all STEM graduates;
•
Expanding and regularly revising the Shortage Occupation List (at least once a year) to reflect current skills shortages;
•
Implementing a streamlined and low-fee Tier 2 visa application process for SMEs.
3. Create a level playing field by redesigning and enforcing the tax system so compliant businesses grow and create jobs, by: •
Developing consistent rules on employment status to reflect the realities of modern working practices;
•
Ensuring that measures covering false self-employment apply to all businesses within the supply chain, not just employment intermediaries;
•
Providing clarity on specific taxation issues such as travel and subsistence schemes;
•
Ensuring that regulations covering recruitment are proportionate and reflect latest market developments, such as the role of umbrella organisations and other intermediaries;
•
Ensuring sufficient resources are allocated to government enforcement for tax, minimum wage, employment agencies and gangmasters in the agricultural sector.
5. REC Jobs Outlook, Nov 2014
www.rec.uk.com
92% OF EMPLOYERS SAY THEY HAVE LITTLE OR NO SPARE CAPACITY IN THEIR WORKFORCE5
RECRUITERS HAVE REPORTED EIGHTEEN MONTHS OF CONTINUAL REDUCTIONS IN THE AVAILABILITY OF PERMANENT STAFF SINCE APRIL 20136
6. REC Report on Jobs, Oct 2014
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Priority 3
Priority 3
Building the best local jobs markets through partnerships and SME access Increasing devolution will bring a new meaning to ‘people powered’ local enterprise and public services. Creating agile and effective local jobs markets will require strong local partnerships between public and private sector employment experts and using public procurement to embed good recruitment practices and balance cost control with quality of service. Harnessing the expertise of local recruiters will make Local Enterprise Partnerships (LEPs) more responsive to the needs of local businesses.
Workforce investment is as essential as infrastructure investment for regional growth Recruiters know their local jobs markets and supply chains like no one else but as yet have been an untapped resource in local strategies which aim to boost regional enterprise and growth. By partnering with the recruitment industry in future workforce planning, LEPs and local decision-makers can better develop strategies that work for the hardest to reach jobseekers and are responsive to local employers’ needs. The REC’s partnership agreement with the Department for Work and Pensions is a model which LEPs could replicate and includes regular regional events for local Jobcentres and recruitment agencies to discuss local jobs market trends and improve employment services for jobseekers.
£1.8 bn IT IS ESTIMATED THAT UP TO £1.8 BILLION A YEAR OF ADDITIONAL SAVINGS COULD BE MADE THROUGH IMPROVED COLLABORATIVE PROCUREMENT BY COUNCILS1
Support local SMEs and balance quality with cost across the supply chain The public sector is an important local employer and purchaser but is facing significant workforce and delivery challenges. Well-managed contingent labour can play an important role in delivering personalised public services and is essential in light of significant cuts to training and workforce planning over the last few years. Going forward, public bodies must continue to balance cost control with quality in staff resourcing. As organisations increasingly come together to manage contingent staffing spend – NHS trusts included – the challenge is to guarantee that procurement agreements are an attractive and financially viable option for SMEs. Aside from better utilising existing levers such as the Public Services (Social Value) Act 2012, the next government must invest in training for all public sector finance, HR and procurement officials to ensure effective contract management.
Local politicians should champion good recruitment practice to build a sustainable local jobs market Embedding good recruitment practices is key to the delivery of public services and the ability of local employers to attract and retain talent and skills. The REC’s Good Recruitment Campaign is already establishing a community of HR and procurement professionals to champion the importance of good recruitment to both organisational success and workplace inclusion. MPs have a critical role to play by actively promoting good recruitment practice at local jobs fairs and business forums.
Case Study: Recruiters are stepping up Keeping local partners up to date in the jobs market One REC member, the Plus Team, runs seminars to share insider tips and techniques to help attendees secure work quickly. Welfare to Work providers also exhibit and all, without fail, including JCP, sit in and take notes to upskill themselves on recent developments such as online CV applications, how recruitment parsing software works or the latest interview techniques.
1. Communities and Local Government Select Committee, March 2014
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www.rec.uk.com
Our call to action The REC calls upon the next government to: 1. Build close partnerships between LEPs and local recruiters to boost local jobs market and regional growth, by: •
Establishing a government taskforce to review and rate LEPs to incentivise them to become more business-led and growth-focused;
•
Building on the existing REC/DWP Partnership Agreement to improve support to local jobseekers and employers;
•
Developing better local labour market intelligence based on the input from local businesses, recruiters and Jobcentres.
2. Prioritise ‘good recruitment’ practices in reforms of public services and procurement, by: •
Monitoring and reviewing the implementation of the 2015 EU procurement directives to ensure that SME suppliers are able to engage in the bidding process;
•
Using public procurement to promote good recruitment practice through the tender process and selection criteria;
•
Investing in training for public sector finance, HR and procurement professionals to ensure effective contract management;
•
Prioritising implementation of the Public Services (Social Value) Act 2012. In particular, encourage collaboration and standardisation of KPIs between local authorities to help SMEs with limited resources compete for contracts regionally;
•
Using ‘Community Business Challenge’ events to bring together public service providers, staffing suppliers and local service users to share feedback on the performance of frontline services.
3. Encourage local politicians to champion ‘good recruitment’, by: •
MPs acting as ‘good recruitment’ champions in their local constituencies; hosting jobs fairs that bring together local employers, jobseekers and specialist recruiters;
•
Using existing initiatives such as the Good Recruitment Campaign to encourage local employers to prioritise social mobility and diversity in their hiring practices.
25%
25% OF EMPLOYERS SAID POOR RECRUITMENT FOR ONE ROLE HAD COST IN EXCESS OF £40,0002
THE REC’S GUIDE ‘PUTTING PUPILS FIRST’ EXPLAINS EXACTLY WHAT SCHOOL BUSINESS MANAGERS NEED TO KNOW WHEN HIRING SUPPLY TEACHERS AND IS AN EXAMPLE OF THE INDUSTRY WORKING TO IMPROVE THE SAFETY, QUALITY AND COST OF CONTINGENT LABOUR
2. CareerBuilder Survey, 2011
www.rec.uk.com
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Priority 4
Priority 4
Enhance our position in the global marketplace Building the best jobs market in the world must involve helping businesses to grow and create new jobs by seizing overseas opportunities. The UK must be competitive in the global marketplace and be seen as a great place to do business. Membership of the EU provides UK businesses with access to the largest trading bloc in the world. Challenges remain, however, and the focus for the next government should be on achieving the reforms necessary to make the EU work as effectively as possible for UK businesses and residents.
Unlocking the benefits of EU membership A number of unjustified barriers prevent UK businesses operating across the EU. This was supposed to be fixed by the EU Services Directive in 2009, but restrictions remain. For example, businesses seeking to operate in Italy are still required to open an office in each of the four separate regions and regulations which require service providers to be a national or resident in a country where they operate are still prevalent. The temporary labour market is similarly obstructed. The UK has fully implemented the EU’s Agency Workers Directive (AWD) whilst other member states maintain restricted labour markets. Sectoral bans in Belgium, fees for temporary work in Austria, and plans to establish minimum contract lengths in Germany limit the opportunities of UK workers and businesses, and hinder European growth. The next UK government must campaign for the full implementation of the AWD, to modernise labour markets, reduce unemployment and unlock the potential of the recruitment industry across Europe.
2.2 m
NUMBER OF BRITISH CITIZENS LIVING ACROSS THE EU AND 2.3 MILLION EU CITIZENS LIVING IN THE UK.1
The successful partnership between the REC and the Department for Work and Pensions demonstrates how industry can work effectively with public employment services to get people into work. Opening up the EURES portal (the EU’s jobs portal) to the European recruitment industry and promoting public/private sector co-operation will benefit business and jobseekers.
Enhancing the UK’s global position will create more jobs UK Trade and Investment (UKTI) have a strong legacy of helping UK businesses to expand internationally. Businesses and recruiters can play a significant contributing role by ensuring that UK businesses access the right skills to make the most of overseas opportunities. When assembling international delegations, the UKTI should include representation of the recruitment industry as a way of building this link. Looking ahead, a renewed focus on language skills and international awareness is essential to ensuring that our workforce can meet the global aspirations of British businesses. As the EU pursues negotiations with the United States on the Transatlantic Trade & Investment Partnership (TTIP), the UK must ensure this delivers further growth opportunities. Expanding the services and export market for UK businesses will accelerate the recovery, create jobs and strengthen the position of UK industry in a global economy.
THE EU JOBS PORTAL (EURES) PROVIDES ACCESS TO OVER 1.4 MILLION JOB VACANCIES AND NEARLY 31,000 REGISTERED EMPLOYERS
1. The Financial Times, February 2014
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www.rec.uk.com
Our call to action The REC calls upon the next government to: 1. Ensure that EU membership works for UK businesses, by: •
Expanding the internal services market by removing latent barriers to providing services across the EU and expanding the EU Services Directive to include professional recruitment agencies;
•
Providing compliant private employment businesses with access to the EU Jobs Portal (EURES), which is currently restricted to the public sector;
•
Calling for an end to labour market restrictions in other EU member states which undermine the effectiveness of the common market, such as the Agency Workers Directive, including proper implementation of Article 4 of the AWD.
2. Making the most of the UK’s membership in the EU, by: •
Championing co-operation between public employment services and private sector recruitment agencies – in particular by building on the European Commission’s PARES initiative;
•
Creating a forum which brings together business and policy stakeholders to share best practice and awareness of EU initiatives that aim to address youth unemployment and labour market inclusion policies.
16%
16% OF UK EMPLOYERS PLAN TO EXPAND IN THE EU OVER THE NEXT TWO YEARS2
3. Ensure the UK’s position in the global marketplace, by: •
Including the recruitment industry on all international trade delegations facilitated by UKTI;
•
Ensuring the Transatlantic Trade and Investment Partnership delivers jobs for the UK;
•
Building international awareness and encouraging the take-up of language skills amongst future generations of workers.
PRIVATE EMPLOYMENT SERVICES ACROSS THE EU SUPPORT OVER 8 MILLION EUROPEANS IN THEIR JOB LIFE EVERY YEAR3
2. REC Jobs Outlook, November 2014
www.rec.uk.com
3. Eurociett
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About the REC The REC is the professional body for the UK’s £28.7 billion recruitment industry. With 3,349 recruitment businesses in membership, we represent 80% of the industry by turnover. In addition, the REC represents 5,759 individual members within the Institute of Recruitment Professionals (IRP). We work to promote the positive contribution that high-quality recruitment can make to UK plc. Our members abide by a Code of Professional Practice and take a compliance test to enter and stay in membership. For more information, please contact: Kate Shoesmith, Head of Policy & Public Affairs
[email protected] © REC December 2014 . 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.
