Tag Archive | "recruiters"

Time to change the world of recruitment methinks

You have to laugh, you know. I never cease to be amazed at the number of posts I see about contractors claiming all sorts of problems with, variously, notice periods (don’t need them, as I’ve said before), IR35-safe contracts (fine as long as they represent reality), the AWR (don’t start me on that one again) and the infamous opt out from the Agency Regulations (opt out if you can but it makes little real difference). Plus, of course, the running complaint about the agency’s percentage of the contractor’s rate: except, of course, as ony fule kno they don’t get the percentage, the contractor does.

However there is a common theme to these various complaints. The agency.

We have to be fair to the poor agents themselves though. Increasingly they are run by accountants targeting sales figures and maximising margin. Little details like serving both sides in the contract have zero relevance to their business model. The individual agents are given achievement targets and so have no time for the niceties if they want to pay the mortgage. And of course it is much more cost effective to employ minimally experienced drones to handle the phones and use software to do the pattern matching between CV and job description.

All of which is fine if you’re dealing with a commodity market like general development, operations and service management roles. But it’s a serious problem for all sides if you are a little more senior, or have niche skills in some area or another. Or even if, like many, you aren’t a specialist in any given field, just a good, solid all-rounder who can make a success of any contract they’re given.

In effect you start from scratch every time you need a new contract. No matter how good you are, you still have to get through the auto-pilot box-ticking recruitment business we have these days. The one that says the agent gets a new role then stands there waving a piece of paper in the air to see who might be interested: usually several hundred, often hopelessly under qualified people on average. The signal to noise ratio in recruitment is actually appalling. How much cleaner if he had the resource to hand when the role comes in.

So how do we change the paradigm (see, I can do business speak as well…). The answer is surprisingly obvious.

The contractor pays the agent, not the client. Shock, horror…

Seriously, it would work. I have many skills but selling isn’t one of them, nor is cold-calling to find work (actually that’s just cowardice, but the result is the same). So why not outsource that part of the business to someone who does it for a living? The agent goes to the client with a zero margin deal. The contract would have to be B2B and, legally, you would have to be opted out of the Agency Regulations, both of which would appear to be good ideas. You know, solid in business indicators, no IR35, no AWR, no secret upper contracts…

There would be no hint of you being anyone’s employee either, since you’re at the top of the contract, not the bottom.

The agent would have to know who you are, what you can do, what you are worth and what your history is. He would be able to sell you actively and be incentivised to find you repeat business, since that’s where his margin comes from. He could specialise in given areas and build up a stable of people with the relevant skills, or he could be the one to fill the awkward jobs from his knowledge of his customers.

Best of all, you set the gross and the agent gets the percentage.

So what’s not to like? If you’re big enough and strong enough to build and justify a working reputation, and be able to be sold into an open market, why not go for it? I’d happily pay for that level of access and support, which has to be better than fighting your way to the top of some disinterested minion’s in tray to get noticed.

All we want is a couple of good agencies with the courage to bite the bullet and disregard the way they’ve always done it.

Ah. That might be a problem. Anyone know any brave, risk-taking agency FDs…?

About the author: Alan Watts

Alan has worked in IT for most of the last 35 years, and first went freelance in 1996. He has been a PCG member from its start and has been spreading the message that freelancing is a professional career choice for many years. Alan also runs Malvolio’s Blog, a personal but highly informative take on the life of the modern freelance.

Alan Watts, Principal Consultant, LPW Computer Services

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Soaring cost of childcare forces families into poverty

A recent survey by Save the Children and the Daycare Trust revealed that some British parents have to spend more than 33% of their income on childcare and this is preventing many women from returning to work and piling financial pressure onto parents.

The REC responded to these claims last week by highlighting the important role specialist recruitment agencies play in delivering a flexible childcare workforce.

The Chair of REC Childcare, Judith Ivers, explained that the cost of childcare is often a major barrier to a parent going back to work. Specialist childcare recruitment agencies provide parents with high quality, affordable childcare.

In addition to considering the cost of childcare, we also need to make sure that there is a pool of properly vetted, suitably trained childcare workers, she continued. Childcare recruiters provide us with this peace of mind.

An increasing number of parents in Northern Ireland are being pushed into poverty due to soaring childcare costs. They spend an average 45% of their income on childcare. Some families on low incomes are having to turn down jobs and others are thinking about leaving their jobs because they cannot afford the cost of childcare.

Whilst parents say they need to work, childcare costs are eating up such a large proportion of their income that nearly 25% are now in debt as a result. One Northern Irish mother said that it was hard to find affordable childcare and if she had to pay for a child minder or private nursery there would be no point in her going out to work.

If the government wants to persuade parents that working is the way out of poverty, it needs to make sure effective and affordable childcare support is available.

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Would contractor accountants swap part of their pay for more holidays?

Nearly 32% of British workers would sacrifice part of their salary in order to get more holidays, according to a poll by Hyphen.

The multi-sector recruiter surveyed more than 1,000 employees and discovered that 56.3% of HR professionals would contemplate swapping part of their base salary for additional holiday entitlement. In the 16 to 24 age bracket, 41.3% were prepared to sacrifice pay for more holidays, as were 42.6% of finance professionals and accountants for contractors.

Another survey, this time by Reabur, found that 51% would be prepared to lose a day’s salary in order to enjoy a longer weekend.

The HR consultant found that another 14% would sacrifice half a day’s pay so that they could have Friday afternoon off and 4% would lose the half day’s salary for Monday morning off. 6% of respondents went as far as to say they would be willing to lose two day’s pay every week if they could have a four day weekend on a permanent basis.

However, 14% of cost conscious respondents would be happy to see a longer weekend implemented in the UK as long as they did not lose any of their salary. Only 9% of people appear to be happy with the five day working week and another 2% said they were impartial.

Reabur’s co-managing director, Georgina Read, pointed out that a lot of companies for finish early on Fridays but it was unlikely that a late start on Monday would be seen as a viable alternative as employers expect staff to be energised after the weekend break.

She went on say that people who wanted a four day weekend could approach their employer with a flexible working request, but before doing so they should consider the impact that request would have on the business.

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Smallest firms could get more time to prepare for pensions auto-enrolment

Smaller firms may be pleased to learn that the government is considering giving them more time to get ready for automatically enrolling their employees in pension schemes.

The Pensions Regulator last week issued guidance for employers that says smaller firms sharing PAYE schemes with other like businesses will see their staging dates deferred by up to 23 months.

The new alterations are expected to be written into legislation prior to the Pensions Bill becoming law and will cover firms with less than 10 employees who are included in a larger PAYE scheme which has in excess of 239 members.

A business fitting the above description would have until the first of January 2016 to implement auto-enrolment.

The Pensions Regulator has also launched some interactive tools to explain the new regulations. As from October next year, employers and recruitment businesses will be required to auto-enrol workers after they have completed 12 weeks service. Employees then have the option of opting out if they do not want to participate in the scheme their employer has chosen. This new duty is to be phased in over several years, starting with larger organisations.

The interactive tools will help businesses establish their staging date, help them understand which employees need to be enrolled and how to enrol them, and what level of contribution is required for each eligible employee.

The REC still has concerns that auto-enrolment will create challenges for recruiters due to high levels of turnover amongst temps and the expectation that a lot of agency workers will opt-out of the pension scheme they have been enrolled in.

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Recruiters – the only people who seem not to understand the value of uniqueness

How would you feel about a business where you didn’t really understand what the product is and were selling to someone who also doesn’t understand what it is but whose understanding was different to yours? But nevertheless the overall business has an annual turnover close to £30 billion.

Because that’s the Recruitment industry these days.

I was in a meeting recently where an account manager from one of the local agencies gave a talk on how the agency interacts with the contractor and all the various add on services they provide. Made for several PowerPoint slides of things ranging from de-risking payments to providing help and guidance And very interesting it was too, until another speaker, this time a contractor, stood up and gave their view of the same relationship..

Guess what? They didn’t really match.

To be fair to the agency, they do find the business and they do factor the money and they will, if pressed, negotiate rates and the like with the end client, all of which is pretty valuable if you want a quiet life. Where it goes wrong is how they represent us to the client.

Every agency tries to tell the client that they have this pool of highly expert staff ready to fulfil any role the client wants filling. And what is more their sophisticated search facilities and in-house databases match candidates to roles with unfailing accuracy. So explain why, if that’s what they do, why is my Inbox getting three or four emails a day from agencies offering me a whole series of roles, almost without exception ones that bear little or no relationship to my actual skills or location. Could it be that what they do and what they tell people they do aren’t exactly fully aligned?

And, of course, this same doublethink has permeated the client HR departments. Because they get contractors from the “recruitment” agencies and those contractors are presented as individuals, rather than as service providers, they see us as a slightly weird form of employee. OK, we may have different email addresses to the permie staff and we might miss out on things like car parking rights and canteen access, but ultimately we are still seen as just another worker.

So why is this important? As long as we get paid, does it really matter?

Well yes it does, actually. In fact it’s getting increasingly important. The career contactor has to demonstrate more and more to HMG that we are free-standing businesses; small ones, admittedly, and ones who probably won’t ever grow too much, but still businesses with all that implies. Sadly, that argument gets cut off at the knees by the way the market treats us as a lightly modified employee with an inflated salary.

Of course, deflecting this juggernaut from its path is not going to be easy; in fact, it may not even be possible. After all, £30 billion a year is something with a lot of momentum. But that doesn’t mean we shouldn’t try. The freelancing model we have in the UK is certainly unique in Europe, and pretty much unique in the rest of the world, with only Australia and the USA coming close to the level of operational freedom we enjoy.

So it’s a real shame that the very people we have to deal with to get our skills to work are the only people who seem not to understand the value of that uniqueness. I think it’s time they found out.

About the author: Alan Watts

Alan has worked in IT for most of the last 35 years, and first went freelance in 1996. He has been a PCG member from its start and has been spreading the message that freelancing is a professional career choice for many years. Alan also runs Malvolio’s Blog, a personal but highly informative take on the life of the modern freelance.

Alan Watts, Principal Consultant, LPW Computer Services

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Big firms pay better but SMEs allow creativity say graduates

Accountants for contractors might want to know that UK graduates think they will receive better pay and career progression opportunities if they work for a corporation rather than an SME, according to Give A Grad A Go, an SME graduate recruiter.

Whilst 91% of graduates think salaries are better in corporations, 92% thought SMEs encouraged more creativity and at 62%, they also scored better on work-life balance.

The managing director of Give A Grad A Go, Cary Curtis, said graduates often do not realise that opportunities are available in SMEs and therefore smaller employers can struggle to source the best talent.

Graduates have been having a hard time trying to find a job over the last three years. According to Thames Ditton – SHL, 60% of people who graduated within the last three years have not been able to secure a graduate position. The class of 2010 has suffered most from the lack of graduate opportunities. Only 34% have secured a graduate position.

The survey also found that over 400,000 graduates would not have attended university if the fees were £9,000 per year. Nearly three quarters of the graduates surveyed said they would consider moving overseas to find a job and 36% of them cited better salaries as their main driver.

All the graduates who took part in the Thames Ditton – SHL survey said they would undertake unpaid work in order to get experience and 39% would be prepared to do this for more than three months if it would help them get a job.

Graduates could be losing out by not using social media in their job hunting efforts. Despite its growing popularity, only 39% of graduates would use it to market themselves to potential employers. Only 5% of graduates apply for roles through LinkedIn and yet 34% of recruiters use it to screen candidates.

Sean Howard, the vice president of business solutions at SHL, said he was amazed that graduates were not using social media in their job hunting efforts. He also believes recruiters may need to think again about their hiring criteria if the government doesn’t reconsider university tuition fees.

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How will City contractor accountants fare this year?

It is unlikely that city hiring this year will reach the heights of 2010, according to recruiter Robert Walters.

Chief executive, Robert Walters, said that last year banks were correcting from the savage cuts they made during the economic downturn. They needed to re-staff quickly but that was a one-off and we now need to wait and see what they’ll do next.

He also commented that the hiring process was starting to take longer. Employees are unsure of their worth and complex variations in salary packages are confusing, he pointed out.

Robert Walters placed 2,000 City workers in 2010 and has seen a 10% rise in net fee income in the first quarter of 2011.

Large recruiters report a buoyant demand for financial staff, in particular those with experience in risk management and regulatory functions. However, much of this demand is due to churn as people look to change employers. Some analysts have predicted that banks will reduce their headcount by between five and eight per cent this year.

Ambition recruitment consultants say that workers in the City pay the same amount in taxes as the whole Scottish population. Its research found that Square mile staff paid a total of £11 billion in NI and income tax, equal to the remittances from the entire workforce north of the border and 7% of the UK total.

Ambition UK’s managing director, Simon Lynch, said that City workers have been subjected to a torrent of abuse in the last few years but they make a very valuable contribution to the public purse.

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Will the Welfare Reform Bill affect accountants?

Vulnerable accountants who are disabled, elderly or suffering long-term health problems could be hit by the coalition’s proposed reforms to the welfare system.

The Chartered Accountants Benevolent Association has pointed out that the government intends to reassess benefits. People currently on incapacity benefit are likely to be transferred to the Employment and Support Allowance and those getting Disability Living Allowance will receive the new Personal Independence Payment.

The Welfare Reform Bill will ensure that claimants undergo more rigorous and regular benefit eligibility assessments. The Disability Living Allowance is to be scrapped and its replacement, the Personal Independence Payment, will be paid to fewer people.

The chief executive of CABA, Kath Haines, said the Association was concerned that the changes laid out in the Welfare Reform Bill would affect accountants with genuine problems.

David Cameron’s Welfare Reform Bill was published last month. It aims to make work pay and cut the cost of the benefits system by £5.5 billion over the next four years.

Disabled people will be encouraged to look for work and employers must be aware that they have obligations to this vulnerable group under the Equality Act 2010. The use of pre-employment health questionnaires will be limited and employers should tread carefully when enquiring about the health of a candidate prior to a job offer being made.

Recruiters and employers will also have to ensure that applicants have the correct paperwork prior to hiring them. Recruiters claiming sick pay or statutory maternity / paternity pay will need to produce a valid work permit when they make their claim. It will no longer be sufficient to quote a valid National Insurance number.

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Are more public sector contracts on the cards for contractor accountants’ clients?

UK contractors will be pleased to learn that the government has committed to overhauling the process by which SMEs compete for public sector contracts.

This will be achieved by cutting bureaucracy and becoming more open and transparent in its dealings.

The national chairman of the FSB, John Walker, says this is a victory for small businesses in the UK. The FSB has been campaigning for SMEs to have the same opportunities to public sector contracts as large organisations do. The new measures to get rid of red tape and open up transparent communications channels, which were outlined on Monday, are most welcome, he said.

There also needs to be a genuine change in culture within government procurement when it comes to dealing with SMEs, Walker added.

According to the Federation’s statistics, 70% of smaller businesses rarely bid for public sector contracts because of lack of awareness.

The situation is so bad that the UK ranks 24th out of 27 member EU states as far as access to public procurement markets goes. Only 24% of public sector contracts are awarded to small businesses in the UK, compared to 44% in France.

The REC has also been campaigning for a change in procurement practices for several years. Kevin Green, the chief executive of the REC, said that at last we are seeing action instead of mere words. The REC wants to see a competitive, dynamic market where recruiters can compete based on their capabilities and competences. He added that the REC will monitor the implementation of the new measures and will continue its constructive work with the Cabinet Office and OGC.

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Will most of the class of 2011 become accountants?

The class of 2011 might be interested to learn that accountancy firms currently top the list of graduate recruiters, according to High Fliers Research, a market research company.

The largest graduate recruiters are PwC, Deloitte and KPMG each of which recruiters between 900 and 1,200 graduates per year.

PwC’s head of student recruitment, Richard Irwin, said he’d seen a massive increase in the number of early applications to the firm this year as students want to be first in line for new opportunities. In addition to this year’s leavers, there is also a pool of returning graduates from 2009 who are still seeking employment and this has led to increased competition. PwC still has 600 graduate vacancies but hopes to have them filled by April.

There is a 12.6% increase in graduate opportunities this year compared to 2010 but larger recruiters are still offering 6% fewer vacancies than they did in 2007. This will disappoint university leavers as this year there are 50,000 more graduates leaving university than there were 4 years ago.

Elizabeth Ewen, the head of talent at recruitment giant Michael Page International, says that qualifications alone will not be enough to secure a graduate role and university leavers should make sure they possess employability skills as well.

This is backed up by the findings of the High Fliers Research that showed that many organisations will not consider even the brightest graduates unless they possess relevant work experience.

Meanwhile, Robert Half’s Salary Guides have revealed the top finance and accounting jobs for this year. In commerce and industry, financial accountants and analysts are up at the top, along with credit controllers, financial controllers and assistant accountants. Purchase ledger clerks could also find prospects look promising.

For people who yearn for the City life of financial services and banking, regulatory accountants and internal auditors come out tops along with financial planning analysts. Assistant management accountants and client services also feature in Robert Half’s Top 11 jobs.

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Contractor accountants could benefit from skills shortages

Over 50% of people working in accounting and finance departments think the economic outlook is good at the moment and staff growth has gone up by 30%.

However, on the downside, many are warning that another wave of redundancies is inevitable.

Poolia, a specialist recruiter, conducted a survey that found financial departments are more positive about the economic outlook for next year although they do still have concerns over staffing levels.

57% expect to see revenue growth next year, 40% predict an increase in projects and more than 30% anticipate increasing recruitment.

The general manager at Poolia’s finance and accounting practice said that there will a race for talent next year but the long term outlook will remain challenging. Companies cut back on vital trainees during the recession and now find themselves in need of experienced workers. However, there is currently a shortage of people with the right skills to meet this demand. 38% of firms are struggling to recruit skilled employees at managerial level and 40% reported problems finding transactional clerks. This lack of supply could lead to more opportunities for contractor accountants.

George Osborne is reasonably confident that the government has taken the correct measures to secure a sustainable economic recovery. While speaking to reporters at the G20 summit in Seoul he said that economic data had been on the optimistic side for the past few weeks and that gave him cause for confidence.

The Bank of England on the other hand is erring on the side of caution saying the outlook remains uncertain. Mervyn King expects the recovery will continue but its strength will depend on developments in the world economy.

Inflation will remain high next year due to the VAT rise, rising energy bills and an increase in the cost of raw materials, but should fall below the 2% target in a couple of years.

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The job curiosity shop

August is traditionally a time when the Job Market goes into limbo. People are away on holiday, trade generally winds down, France stops completely and people are generally more relaxed than usual. Thing is, though, that this August is doing some strange things.

For a start, Public Sector work seems to have vanished entirely. This is not exactly unexpected, of course, given the Coalition’s policies in this area, but it’s been so abrupt you have to ask yourself if the powers that be have really thought it through. For example I was up for one process rationalisation role recently that, with a following wind, would have probably resulted in a cost saving considerably larger than what I would have charged them for doing it. The role got canned, sadly, since they can’t recruit anyone – even non-permanent people like me – on account of HMG’s directives. This means that they will actually now be spending money over the next six months that they don’t need to spend because they are not allowed to spend any money. Not my understanding of economics, but there you go.

However look at the wonderful world of Finance and the stream of new roles is never ending. This doesn’t help me find work, of course, because these roles will naturally only ever go to people who already work in the Finance industries, even roles in my arena, Service Management, which is largely unconcerned with the nature of the industry. In effect they are operating the same apartheid as all those Government hirers with their slavish adherence to the wrong set of rules for Security Clearance.

Then you see roles that are mostly managerial in nature, running portfolios of projects for instance, that still demand a list of technical skills. OK, you need to understand what your techies are doing, and you also need to be able to explain it to the wider business. So while I can’t configure a high availability Storage Area Network, I do know what one is and how it works. Clearly, that’s not enough; I have to be able to build it from the ground up. I thought that what was we paid the techies to do though…

And of course the agents don’t help. I didn’t get a call about a role last week because “the rate is too low to interest you”. Sorry? For one thing the job is literally 20 minutes from home; that’s worth quite a few pounds a day all by itself. Plus the rate on offer wasn’t all that awful and it was rather more than I’m earning right now.

Or there’s the other agent that actually put me forward for a fairly senior and challenging piece of work (actually one would I would really relish doing) then goes on holiday for two weeks. OK, people can have holidays, but is it too much to ask that someone else in the office at least knows the role exists? So much for managing the client’s expectations then. Or mine, come to that.

So as I say it’s all the usual frustrations and the usual clumsiness of the middle men. This is why I say you can’t really call it a Job Market any more. It’s really is more of a Curiosity Shop.

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Preparing for the Agency Workers Directive

The plight of UK contractors, freelancers and temporary workers has once again come under the spotlight this week following the launch of the REC’s Agency Workers Directive (AWD) Toolkit.

Since the EU-inspired regulations were signed off in January this year there has been much speculation within the industry about the scope of the AWD. As things stand, umbrella company workers are thought to be captured by the regulations whereas those who are genuinely “in business on their own account” are not.

This would appear to suggest that contractors working outside of IR35 and through their own limited company will not be subject to the much critised ’12 week rule’. Many industry insiders however are yet to be fully convinced that this is indeed the case.

The REC is under no illusions about the potential impact of the AWD. According to the organisation, their new toolkit will assist recruiters to overcome the administrative, legal and practical challenges in a post AWR world.

A spokesperson from the REC said that the industry has reached an important milestone and the now was the time to sit up and pay attention to what is one of the most significant events ever to hit the industry. More information about AWR toolkit can be found by visiting the REC’s website.

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