Less than a year since the Institute of Recruiters (IOR) launched, it has gained the backing of the Government in taking on the role of standards champion for the UK recruitment industry. It now has two key goals - making British recruitment the gold standard globally and becoming the biggest UK recruitment body by the end of 2013.

The IOR has been granted official UK Institute status by the Secretary of State for Business Innovation and Skills, Dr Vince Cable. The first new institute to be created in 2012, the IOR has gained recognition as a professional recruitment membership body of the highest standing. It is also the only official British institute to offer membership to both recruitment companies and individual recruiters.

Azmat Mohammed, Director General of the IOR, comments: “Government is at the very heart of the recruitment industry. We are dependent on it to steer us in an increasingly fast-moving legislative landscape and in the governance needed to achieve the gold standard in British professional services. Equally, in the spirit of the Big Society, we need to be in a position to partner with Government in the adoption of standards, codes of conduct and compliance that will ensure Britain leads the way globally for recruitment best practice, training and talent.

“As a named British Institute, we now have the confidence of the UK Government to be the recruitment organisation that can step into the breach and drive this agenda. At the same time we will provide all the necessary education and innovation to our members, equipping them with the additional knowledge and skills to ensure a proud British recruitment industry, highly regarded internationally.”

The IOR has cemented close links with the Employment Agency Standards Inspectorate (EAS), adopting its standards as its own conduct regulations. Equally, its professional qualifications are directly linked to the British National Occupational Standards in Recruitment and British universities, ensuring that, in terms of both compliance and training, the IOR is adopting British best practice.

Former Minister for Employment Relations, Consumer and Postal Affairs, Ed Davey, has already welcomed the IOR’s contribution in raising awareness of the requirements of the employment agency legislation.

“It makes sense to partner with those organisations that have identified what is required in terms of the regulations, qualifications and conduct to be best in class,” adds Azmat. “One of our roles is to help members conform to Government-set standards and, as such, work to best practice. Our focus is on providing the necessary professional services to offer members the opportunity to become world-class and, in doing so; grow their careers and their businesses.”

With the aid of these paradigm-shifting developments, the IOR hopes to increase its membership substantially in the next year. With more than 2,000 members and growing fast, it could become the biggest UK recruitment body by the end of 2013.

Commenting on the news of the UK Institute status, Lindsey Bell of IOR legal partner, Clarke Willmott LLP, says, “Having worked with the recruitment sector and its legal issues for many years I believe the IOR will be a valuable asset to the industry. I’m looking forward to working with its members and assisting with their training and legal compliance.”

Membership of the IOR is available on several levels, based on assessed and qualified standards.

Individual membership starts at a free affiliate level, rising to £49 as a fellow and £249 for corporate membership. There is no joining fee.

More information can be found at http://www.theior.org.uk

ENDS

Image:

Kevin Bowers Lockton Company (Recruitment Insurance)

Dave Barber – Director of Sales, IOR

Pamela Butler, Director, Kingston Smith LLP (Accountants)

Azmat Mohammed –Director General, IOR

Matt Newman, Kingston Smith LLP(Accountants)

David Montague – Head of Regional Directors, IOR

Lee Biggins – MD @ CV Library

Lindsey Bell – Partner @ Clarke Willmott

Taken on Westminster Bridge, London with the IOR certificate of Institute Status.

Note

The Institute of Recruiters (IOR) is the professional body for HR, agency and in-house recruiters, founded to represent the interests of those in the sector in the UK and overseas. Run by experienced recruitment professionals, the international not-for-profit body is serious about personal development for those in the sector and provides world-class, transferable university qualifications as well as more than 100 CPD events each year.

The ego state in which we communicate in, can have a direct result on the behaviour we get back from our consultants. For example if we communicate in a Parenting way, then we are encouraging a response from the Consultant’s child. If I say to a Consultant ‘have you called that manager yet’ in a tone of voice that is almost saying ‘I know you haven’t’ then we could unconsciously be asking ‘have you done your homework yet?’ which may result in a ‘sulky no’ or a ‘yes but they weren’t there’. Either answer could be true or false.

If as a manager I over nurture my consultants, support them, look after them, answer all of their questions (even when they know the answers) then I am setting up a Consultant to be dependent on me which could hold their development back.

The TA model says there are 2 types of Parent states – critical and nurturing which both examples above describe. There are 2 Child ego states – ‘adapative’ (I will do everything you say) and ‘rebellious’, no explanation needed for that one!

That leaves us with the adult state which I believe is where we can get the best out of our consultants on an equal playing field where both parties are communicating in an adult way with each other. The next time you get a response from a Consultant which wasn’t what you were expecting have a look at the way you spoke with them and what ego state of theirs you engaged. Here are some common examples in the recruiting day:

Manager: Why didn’t you say what I told you say on that call? (controlling parent)

Adult Manager – what stopped you from saying what we discussed?

Manager: I will write up the objectives you have agreed and email them back to you (nurturing parent)

Adult Manager: When you get back to your desk please email me what we have just agreed so I can keep a record of it.

Manager: You need to act with more urgency, you are not picking the phone up enough, you must do more calls (controlling parent)

Adult: I notice your call numbers are lower than everyone else’s, what needs to happen for you to step it up?

Interesting isn’t it?

Yes we need to give consultant’s feedback in a direct manner, address poor performance and give them support and encouragement but there is an art to how we do these tasks to ensure the response we get back, is a productive one and will lead to the desired end result – to empower them (not parent them) to make placements.

I was recently reading a book by the great coach and motivational speaker, Les Brown and he shared this story, which I would like to share with you.

A couple on holiday walk past a house where a family are sitting on chairs in their porch. Lying in between them is their dog which is moaning and groaning.  This scenario happens over several days when the couple passed the family. Confused, the couple decided if the same scenario happened the following day that they would ask the family about it.

Sure enough the next day, the same thing happened when they walked past the house.  So they finally ask the family, “What is wrong with the dog?”

The lady replies that there is nothing wrong with the dog; he is lying on a board that has a nail sticking up.  It bothers him enough to moan and groan, but it’s not irritating him enough to get up and move.

Can you identify with this story?  How many situations have you been in where you’ve moaned and groaned about something, but was not irritated enough to get off the nail and do something about it. When will you do something about it? Or do you want to keep shifting around the problem and moan and groan some more, when the nail hits another part of your body?

Every day I get emails and phone calls from recruitment business owners moaning and groaning about the performance of their consultants, or moaning about not having enough business. I explain that it’s not their fault because they have never been taught how to run a business.  Neither have they been taught how to use marketing successfully to grow their business.

I then go onto to explain that there are books, CDs, recruitment organizations and coaches, where they can access information to help them overcome the problems they are moaning and groaning about.

The amazing thing is when we speak to them 3 months later to see how they are getting on, the majority of them respond with, “We have been really busy and haven’t got round to it yet.”

Apparently in a recent study carried out in the USA, it was found that 93% of self help books never get completely read by the purchaser.  But guess what, those recruitment business owners that do read the self help books, listen to CDs, talk to recruitment organizations or coaches and take action, do get results.

It is really easy to moan and groan about your consultants, clients and your candidates. It’s easy to moan and groan about the economic climate. In fact anybody can do that and most people do. It’s the successful ones who get off the nail and take action.

Which one are you?

There can be cost implications hidden within contracts, as contractual obligations can sometimes be passed to the supplier.  This can become a funders’ nightmare, as it’s not always clear who the client is, if these obligations have been passed on.  My answer to this has always been, ‘if you took a case to court, who would you sue?’  Once you have identified this, then this is the individual or company you should be invoicing.

To help explain this further, here are four key issues that could become potential problems if they’re not identified before signing on the dotted line. If you ignore them they could bite back in a way injurious to the health of your business…

Pay when paid

Let me set the scene.  A recruitment company works with a recruitment process outsourcing (RPO) company, or master vendor, to manage the recruiting process and source new staff for clients.  When it comes to payment, a ‘pay when paid’ clause inserted into the contract between the recruiter and RPO means that recruiters in the supply chain will not be paid until the RPO itself has been paid.  This creates financial problems for recruiters, and means they have to pay their employees before their own clients have paid them, leaving them out of pocket until they are paid themselves.

There are numerous problems here; however the most immediate concern will be cash flow.  Cash flow has always been a major concern for the recruitment industry; because recruiters are effectively at the end of the payment chain they have no guarantee that they will see that money, unless the RPO has already been paid.  It’s an area that some recruitment agencies might not even be aware of when they engage in such relationships, which will certainly cause problems further down the line if they haven’t budgeted to ensure they have enough money to pay their staff whilst they’re waiting for payment from a master vendor or RPO provider.  Something needs to be done to address this frequent limitation on cash flow situation.

As possibly the first to voice this issue within the sector, I have long called for recruitment industry bodies, like the Association of Recruitment Consultancies (ARC), to join forces and persuade the Government to clamp down on this problem and change the legislation that’s currently in place to allow this clause to continue appearing in contracts.  The ARC did launch a campaign in August 2011 to rule out the unfairness that currently exists within the recruitment sector, which is a step in the right direction, but I want to see more being done to target this clause.

Third party rights

Similarly to pay when paid, this contractual issue can also be passed onto suppliers.  The Contracts (Rights of Third Parties) Act 1999 states that ‘a person who is not a party to a contract (a ‘third party’) may in his own right enforce a term of the contract if a.) the contract expressly provides that he may, or b.) subject to subsection (2), the term purports to confer a benefit to him’.  Therefore third parties can enforce terms of contracts that benefit them in some ways, including the right to sue if the terms are breached, depending on the circumstances; it also means they may be able to claim compensation for any loss they suffer as a result of the breach.

The moral of this is when you enter into a legal contract, you must consider whether it claims to grant any benefits on any third parties and if they may be able to enforce the terms; you must state that they cannot.

Ban on debt assignment

This clause specifically bans the assignment of the benefits or proceeds of the sale or contract to a third party, which means that the company refuses to accept the assignment of the invoice.  There are two types of ban on assignment, neither of which recognise the funder: debt assignment and contractual assignment.  Without a ban, debt assignment agreements enable businesses to sign over any debts to another party, so they can continue to receive money from funders.  Therefore, if a contract contains a ban on the debt assignment clause, the invoice funder will almost certainly want to stop funding the work, especially since they won’t have any security in regards to the invoice debt!  This clearly isn’t good news for the business, because it simply won’t see any more cash flow coming its way unless it signs over its debts to another party.

Self-billing

In a nutshell, self-billing is where a customer makes out VAT invoices on behalf of their VAT registered supplier and sends a copy of the invoice to the supplier with the payment.  Whilst there are some benefits to both the supplier and business – including customer responsibility, and saving time and money, respectively – there are some disadvantages, which can lead to penalty payments if it’s done incorrectly.

Self-billing is undertaken following an agreement between the business and supplier; otherwise the self-billed invoices won’t be valid VAT invoices and you won’t be able to reclaim the input tax shown on them.  It’s important for the business to fully understand how they must properly complete each invoice and for the supplier to ensure that the invoices are in the correct format (suitable to HMRC standards) and that their accounting systems accept the invoices – otherwise, they won’t get paid!

Factoring has often become the generic word for raising cash flow from invoice debt funding, and that can cause confusion because in recruitment in particular there are many more ways of obtaining cash flow from invoice debt, than simply factoring.  It’s important to note that self-billed invoices often don’t facilitate factors’ debt assignment notices.  Therefore if the RPO’s invoicing systems can’t address this, then your factor could restrict your funding, leaving you with a cash-flow hole.

In short, I wouldn’t recommend entering any one of these contracts unless you’re aware of all the pitfalls that accompany the benefits. I’d be delighted to offer advice to any new starts or SMEs unsure of their position in this regard, and advise you to call on 01594 546585 or check out my company website www.simplicityinbusiness.com for a range of products that are available to help you increase profit and margins for your recruitment business.

Personally, I don’t see how agencies are under threat by direct employment rising and I will explain why. Currently in larger organisations they already have internal recruiters and recruitment functions within HR, but we see a great business model in RPO. We also see how many agencies are often on multiple tiers of a company’s PSL. Can you imagine how many internal recruiters they would have to employ to access that kind of reach to candidates?

Also, recruitment and the techniques involved have never been a mystery to employers, it is not as though it’s a function they could not manage internally, it’s through an understanding of how outsourcing can leverage a greater labour market reach (and speed) that they use agencies, and always will. With SME’s, they often do not have the internal recruitment resources, so that will always be a healthy market for recruiters.

New technology is not the main driver causing an increase in direct hiring either, it’s the economic climate that is doing that. Once things pick up again you will see that reflected in the agency business model, although it is fair to say there will be agency casualties. Having said that, when the business climate is very tough, CEO’s have to make sure they have a plan for recovery, and to compete in that climate they need one important ingredient, great people, and that leads them back to the recruitment agencies. In some industries (such as certain financial ones) they rely directly on agencies to find the right people, trying to hire directly will just not do.

I agree that employers will expect more ‘consultancy’ from recruiters, and expect more market intelligence, meaning those will fewer skills and expertise will suffer, but that is just market evolution.

If you want an example of what can really damage recruiters you need look no further than legislation such as AWR. On that note, if there are any IOR member recruiters who have clients that are concerned about using their temps because of AWR, do let us know and we can happily provide your client with all the free legal support and advice they need to work with you knowing their full requirements under AWR.

I believe a consultant’s results are driven by certain factors: Mindset, Knowledge and Experience of the process and Activity levels which lead to Results. A consultant’s thought process and ability to manage their emotions (emotional intelligence) will drive their Mindset and the decisions they make will drive their activity levels which leads to results.

We make decisions all day long, some we are consciously aware of e.g I will decide to plan my day and stick to it, to others which are made unconsciously e.g to go on linkedin (conscious decision) and to get lost in it for 30 minutes (unconscious). The other day in a Rookie training programme we broke down a day in the life of a recruiter and how many decisions were made in that time. We came up with 42 decisions and I am sure if you worked next to one of your Consultants for a whole day and really looked at every decision they made consciously and unconsciously there will be thousands more.

Here are some of the decisions we came up with:

1. What sort of day I will have (made before I get into work)
2. Whether to plan my day or not (or just a rough To-Do list)
3. Whether to stick to my plan (or adjust)
4. What activities to prioritise
5. Whether to go home having not completed everything I needed to do
6. Which jobs to work on, for how long and at what point in the day
7. Which jobs to stop working and when
8. Which clients to call and when
9. Which candidates to work on and for how long
10. Whether I will get distracted and for how long
11. To change my plan for the afternoon based on my progress in the morning
12. Whether to plan my calls or just call through a list
13. How long to spend on calls (getting results not just getting my call times up)
14. How long to feel down for when something has gone wrong (if you can’t change it, move on)
15. To do business development calls even when I have lots of jobs to work

It is so easy to be busy in this job and it is easy to be a busy fool. I get asked all the time to deliver time management training and yes there are some hints, tips and tricks you can adopt however the most critical skill when it comes to time management is to look at the decisions being made around time. You can’t manage time, we have the same hours in every day but you can manage yourself.

Working Smart is managing yourself, making the right decisions, making conscious decisions and choosing where to spend your time and energy. So the next time you want to diagnosis why you haven’t had a successful day or month, look back to the decisions you made and I bet there lies the answers.

As accepting liability for your contractors becomes the norm, your business can either ignore the potential insurance pitfalls, make conforming an administrative burden, or turn it in to an easily managed revenue stream. If opting for number one or two, good luck! If number three appeals, why not find out more…

The current legal landscape for Technology Companies is immature and constantly evolving. The products are cutting edge with capabilities not envisaged when most insurance policy wordings were written. Operations span international borders and products are distributed around the globe. You are special and therefore require specialist insurance!

With this in mind, is your current insurance programme clear on the following ‘must have’ sections?

• Clear, unambiguous cover for breach of a client contract
• Full civil liability coverage, not just negligence
• Specific cover for breach of intellectual property rights
• Cover for suits brought anywhere in the world
• Payment of fees withheld by an aggrieved client if this mitigates a potentially larger claim
• Reimbursement of costs incurred to help reduce or avoid a claim
• Punitive and exemplary damages cover where allowed by law
• No exclusions for civil fines and penalties, project delays, third party defects or bugs post acceptance
• No pre-defined definition of technology activities that restricts cover
• Virus and hacking liability cover

If the answer is ‘NO!’ then you’re bottom line’s exposed and you’ve failed the “health check” – there will be more on the subject of health checks & wellbeing in my next blog.

I am at my most animated when watching a great game of rugby or watching Ed Balls being interviewed. The first fills me with good feelings about skill, sportsmanship and what can be achieved by a truly motivated team. The second, a display of political points-scoring at a time when we need unity, drives me mad.

Professional team games are not just about winning, they’re also about working collectively to make sure the sport is attractive and run properly otherwise the fans will start to drift away.

Most sports have reached this understanding and they try to promote a positive image, interact with their communities, manage individual player behaviour and encourage spectator participate.

Elsewhere we see Journalism, Politics and Banking all acquire terrible reputations as a result of selfish self-interest similar to that shown by Mr Balls. They don’t manage themselves very well and the consequences are there to see. People stop buying Newspapers, start hating Politicians and despise Bankers.

There is a message here for the recruitment sector where for years individual firms have had little regard for how their actions impact on the reputation of the sector. Consequently as the goodwill of employers and candidates drifts away, it becomes increasingly difficult to trade through the head-wind of negativity.

Up until now the recruitment sector has not managed its PR well. This is largely because firms are fiercely independent, don’t collaborate and there is little or no central leadership. It’s also fair to say that when business has been so good the eye has been distracted from the issue of reputation.

Well the tide’s turned and we can now see how damaging that loss of goodwill is becoming. To my mind the solution has got to be to all pull together and collectively re-brand the recruitment sector. Play your part, however small-it’s in everyone’s interest.

Here are some ideas that I’m sure you could add to:

1. Trade Associations.
Join and actively support one of the main recruitment bodies: IOR, REC, ATSCO etc. Support initiatives even if it’s just adding your email address to a group, take part in the 5 minute polls or attending a breakfast meeting in your area. By doing so you’ll strengthen the ability of that body to: provide tangible benefits, improve professional standards and influence change.

2. Local Networks.
Set up a Networking group in your local sector. Put together a website designed to link you and your members with the Client and Candidate markets locally or sectorally. Make it easier for Employers and Candidates to connect/interact at a group level. Give the group local buying power with Job Boards, Software vendors etc. Collaborate on projects with other group members you meet and empathise with.

3. Good PR.
Undertake initiatives that do not have a direct impact on revenues but do raise awareness and improve perceptions. These could be joint-initiatives with Clients or other Employers and other recruitment firms like: Job Centre workshops, school Careers office drop-ins, Charity events etc.
See: http://ukrecruiter.typepad.com/uk_recruiter_blog/2011/11/uk-recruitment-squash-tournament.html

All of this will take up relatively little of your time but the size of your UK team is some 50,000 consultants. Collectively you could make a big difference. It’s a simple choice now: do you want to go down with the Bankers and Journalists or do you want to pull together as a team and turn things around?

In 2005 Liverpool played AC Milan in the Champions League final. At half-time they were losing by 3 – 0 and all but written off. Famously they went on to draw the game at full time and win on penalties. For me it showed everything that’s good about team spirit. We could definitely do with this attitude now in the recruitment sector and as George Osborne attempts to plot a path through the economic rapids, perhaps someone, other than Ed Balls, could step up and galvanise TEAM UK.

David Palmer
Founder of Vacancy-Clearing
www.vacancy-clearing.com

Tune in your TV or radio and you will be presented with a tale of economic and employment doom and gloom, and while different sectors suffer the slings and arrows of government cuts, reduced spending, and limited credit, there is still hope for innovative and determined businesses. That need to focus on the positives in life is especially true for anyone working in the highly competitive world of recruitment.

With AWR (Agency Workers Regulations) now embedded across the recruitment sector, and statistics highlighting agency insolvency and rising unemployment, you would be forgiven for thinking that recruitment is probably not a healthy place in which to operate a profitable business. While there are some recruiters that are going through very hard times, there are also those prospering in what seems like desperate times for many folk. That old maxim holds true, what’s bad news for some is good news for others.

Where does this optimism spring from? The rebuilding and re-birth of the British economy will come from entrepreneurs and SMEs, and recruitment will be the sector that will fuel the economic machine.  Small businesses can develop new revenue streams for the UK’s GDP and recruitment agencies can help tackle the blight of unemployment In Britain. Simple!

The larger companies either spectacularly fail with new legislation or effortlessly integrate it into their corporate mechanisms, but it is the start-up and smaller to mediums size businesses that will face the brunt of challenges from the new complex limitations and regulations. You either tame the beast or get eaten by it. As a professional dragon slayer, I’m keen to solve the puzzles that HMRC and other agents of Government throw at us.

Worries about AWR and financial constraints should not limit the ambitions and growth plans of SMEs. During times of trouble and uncertainty, innovation and searching for clever and new solutions can be the key to surviving and even prospering during the challenging times. 

Problems certainly exist for recruiters that do not fully understand the AWR, or lack the knowledge of its application. Low credit ratings and a general climate of economic uncertainty backed by statistics of insolvency can put off potential funders and banks, hamstringing new and developing businesses with no credit to fund prospective growth.

In my view AWR is just red tape waiting to be cut. Smaller businesses can outsource their back-office duties and payroll to companies that are experts in these fields. Outsourcing can provide trained professionals, who can handle the complexities and trials of AWR, leaving the front-of-house free to carry out lead chasing and recruitment drives to their maximum capacity.

Loopholes and workarounds such as the Swedish Derogation Model can help recruitment agencies further avoid the hassle of AWR. But, this clever let-out negotiated by the Swedish team at the EU ‘pow wow’ which cooked up this concoction means that rights to equal pay for agency workers no longer exist when agency workers are employed on a permanent basis by their umbrella company or temporary work agency and receive pay in-between assignments. There are strings attached: the agency worker needs to be genuinely employed by the umbrella company or agency with a permanent contract of employment in place. The contract should also have been entered into before the beginning of the worker’s first assignment. But, it is only a matter of time before this loophole is closed off. The side affect not considered by the Unions in their rush to protect workers’ rights is that this device enables employers to pay the absolute minimum.

Companies considering outsourcing can take such options into account to ensure that a businesses’ back-office is as efficient and cost-effective as possible leaving the front-end clear and free to pursue growth and future success.  Any mistakes with AWR can also lead to costly tribunals and fines which smaller recruiters cannot absorb, but professionally trained outsourcers can ensure that such errors and problems are avoided. 

Fears that AWR can cripple an agency’s payroll if their client suddenly goes under, poses a concern for companies that may not have the financial reserves to handle the pay for a cohort of expectant temps.  With the state of the UK economy limiting the confidence of financing and credit loaning, some recruiters could find themselves facing bankruptcy due to their client’s insolvency leaving them with wages to pay and no fee to collect, and destroying their bottom-line.

But, once again, there are solutions at hand. Simplicity itself offers credit insurance that can protect agencies from such trials, and the company’s new ‘Double It!’ scheme, can provide businesses with the finance needed for growth that rallies in the face of economic downturn. This allows agencies to more than double their credit limit, and in turn increase the recruiter’s overall sales and margins, in addition to providing increased opportunity to win new business. This innovative solution works with existing funders and includes full back office payroll, invoicing and credit control with debt protection included.

An efficient and effective company will flourish in good times, and continue to excel in a challenging climate. And while uncertainty plagues all business sectors with a terrible tenacity, the innovations and solutions at hand can turn trial in to triviality and help businesses grow into industry leaders and bring a beleaguered British economy back into fighting shape.

So, don’t run for the hills, consider your options and take expert advice. Cut the red tape and liberate yourself to think bigger!