Category: Recruitment Agencies

Industry calls on HMRC to better enforce existing legislation to weed out non-compliant firms.

Frances O’Gradygeneral secretary of the Trades Union Congress (TUC), has called for a ban on the use of umbrella companies, saying: “Employers shouldn’t be able to wash their hands of any responsibility by farming out their duties to a long line of intermediaries … It’s time for ministers to ban umbrella companies, without delay.”

The TUC, which represents 5.5 million workers, estimates that half of all agency workers are employed through umbrella companies based on research it commissioned from the Low Incomes Tax Reform Group. It predicts a rise in the use of umbrellas to source agency workers fill post-pandemic talent shortages.

Clarke Bowles, Director of Strategic Sales at Parasol Group, commented: “After what I thought was a well written and balanced report from The Low Incomes Tax Reform Group (LITRG), it’s disappointing to see TUC still hold a view which in my opinion does nobody any good. Compliant and ethical providers, those who supported throughout furlough, those who ensure holiday pay is always paid are tarnished with the same brush as tax avoidance promoters and even fraudulent models.

“There is a place in the supply chain for compliant and ethical providers and many contractors choose to use an umbrella company for the benefits they receive, but I believe it is about contractor choice, regulation and enforcement.”

This view was echoed by Crawford Temple, CEO of Professional Passport, who said: “It is surprising to hear this call from Frances O’Grady as the Loan Charge APPG report commissioned by the TUC did not call for a ban. Whilst there is a lot of regulation already in place to address malpractice in the industry, a blanket ban is not the way forward and the call by the TUC serves to demonstrates a lack of understanding on how compliant umbrellas work to support workers.

“The Government needs to address the underlying issues and challenges that our industry faces as a matter of urgency, namely non-compliance, transparency and enforcement. Non-compliance is fuelled by the complexity of legislation currently in place. The lack of visible enforcement, the lengthy delays in taking any action, and targeting the workers for recovery all serve the interests of those seeking to circumvent, or disregard, the rules. HMRC holds all the data it needs to stamp out bad practice and it is simply not taking the proactive approach. This is where the real problem lies.”

Dave Chaplin, CEO of contracting authority ContractorCalculator adds: “Not surprisingly, the fraudsters aren’t scared by unenforced regulation – which is why some are happy to call for more of it – knowing that they can just carry on with limited (or no) oversight. Payroll transparency and monthly independent party auditing is where the market needs to head, and some are already leading the way on that.”

Phil Pluck, CEO of the FCSA, described the TUC’s call for a ban as ‘a knee jerk reaction to a sector that has come about through necessity’ adding that it is misguided in suggesting recruitment agencies be the provider of contingent labour.

“A contractor may move from contract to contract on almost a weekly basis with day rates for their work varying on each contract,” he explained. “Recruitment firms realised long ago that to have for example one thousand contractors on their books moving through thousands of variable rate contracts whilst actually being their employer was logistically impossible. The same contractors will then typically move from one umbrella to another around three times per annum.

“To employ a contingent worker through large numbers of contracts whilst also employing them whilst they are not actually working on a contract requires detailed knowledge in taxation, accountancy and employment law as well as a detailed understanding of highly complex software management systems. Recruitment companies are simply not equipped to properly manage and employ such a varying workforce. Hence the existence of umbrella firms. To simply suggest that umbrella firms be banned is not workable and ultimately will disadvantage the freelance worker.”

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Demand for recruiters is rising exponentially across the UK and Europe, according to new data from LinkedIn, which had 6.8 times more recruiter roles on its platform in June 2021 than the same time last year.

The research from LinkedIn highlights several talent acquisition trends in the recruitment sector that are making it more difficult for staffing and talent solutions firms to find the quality and quantity of consultants they need. It found, for example, that fewer are hiring from outside the industry than in previous years so ‘they’re increasingly competing for the same narrow set of candidates’.

It found that the number hired from previous recruiting roles has almost doubled from 33% in 2020 to 59% in 2021, attributing this in part to redundancies last year and a preference in hiring those who need less training. “The current hiring pace makes it more challenging to hire outside of recruiting because it takes time to bring newbies up-to-speed with recruiting-specific hard skills,” said Erin Scruggs, LinkedIn’s senior director of talent acquisition.

Of those that are sourced from outside recruitment, the top roles were HR (35%) and sales (12%), including account managers, project managers, and customer service representatives.

Looking at incentives and key motivators for recruitment talent, the research found that work-life balance, compensation, and company culture were still most important, but job security increased to 21% as a priority followed by purposeful mission (up 19%), having influence over tasks and priorities (up 11%) and challenging work (up 9%).

“It’s positive to see that demand for recruiter roles is growing, a trend that we’re seeing around the world, and that demand has now surpassed pre-pandemic levels in the UK,” said Adam Hawkins, Head of Search and Staffing EMEA at LinkedIn. “After a particularly tough year, it’s perhaps unsurprising that job security is high on the priority list when recruiters consider new roles.”

With specialist consultants in such high demand, many of those made redundant or furloughed in 2020 have been tempted to start their own business. So are we likely to see a surge in staffing firms like the 46% spike in 2018 after nearly 8,500 new recruitment start-ups were registered at Companies House?

“A raft of talent tech solutions can help start-ups punch above their weight and it’s interesting to note from LinkedIn’s research that more want greater influence over their work, and perhaps more autonomy after a year and a half of working remotely,” said Alex Evans, Programme Director of TALiNT Partners and head of the PointSix network. “However, job security has increased as a priority for recruitment talent and work / life balance is hard to achieve as a startup founder. The best staffing and talent solutions firms to work for recognised by our TIARA programme this year have all invested in training, technology, brand and management to attract and retain recruiters – and prevent key people from becoming competitors.”

Photo courtesy of Canva.com

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Talent shortages and new tech-enabled services have helped the world’s biggest recruiters to achieve significant revenue growth over the last six months.

Global recruitment firm Randstad reported revenue growth of 38.2% over the second quarter with Group revenue 3% up on Q2 2019. Permanent placements were up 91% year-on-year and up 1% on 2019. The firm showed continued market share gains in the USA and France with volume trends in early July indicating continued positive momentum.

“We welcomed more than 2,400 new colleagues to our global workforce,” said CEO Jacques van den Broek. “We are also continuing to roll out our global technology transformation, with Monster showing positive YoY momentum, and are excited to provide a better experience to both talent and employers using the combination of Randstad and Monster capabilities in the future.

“By providing in-depth data, technology and integrated services, we are playing an essential role for our clients by helping them to achieve a total talent management strategy.”

Announcing its Q2 financial results, Adecco Group posted a 20% increase in revenue. It was strongest in higher-value activities with permanent placements up by 88% with training, upskilling and reskilling up 78%. The Group’s gross profit increased by 39% organically, with substantial growth recorded in all Global Business Units.

Alain Dehaze, Adecco Group CEO, commented: “We have seen pockets of talent scarcity and wage inflation in our end-markets, particularly in technology solutions, and the pace of recovery in Permanent Placement is unprecedented. We are cautiously optimistic that all our service lines, including Flexible Placement, have scope to recover further in the quarters ahead. We are confident that with the implementation of our Future@Work strategy, including the digital transformation of our business, we will be optimally positioned to take market share”.

Robert Walters PLC reported a record first half performance, with an operating profit increase of 478% year-on-year to £24.1m. Recruitment activity levels across all professional disciplines accelerated through the first half of the year, with wage inflation returning as demand for talent outstrips supply. Growth is seen to be strongest across permanent and interim recruitment as candidate and client confidence levels improved while permanent recruitment now represents 67% (compared to 62% in 2020) of the Group’s net fee income.

International businesses now generate 79% of the Group’s net fee income with its largest region, Asia Pacific, now accounting for 45% (2020: 40 percent) of NFI

Robert Walters, Chief Executive, said: “It’s been a record first half performance with the Group delivering a four-fold increase in pre-tax profits year-on-year. Recruitment activity levels accelerated markedly as the first half of the year progressed, with the demand for talent outstripping supply across many markets and disciplines. A war for talent and significant wage inflation is beginning to emerge. I am delighted that we continue to be recognised as a leader in the ESG space; achieving carbon negative status and being shortlisted as a finalist in the ESG Reporting Awards.”

UK staffing firm Impellam Group plc reported revenues of £1.09bn for the six months ending 2 July 2021, an increase of 8.2% on 2020, as trading recovered in the US, UK and Europe regions. US and UK operations saw the strongest gross profit growth over the half year, up 13.3% and 9.9% respectively, while APAC is still impacted by COVID-19 and declined by 10.6%.

The Group reported a temporary recruitment gross profit increase of 6.8% and permanent recruitment up 33.7% – with perm now making up 10.6% of gross profit.

“Our H1 performance has surpassed expectations,” said Julia Robertson, CEO of Impellam. “With a simplified regional business structure and reduced management layers we have reacted quickly to changing end-market conditions and have made significant investments in digitalisation and new virtuoso fee earners whilst retaining the substantial cost base savings from the transformation of our business in 2020.”

Photo courtesy of Canva.com

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Japanese engineering recruitment firm, Meitec, announced its results for the first quarter. According to Hideyo Kokubun, President of Meitec, during the first quarter of the current fiscal year (the three months from April 1, 2021 to June 30, 2021), the economic climate remained challenging due to intermittent restrictions on economic activities caused by the re-issuance of a state of emergency due to the re-emergence of COVID-19 in some areas of the country. Although Meitec’s manufacturing clients showed signs of recovery as well as its order environment showing signs of recovery, the future remains uncertain.

As a result, consolidated net sales for the period under review increased ¥1,431m, or 6 percent, from a year earlier to ¥25,196m. Consolidated cost of sales increased ¥1,368m, or 7.8 percent, from a year earlier to ¥18,835m, due mainly to an increase in labour expenses associated with a growth in the number of engineers. Consolidated selling, general and administrative expenses increased ¥288m, or 8.2 percent, from a year earlier to ¥3,807m, due mainly to an increase in hiring-related expenses. As a result, consolidated operating profit decreased by ¥225m, or 8.1 percent, from a year earlier to ¥2,552m.

If you have any interesting news to share, please email the Editor at Debbie.walton@talintpartners.com

 

 

 

 

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With the arrival of the pandemic, the need arose for fast digital transformations and an agile working approach to the ‘stay at home’ orders issued at the beginning of the first lockdown in March of 2020. The increased need for technology solutions for businesses to continue operating during the most uncertain economic climate seen in a lifetime, could be directly related to the increase in vacancies for IT professionals that have continued to accelerate in 2021. Hiring levels in June represent the fourth record breaking month of the year and according to research conducted by the Association of Professional Staffing Companies (APSCo), hiring levels in the first half of 2021 currently make up 91 percent of the total of tech hires for the whole of 2020.

Hybrid working drives demand for IT professionals as the economy comes back to life

Gone are the days of full time, office-based working. Many businesses are now implementing hybrid working policies that allow for employees to split their work hours between home and the office. According to business intelligence specialists Vacancysoft, this new way of work has seen firms in England and Wales post 11,553 vacancies in June alone, marking the first time this year that hiring levels have breached 10,000. This sudden burst of advertised positions can be attributed to the removal of the work-from-home rule on 19 July, Freedom Day in the UK, and companies were pressed to have their hybrid working models in place and operational.

Data from Vacancysoft also revealed that the technology arena was responsible for the most professional IT vacancies which made up 43.2 percent of total vacancies in June of this year.  Banking followed in second place, with 12.4 percent.

Amazon retains spot as top hirer   

Across the companies hiring for IT talent in the first half of 2021, Amazon topped the table with 854 vacancies. The data also reveals that there was notable hiring activity at Sky, which published 771 senior IT roles in the first six months of the year, and JPMorgan Chase & Co who recruited for 742 tech experts over the same period.

Ann Swain, CEO of APSCo comments: “The fact that IT vacancies continue to perform so well is incredibly encouraging and reflective of not only the huge reliance on remote working, but also employers’ reliance on these experts to facilitate and implement hybrid working models as Freedom Day approached in June.  As the country continues to open up and recover from the pandemic we don’t expect any let up in demand for IT talent as hybrid working practices look set to be a firm part of our future.”

Photo courtesy of Canva.com

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UK staffing firm Impellam Group plc reported revenue today for the six months ending 2 July 2021 of £1.09b, an increase of 8.2 percent on a like-for-like basis when compared to the previous year.

Revenue reportedly grew in the first half of the year as trading recovered in the US, UK and Europe regions after the impact of the pandemic from Q2 2020. US and UK operations saw the strongest gross profit growth over the half year, up 13.3 percent and 9.9 percent respectively, while APAC is still impacted by COVID-19 and declined by 10.6 percent.

The Group reported a temporary recruitment gross profit increase of 6.8 percent and permanent recruitment up 33.7 percent; with permanent recruitment now making up 10.6 percent of gross profit.

Julia Robertson, Chief Executive Officer of Impellam, said, “Our H1 performance has surpassed expectations. We started 2021 with a degree of optimism following the decisive moves we made in 2020 to re-shape our business for the long term by transforming and de-layering our business to free up our virtuosos to do what they do best, finding good work for people and people for good work.”

“However, almost immediately, the UK was placed back into lockdown and schools were closed meaning that we reverted to the well-trodden home working patterns of 2020 with practised speed and agility,” Robertson said. “With a simplified regional business structure and reduced management layers we have reacted quickly to changing end-market conditions and have made significant investments in digitalisation and new virtuoso fee earners whilst retaining the substantial cost base savings from the transformation of our business in 2020.”

 

If you have any interesting news to share, please email the Editor at Debbie.walton@talintpartners.com

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TrueBlue, specialists in workforce solutions and recruitment, this week announced strong revenue growth across all segments. Second quarter revenue was $516m, an increase of 44 percent compared to revenue of $359m in the second quarter of 2020. Net income per diluted share was $0.45 compared to net loss per diluted share of $0.23 in the second quarter of 2020.

“The momentum from earlier in the year carried into the second quarter with strong revenue growth across all segments driven by new business wins and higher existing client volumes,” said Patrick Beharelle, CEO of TrueBlue. “We are capitalising on strong demand in the markets and industries we serve and driving improvement in our segment profit margins.

“I’m enthusiastic that our technology strategies will also make our service delivery costs more scalable resulting in a higher EBITDA1 margin during this economic expansion compared to the last cycle,” Mr. Beharelle continued. “JobStack continues to be a competitive differentiator for our PeopleReady business as heavy client users show stronger growth compared to the rest of our customer base and now represent 46 percent of PeopleReady U.S. on-demand revenue. We are excited about the prospects for the remainder of the year and beyond.”

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Staffline Group PLC, the recruitment and training group, ahead of its Annual General Meeting (AGM), released its trading update for the last six months ending June 2021.

At the AGM, Ian Lawson, Non-executive Chairman of Staffline stated that trading continued to be strong across the first six months of the year to 30 June 2021 and is ahead of expectations with all three of Staffline’s core divisions delivering a solid performance in the first half. The Group’s cost reduction measures implemented in 2020 also benefited the growth experienced.

Revenue for H1 2021 is expected to be £450.7m (H1 2020: £430.3m), up 4.7 percent with gross profit expected to be £39m (H1 2020: £34.2m), up 14 percent, an improvement year-on-year and a positive trend in the gross margin.

The Group reported a net cash position of £20.9m at 30 June 2021.  The equity raise of £44.4m in June of 2021 coupled with debt refinancing have transformed the Company’s balance sheet and repositioned the Group for the medium term.

Lawson said: “Overall, the Board and management team are pleased with both the operational and financial performance for the six months to 30 June 2021. Whilst there remains economic uncertainty as we enter H2 2021 and ongoing headwinds relating to the pandemic, the Group has and will benefit from the loosening of lockdown restrictions across the UK and Ireland.”

If you have any interesting news to share, please contact the Editor on Debbie.walton@talintpartners.com

 

 

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Robert Walters PLC, the international recruitment group, today announces its half-yearly financial results for the six months ended 30 June 2021 and has reported a record first half performance and profit ahead of expectations.

The recruitment group reported an operating profit increase of 478% year-on-year to £24.1m (£25.4m) (2020: £4.2m). Recruitment activity levels across all professional disciplines accelerated through the first half of the year, with wage inflation returning as demand for talent outstrips supply. Growth is seen to be strongest across permanent and interim recruitment as candidate and client confidence levels improved while permanent recruitment now represents 67 percent (2020: 62 percent) of the Group’s net fee income.

79 percent (2020: 77 percent) of the Group’s net fee income is now made up from its international businesses with its largest region, Asia Pacific, now accounting for 45 percent (2020: 40 percent) of its net fee income.

Robert Walters, Chief Executive, said: “It’s been a record first half performance with the Group delivering a four-fold increase in pre-tax profits year-on-year. Recruitment activity levels accelerated markedly as the first half of the year progressed, with the demand for talent outstripping supply across many markets and disciplines. A war for talent and significant wage inflation is beginning to emerge.

“To produce such a strong performance during a period when many of the Group’s markets were still in either full or partial lockdown is a credit to the hard work, dedication and resilience of our people across the globe and their commitment to providing our clients and candidates with the highest quality of service. I am also delighted that we continue to be recognised as a leader in the ESG space; achieving carbon negative status and being shortlisted as a finalist in the ESG Reporting Awards.

“Trading is comfortably ahead of current market expectations for the full year, and we enter the second half of the year with cautious optimism and confidence that we will continue to take advantage of market opportunities as they arise.”

If you have any interesting news to share please email the Editor at Debbie.walton@talintpartners.com

 

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Global recruitment firm Randstad has reported revenue growth over the second quarter at 38.2 percent with Group revenue higher than it was in Q2 in 2019, utilising the full strength of its portfolio and permanent placements +91 percent year-on-year +1 percent vs 2019. Global market leadership and competitive growth supported by diversified portfolio; in-house and professionals above 2019 levels. The firm showed continued market share gains in the USA and France with volume trends in early July indicating continued positive momentum.

“Positive momentum continued across all our geographies into the second quarter of 2021 and we delivered strong Group performance,” says CEO Jacques van den Broek. “Group revenue surpassed 2019 levels and we achieved solid profitability whilst continuing to invest in new growth opportunities. As a result, we welcomed more than 2,400 new colleagues to our global workforce. We are also continuing to roll out our global technology transformation, with Monster showing positive YoY momentum, and are excited to provide a better experience to both talent and employers using the combination of Randstad and Monster capabilities in the future.

As markets begin to recover, pre-pandemic trends such as talent scarcity are also returning. By providing in-depth data, technology and integrated services, we are playing an essential role for our clients by helping them to achieve a total talent management strategy. At the same time, the pandemic continues to touch the lives of many and the wellbeing and health of our employees is our highest priority. This quarter, in particular, I am proud of the active role we played in the pandemic humanitarian response in India. I would also like to thank all our global colleagues for the support they have shown. Based on the strength of our performance in the first half we are optimistic for the remainder of 2021, although we are still exercising caution while pandemic-related instabilities and limited visibility remain. We look forward to sharing an update of our strategy at our Capital Markets Day in November 2021.”

If you have any interesting news to share please email the Editor on Debbie.walton@talintpartners.com

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