Category: Recruitment

Despite new IR35 regulations and guidance in April, and the Department of Work and Pensions and Home Office hit with fines of £87m and £29m, respectively. HM Courts and Tribunal Service has fallen victim of CEST misuse with a total fine of £12m.

Commenting on the latest Check Employment Status for Tax (CEST) casualty, Dave Chaplin, CEO of IR35 Shield said: “HMRC’s CEST tool is failing fast and now we are hearing of yet one more government department, HM Courts and Tribunal Service, hit with a high tax bill to the tune of £12m because it has relied on CEST to assess its contracting workforce. One of CEST’s major flaws has been its over-reliance on substitution, which any defence expert knows is folly. Over the last few years, many industry experts have pointed out CEST’s failings to HMRC but those messages were ignored and now we are witnessing the fallout and financial damage.

“My advice to anyone who has used CEST is to revisit your determinations and if they rely on a valid right to substitute then seek advice on the correct interpretation of the law. Also, recheck the status with the assumption that the substitution clause is not valid, to make sure you have not also been badly exposed due to the flaw.

“Moreover, it is crucial that once you hire a worker on an “outside IR35” basis that you continue to monitor the status throughout the engagement. Regular checking and gathering contemporaneous evidence are crucial in forming a pre-emptive defence.  Poor assessment decisions left alone, without any evidence to back them up, can prove costly as we are seeing with these recent governmental departments.”

The FCSA, the membership body dedicated to raising standards and promoting supply chain compliance for the temporary labour market, responded saying that it had expressed its concern to HMRC about the validity of the CEST tool. “The current fines perhaps demonstrate that the CEST tool needs re-visiting in terms of a valid SDC determination. In the light of the current outcomes, it would be silly for HMRC to simply press ahead without stopping and reviewing the tool.

“In the interim, marketplace experts, including many FCSA members, have developed alternative tools that can assist the sector in creating more accurate determination tests. So far, there is an ironic pattern emerging here in that one government department is taking money from another and so the government balance remains at zero. The real threat comes when other non-government bodies start to fall victim to huge fines because of using a government promoted test. That will not sit well with a sector that is working hard to support the government to ‘Build Back Better’.”

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With job vacancies hitting record levels in July, according to ONS, and Broadbean Technology revealing that application numbers have consistently dropped over the last three months, employers are turning to those candidates who came a close second in the hiring process in a bid to address talent shortages, according to talent outsourcing and advisory services provider AMS.

 

Those who have previously made the hiring shortlist are an appealing esource to employers but eraching out to them and attracting their needs needs to be handled with care.

 

Steve Leach, Regional Managing Director, UK & Ireland, at AMS commented: 

 

“Tapping into this talent pool is certainly a strategic move that we’re pleased to see organisations embrace, after all, these individuals have already engaged with the brand and have some connection to the business. However, how these individuals are engaged does require careful management. Their prior experience in the recruitment process and how their rejection was handled could impact the success of this interaction – and certainly highlights the critical importance of a positive candidate experience for future-proof businesses.

 

“The process of re-engaging with this talent community in order to fill resourcing gaps needs to be both personalised and streamlined. They can’t just be approached as a warm lead or even as a brand-new connection. They need a tailored approach that speaks to their prior experience with the business and convinces them why they should give the firm another chance. Technology can certainly play a key role in streamlining engagement with these individuals and, if implemented correctly, will provide a positive experience for these silver medallists, but the key to successfully enticing this group back to a brand lies in tailored engagement strategy designed solely for their needs and prior interaction.”

 

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The new partnership has solidified the place of video conferencing in the talent recruitment industry.

Global recruiter Hays has partnered with specialist tech provider Odro to deliver video interview and engagement technology to over 1,800 recruitment professionals across the UK and Ireland (UK&I).

The contract is a significant win for Odro, which has over 700 clients worldwide and more than 10,000 platform users. It comes just two months after the company announced an impressive £5.2m cash injection from UK investor, BGF.

Hays’ confidence in Odro is not only an endorsement for the business but the increasing importance of video software in the industry. The technology offers asynchronous and two-way interviewing, digital shortlisting, video sales messaging and content production.

Commenting on the partnership, CEO of Odro, Ryan McCabe said: “We’ve been really encouraged at signs that the industry is bouncing back and it’s great that video has firmly cemented its place as a must-have in the modern-day recruiter’s toolkit.”

Hays Group employs 10,000 staff in 33 countries and in the year to June 2020 placed 66,000 candidates into permanent jobs plus 235,000 people into temporary roles.

Roddy Adair, Director at Hays, said that it is constantly looking for ways to improve and upgrade their tech offering to support their staff in their daily operations. “We were really impressed with the implementation process and the approach by the Odro team from the outset,” he said. “Feedback from the pilot was incredibly positive, with great results and our existing clients have reacted really well to our new way of working, which has significant efficiency benefits for their businesses too.”

Odro has been shortlisted in four categories for the 2021 TIARA Talent Tech Star Awards, including the Optima Talent Tech Leader of the Year.

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HMRC has firmed up off-payroll legislation with new guidance issued in April.

With more employers and recruiters exploring IR35 solutions, HMRC has issued new guidance on Statement of Work to help them and contractors to avoid future liabilities.

“I’m aware of many incidents where Statements of Work are wrongly seen as a magic bullet to disapply off-payroll legislation and there has been a sharp increase in supposed ‘IR35 solutions’ which are simply a change in contractual wording in how someone is engaged,” said Julia Kermode of IWORK, a champion of independent workers and former CEO of the FCSA.

“My advice is simple – be very wary of these models. If a service is genuinely contracted out then a statement of work is perfectly acceptable, however simply amending the contractual wording in isolation does not achieve this and it is likely that you will need to consider the off-payroll working rules. There is no work around or solution to off-payroll, and the sooner everyone realises that the better.”

Clarke Bowles, Director of Strategic Sales at Parasol Group observes that the new guidance from HMRC on SOW has come at an interesting time.

“It would seem to be a reaction to some of the behaviours we’ve seen across the industry since the IR35 reforms in April,” he said. “How you assess IR35 is exactly the same for SOW as it is for any other engagement. Therefore, if something is genuinely outside of IR35 so long as it is accurately and fairly assessed it will be outside for both as it should always reflect the contracts and working practices, so there is an argument that actually getting to the root of the issue and amending contracts and working practices could be a better approach for many and one worth considering.

“Using a Statement of Work for genuinely outsourced services is a sensible way to ensure that expectations and responsibilities of parties are agreed and documented if it reflects the reality of commercial arrangements. However, as a way to circumvent the reforms, it is inappropriate and introduces unnecessary risk.”

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The number of applicants per vacancy (APV) declined significantly across three key sectors in the first half of the year as vacancies have surged, according to data from Broadbean.

Across manufacturing and production, vacancies rose by 32%, while the APV was down 46%. Sectors experiencing the largest fall in applicant numbers were logistics & supply chain and retail, with the former seeing vacancies rise 85% and the AVP decreasing by 60%. The latter saw roles increase by 101% and applicant numbers dropped by 55% between quarter one and quarter two 2021.

Retail has been hit hardest by the so-called ‘pingdemic’, with large employers reporting that entire stores are being forced to shut because of staff needing to isolate.

“The fact that we are seeing applicant numbers fall and companies starting to really struggle to recruit is worrying and could hamper the UK’s ability to build back after the pandemic,” said Alex Fourlis, Managing Director at Broadbean Technology. “And while we expect applicant numbers to pick up once again in September after the usual summer lull, the next few weeks will prove a testing time for the employment market, particular given the huge numbers of people isolating.”

The latest Report on Jobs survey by the REC and KPMG showed that recruitment activity continued to rise sharply across the UK at the start of the third quarter, with permanent and temp billings both rising at near-record rates and starting salaries increasing at the quickest pace on record.

It found that that rising demand for staff as restrictions ended and a further marked drop in candidate supply have accelerated increases in permanent starting salaries, with the rate of salary inflation the sharpest seen in nearly 24 years of data collection. In contrast, temporary/contract staff hourly pay rates rose at the second-quickest rate since the survey began.

Overall, candidate numbers fell at the second-sharpest rate in the survey history, easing only slightly from June’s record, with Brexit cited as a key factor reducing the supply of workers, especially temporary staff.

“While companies want to invest in their business now that restrictions are lifting, demand for new staff still outstrips supply due to low candidate availability,” said Claire Warnes, Partner and Head of Education, Skills and Productivity at KPMG UK. “We know that reskilling and upskilling is needed to help people move between sectors, and there’s no doubt the ‘pingdemic’ has added an extra dimension to the recruitment challenge. Plus, with furlough due to end soon, there may be a downward pressure on pay to come.”

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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.”

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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.”

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Personio, an HR software for SMEs in Europe, is ramping up its efforts to invest and expand its footprint in the UK with an upgrade to a new and larger office in London’s Soho, new senior hires, and plans to further grow the team.

Larger office space in today’s hybrid workforce landscape seems out of place but Personio is expanding its footprint globally with up to 500 new hires also announced in its Dublin offices along with expansions in Madrid and Munich. Personio clearly has increased headcount and company growth at front of mind. Hanno Renner, co-founder and CEO of Personio has said that the business is committed to a hybrid way of work, so the increase in office space globally will be geared for that.

The fast-growing HR tech company has experienced strong demand in the UK as businesses have recognised the need to automate and digitise processes, in order to boost productivity. Personio’s UK revenue in Q1 2021 was more than 10 times greater than the same period last year. It counts leading SMEs such as Mindful Chef, Tractable and Numan among its UK customers, as well as Premier Inn, Statista and SkyTeam internationally.

Renner says, “The UK market is highly underserved in terms of HR software for SMEs. And appetite for this has only increased as a result of the pandemic, with businesses increasingly needing new ways to manage remote and hybrid workforces. With the UK representing one of our most important markets we’re keen to further invest in the UK and support the country’s six million SMEs as they get back on track and play a key role in fuelling the country’s economic recovery.”

As part of its growth, Personio has doubled the size of its London team over the last quarter. With the appointment of Sam Richards, Personio’s new Country Manager for the UK and Ireland, who joins Personio from Eventbrite, Personio has tapped into London’s tech talent pool to further strengthen its management team in the capital. Richards’ role will focus on increasing Personio’s UK and Ireland customer base and making Personio the leading HR solution for SMEs in the region.

New additions to the team also include Loretta Ediam as Head of Product Operations and Nick Peart as Vice President Marketing, who joins from Databricks and Zendesk, where he’s accompanied both companies on their journeys to their IPO. They will all join Ross Seychell, Chief People Officer and Ben Kiziltug, Head of Northern Europe in the new, larger London office recently opened in Soho.

Ross Seychell, Chief People Officer at Personio: “People are the single biggest influencer on the success of any business, and as such, we’re extremely committed to hiring top talent across all of our European offices to drive us forward. London remains one of the best places for tech companies to hire talented people, and Loretta, Nick and Sam all have proven skills and diverse experience and will be invaluable assets to our team here in the UK.”

Looking ahead, Personio is on track to grow its London presence almost fivefold by hiring an additional 40 new employees over the next two years. To make this happen, the company is hiring talent in all areas of the business, with a particular focus on sales and marketing as well as product analysts for its London team.

Offering SMEs recruiting, HR management and payroll support through its all-in-one HR software, Personio, which is headquartered in Munich, also operates from offices in London, Dublin, Madrid, with its new Amsterdam office set to open in autumn 2021.

 Allen Simpson, Acting Chief Executive, London & Partners said: “It is fantastic news Personio are growing their London footprint, demonstrating their commitment to the UK and their success so far in the UK market. We’ve seen the accelerated adoption of HR tech solutions over the last year as the world has adapted to new ways of working and Personio’s rapid growth in the UK is testament to their innovative offering for SMEs. London is a global hub for tech and innovation and Personio’s new Soho office right in the heart of London’s West End is a great place to be, an area home to some of the world’s fastest growing tech companies. We look forward to seeing Personio continue to grow in London and globally.”

In January this year (2021), Personio announced $125 million of new and pre-emptive Series D funding in an investment round that values the business at $1.7 billion, placing Personio among the most valuable private software companies in Europe. This latest funding came only 12 months after the company received $75 million of Series C funding in 2020, bringing its total funding to $250 million since launching in 2015.

 

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COVID-19 restrictions are lifting, and workplaces are reopening, but recent research reveals that three-quarters of UK workers fear going back into the workplace because it poses a risk to their health and safety. David McCormack, CEO of employee benefits and outsourced payroll provider HIVE360, says employers should take a simple seven-step approach that will support effective management of the workforce’s return to work.

Seventy three percent of workers admit they fear a return to the workplace. Responsible employers need to take action to support workers and ease their worries, to ensure they feel secure and comfortable whenever in the workplace, and know they have their employer’s support and commitment to maintain a safe environment.

The foundation to this is our seven-step return-to-work action framework:

  1. Communicate: Ensure workers know it’s ok to feel anxious about the return to the workplace. Encourage them to talk about their feelings so you can reassure them and take any additional action to ease any worries.
  2. Stay in touch: Make a point of checking in with staff regularly and ask how they are coping.
  3. Be flexible: For those feeling uncomfortable about being in the office, give them the option to continue working from home some days each week. For those anxious about a busy commute to work, be open to an early or late start and finish time for the working day.
  4. Be safe: People are counting on their employers to help them get back to work safely, and by putting employee health, safety and wellbeing at the heart of the return-to-work planwill help reduce any stress or anxiety:
  • Be COVID-19 aware, safe and secure. Employers have statutory duties to provide a safe place of work as well as general legal duties of care towards anyone accessing or using the workplace
  • Carry out a risk assessment of the entire workplace and implement measures to minimise these risks
  • Create a clear policy of behaviour in the workplace and share it with all employees. Policies should include the rules on wearing facemasks, social distancing, hand washing and sanitising, with the relevant equipment available to all. Include clear instructions on what people should do if they or someone they live with feels unwell or tests positive for COVID-19.
  1. Be caring: With concerns about the effects of COVID-19 on society and the economy, mental health is a growing problem, but people continue to feel uncomfortable speaking about it. This is unlikely to change, so make time to show you are an employer that recognises and understands by introducing and communicating the tools, support and measures available to them to help address any fears. Give them access to specialist healthcare resources, information and health and wellbeing support.
  2. Encourage work/life balance: Poor work/life balance reduces productivity and can lead to stress and mental health problems, so build-in positive steps to help the workforce achieve it by encouraging sensible working hours, full lunch breaks, and getting outside for fresh air and exercise at least once a day.
  3. Tailor solutions: Show that you understand that everyone’s personal situation is different and that you will do your best to accommodate it. Remind people of their worth as an employee, and the positive attributes they bring to the team.

Added benefits

Employee health and wellbeing support and benefits are a ‘must have’ rather than a ‘nice to have’. Onboarding and career progression, reward and recognition policies, training and development, employee benefits, work/life balance initiatives, financial, mental health and wellbeing support, are all essential components of an effective employee engagement strategy. Together, they improve and maintain a positive working environment.

HIVE360 is an expert in recruitment agency PAYE outsourced payroll. Our HMRC-compliant solution guarantees a speedy, transparent service, with no nasty fees for workers. It also delivers efficiency gains from payroll, digital payslips, pensions auto-enrolment and pay documentation support.

HIVE360 goes further. Our unique, customisable employee pay, benefits and engagement app Engage is provided as a standard element of our outsourced payroll solution. It gives workers access to an extensive range of health and wellbeing benefits and employee support services, including:

  • 24/7, confidential access to mental health support, counsellors and GPs
  • Thousands of high street and online discounts
  • Huge mobile phone savings
  • Online training resourcesand access to the HIVE360Skills Academy
  • A secure digital payslips portal
  • A real-time workplace pension dashboard to support employees’ financial wellbeing.
  • An incident reporting system to ensure the safety of employees in the workplace, which allows workers to – anonymously – raise serious issues or concerns with their employer directly through the app.

HIVE360 is a GLAA (Gangmasters and Labour Abuse Authority) license holder and is championing a new model of employment administration, redefining employment and pension administration processing. Visit: www.hive360.com

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