Transcript AWR - Recruitment International

RPO – a boon for recruitment?
Speaker:
Adrian Marlowe Chairman
AWR
AWR Guidance
Employment Tribunals
Social Media
IR35
Conduct Regulations 2003
targeting the issues that really matter
Think Tank
Legal expertise
= Effective proactive lobbying +
Quality Support Services
Vision for
recruitment
and supply
Commercial
knowledge
2013
 Big business - consolidation
 Small business – competitive conditions
Recruitment Process Outsourcing
= big business
128 Councils use RPOs or MSPs
Is RPO model a boon for recruitment?
 Interposition removes direct relationships –
not good
 Introduces tighter margins - horrible
BUT
 Retains the use of external recruiters by hirers
 Gives the service the hirers want
Is RPO model a boon for recruitment?
 single contract
 single point services for all requirements
 access to wide range of recruitment
businesses and candidates
 lower rates
 lengthier payment periods
 stronger bargaining power
 less administration
= Cost
savings
In pursuit of
RECRUITMENT Growth
 ARC campaign re ‘pay when paid’ and
problem clauses since 2010
 Request by government to provide evidence
– October 2012
 Consultation on Agency Regulations –
January 2013
 Surveyed members and collated info
 Response to government 11th April 2013
Problematic clauses
A.




x
x
x
Pay when paid
No certainty for payment
R.12 – must pay worker
Advantage to those self financing
Or higher cost finance, and harder to obtain credit
insurance
Low margin, uncertainty, higher cost = risk
Excludes some agencies from marketplace
Removes opportunity from candidates
Problematic clauses
B. Restrictions on assignment of debt
x
Stops factoring and invoice financing, or
x
Pushes agency to use RPO finance model?
x
Excludes smaller agencies from the marketplace
x
Removes opportunity from candidates
C. Info required within specific time
x
Reason for delayed payment
x
No obligation to correct by RPO
x
Possible non payment
Problematic clauses
D. No obligation to make claims from hirers
x
No recourse to recover monies owed where
payment not received by RPO from Hirer
= unlimited payment period
E. Delay on payment for technical reasons
x
Puts payment at risk
Problematic clauses
F. Exclusion of right to contact the Hirer.
x
Hirer precluded from identifying real problems
x
Inability for agency to obtain AWR information
where RPO requires indemnities
G. Requirement to use additional services.
e.g. payment for use of electronic portal
e.g. requirement to use a specific umbrella
Any clause allowing for delay = risk
 Invoice discounting/ factoring in principle
 Refactoring after 123 plus days
 Credit insurance problems
 Light balance sheet
Communication problems = risk
Additional services = RPO control
= “Monopoly”
Problematic clauses
Question
Is the Hirer necessarily aware of
 various requirements and conditions
 advantage to RPO of specific requirements
 potential prejudice to candidate accessibility
?
Is RPO model a boon for recruitment?
Round up:
Genuine need for
Single point contract and services
Cost savings to hirer
Problems
x Lack of transparency – do hirers know the full
picture?
x Uncertain payment terms
x Unfair clauses allowing for delayed or no payment
x Total restriction on hirer contact
x Requirement to use additional services
ARE RPOs a boon for recruitment?
Solution:
 Amend Conduct Regulations to rule out payment
uncertainty, i.e. must be a fixed period
 Preclude RPO additional services for which there is a
charge either for the EB or the agency worker
RPOs then must deal with Hirers on realistic terms
2013
Code of conduct?
Difficult operating conditions for 2nd tiers
Money short, terms tough
Is the aggressive RPO model sustainable?
To get balance right requires targeted approach
ARC supporting both 2nd tier agencies and
Longer term RPO strategy
What ARC members benefit from:
Support Services = immediate short term support
Lobbying Services = long term value
Engage with an effective support group
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