A look back at 2016

22 Dec 2016



2016, a year that will go down in history due to momentous, and largely unpredicted, ballot results both in the UK and across the Atlantic. 2016 was memorable for many other reasons in the recruitment world. Here’s a quick rundown of some of the main developments.

Tax changes

The Autumn Statement confirmed that there will be changes to off-payroll working in the public sector from April 2017 and there will be a new digital tool (currently being developed by HMRC and tested by REC members and others) to help determine IR35 status.   HMRC have recorded a webinar for us where you can find out more.

We also found out this year that the Apprenticeship Levy will go ahead. All businesses with a pay bill above £3 million will have to pay a tax of 0.5% from April 2017.  We have lobbied Number 10, Treasury, HMRC, DfE and BEIS at civil service and Ministerial level and pointed out that this tax should not be raised on payrolls for contingent labour. But the government is set on meeting its target for 3 million new apprenticeship starts by 2020, so now is the time to prepare for the changes and make sure we can make the most of the levy. You can find out how here.

The EU referendum, skills and immigration

REC and IHS Markit’s Report on Jobs was the first set of labour market data available following the outcome of the EU referendum in June. While there was an immediate impact on the market, with many employers taking longer to make hiring decisions, the UK jobs market has finished 2016 on a high.

Concerns about Brexit did not stop on 23rd June. In our latest Recruitment Industry Trends, Brexit has emerged as one of the top issues of concern (19%) for recruiters.  We have been keeping members up to date via our regular blogs, webinars, and sector events. One of the key issues for the recruitment industry is going to be the type of immigration system adopted by the UK once we leave the EU, and how this enables businesses to source the people and talent they need to grow. The REC will be doing a major piece of work on this in 2017, so watch this space.

Alongside a suitable and sustainable immigration policy, this undoubtedly means that employers are going to have to consider a diverse approach to recruitment. 2016 offered us many opportunities to engage with government on this important agenda:

Advisor to government, Baroness McGregor-Smith, attended an REC member roundtable on recruitment practices for engaging ethnic minorities. The then Minister for Pensions, Baroness Altmann, asked the REC to host a member meeting on ‘Fuller Working Lives’ and recruiting older workers. Minister for Disabled People, Health & Work, Penny Mordaunt MP, announced the relaunch of Disability Confident at the REC. The Minister for Employment, Damian Hinds MP, attended CEO roundtable & re-signed the REC / DWP partnership agreement.

Agency workers and employment status in the spotlight

The new Prime Minister lost no time in announcing that we should live in a Britain “that works for everyone” and shortly after, appointed the chief of the Royal Society of Arts (RSA), Matthew Taylor, to lead a review into modern employment practices.  This came hot on the heels of the Business Select Committee’s inquiry into SportsDirect, which they have followed up by reviewing the future world of work and worker rights more broadly.  The Resolution Foundation, announced they would be leading an 18 month research project into agency work.

The REC was ready to respond to these developments: Kevin Green spoke on the platform alongside Frances O’Grady of the TUC and Iain Wright MP at the Resolution Foundation, we have been in contact with Matthew Taylor and his new commissioners, and we have provided evidence to the BEIS Select Committee.  In total, the REC has made over 30 submissions to Parliament this year and 73 broadcast appearances to provide the perspective of the recruitment industry.

Looking ahead…

2017 will herald the outcome of these reviews, plus the formal appointment of a new Director of Labour Market Enforcement and reform of the Gangmasters Licensing Authority.

This makes it doubly important for compliance to be the watchword for ethical recruiters and that good recruitment practices are at the forefront for all employers.

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