Recruiters should do more to trumpet their value to society - City Comment
4 July 2013
Socially responsible investing (SRI) is a key growth area, with an increasing number of investors looking beyond simple financial returns when allocating funds. Historically, investors simply looked to avoid certain types of business (e.g. no arms, no tobacco).
Thu, 4 Jun 2013 | By Adrian Kearsey, equity analyst at Hardman & CoSocially responsible investing (SRI) is a key growth area, with an increasing number of investors looking beyond simple financial returns when allocating funds. Historically, investors simply looked to avoid certain types of business (eg no arms, no tobacco).
More recently, this negative filter has been replaced with a more positive or pro-active approach. An increasing number of investors are beginning to seek out businesses which generate a positive impact. Defining such a social contribution is obviously highly subjective but nevertheless momentum is building.
The US Forum for Sustainable and Responsible Investment's 2012 Report on Sustainable and Responsible Investing Trends in the United States identified $3.74 trillion (£2.45 trillion) in total assets under management using one or more sustainable and responsible investing strategies. The report showed that SRI had grown by 22% over a two-year period.
The London Stock Exchange has recognised this trend and has sponsored the creation of the Social Stock Exchange, which aims to promote businesses which make some form of positive social impact.
We anticipate the staffing industry will begin to benefit from these trends. For some time, the larger recruitment firms and trade associations in the industry have highlighted the contribution the staffing industry makes to the wider economy. International Confederation of Private Employment Agencies (Ciett) data for example, shows that in 2011 there were 46m agency workers globally. Many of these workers are using agency work to enter the permanent segments of the economy.
Moreover, employment agencies play a vital role in creating labour mobility, linking employers and candidates, who otherwise would find it impossible to meet. Most of the time, agencies simply introduce potential candidates who are actively looking for work. However, within specialist segments of the market, a large proportion of candidates are not actively looking and the agency plays an even more important role in the process.
We believe the industry should also highlight how firms are providing capital to finance client temp labour. The three biggest agencies (Adecco, Manpower and Randstad) have a combined debtor book of £8bn. Essentially this is short-term financing for their clients. Many of these are SMEs who would find it difficult to secure such lending from banks.
Staffline provides an even more pronounced example of how agencies can add value to society through their participation in the UK government-funded Work Programme, aimed at helping the long-term unemployed. Following the completion of the second full year of its contract, Staffline delivered 3,279 successful job outcomes from a total of 10,846 referrals in the Birmingham, Solihull and Black Country contract package area (Job Outcome rate of 30.2%).
Therefore, with investors increasingly looking for businesses which make a positive social impact we believe the recruitment industry has a good case to make and should see increasing interest.
More recently, this negative filter has been replaced with a more positive or pro-active approach. An increasing number of investors are beginning to seek out businesses which generate a positive impact. Defining such a social contribution is obviously highly subjective but nevertheless momentum is building.
The US Forum for Sustainable and Responsible Investment's 2012 Report on Sustainable and Responsible Investing Trends in the United States identified $3.74 trillion (£2.45 trillion) in total assets under management using one or more sustainable and responsible investing strategies. The report showed that SRI had grown by 22% over a two-year period.
The London Stock Exchange has recognised this trend and has sponsored the creation of the Social Stock Exchange, which aims to promote businesses which make some form of positive social impact.
We anticipate the staffing industry will begin to benefit from these trends. For some time, the larger recruitment firms and trade associations in the industry have highlighted the contribution the staffing industry makes to the wider economy. International Confederation of Private Employment Agencies (Ciett) data for example, shows that in 2011 there were 46m agency workers globally. Many of these workers are using agency work to enter the permanent segments of the economy.
Moreover, employment agencies play a vital role in creating labour mobility, linking employers and candidates, who otherwise would find it impossible to meet. Most of the time, agencies simply introduce potential candidates who are actively looking for work. However, within specialist segments of the market, a large proportion of candidates are not actively looking and the agency plays an even more important role in the process.
We believe the industry should also highlight how firms are providing capital to finance client temp labour. The three biggest agencies (Adecco, Manpower and Randstad) have a combined debtor book of £8bn. Essentially this is short-term financing for their clients. Many of these are SMEs who would find it difficult to secure such lending from banks.
Staffline provides an even more pronounced example of how agencies can add value to society through their participation in the UK government-funded Work Programme, aimed at helping the long-term unemployed. Following the completion of the second full year of its contract, Staffline delivered 3,279 successful job outcomes from a total of 10,846 referrals in the Birmingham, Solihull and Black Country contract package area (Job Outcome rate of 30.2%).
Therefore, with investors increasingly looking for businesses which make a positive social impact we believe the recruitment industry has a good case to make and should see increasing interest.
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