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Episode 171 - Who is HiTech and why did they buy Hudson?
106 Plays10 hours ago
RNA episode 171 has news for 28 July 2026, including the labour market update for June, PageGroup reverts to Michael Page, Randstad's global profits climb, Queensland rolls out big apprentice incentives, a Harvard study exposes a wild hiring bias toward fast repliers, SEEK ad volumes keep sliding as job competition hits a record. Question of the Week is "Who is HiTech and why did they buy Hudson?"
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Transcript
Introduction to Wingman Recruitment and Services
00:00:06
Speaker
That's Wingman Recruitment. They place fully trained remote professionals straight into your agency. Handling, sourcing, admin, CRM, the lot. Wingman Recruitment, built by recruiters for recruiters. Head to wingmangroup.com.au and check out the services tab.
Recruitment News Australia Overview: July 28, 2026
00:00:23
Speaker
Welcome to Recruitment News Australia. This is the news for the 28th of July, 2026. I'm Ross Klenit. And I'm Adele Last.
Australia's Job Market: Unemployment and Growth Rates
00:00:32
Speaker
Australia's job market is holding steady with the ABS labour market update for June, reporting that the national unemployment rate held at 4.4%. Total employment jumped by 76,000 last month, bringing the total number of employed Australians up to 14.8 million.
00:00:49
Speaker
Most of that growth came from part-time work up 47,000 to more than 4.6 million people. Full-time jobs grew by just over 29,000 positions to top the 10 million mark. The ABS said it was a strong June result compared to June's results in recent years.
00:01:06
Speaker
More good news was an increase in people joining the workforce, pushing the participation rate up 0.3 percentage points to 67% on the back of the participation of workers aged 55 to 64, which is at a record high of 70.6%.
00:01:22
Speaker
The bad news was an increase in the number of unemployed Australians up by 13,000, bringing the total to just under
00:01:31
Speaker
New South Wales is the best performing state with the unemployment rate at 4%, closely followed by WA at 4.2%. Victoria was the only state or territory to have an unemployment rate with a 5 in front at 5.1%. And zooming out to the annual picture, the financial year July 2025 to June 2026 saw the Australian economy add 252,000 jobs, which continues the annual decline of the past three financial years.
00:01:59
Speaker
FY 2025 produced new jobs. It was new jobs in FY And in the number of workers in jobs grew by
00:02:14
Speaker
after the concerning april result which saw total employment drop by nearly nineteen thousand people june produced another month of good labour market news for the federal government Big branding news
Page Group Rebranding to Michael Page: Celebrating 50 Years
00:02:27
Speaker
released last week. Page Group is going back to its roots.
00:02:30
Speaker
So it seems, Sydell, in line with its 50th anniversary, the company has dropped the Page Group name and reverted to Michael Page. The legal entity is now officially Michael Page PLC, effective from last Monday.
00:02:44
Speaker
a bit of a full circle moment. Michael Page, the person, co-founded the business back in 1976, retired in And then in 2012, the company rebranded from Michael Page International to Page Group.
00:03:00
Speaker
Now, 50 years on, it's coming home to the name that started it all. CEO Nicholas Kirk says the move to a single Michael Page brand gives clients, candidates and employees a clearer, more unified proposition.
00:03:12
Speaker
The new identity was developed with Paris-based brand consultancy Dragon Rouge, working alongside Michael Page's global marketing and leadership teams. 50 years.
00:03:23
Speaker
One name, back where it began, Michael Page. It is. Everything old is new again.
Randstad's Financial Performance Analysis
00:03:30
Speaker
The world's largest staffing business delivered improving results when Randstad reported Q2 global revenue of 5.89 billion euros, up 1.9% on an organic basis, although gross profit dropped 2% year on year.
00:03:45
Speaker
However, Randstad ANZ was disappointing with a 3% decline in sales in the three months to June. but it was a much stronger result on the global bottom line. Operating profit jumped to €145 million, euros up from €117 million euros a year earlier.
00:04:02
Speaker
Perm fees decreased by 5% year-over-year and were also down 10% compared with the first quarter of 2026. RPO fees increased by 7% year-over-year organically.
00:04:14
Speaker
Ransad CEO says hiring is recovering as economic activity picks up. even with clients still navigating global uncertainty and that more employers are turning to flexible workers to manage risk.
Queensland's Tradie Start Program for Apprenticeships
00:04:26
Speaker
Queensland businesses are being offered thousands of dollars in cash incentives to take on new apprentices as the state races to fill a growing skills shortage in construction. The state government is launching a new scheme called Tradie Start alongside an expanded version of its existing small business apprenticeship program,
00:04:45
Speaker
Together, they're aiming to recruit about 4,500 new apprentices into the construction sector. Queensland's building sector is bracing for a massive workload ahead of the 2032 Brisbane Olympics, and the government says it simply doesn't have enough tradies to get the job done.
00:05:00
Speaker
Under Tradie Start, small businesses hiring a very first apprentice can get a base payment of $10,000. That goes up by another $4,000 if the apprentice is over 21, and there's a further $2,000 available if they come from a priority group. like veterans, women, Aboriginal and Torres Strait Islander people or people with disability.
00:05:20
Speaker
That stream is reserved for smaller operators, businesses turning over less than $10 million dollars a year who are hiring apprentices for a construction, plumbing, engineering or electrical job. There are 2,500 spots available.
00:05:33
Speaker
Medium-sized businesses and group training organisations don't miss out with payments of up to $14,000 for hiring apprentices from those priority groups. Meanwhile, the state's existing wage subsidy program is being extended to cover another 2,000 construction apprenticeships. That one covers half an apprentice's wages in their first two years of training, tapering to a quarter in years three and four.
Job Candidate Bias in Harvard Business Review Study
00:05:59
Speaker
The Harvard Business Review has just published a summary of research about how our instincts might be failing us during the hiring process. It specifically looks at response latency, and where the hiring managers and recruiters are unfairly favouring job candidates who reply to contact the fastest.
00:06:18
Speaker
The researchers analysed over 11 million transactions on the global freelance employment marketplace Fiverr. They studied scenarios where candidates had identical qualifications but differed only in how quickly they responded to an initial outreach, ranging from just a few minutes to a full 24 hours.
00:06:36
Speaker
The results showed a significant hiring bias for fast responders. Participants consistently rated candidates who promptly replied to messages as more conscientious and more interested in the role compared to those who took longer to reply.
00:06:51
Speaker
The researchers concluded that response delays by as little as a few minutes significantly impacted a candidate's likelihood of being hired. Wow, just digging into the specifics of that, I see that on average, a one-hour delay in response time by a job candidate made them 46% less likely to be hired. And those who responded more than 24 hours after receiving a direct message from a potential employer were 90% less likely to be hired compared with a candidate who had responded immediately.
00:07:20
Speaker
This speed penalty held true across job types, contract size, wage rate, experience on Fiverr and multiple other control factors. However, when the researchers tracked the actual job performance of those individuals on assignment, there was no meaningful correlation between initial response speed and long-term work productivity or quality.
00:07:41
Speaker
So it sounds like hiring managers and recruiters are essentially rewarding freelance job seekers for being tethered to their devices rather than their relevant skills. Exactly. Across the research, response speed positively predicted evaluations of applicants' competence, warmth and expected future responsiveness. Managers might believe that response speed is not a top factor. However, when their observed behaviour is monitored, the research shows that it definitely was.
00:08:07
Speaker
No surprise to me that the study concludes that this speed to reply metric is a noisy signal that leads to systemic bias. often penalising highly qualified candidates who might simply be focused on their current role or who have personal commitments that prevent an instant response.
SEEK's Job Market Trends and Challenges
00:08:24
Speaker
The month-on-month trend with job ads keeps heading in the same direction as SEEK's June employment report showed job ads fell 0.9% in June compared to May. That's now 11 straight months of month-on-month declines.
00:08:39
Speaker
Year-on-year, ads were down 5.8%. Mirroring the employment data, there is a significant variation across the country. WA and South Australia were the only states to post growth in June, extending a run of gains that's now stretched past six months in both states.
00:08:56
Speaker
Everywhere else went backwards. The Northern Territory recorded the biggest monthly drop down 1.5%, followed by Tasmania And New South Wales down 1.3%.
00:09:09
Speaker
Applications per ad, which is a proxy for competition amongst job seekers, jump 2% month on month, taking applications per ad to their highest level on record. Although this data point does have a one-month lag, this is the May result. So month by month, we're seeing the same pattern repeat, ad volumes edging down and competition for each role edging up.
Hitek's Acquisition of Hudson: Strategy and Challenges
00:09:37
Speaker
Question of the week, who is high-tech and why have they bought Hudson? I'm asking this because last Monday morning, High Tech Group Australia, a company most people in this industry had probably never heard of until three months ago, announces buying Hudson out of administration. So let's walk through the details, Ross.
00:09:56
Speaker
Sure, Adele. Back on the 23rd of June, the day before the second creditors meeting, Hitek told the market it had submitted a proposal, effectively a deed of company arrangement to Hudson's administrators, which was not accepted by the creditors at the meeting.
00:10:11
Speaker
After the original accepted docker from the existing Hudson executives was withdrawn, a revised version of Hitek's original proposal became a binding agreement.
00:10:22
Speaker
Hitek is acquiring Hudson's Australian operations and selected business assets for an upfront consideration of $7 million. dollars $7 million dollars for a business that by Hitek's own numbers generates around $190 million in annualised revenue?
00:10:39
Speaker
That's right. And that gap is the whole story, Adele. Tells you this is a distressed asset purchase, not a normal trade sale. Hitek gets the brands, the client relationships, the contractor workforce and the operating platform, but it's specifically designed to leave the historical liabilities with the administrators.
00:10:59
Speaker
So break down the purchase price for me, Ross. There's $7 million up front, including a $1 million dollars deposit paid on signing, plus up to $3 million dollars in deferred consideration payable within 12 months, contingent on how much cash cash the business actually generates.
00:11:14
Speaker
There's $7 million up front, including a $1 million dollars deposit paid on signing, plus up to $3 million dollars in deferred consideration payable within 12 months, contingent on how much cash business actually generates.
00:11:28
Speaker
So the real cost could land somewhere between $7 million dollars and $10 million, dollars and it's still subject to conditions. Customer contracts have to be novated across, and it needs ACCC approval.
00:11:39
Speaker
Now, before we go further into the deal itself, who actually is tech? Because you pointed out that this is a company that's flying almost completely under the radar. It genuinely has. Hitek was founded in Sydney in 1993 by brothers Raymond and Sam, or Salem, Hazuri, and it listed on the ASX in April 2000. Sam left the business in 2013. Today, it's run by CEO Elias Hazuri with Ray Hazuri as chairman.
00:12:10
Speaker
Between them, the Hazuri family controls roughly two-thirds of the company's issue capital. That's an extraordinary concentrated ownership structure for a listed company. It is. Ray Hazzuri alone holds nearly 42% of the shares with something like $20 million dollars at current prices and he was paid executive remuneration of just over $900,000 in the 2025 financial year.
00:12:37
Speaker
Elias holds close to 21% of the shares worth around $10 million dollars and earned remuneration of a about $725,000 for the 2025 financial year.
00:12:50
Speaker
The board is just the two of them, plus one long-serving non-executive director, a Sydney lawyer, who's been there since 2003. And what does high tech actually do day to day?
00:13:02
Speaker
There's two arms to do. High tech personnel places IT t contractors predominantly within the federal government, and they have a little bit of work in non-IT recruitment. Then there's high tech ICT project delivery services, which supplies ICT statement of work contract teams to federal and state government departments.
00:13:24
Speaker
The client list reads like a who's who of federal agencies. Defence, the ATO, Home Affairs, Services Australia, Australian Signal Directorate and more. It's a government recruitment specialist essentially.
00:13:37
Speaker
How big is the company in terms of headcount? 17 employees and that's it. And that's really the number that should stop people in their tracks. Why do you say that, Ross?
00:13:48
Speaker
Because of what that tiny headcount produces. 2025 financial year revenue was just under $68 million, dollars gross profit, 12 and a half million, operating profit just under $9 million dollars and net profit after tax hit a record $6.38 million. dollars If you strip out the remuneration paid to the two executive directors, the remaining cost base for the other 15 staff and all the company overheads was $1.4 million. dollars That's an average of about $92,500 per person.
00:14:24
Speaker
There's almost no room in there for meaningful commissions or bonuses. So how does a business that small convert so much gross profit to the bottom line?
00:14:35
Speaker
And that's the number that really jumps out, Adele. Hitek's 2025 financial year conversion rate, and that is The percentage of gross profit that converts to operating profit was just under 71%. That's extraordinary. For context, Hayes ANZ's best conversion rate in the last 20 years was just under 49% back in Hayes globally posted conversion rate in the financial year.
00:15:06
Speaker
High tech isn't just efficient by staffing industry standards. It's operating in a different universe. I mean, my assessment is that this business is probably run more efficiently than 99.9% of staffing companies anywhere in the world that have non-director employees. It's incredible, Ross. like What explains that? Do they actually have a government tech background? Yeah.
00:15:29
Speaker
Well, that is my read of it. i mean I mean, I can only see what's publicly available. And from that, we can see Ray and Elias have both worked in private and public sector employee and consulting roles prior to high tech.
00:15:42
Speaker
So it's a model built almost entirely around these two people's relationships. It appears so The Husserys appear to hold the key government-client relationships. And from what I can glean from annual reports and LinkedIn, they're supported by a pretty lean team, I'd say, 10 to 12 sources, candidate managers and account managers, plus a handful of finance and admin staff.
00:16:06
Speaker
Total marketing spend in the 2025 financial year was $19,000, which tells you there's very little in the way of client lunches, candidate events or sponsorships going on. It's a relationship and delivery machine, not a brand building one.
00:16:23
Speaker
So has it always looked this good? Not remotely, high-tech shares didn't trade above 11 cents for 12 straight years between early 2003 and late 2015, touching of 1 cent in 2020.
00:16:36
Speaker
touching a low of one cent in iru company didn't pay its first dividend until 16 years after listing on the ASX.
00:16:46
Speaker
Sales really took off post-COVID. 2021 financial year revenue jumped to million, dollars then the next year jumped another to just under million. dollars Revenue peaked in the 2023 financial year at $74.5 million, dollars although profit that year was actually lower than the 2025 financial year record.
00:17:10
Speaker
The shares hit an all-time high of $2.40 in August 2021. They're trading at around $1.14, now well down on ah about $2 where they were about 12 months ago.
00:17:23
Speaker
And what about the most recent results, like the half-year to December 2025? um Pretty good. Revenue was down 3.3% year-on-year to around $33.5 million, dollars although gross profit fell 29% to just under $5 million, dollars and EBITDA was just over $3 million. dollars The company is sitting on $10.5 million dollars cash, and it has no debt.
00:17:48
Speaker
So going into this deal, high-tech was smaller than it had been under some margin pressure, but Debt Free cashed up and clearly looking for a way to change its trajectory.
00:17:59
Speaker
Let's talk about what they're buying. Why would Hudson be a good buy for high-tech? Well, Hudson's business much broader than high-tech. It's got professional recruitment, has got IT, it's got business support, project services, PERM, executive search, it's got relationships across government and private sector clients, does have a national footprint.
00:18:21
Speaker
Contractors with security clearances are particularly lucrative for panel providers, whether they be Hudson, Hitech or anyone else, so much so that the Department of Defence instigated 12-month moratorium on APS staff leaving and being re-employed as contractors to stem heavy churn.
00:18:41
Speaker
So geographically and in service coverage, it's the opposite of Hitech's tightly concentrated Canberra-centric government model. Yes, although Hudson has been very strong on government recruitment and labour high panels.
00:18:54
Speaker
HITEX management is framing this as complementary rather than overlapping. In the ASX announcement, CEO Elias talks about the deal giving HITEX access to private sector customers and new government relationships it doesn't already have, the kind of access that could otherwise take many years to build organically.
00:19:14
Speaker
So what does HITEX say it's trying to achieve strategically? Four things, in their words, according to the press statement, build a genuine national workforce solutions platform, diversify away from being purely an ICT recruiter, deepen government capability by combining HITECH's federal strength with Hudson's broader state and federal relationships, and create a platform for further organic and acquisition-led growth.
00:19:42
Speaker
So on the Hudson side, I'm going to ask the question most people are probably thinking, what happens to the people? Well, this is where it gets ah really interesting. i mean, it appears Hitek has no other leaders of significance outside Ray and Elias Hazuri.
00:19:58
Speaker
To successfully integrate Hudson, it seems almost certain that many Hudson leaders, including senior leaders, will need to be retained at least for the next year or so, as HITECH appears to have no excess leadership capacity within existing employees.
00:20:13
Speaker
HITECH's stated plan is to run the acquired business as a standalone operation initially, fully backed by the HITECH group, before progressively integrating support functions, technology and shared services over time, where it makes sense.
00:20:27
Speaker
Not everyone at Hudson transfers across. HITECH acknowledged that in the announcement. But the intention is a structured onboarding process for those who do. So stepping back, is this a good deal for high-tech shareholders?
00:20:41
Speaker
On paper, the arithmetic looks attractive. Roughly $190 million of pro forma revenue for $7 million dollars upfront, structured to leave historical liabilities behind. But headline revenue isn't the risk here. The risk is culture and execution. Hightech has a 17-person business built around two family members' personal relationships and almost 71% conversion rate and $19 million dollars a year in marketing spend.
00:21:06
Speaker
Hudson is a 40-year multi-brand, multi-state business that's just come out of administration with all the disruption, client nervousness and possible staff attrition that involves.
00:21:17
Speaker
Oil and water, I think you stated in your blog, Ross. Exactly. The two businesses' size and operating models are about as similar as oil and water. Whether high tech can bring anything close to its own discipline and efficiency to an organization many times its size spread across five states is the real question.
00:21:35
Speaker
And it's the one that won't be answered in the short term. It'll be answered over the next 12 to 24 months of integration. Given it appears high-tech recruiters and candidate managers are not on commission schemes, and the Hudson recruiters would be, the issue of new employment contracts for Hudson staff will be the first significant cultural hurdle to be surmounted.
00:21:58
Speaker
Also, isn't this purchase also an opportunity for Ray and Elias Hazuri to create a succession plan for the high-tech group? ah Given Ray is 64, Elias is 58, you'd think they want to both retire within the next half a dozen years. So transferring Hudson leadership could create a pool of potential high-tech CEOs, surely?
00:22:17
Speaker
For sure. It looks like high-tech, not just buying a contract, book client relationships and staff, but also a potential succession plan for the Hazzuris. Anyway, first things first, the completion of the conditions, the novation of Hudson's customer contracts and ACCC sign-off. And crucially, as you flagged what will be the retention of Hudson staff, there's plenty of interest to watch over the coming months, Ross. Thanks for taking us through it.
00:22:42
Speaker
No trouble to do.