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RNA Episode 124 - Will the industry allow Ephram a comeback?
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Episode 124
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Transcript
Introduction and News Overview
00:00:08
Speaker
I'm Ross Klenitz and this is the news for the 26th of August 2025. And I'm Adele Larson. Welcome to Recruitment News Australia. We start the conversation on news, Ross, around some good and bad results.
Financial Impact on Recruitment Agencies
00:00:23
Speaker
So let's start with the bad news and that's Hayes. Hayes...
00:00:28
Speaker
So Hays ANZ, I'm just going to focus on Hays ANZ, not Hays Globally. So they reported that their net fees, so that's permanent placement fees plus net temporary margin, decreased by 13% to million. pounds so that's about million.
00:00:48
Speaker
Australian dollars. Operating profit was down 67% to 3.6 million pounds, which is about $7.5 million. dollars There was a currency impact on both net fees and operating profit.
00:01:02
Speaker
So PERM was down 22%, whereas TEMP and contracting was only down 8%. Private sector down 10%. private sector down ten percent public sector down 19%.
00:01:18
Speaker
So very painful days for Hayes ANZ at Earl. What about other company results, good news or bad? Good news. And firstly, Ignite. That used to be Candle all those years ago and became Clarius.
00:01:33
Speaker
So although their revenue continues to go down and the um it's gone down 6.7%, so at million dollars for the financial year.
00:01:44
Speaker
ending 30 June. Gross profit went up slightly, which was good news, up to 11.7%. EBITDA was up by 33% to 1.4 million and statutory profit doubled to 1.2 million.
00:02:01
Speaker
Headcount very low. There are only 40 employees these days, but the the new CEO or relatively new CEO, Cameron Judson, X Chandler McLeod seems to be turning the ship around there.
00:02:16
Speaker
ah The other one was ASX listed IT recruiter high-tech group, very low profile business, but operating revenue for the financial year was up to $68 million, dollars increased by 7%.
00:02:28
Speaker
Gross profit was down slightly 1% to $12.7 million, but underlying eberter was up 1.3% to $9 million dollars in underlying net profit after tax, was up 10% to $6.6 million. dollars So, High Tech Group continues to produce um outstanding financial results.
Data Breach and Security Concerns
00:02:48
Speaker
And our friends at SEEK, tell us what's happening there. Fairly stagnant. Net revenue 1% to billion. to million. Adjusted profit fell to ah hundred and fifty five million and az job ad volumes down eleven percent over the year although yield grew thirteen percent So obviously that seeks motto, aligning price to value, and they seem to be doing that. So they're holding steady with their financial results, even as volumes are falling.
00:03:28
Speaker
ah Moving on to our next story, we have had a data breach from Manpower. What's this one about? Yeah, Manpower in the US reported a very significant data breach. 145,000 records were stolen by attackers who breached the systems via a franchise office of Manpower in the US in December last year.
00:03:53
Speaker
It's a ransom hub ransomware operation. So they've claimed responsibility for the attack. It's unknown whether...
00:04:04
Speaker
The information is now safe. Data is no longer available on the dark web, which would seem to suggest that Manpower have paid some form of ransom, but they have not made any public comment about it.
00:04:20
Speaker
Will you look at the types of details that have been stolen there? So a database of client information, and candidate information. So it includes corporate data, passport scans, IDs, addresses, contact information, test results, records of correspondence between the agency and clients, financial statements, HR data analytics, non-disclosure agreements. So it's pretty embarrassing for manpower, that's for sure.
00:04:52
Speaker
and Maybe another agency wanting all of that data. Sounds rather interesting. Well, I've got to say one of my best mates is he he runs an IT outsource business and manages the ah IT t of a large number of businesses, including some recruitment agencies. And he said in his experience, the general security in most recruitment agencies in this country is terrible.
00:05:14
Speaker
They have no idea how bad it is. that Many are vulnerable. And he said, Ross, your protection, and I mean, I'm not a recruiter. I don't have that sort of information. He said, the protection you buy is better than most of the recruitment agencies out there. So I think this is unfortunately going to be something that people are only going to understand how vulnerable they are after they've had data stolen.
AI Restructuring and Workforce Reduction
00:05:39
Speaker
And CSL, a very large global employer, looks like it is the next victim perhaps to AI impacting its workforce. Well, we don't know for sure. What we do know is that they announced they're going to cut 15% of their global workforce. So they employ just under 30,000 people globally.
00:06:00
Speaker
So that means about 4,500 people are going to go before the end of the next financial year. So we are talking about 22 months, but that's a very significant drop.
00:06:13
Speaker
Share market reaction was not favourable a Share price dropped about 17% after the announcement because the cost, the restructuring costs are going to be 560 to 620 million in the current financial year, but they hope to save 550 million a year for each of the next three years. So seems that they've got underperforming centers in the US. They're talking about closing 22 of them.
00:06:41
Speaker
So, yeah, we don't really know about what impact Gen.ai has had here, but certainly for a very significant Australian company that's been ah ah post a poster child for growth and success, this is a very significant step in terms of a headcount cut.
00:06:56
Speaker
No indication of the actual numbers for Australia? They don't say, ah but I think these days a greater proportion of their workforce is outside of Australia. So you'd have to think,
00:07:10
Speaker
given what they've said about those underperforming centres, which are, think, predominantly in the US, that a large majority of the read of the reductions will occur in the United States.
00:07:22
Speaker
Okay.
Unemployment Figures and Employment Barriers
00:07:23
Speaker
There was a really interesting ABS update this week stating that there's a million people who want to work, but many are not classified as unemployed. I found this one really interesting given talent shortages, particularly in this country, and and labour force participation, it was the report.
00:07:40
Speaker
ah What did this one reveal? Well, this is one of my favourites because I have blogged about this data set before. It's called Barriers and Incentives to Labour Force Participation.
00:07:52
Speaker
And the update that's just been released last week was the March quarter 2025. And tells us... and it tells us um between Australians between 18 and 75, there's nine just over 19 million people, of which 14 million were employed or had a job to start to or return to. Four million were retired or permanently unable to work or did not want a job. Yet we've got 1.24 million who want to work
00:08:25
Speaker
And the official unemployment numbers, and this is the July numbers, were 649,000. So basically, there's twice as many people who want a job than are officially classified as unemployed.
00:08:39
Speaker
So this is a bit of a distortion with these figures then, Ross. If there is ah many more people wanting to work, why are what what are those barriers? Why are they unable to work? Well, firstly, just I'm sure most people are aware, but to be classified as unemployment um and as unemployed, you need to be actively seeking work in the month or the week that the survey is taken.
00:09:03
Speaker
So that is a very specific definition of unemployment. um But if you look at the reasons, and mostly people are saying, we want to work, but we're not available within four weeks. So caring for children,
00:09:21
Speaker
42% – sorry, this is for women, so caring for children. 42% of women who wanted a job but were not available within within four weeks were caring for children. And 17% said they're caring caring for an ill, disabled or elderly person.
00:09:36
Speaker
Whereas for men, the main reason that they're not available within four weeks, short-term illness or injury, 40%, or long-term health condition or disability, 28%.
AI Talent Acquisition and Industry Reactions
00:09:47
Speaker
And we have Mark Zuckerberg and Meta back in the news, maybe for the wrong reasons this time.
00:09:53
Speaker
Well, Adele, just a little question. What do you reckon a large amount of money is to turn down as an offer? Oh, you you know, a couple of hundred thousand dollars would be pretty crazy to turn down as a good job offer.
00:10:11
Speaker
Yeah, would have thought so. I suppose it depends on your skill set, but would you believe that according to TechZene, that Zuckerberg, who's personally been involved in recruiting AI talent, put an offer to a candidate of, wait for it, $1.5 billion, follows and the candidate turned it down.
00:10:36
Speaker
That's not a typo, Ross. $1.5 billion. That's right, 1.5 billion. Just imagine the conversation at the dinner table that night. hi honey, how was your day? Any interesting news?
00:10:49
Speaker
Oh, darling, I turned an offer down. Oh, really? What kind of offer was that? How much are you talking about? Mark Zuckerberg contacted me and he offered me $1.5 billion dollars and i said, nah,
00:11:01
Speaker
sorry mate I would love to have been a fly on the wall for that conversation. Can you imagine that? It's it's it's just like hard to comprehend. look We don't have any validity other than it was reported on this website, but we do know that Zuckerberg has been very aggressive about ah money and offers for the to try and get the best AI researchers across to Meta. So who's to say it's not true? Hey, Ross, think about the recruitment fee on $1.5 billion. right. 18% on $1.5 billion earned.
00:11:32
Speaker
that's right ah's eighteen percent on one point five billion It's a number too big we can't calculate. Oh, it's got to be about $280 million. dollars Gee, I think you could retire as a recruiter after that. dar I think you're done.
Ephraim Stevenson Controversy
00:11:47
Speaker
That's the news for the 26th of August, 2025.
00:11:55
Speaker
Question of the week is, will the industry allow Ephraim a comeback? Well, ah from the... feeling generated by my blog on Thursday morning, Adele, I'd have to say probably not at this point. But anyway, we'll get to some of those comments shortly. But for those of you who don't know, i published a blog on Thursday morning where I summarized what had happened since Ephraim posted on LinkedIn the previous Friday about his
00:12:27
Speaker
ah new business venture, Ephraim's, and then the response in terms of him pulling that LinkedIn post and then on the Monday launching the Ephraim Stevenson podcast. So, yes, it was um a pretty emphatic response.
00:12:45
Speaker
Yeah, I think it was something that perhaps was ah very Interesting to read, I suppose. I'm talking about specifically your blog. It was a really, I believe, fair and, um you know, even summary of the events. Yes, you you voiced your opinion in there and I think there was reference to John Farnham, which definitely made me laugh and I know a few people commented about that as well.
00:13:11
Speaker
um So the comeback of, you know the comeback of the comeback. ah and But generally the feeling and sentiment was in support of your post around the fact that, you know, here we go again. How could he be doing this again?
00:13:24
Speaker
there didn't seem to be much support for him from the general comments against the post. And you received 70-odd comments on the LinkedIn post, I know, and then many more on your own blog, right?
00:13:35
Speaker
Quite a few. it It was pretty much one-way traffic. I think we could fairly accurately summarise. And yes, I did try to be objective with the post.
00:13:46
Speaker
I wasn't trying to pile on. i was just attempting to set out what I saw as the sequence of events and the difficulty that he would have in returning yet again to launch ah another new venture.
00:14:04
Speaker
Yeah, and look, we won't recap about it about what he's done. If you don't know and you're um trying to understand that, go back to our podcast um a couple of ah podcasts ago. You can go and read Ross's blog, of course, as well at rossclinant.com. So, you know, familiarise yourself with the story. But it's a really interesting one that I think the industry has and interestingly kind of ignited us all in the same direction, which doesn't happen very often.
00:14:30
Speaker
But I understand you had a very specific ah call from somebody about this. um Well, I had a message from the man himself. So Ephraim messaged me on Thursday evening and he wanted to speak. So we set up a time to speak on Friday and then we had about a 15-minute conversation on um um Friday.
00:14:52
Speaker
All right. Please do tell Ross because now we're not just talking about what's publicly available. out there, what's on posts, you're talking about a direct conversation with the man. So tell us about this conversation.
00:15:04
Speaker
Well, I'm not going to go into great detail, but I think it's fair to say that he was fairly bruised about the vitriol that had been unleashed by the blog.
00:15:23
Speaker
um But to be fair to him, he certainly didn't ask me to take it down or modify it in any way, didn't ask me to give him a fair go or anything like that. So certainly he wasn't attempting to influenced me to to do anything with that blog or subsequent coverage ah was more about attempting to understand the degree to which people had pretty fierce feelings and what what my view was um about that.
00:15:57
Speaker
And was he surprised? is that Is that what you're saying? He was surprised at the response he's getting out there in the public? I think the degree of anger or vitriol was the thing that surprised him. I mean, in Ephraim's world,
00:16:11
Speaker
he i mean He's got a young family. He's lost money as well with the demise of Collar. He's attempting to provide for his family, generate an income. So from from that point of view, he's doing what he sees as the right thing for him and his family, which is to try and generate an income, which and absolutely i understand.
00:16:36
Speaker
But clearly, there's a lot of people who feel let down, not just because maybe personally they were part of the Collar story, but the um unfortunate overflow to the broader recruitment industry and having a fairly high profile failure like that reflect, unfortunately, or unfairly on the general ownership capability of people within our industry.
00:17:05
Speaker
Yeah, and I think that from the sentiment of the comments and certainly has been several, you know, in conversations I've had with people, it's ah it's definitely been the way everything has been handled because I think you're right.
00:17:17
Speaker
Nobody would cut down anybody for having a business failure. Nobody would, ah you know, go out there and directly attack somebody who, you know, may not have been successful in their business or had, you know, had to close it. And, you know, that's happened before we understand that.
00:17:34
Speaker
And, It's probably just, as I said, more about the way he's handled things. He's been so very vocal about how successful he was right to the very end and clearly he was lying at the very end because he was still posting about how successful he was right before it failed.
00:17:51
Speaker
And then to come back with no further conversation about the journey and what happened, you know, no no explanation, I suppose. It really feels like the industry feels like we're owed an explanation. And I feel obviously those staff who are directly personally impacted by this to date still don't have an explanation from him either.
00:18:14
Speaker
Yes. And it's, I mean, it's certainly not at all the same, but if you look at another industry leader, Stephen Carter from Sharpen Carter, when that video from his address to his staff last November about their potential behaviour at the Christmas party went viral and got ah mainstream media access.
00:18:40
Speaker
ah Steve came out a couple of weeks later and wrote or published a ah LinkedIn post, you know, effectively taking responsibility for what had happened. And again, i you know, personally, and again, I wrote about this.
00:18:58
Speaker
I don't think he had a lot to apologise for. I think there was certainly a pile on there. And certainly, know, his ethics and Ephraim's, you know, completely different. But that, to me, shows you how it's done.
00:19:14
Speaker
on the front foot, show some contrition, demonstrate certainly through words at least, that um you understand why people reacted the way that they acted and then state what you're going to do going forward.
00:19:30
Speaker
And not that that's your position to do that, Ross, but did you have that sort of conversation with him? Did you actually provide any insight into what he could do? I mean, we're not experts in this space and we're just reporting the news around this, but you know, what should he be actually doing to to if he's planning to come back and he wants to make money and he wants to start a new business? How could he go about this?
00:19:54
Speaker
Well, I mean, firstly, I'm no crisis management expert. I'm no PR expert. So there are certainly professionals that are well-placed to provide that advice, not me. But, you know, pretty much as I said to him, people are looking for some acknowledgement of your responsibility and what happens and contrition. And who knows that I mean, he's promising that in the first episode of his podcast. So maybe maybe we'll hear that.
00:20:17
Speaker
ah But that, in pretty simple terms, is what I said. If you're going to be posting about a new venture, then you need to be acknowledging what happened in the previous one.
00:20:28
Speaker
So there's no indication that he's receiving professional PR ah support on this, as far as you're aware? Not that he told me and I didn't ask. Okay. So, you know, I guess in that sense, from a media perspective, from a coverage perspective,
00:20:42
Speaker
You know, they say no news is good news. um Sorry, bad news is good news. You know, maybe this is all part of the plan. Maybe he's creating this buzz. There's a lot of people talking about him again. ah Is that really going to translate into business?
00:20:57
Speaker
Well, i I would doubt it because surely business owners who might benefit from some of the things he's got to say, and of course not everything that he would have to say about a but being a business owner is useless, but people would be very are cautious about being associated with him given the sort of radioactive nature of his name right at the moment.
00:21:27
Speaker
And that that makes it difficult to build a business when there's that public perception um around your name. ah Radioactive is a great word, Ross. I love that. I think that's a great summary of the situation. But how do we close this out for our conversation? Will the industry allow if from a comeback? I believe there's a couple of really ah poignant um um comments on your blog that I think we should share with our listeners.
00:21:53
Speaker
Sure. why don't you start with um one on my blog and I'll finish with one from the LinkedIn update that I posted. There is a comment from somebody called Ben and he says, it was apparent to a lot of people in the recruitment industry early on that there was something very fishy about Ephraim and Collar Group and no surprise at all when it all turned out to be Fugazi.
00:22:15
Speaker
To welch on your responsibilities and the Docker agreements and leave your former employees thousands out of pocket, And then just delete collar from your LinkedIn profile. Crack on with a new venture and tout yourself as some kind of recruitment business guru is just insane.
00:22:29
Speaker
This guy should never be allowed to be a company director again, let alone advise anyone else. And I've got a comment here from Liam Davis, the founder of Better People.
00:22:40
Speaker
And on my LinkedIn update, he has said, I can appreciate a human looking for something new to drive himself and get back into work, but this isn't it. Personally, i wouldn't want to learn about recruiting and business from someone who's done the things he has.
00:22:57
Speaker
ah do hope he gives the full story in his podcast about what really happened, although with him controlling the narrative, I really doubt it.
00:23:07
Speaker
Some really fair and interesting comments there. I agree. I think we have to wait to see what the first podcast brings us and whether it will shed any light and any humility from his part on the whole subject.