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Is AI the beginning of the end for recruiters?
148 Plays2 months ago
Episode 82 has news for 30 September 2024 and Question of the Week "Is AI the beginning of the end for recruiters?"
#RNA #RecruitmentPodcast #RecruitmentNewsAustralia
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Transcript
Bullhorn's AI Enhancements in Recruitment
00:00:09
Speaker
Bullhorn is reimagining recruitment with AI infused everywhere. Bullhorn is taking a hard look at where and how recruiters spend their time to identify tasks and activities that are well suited to enhancements from AI. Bullhorn is developing AI capabilities and solutions to specifically target those parts of the recruitment lifecycle. Across their platforms and products, Bullhorn has over 22 billion data points specific to recruiting. These include 800 million candidates, 21 million jobs,
00:00:38
Speaker
453 million submissions and 60 million placements. This data helps make Bullhorn's matching models accurate. Bullhorn knows what success looks like at scale.
Australian Job Market Trends
00:00:50
Speaker
This is the news for the week beginning, the 30th of September, 2024. I'm Ross Clennett. Job vacancies were $339,900 in the three months to August, 2024, a seasonally adjusted decline of 5.2%.
00:01:05
Speaker
according to last Thursday's ABS labour market release. Despite the national decline, eight of the 19 industries recorded vacancy growth between May and August, retail trade, arts and recreation services, transport, postal and warehousing, wholesale trade, other services, construction, and financial and and insurance services. By industry, the largest drop in vacancies, 17.2%, was in accommodation and food services.
00:01:34
Speaker
Despite this being the ninth consecutive quarterly decrease, job vacancies are 45% higher than February 2020 prior to the start of the pandemic.
Rebranding in Recruitment: Solve by Talent
00:01:45
Speaker
One of Australia's largest recruitment agencies, IT Specialist Talent, has announced the separate branding of its six-year-old RPO business and talent consulting practice. It will now be known as Solve by Talent. Solve's four service lines are Embedded Recruitment, MSP, RPO and Advisory.
00:02:04
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Tom McIntosh, who joined talent in mid-2018 after 10 years with Rubicore brand Expand, will continue as Solve's Managing Director.
Acquisition of BEX Wigan Stokes
00:02:14
Speaker
Melbourne SME recruitment agency BEX Wigan Stokes has been sold. Dan Canham, owner of Strategy Consultants Tomorrow Strategy Co. has purchased the business from owner Belinda Wiggins. Wiggins will become the firm's executive chair. John Wallace joins BWS as CEO from Blue Bike Solutions, a business and technology consultancy where he was most recently its client engagement director.
00:02:38
Speaker
BWS was established in 2004 and currently has eight employees operating out of one office in Scoresby and Melbourne's outer eastern suburbs. The terms of the sale were not made public.
Monorom Labours Power's Legal Issues
00:02:50
Speaker
The Supreme Court of Victoria has imposed penalties totalling over $220,000 to a labour hire firm for making unlawful changes to its directors. The firm, Monorom Labours Power, was supplying workers to farms in Cooey Australia's largest asparagus growing district and vineyards in the Yarra Valley. The ruling follows legal action launched by the Labor hire authority in August 2023 and in it the authority accused MLP of failing to notify of multiple changes to directors and secretaries and said that one director was not a fit and proper person to operate a labor hire company. Ensuring we have fit and proper people running Victorian labor hire companies is an important way of protecting workers and improving the industry's integrity.
00:03:36
Speaker
Labor hire Licensing Commissioner Steve Dargaval said in a statement. Labor hire workers in the horticultural industry are among Victoria's most vulnerable, so the industry is a key focus for our expanded compliance and enforcement program, Dargaval said.
Global Staffing Firms Revenue Decline
00:03:51
Speaker
Revenue at the world's 100 largest staffing firms, fell by an aggregate 7% in 2023,
00:03:57
Speaker
to US billion according to the latest, largest staffing firms globally report released by staffing industry analysts. The largest staffing firms represented 43% of global staffing revenue last year. For the sixth year in a row, Randstad was the largest staffing firm overall.
00:04:18
Speaker
The top five staffing firms by 2023 global staffing revenue were, one, Randstad, $25.4 billion dollars sales, two, Adeko Group, $20.3 billion, three, Manpower Group, $18.9 billion, number four, Allegis Group, $12.1 billion, and at number five, Japan's Recruit Group, $11.56 billion.
Trends in Office vs Remote Work
00:04:47
Speaker
u s dollars According to the latest research by global recruiter Robert Half, 39% of Australian workers are expected to be in the office full-time this year, up from 19% in 2023. 78% of workers state remote work plays an important role in their overall job satisfaction. Remote work is by far more important for the job satisfaction of Gen Z at 84% compared to Baby Boomers at 71% the data found.
00:05:18
Speaker
Robert Half said employers willing to pay a salary premium to lure workers back to the office may have some success, with 44% of survey respondents saying they would be willing to return to the office full-time if they were offered a higher wage. The survey, which polled 1,000 full-time office workers across the country, found that flexible work hours are also a significant reason for many workers to remain in their jobs, with 39% prepared to resign or turn down a job offer that does not include flexibility.
AI Comfort in Recruitment: A Bullhorn Survey
00:05:47
Speaker
However, workplace flexibility would not impact the decision of 36% of Australian workers to turn down a job offer or 37% of employees to leave a company, the survey reported. According to the results of a Bullhorn survey released last week of 2,400 recruitment agency contingent workers in North America, Europe and Asia Pacific, 60% are comfortable with artificial intelligence managing the entire recruitment process, including job matching, onboarding and interviews.
00:06:17
Speaker
speed and job fit with the top pain points cited by candidates who are dissatisfied with the current human-centric recruitment process. The outcome of the Bullhorn research support the results of a survey of 3,000 UK and US workers released two months ago that found that not only do 49% think AI could help the issue of bias and unfair treatment in hiring,
00:06:38
Speaker
but 46% of workers believe AI will be better than humans at being fair in the hiring process and 50% believe that AI could improve the hiring process. Other results from the Bullhorn survey of agency contingent workers were 75% of contingent workers would work with their staffing firms again, up from 68% last year, 58% intend to leave the contingent workforce for full-time employment within the next year,
00:07:06
Speaker
63% of candidates already working with AI say they have received faster responses because of it. 89% of candidates who heard from their recruiters more than once a week would keep working with them. Contingent worker loyalty hit 85% when recruiters reach out with new job opportunities before the last contract has ended. A marketing agency in Thailand has announced it will be giving employees paid tinder leaf to explore dating options on the app.
00:07:36
Speaker
From July until the end of the year, White Line Group's employees will be paid to go on dates as part of an initiative to boost their wellbeing. The move was brought about after one staff member complained about being too busy to date. White Line Group managers were quoted as saying research indicates that being in love increases happiness, therefore making work more enjoyable. However, staff aren't just getting days and nights off to meet with potential suitors. White Line Group is also paying for six-month-long Tinder Gold and Tinder Platform platinum subscriptions for its staff.
Concerns Over EY's Work Culture
00:08:10
Speaker
an ernst young employee in india has died allegedly due to a gruelling workload twenty six year old woman anna peril worked as a chartered accountant with ah member firm of ey global in punei a city 150 kilometres southeast of Mumbai on India's west coast. Four months into the job, Ms. Perel died from what her father described to local news media as a combination of multiple issues, including acid reflux, work stress and work pressure. Mrs. Perel's mother wrote a letter to the head of EY in India that said in part, and has experienced sheds light on a work culture that seems to glorify overwork
00:08:47
Speaker
while neglecting the very human beings behind the roles. This is not just about my daughter, it's about every young professional who joins EY filled with hopes and dreams, only to be crushed under the weight of unrealistic expectations. Anna's death should serve as a wake-up call for EY," Ms Pareil's mother wrote. She also said no one from EY attended Anna's funeral, adding she reached out to EY management afterward but received no reply.
00:09:15
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EY said work pressure was not the reason for Ms. Pereal's death. Ms. Pereal's death in her mother's letter has led to an outpouring of grief and anger online with professionals from the industry, including some from EY sharing their experiences of toxic work environments and crushing workloads common across India's accounting profession. An EY co-worker claimed on Reddit We average 16 hours a day in the busy season and 12 hours a day in non-busy seasons. No weekends or public holidays are off. India's absence of labor protections and associated workplace stress have long been of concern for the international labor organization as employee complaints frequently lead to reprisals and in many cases, termination. India's standard work hours are some of the longest in the world,
00:10:03
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with 51% of India's workforce working at least 49 hours a week. And that's the news for the week beginning the 30th of September 2024.
AI's Impact on Recruitment Teams: Efficiency vs Headcount
00:10:14
Speaker
I'm Adele Last.
00:10:26
Speaker
Question of the week. Is AI the beginning of the end for recruiters? Yes. Oh, my gosh, Ross. Why do you say that? Yes, it is. Well, OK, caveat. It's the beginning of the end for average agency recruiters and obviously below average agency recruiters. So by definition, if you look at all the average and below average recruiters, that's a majority of the recruitment industry. I reckon a majority of the recruitment industry is in serious trouble. OK, why do you say this?
00:11:02
Speaker
Okay, well, let's look at the Bullhorn survey that was mentioned in the news. So 2400 recruitment agency contingent workers, in other words, you know, temps or contractors. So these are candidates currently working for a recruitment agency. Now, 60% of them.
00:11:23
Speaker
are comfortable with artificial intelligence managing the entire recruitment process, including job matching, onboarding and interviews. Why? Well, 56% say recruiters lack an understanding of what they're looking for in a job. In other words, what the contingent worker is looking for in a job.
00:11:42
Speaker
44% felt recruiters were too slow to respond. And then if I bring in that other survey of 3000 UK and US workers from a couple of months ago, 46% surveyed there believe AI will be better than humans at being fair in the hiring process and 50% believe that AI could improve the hiring.
00:12:09
Speaker
experience. So there you go, Adil. That's what I'm basing my view on. But isn't that just candidates, you know, being candidates, you know, they don't want to deal with us. They think we're a roadblock in the process. They think we're too slow to get back to them. All of those things. I mean, what they say in a survey and what the reality is when, you know, a job's on the table and they want our help is pretty different in my experience. I don't know that that this is exactly what's going to you know reflect in the industry.
00:12:37
Speaker
Okay, so I'll give you some of that. What I point to is that we're in the early dawn of the impact that AI is going to have on recruitment, like literally early dawn. And if we've got basically half our candidates going, bring on AI, because I think it can do better, surely when we're getting to mid-morning or towards lunchtime in terms of the evolution of AI and recruitment,
00:13:12
Speaker
70% of our industry is toast, surely. But that's like every other new innovation that's come into our industry. you know We've had job boards like SEEK you know going to take out the recruitment industry in the late 90s. We had LinkedIn come in and that was supposed to be the beginning of the end of the recruitment industry as well. you know There's been so many changes and and tech that's supposed to have been the beginning of the end. Isn't this just another um phase Isn't this just another iteration of some change that is likely to take us out but really won't? No, because, and he's kind of the kicker, the recruitment agency owners
00:13:54
Speaker
will be the first, or maybe not the first, but they'll see the potential for AI and they're going to eliminate a lot of their workers or not hire the workers or consultants that they could, because with a very small number of, let's say, high-performing recruiters,
00:14:14
Speaker
they can make the experience excellent. And so it's almost like there just won't be a place for an average recruiter because they just won't be profitable. And so I think it's probably the recruitment agency owners themselves that are probably going to drive a lot of this and are going to bring a lot of AI into recruitment.
00:14:36
Speaker
And there's just going to be a lot of recruitment agency firms that in this era have grown to 15, 20, 25, 30. Whereas in the coming era, those sort of businesses are probably going to be two or three employees and just a shitload of AI. Well, look, I'm all for improving our profession. I'm all for a high performing recruiter. ah None of us want to you know consider ourselves an average recruiter or you know really accept a lower standard. so On that basis, I think what you said then is a good thing around, you know, the AI driving out, you know, the average performers and keeping high performers in what will be smaller teams and smaller, you know, smaller ah staff and recruiters in in agencies. But, you know, you can't replace the human touch. This job is a job about people. You can't tell me that whilst candidates are saying that they would rather deal with, you know, a bot ah end-to-end in the process. I mean,
00:15:32
Speaker
you know, pardon my French, when the shit hits the fan, they want to deal with a person. Well, okay. So I will give you that in the sense that again, if I look at the Bullhorn survey, what do the contingent workers say they want in terms of recruiter contact? Well, 57% say they want that contact once a week or more frequently.
00:15:56
Speaker
and then 22% say twice a month. So we've got 79% that are saying at least twice a month, preferably once a week or more, and then only 21% saying less frequently. And again, survey indicates that what increases candidate loyalty? Well,
00:16:20
Speaker
contingent worker hits a high point of 85% when recruiters reach out with new job opportunities before the last contract has ended. So I absolutely agree the opportunities there.
00:16:34
Speaker
Absolutely. And that human contact is critical, but can we get our house in order as an industry to prioritize that? Because again, you look at the survey results and it would say, despite everything we might say about doing that, we're just not doing it to the extent the candidates want. So we don't want to bury our head in the sand about it, obviously. And we didn't with any of the other innovations that I mentioned earlier, you you need to be across them and aware of them and how to harness it, for sure. But the human element of what we can do needs to be enhanced by this, which is what we're hearing about a lot of AI. It's got to be an enhancement to the to the person that's involved in the role. um And I think we're getting to the crux of talking about how we're dealing with candidates really. Our reputation, our currency, our currency reputation with candidates is not is not good. It's not high. And we need to improve that as an industry, I think is what you're getting to.
00:17:33
Speaker
Well, yeah, because for the simple reason that if I surveyed a random 100 recruitment agency owners, and if I asked them the question, um do you have a candidate acquisition and retention strategy? And if you do, is it followed by all your recruiters? Do you measure the results and do you regularly improve that strategy and provide feedback to your consultants based on those results? I know the answer. I know what the percentage will be. what what do like Okay. What do you recommend? You contact 100 recruitment agency owners and I think you'd be lucky to find five. I agree. That's even being implemented and they certainly don't measure and improve it and even reward on it. It's it's probably just a document that was written some time ago.
00:18:31
Speaker
If it was more than 10 percent, I would be shocked. I would honestly be shocked. And yet we bang on about the candidate experiences being our competitive advantage. And if you look at the difference between what agency owners say and then what they do, there's a huge gap.
00:18:56
Speaker
Huge gap. So we've only got ourselves to blame as far as I'm concerned. Like to me, the answer is kind of obvious and the surveys tell us that. And yet what a recruitment agency owner is doing about it in terms of prioritizing resources towards that, not much at all. So I think what you're saying around this question is AI at the beginning of the end for recruiters. And I get why you say yes.
00:19:24
Speaker
But it should be a bit of a warning sign, right? It should be a wake up call that if you're harnessing AI and you're excited about AI ai and you're integrating it and and a lot of people are, you've really got to look at what it's going to improve for you in terms of making the people element available. What could they be doing? I mean, if the AI is actually relieving recruiters from two or three weekly contacts to a candidate allowing them to, you know, if it's making regular contact with candidates on your behalf, great. What is it freeing the recruiter to do then? What will they actually be performing in order to improve service, particularly to candidates? Well, I think what they should stop doing is just working on low probability jobs because this is
00:20:06
Speaker
I reckon a major part of why candidates are so pissed off that if you've got a recruiter working on 15 jobs of which, let's say, 12 or 13 low probability or speculative jobs, then the recruiter might be calling candidates, can I put you up? Yes, you can put me up.
00:20:23
Speaker
And they're sort of throwing mud against a wall. And are they really going to prioritise the candidate experience? Are they going to ring every single candidate who they've put forward to go, Oh, sorry, I haven't heard back. I'm following up. Like, they're just not going to do that. They don't have enough time. And that's the sort of stuff that drives poor candidate experience. Recruiters just chasing way too many jobs or working on way too many jobs that are low probability jobs. And the sooner that agency owners create a much higher benchmark for what jobs that their recruiters ah will work on, then I think we're then taking an important first step towards a better candidate experience. So what I'm taking from what you've said, Ross, is that for the average recruiter, average performance recruiter, AI could be the beginning of the end.
00:21:14
Speaker
they should see this perhaps as a bit of a warning sign, a wake up call to get their house in order, particularly around candidate experience. No, Adele, this is the beginning of the end. There is no future for the average and below average agency recruiter.