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Episode 122 - Is the decline in TA good for recruitment agencies?
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Episode 122
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Transcript
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00:00:08
Speaker
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Closure of SEEK's Recruiter Network
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This is the news for the 12th of August, 2025. I'm Ross Klenit.
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SEEK has closed the SEEK Recruiter Network. Last Monday, the site's yeah URL returned the response, SEEK Recruiter Network is no longer available. We've made the hard decision to close the SEEK Recruiter Network. If you have an active job brief with us, you will continue to be supported.
00:00:53
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A senior SEEK representative declined to comment about the reasons for the closure when ah RNA contacted him late last week. SRN was launched as a trial in early 2024 with no publicly specified end date or viability metrics in an attempt to monetise the marketplace for matching SEEK customers who are unable to fill their role via a SEEK ad with relevant agency recruiters.
Leadership Change at People2People
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Liz Punchen has been appointed Managing Director of People2People Victoria. Founding MD Erin Devlin announced her departure from People2People at the beginning of April this year.
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Punchan joined People2People's Sydney Graduate Recruitment Program in early 2008, having completed undergraduate studies at the University of Wollongong the year before. Since moving to the Melbourne People2People business 10 years ago, Punchan has been promoted through various leadership roles, culminating in her directorship last year and elevation to managing director this year.
Financial Results: ADECO and Hydric & Struggles
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The ADECO Group reported 2025 Q2 revenue of 5.77 billion euros, up 0.4% on an organic trading days adjusted basis compared to Q2 2024. Temp contract revenue grew 1% while PERM placement income dropped 6%.
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Gross profit was 1.09 billion euros, down 3%. APAC was up 9%, although ADECO ANZ revenues were 5% lower.
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Global search firm Hydric & Struggles reported net revenue increased 13.9% year-over-year in Q2 2025. Growth was recorded in each of the company's lines of business, Executive Search, On-Demand Talent and Hydric Consulting.
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With the executive search in Europe, the standout up 24% in constant currency. The APAC region reported revenue of $25.5 million, 11.8% year-on-year. Adjusted EBITDA $33.9 million and adjusted net income $18.1 million, increase of 28% from 2024.
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adjusted ebater was thirty three point nine million dollars and adjusted net income was eighteen point one million dollars an increase of twenty eight percent from q two twenty twenty four Recruit Holdings, the Tokyo-based owner of local brands, Chandler McLeod and PeopleBank, reported revenue in their staffing division decreased by 3.4% to billion u s dollars in its fiscal first quarter, ended June group ebiter was up one percent to one point one billion dollars and group operating income was up twenty percent
00:03:23
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to one billion dollars First quarter revenue at Tokyo listed Persol Holdings rose by 3.6% year over year to billion. u s dollars Group adjusted operating profit declined 9.2%.
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Persol reported constant currency rise sales of 4.9%. dollars down five point one percent year onyear and operating profit decline nine point two percent perol aacc reported a constant currency rise in sales at four point nine percent but increased systems investment contributed to a 37% decline in EBITDA.
Fraud in Victoria's Labor Hire Companies
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Allegations of criminal activity in the Victorian labour hire sector by organised crime syndicates were made last week by the Labour Hire Authority. The LHA alleges unlicensed labour hire companies are targeting horticultural businesses in and around Mildura after authority officers attended the premises of several horticulture businesses and worker accommodation sites as part of an ongoing operation in the Sunraysia region.
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Labor hire providers have been found producing fraudulent paper licences, doctoring digital files relating to their licensing status and claiming to be a specific licensed company without that operator's knowledge, then giving a grower their own contract and bank details for payment.
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The authority did not name the companies. These operators can be involved in crime from across the state and international borders, so they're not people you want to do business with, Steve Dargarville, Labor Hire Licensing Commissioner, said in a press release.
Australian Defence Force Recruitment Success
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Figures for the most recent financial year show a significant turnaround in the Australian Defence Force's recruitment and retention of personnel. Figures from the Federal Government show the permanent and full-time headcount reached more than 61,000 personnel the end the 2025 financial year,
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reflecting an annual increase of almost 1,900 people, the highest in 15 years. Year on year, it reflects a 17% increase in the number of people joining the ADF, which Defence Minister Matt Keough attributed to smarter career advertising, including advertising in games and utilising TikTok.
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More than 75,000 applications were received, the strongest demand in five years, up 28% on the previous year and consistent with rising applications for Defence Force careers in other countries.
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The Army's headcount is now at a four-year high. While the Navy and Air Force saw their respective overall headcounts reach their highest levels since 2006, Mr Keogh partially attributed a broadening of entry eligibility for a five-year high in applications.
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The median age of recruits was 23 years. Departures from the ADF dropped to only 7.9%, the lowest rate in a decade, and down from 11.2% three years ago, indicating retention initiatives such as the Continuation Bonus and Defence Assisted Study Scheme are effective at decreasing turnover.
00:06:23
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ADECO Australia replaced Manpower Australia as the vendor responsible for ADF recruitment on 1 2023 after transition period.
Victoria's Work from Home Law Proposal
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The Victorian Government's plan to legislate a right to work from home is facing major legal roadblocks, with experts warning it may be logistically unworkable.
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Premier Jacinta Allen announced the proposal at the State Labor Conference earlier this month. If passed, it would grant workers in both the public and private sectors the legal right to work remotely at least two days a week.
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Allen said the Government is exploring several legislative options, including amending the Equal Opportunity Act. But legal experts say it's unclear how such a law could be enforced as industrial relations are a federal matter.
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Speaking to news.com.au, Geoff Baldwin, Special Counsel at Stacks Law Firm, noted that while the Fair Work Act 2009 already allows employees to request for flexible working arrangements, it does not guarantee a right to work from home.
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Employers can reject such requests on genuine business grounds, which is a narrower test than what might be considered reasonable. Meanwhile, employment law expert Ian Neill SC labelled the proposal a stunt, warning that any state law conflicting with federal legislation would likely be invalid, given the Fair Work Act already covers this space comprehensively.
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If passed, Victoria would become the first Australian state to legislate work-from-home rights, but legal experts suggest this may never happen.
SAP Acquires Smart Recruiters
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SAP announced that has reached an agreement to acquire recruiting software company Smart Recruiters.
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In a 1 August press release, the European software giant said that Smart Recruiters' powerful, user-friendly interfaces and seamless workflows will complement SAP's existing HR tools.
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Mohamed Alam, the SAP Executive Board member who leads product and engineering, said in a statement that with this acquisition, customers will be able to manage the entire recruitment candidate lifecycle,
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from sourcing and interviewing to onboarding and beyond, all in a single system to streamline the experience for recruiters, hiring managers, and in particular, candidates. Smart Recruiters was established in 2010, and more than 4,000 companies in 120 countries, including Amazon, Visa, and McDonald's, use their ATS.
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The terms of the acquisition were not disclosed. The deal is expected to close in the final quarter of this year.
Corruption Investigation in School Infrastructure NSW
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In New South Wales, public hearings have concluded in the Independent Commission Against Corruption's investigation into alleged corrupt recruitment and contracting practices at School Infrastructure New South Wales.
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The ICAC inquiry, known as Operation Landon, is examining the conduct of former School Infrastructure New South Wales Chief Executive Anthony Manning, along with other staff between 2017 and 2024. The investigation focuses on
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the investigation focuses on three key areas of concern, the subversion of recruitment processes, the improper awarding of contracts and the misuse of public funds to benefit friends and associates.
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Among the most serious allegations, Manning awarded a $19 million dollars contract to a personal friend. Another associate of Manning's who had previously been excluded from an official recruitment process was later hired as Executive Director of Infrastructure Planning via a $650,000 contract, followed by a second role worth $911,000. Manning has admitted to failing to declare personal relationships and accepting gifts, including Formula One tickets, from the friends who benefited benefited from the contracts.
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The ICAC is also investigating whether Manning and ah HR advisor Wendy O'Brien took reprisal action against whistleblowers and whether O'Brien deleted evidence from her phone after being contacted by investigators.
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In under two years, Manning approved the rise in O'Brien's daily consultancy rate from $800 to $1,425. The inquiry is now in the second stage of receiving written submissions from all involved parties.
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A further update is expected in October.
The Future of Talent Acquisition Teams
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Senior Chandler McLeod recruiter Martin Hill has announced the launch of his reference-checking platform Referees, another player in the market dominated locally by Xref and Referew.
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Based in Perth, Hill previously worked at ProTech Group and Zenith Search, started his own recruitment agency last year before rejoining Chandler McLeod, having had a two-and-a-half-year stint there over a decade ago. Hill is also a multiple sourcer recruiter of the year winner for Mining.
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And that's the news of the 12th of August 2025. I'm Adele Last. Stay tuned now for question of the week.
00:11:19
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Question of the week. Is the decline in talent and acquisition good news for recruitment agencies?
00:11:28
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Well, I think I know where this has come from. This has been prompted by a LinkedIn post late in July by Scott Brown. Scott Brown, I don't know him personally, but he has a history in the agency side, Julia Ross, Manpower and Claris.
00:11:45
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And most recently, he's been at EY, as an executive talent consultant. And his post on LinkedIn, after having been made redundant, says, do businesses not necessarily understand the value of TA, that their value is derived not only by sourcing great talent for boom times, but also by keeping the talent pools full and bringing more strategic talent planning to bear during the leaner times.
00:12:11
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What about EVP, employer branding, benchmarking, and analysis of market and trends? so TA is far, far more than putting bums on seats. It's an interesting discussion, isn't it, Ross? Because we are seeing ah perhaps what is some considering you consider a cycle. You know, there is this evolution of, ah you know, times are busy and employers bulk up their TA teams internally, hire lots of recruiters to fill positions.
00:12:39
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And then when things slow down a little, the TA teams are the first to be made redundant let go. For sure. it's not It's not new. It's not something that we haven't seen lots of times before.
00:12:50
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But his argument in this post is saying that why do they not see the greater benefit of what TA provide? Well, does that mean that TA have had the opportunity to demonstrate that value and have not been able to? Or they have demonstrated it, but the business frankly doesn't care or doesn't care enough?
00:13:11
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I don't know. What do you reckon? Yeah, it's an interesting one and I think it relates to the leadership connection, I suppose. So where TA fits and in a lot of organisations it fits within the people culture area of a business and that's usually headed up obviously by a people and culture or what used to be the HR manager, ah HR director type position.
00:13:34
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It does really depend on how strategic that person is and whether they are holding a seat at the boardroom table, whether they have the ear of senior leadership in the organisation for them to really understand what the function does?
00:13:48
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And more importantly, do they even respect it? Because as we know, a lot of people in senior ah HR, senior people and culture positions, they don't value recruitment, the recruitment or talent acquisition function internally very much themselves. You know, they don't want to do it. they they It's, it's a you know, a thorn in their side, so to speak.
00:14:06
Speaker
Well, I think it largely comes from the fact that TA have traditionally not been very good at demonstrating their value. In other words, gathering critical talent data and then proving that the TA team are moving the needle in things such as quality of hire or tenure or retention or any of those things that the business surely would take note of and value if it was being tracked and presented in a powerful way. Mm-hmm.
00:14:36
Speaker
And look, that could be not their fault as well. You know, a lot of internal talent teams are stretched. You know, they're under-resourced. They are managing a large number of vacancies at any one time. So, you know, they're often just trying to chew and swallow BAU stuff and not really get strategic. But I think they have to put their head up and understand that this is to some extent of their own making. If you haven't proved your value,
00:15:03
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to your employer, then yes, you're going to be in line potentially for redundancies when times are tough. And frankly, it's an easy overhead for a head of ah HR or people in culture or CEO to make. And then hopefully that's good news for the recruitment industry, for agencies, because it's unlikely that the remaining TA people are going to be able to cover all the vacancies that fall to them. Hiring managers typically don't want to do it.
00:15:32
Speaker
So is this good news for us? Does that mean the spillover leads to more vacancies being registered with recruitment agencies and therefore we benefit? Yeah, I think we have to see it that way. I think we have to take advantage of the cycle potentially of of TAs ah being made redundant or positions and teams reducing and looking at where we can provide even external from an external source that strategic value. So understanding our markets very deeply, providing business analysis of what's going on in the market, comparative results, like you said, around things like tenure, around things like salaries, around time to fill. You know, this is another one that I think is really overlooked in a lot of internal teams
00:16:18
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is how long is it taking them to fill a position um from start to finish, you know, and we know that agencies do that much faster. Well, typically the data...
00:16:29
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all of the data I've seen indicates that time to fill is blowing out, which seems confusing because aren't good people easier to find and recruit? Isn't technology making the process faster? It certainly doesn't appear so.
00:16:51
Speaker
yeah that's an interesting one, isn't it? Where we have, ah you know, the most... um technologically advanced era we've probably had in the space, you know, it's less manual than it's ever been and yet we're finding it difficult, more difficult to find the right candidates.
00:17:07
Speaker
I think most agencies at this very minute of you know, August 2025 or September 2025 would be saying um it's ah there's a large abundance of candidates. It's now just that sourcing and filtering and finding the right sort of candidates to to bring the best to the top. But you know Again, as I said, good recruiters do this day in, day out. That's their bread and butter. That's what they know how to do well.
00:17:31
Speaker
Well, is it a cycle, Adele? Like, are we just seeing the typical churn in, churn out cycle of TA and when hiring picks up again, more TA changes? ah people will be hired into TA teams or do you think this is a more permanent shift? i i suspect it's more permanent shift. I suspect this is the sort of area CEOs will be going, can't we replace TA people with Gen AI products?
00:17:58
Speaker
What do you think? Yeah, well, there's a few comments on that original post from Scott Brown around what else TA can be doing and um looking at their greatest skills. And, you know, this person that comments actually says,
00:18:11
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You know, what about their sales and marketing ability? And that made me laugh because that's often the very reason why some agency recruiters go into talent acquisition internally is because they don't want to do the sales and marketing. So what you're left with is somebody who's doing recruitment processing. And I know certainly from my own personal experience, I've worked a couple of internal positions in my career.
00:18:33
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And i hate to say, but that's the majority of the skill set that I've worked alongside are people who know how to recruitment process. They know how to take a vacancy and post an ad and process people through the process essentially to an outcome.
00:18:50
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They're not necessarily managing it in the in a strategic way. They're certainly not talent pulling in the in the right way. They're certainly not tapping people on the market. They're not headhunting. So, you know,
00:19:02
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it indicates to me that it is underlying an underlying fundamental issue with the role itself as well. Yeah, look, I haven't worked internally. My wife had 10 years in agency recruitment and then she spent 15 years in HR.
00:19:19
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And certainly I think it would be fair to say that it's a majority of TA people that she came across weren't particularly impressive. I'd say if I had to pick a percentage that it would be 30% impressed her, 70% did not.
00:19:32
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andmpressedto seventy percent did not impress her. And to be fair, I think the real issue, not real, but one of the significant issues is very difficult to specialise because generally people in TA have many more vacancies to fill than on the agency side.
00:19:53
Speaker
And unless they're a very big business that they're supporting, they're going to be dealing with roles across all sorts of areas and they just don't have the time to develop particular expertise. And that's where I think in the long term, the recruitment industry, particularly those deep niche specialists, have an opportunity to re-establish or further enhance their value with those sorts of businesses that are downsizing their TA teams.
00:20:24
Speaker
Yeah, I think that's a really good point in this factor. If you are a deep sector specialist in one particular area or narrow and deep sector specialist, you can really take advantage of this situation both with ah strengthening the TA contacts you do have and making sure you've got multiple contacts in an organisation.
00:20:45
Speaker
And I would even say make sure you've got hiring manager, line manager contacts as well because if your TA contact does suddenly find themselves out of work and that's your only channel in, as you know, you've got to kind of, you know, have multiple contacts within one organisation at different levels as well and bring that value about what you know. Give give up all of the information you've got now because that's what's going to get get them to hold on to you.
00:21:11
Speaker
And the most important thing will be if you can consistently deliver the top 20% of talent and the client recognizes that, you are going to be very valuable to that organization.
00:21:25
Speaker
And I think by and large, the recruitment industry has got by by delivering a lot of, let's say, six, six and a half, seven out of 10 rating candidates. I think those days are coming to an end, but those agencies that consistently deliver those eight, eight and a half, nine, nine a half, 10 out of 10 candidates, they're the ones that are really going to um have a much brighter future going forward.
00:21:54
Speaker
And we should always be delivering those nine and a half and 10 candidates, I'd like to say. That should always be our target. But yeah, this could definitely be ah good news for the recruitment agency space.
00:22:06
Speaker
Well, I'll particularly listen with interest when I talk to people at the RCSA conference later this month, whether they're experiencing a reduction in TA teams. And then there's the ATC, which is Federation Square in Melbourne,
00:22:21
Speaker
in late October, which is full of ah ta people. So I'll be fascinated when I attend there to talk and see what the the word is on the ground about the size of TA teams.