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Episode 153 - Should AI recruiter bots have a human face?
51 Plays3 hours ago
RNA episode 153 has news for 24 March featuring Quest Personnel entering administration, the ABS reporting a surprise jump in unemployment, to the NSW Government turning back to recruiters, growing scrutiny of AI screening tools, and a regulatory crackdown on sham contracting. Question of the Week is "Should Ai recruiter bots have a human face?"
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Transcript
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Quest Personnel's Administration and Fraud Scandal
00:00:37
Speaker
This is the news for the 24th of March, 2026. I'm Ross Clennett. And I'm Adele Last.
00:00:44
Speaker
Adele, i read that Victorian headquartered Quest Personnel entered administration last week. Now that name rings a bell. Weren't they in the news a few years ago, something about a big fraud case?
00:00:54
Speaker
More than a decade ago, in fact. Back in 2014, they were caught up In one of Australia's most prominent candidate fraud cases of the past two decades, an individual named Andrew Flanagan was hired by Meyer for a senior executive role based on what turned out to be a fraudulent resume and fake references.
00:01:18
Speaker
Andrew Flanagan, yes, that's right. Quest Personnel was the agency that handled his placement and the concern surrounding the case was that they may not have conducted thorough background checks. I recall this case at the time because I actually worked for Quest Personnel, not as a recruiter, but as a temp. I registered with them. It was the first exposure I had to a recruitment agency and they had placed me into a retail job.
00:01:42
Speaker
Wow. Okay. Well, my understanding is that's what they specialised in retail. Apparently, Quest Personnel's MD, Lorraine Tribe, is also the company's founder. I recall she did say at the time the agency was misled, by incorrect and misleading information regarding Flanagan's employment history. He'd also used the alias Geoffrey Flanagan. In fact, that's the name I knew him as. What do you mean you knew him, Russ?
00:02:09
Speaker
what Would you believe he used to be my neighbour? When Michelle and I owned a townhouse in Hyre before we moved to Mornington, we were one of five and number one was rented by ah Jeff, as I knew him, and his wife. I had four boys and young boys. The eldest two were similar to my eldest two and occasionally they played together and out the front I'd stand and Jeff and I would just exchange chit-chat.
00:02:36
Speaker
Oh my gosh. Lucky he didn't ask you for any career advice, Russ. Oh God, thank God he didn't. Now, I understand he managed to full mire in that case, but there were some other companies as well. Oh, a bit of a roll call, in fact.
00:02:49
Speaker
Australia Arab Chamber of Commerce, Rivers, Bendigo Health, and was even hired by recruitment agency Carmichael Fisher as a recruiter. So, he was quite practiced at the deception.
00:03:04
Speaker
However, in the Meyer case, it did go to court. He pled guilty to three counts of obtaining property by deception and was ordered to perform 400 hours of community service.
00:03:16
Speaker
And now Quest personnel is in administration. Is that directly related to this case? Well, while the direct cause of the company falling into administration isn't explicitly linked to the 2014 Certainly, I'd expect that the event casts a shadow over their credibility. EY Parthenon Australia has been appointed as the company administrator and that happened last week and the administrators say they intend to continue trading the company as usual. Anyway, regardless, it's sad to see a recruitment agency with nearly four decades of trading in administration.
Australia's Labor Market Update: Jobs Growth vs. Unemployment Rate
00:03:48
Speaker
The latest labour market update from the ABS has both good and bad news. It was solid jobs growth, but the unemployment rate jumped to 4.3% in February. It's surprising, especially since economists had predicted it would stay steady at 4.1%. And the forecast rise of around 20,000 new jobs was wrong by more than half as employment increased by 49,000 people. The increase in people actively looking for work The participation rate rose 0.2 points to equal record highs of 66.9%, contributed to the rise in the unemployment rate. The number of unemployed people grew by 35,000. I also note the rise in jobs was primarily driven by part-time roles. I read part-time employment jumped by 79,400 to 4.6 million, while full-time employment fell by 30,500 to 10.1 million. Sean Crick, the ABS head of Labor Statistics, noted that more people, especially those aged 65 and over, moved into part-time employment and fewer people are retiring compared to a year ago. Harry McCauley from Oxford Economics Australia commented that due to recent interest rate rises and the conflict in the Middle East, they've adjusted their unemployment forecast. They now expect near-term unemployment to keep rising and to rise faster through 2026, potentially peaking at just under 4.6% in early 2027. When job growth is strong, especially in part-time roles, it can draw more marginal workers into the labour market. which may lift unemployment. We'll be watching the next labour market updates closely.
NSW Government's Strategy for Skills Shortages
00:05:26
Speaker
It looks like recruitment agencies are back in fashion with the New South Wales government, Adele. Really, Ross? Is this rumour or fact? Well, would you believe it's part of an official New South Wales Premier's Department circular skill shortage allowance implementation guidelines that came into effect last October. It states, amongst other things, that when government departments and agencies are trying to fill a role, they should use strategies to get a diverse pool of candidates, including engaging a recruitment provider.
00:05:55
Speaker
which is public service speak for a recruitment agency. It's fascinating, Ross, especially since I read that the New South Wales government spent almost $60 million dollars last year on external consultants for work that could have been handled by public servants. This new advice seems to be a formal acknowledgement that external recruitment is a valid part of their strategy to access chronic skills shortages.
00:06:17
Speaker
About time. The article also points out that while the Premier's department is encouraging the use of external providers, hiring managers are being told to first emphasise flexible work conditions, including work from home, before offering more money to candidates. This is happening despite the government saying 18 months ago they wanted public servants back in the office.
00:06:37
Speaker
So it's a bit of a balancing act then. They're trying to find efficiencies and savings before the state budget. but they also recognise this flexibility when they can't find talent at the standard rates. If flexible work doesn't attract suitable candidates and other strategies fail, I also noticed the New South Wales government has a pot of money to boost offers that would otherwise be uncompetitive with the private sector.
00:07:00
Speaker
Yes, the circular goes into this. It's called a skills shortage allowance, which allows departmental heads to offer up to $20,000 in additional payments for new hires when talent can't be found at standard government salary ranges.
00:07:16
Speaker
This amount has been increased from $13,000 to recently, and i suspect it's going to help somewhat bridge the gap between public and private sector salaries in Sydney. I wonder what happens when a long-term public sector worker finds out a newbie is doing the same or similar work to them, but he's paid up to $20,000 more.
00:07:36
Speaker
Sounds to me like more government departments need a complete remuneration overhaul if the salaries they pay are that far out of alignment with the private sector. I
Crackdown on Sham Contracting by ATO and Fair Work Ombudsman
00:07:47
Speaker
agree. But meanwhile, let's be happy that recruitment agencies may benefit from the New South Wales government's inability to effectively source their own talent.
00:07:55
Speaker
Ross, have you seen the news about the ATO and Fair Work Ombudsman intensifying their crackdown on sham contracting? Sounds like they're really serious about this. Yes, I did see that. It seems like they're putting a lot of focus on ensuring businesses correctly classify their workers and don't engage in sham contracting.
00:08:15
Speaker
For those unaware, sham contracting is defined as when an employer pretends an employment relationship is in fact an independent contracting arrangement, even when they don't reasonably believe it. A business may be motivated to do this to avoid paying entitlements like superannuation, leave or workers' compensation. Such behaviour disadvantages businesses that do the right thing and it also undermines workers' rights.
00:08:40
Speaker
Anna Booth from the FWO said they have investigations underway in sectors like building and construction, road transport, and they won't hesitate take to take enforcement action when unlawful activity is found. I understand the ATO has increased visibility through the Tax Payments Annual Reporting System. They can match industry data with tax returns, ABN records, super reporting and single-touch payroll to identify potential sham contracting arrangements.
00:09:07
Speaker
Plus, the ATO-led Shadow Economy Task Force receives almost 1,000 community tip-offs each week about suspected tax evasion behaviours, including sham contracting. The penalties are significant depending upon the size of the business. Fines of three times the underpayment amount as well as having to correct pay deficits create significant incentives for businesses to do the right thing. There are some key factors that help define the real nature of the working arrangement. Recruitment agencies that place on-hire workers as contractors need to pay attention here.
00:09:39
Speaker
A key defining feature is control. An employee typically works under the business's direction regarding how where and when they do their work while a contractor has more autonomy.
00:09:50
Speaker
Another critical distinction is whether a worker serves within the business and acts as its representative, hence they are defined as an employee. By contrast, an independent contractor provides services to an organisation to further their own business.
00:10:03
Speaker
For the recruitment sector, this is a timely reminder that agencies and labour hire firms need to be especially careful about how workers are classified. Simply describing someone as an independent contractor is not enough.
00:10:16
Speaker
The reality of the working relationship
Debate Over AI in Recruitment: The Case of 'Stephanie Sirius'
00:10:18
Speaker
matters. Getting it wrong can expose recruiters and employers alike to serious legal, financial and reputational risk. Russ, I heard you're speaking at TalentX this year.
00:10:28
Speaker
I am. I'm facilitating a panel. It's called The Future of Recruitment. Excellent topic. Where can we hear this? Well, it's at the RCSA's Talent X on Thursday the 21st of May 2026 at the Melbourne Convention and Exhibition Centre, known locally as Jeff's Shed, 8.30 to 3.30 in the evening is the RCSA Industry Awards Night. For more information about the event, go to the event website txrec.com.au.
00:10:58
Speaker
And that's your news up to date. Stay tuned now for Question of the Week.
00:11:14
Speaker
Question of the week. Should AI recruiter bots have a human face? This was prompted, Ross, by Sirius People's new AI recruiter. Stephanie Sirius, who has a photo and a full LinkedIn profile, is certainly generating some discussion online.
00:11:32
Speaker
It certainly is. i did see the LinkedIn post last Thursday. i've got to say, interesting example of how AI is making its way into recruitment.
00:11:44
Speaker
Serious positioning, Stephanie, as a virtual AI recruiter designed to streamline the early stages of the hiring process. Yeah, it seems the main selling point seems to be about speed and responsiveness. They're suggesting candidates get immediate engagement rather than waiting for days to hear back. And human recruiters are then freed up to do higher value work like relationship management and deeper assessment.
00:12:10
Speaker
Well, certainly that's how I'd be selling it if I was serious. I mean, it sounds appealing, faster responses of what candidates want. candidates always complaining about recruiters, not communicating, think that's probably a good thing, overall going to improve the recruitment experience in a meaningful way? Or is it just creating the appearance of responsiveness?
00:12:35
Speaker
Well, I think that's really the question to ask, isn't it, Ross? There's a big difference between hearing from somebody quickly, but actually feeling informed and understood and valued as a candidate, I think is something different. If it's immediate sort of response, that's great. But if it's still generic, has it really improved the experience at all? Well, we're probably talking about what the heart of recruitment, particularly agency recruitment, is about. It's not just process efficiency. It's the human side, like judgment, communication, relationship building. When a recruitment agency introduces an AI recruiter,
00:13:11
Speaker
even one that they're positioning just as an assistant, not a decision maker, I think it's probably fair enough to question where the real value is being added here.
00:13:22
Speaker
Sirius has said in their LinkedIn post comments that Stephanie is designed to engage with every applicant so no one is missed or left sitting in a queue. They also say she doesn't make decisions or filter candidates out, but instead gathers structured insights for recruiters to review. Well, yeah, I mean, that that's definitely an important distinction. If Stephanie is genuinely just gathering information and it's true or accurate to say that every candidate still reviewed by a human recruiter, then certainly for me, it does reduce some of my concerns about ai overreach. But still, still a lot of questions remain. Yeah.
00:14:03
Speaker
Yeah, because even gathering tools that are influencing outcomes could be the issue. You know, if AI is deciding what questions to ask, you know, how to frame them, how to summarise the responses, that's all going through to the recruiter and going to shape their thoughts or their part of the process.
00:14:19
Speaker
I'd agree. i mean, even if it's not making the final decision, it's clearly going to be influencing the recruiter's First impressions, we we do know that, I mean, if an AI presents one candidate as very succinct and concise and another one as ambiguous or unclear, is that going to affect how the recruiter approaches each of them? Well, that's the issue to discuss around, you know, ah possible bias creeping in in the creation of the tool, depending on what the tool is that they're using for this assessment.
00:14:53
Speaker
I mean, this is where the type of transparency is important. I mean, we can say like serious, you know, we're being open, we're using ai But really, for me, transparency then goes to the next level. How's the data being used? Are candidates then ranked?
00:15:14
Speaker
according to that data? Are summaries being generated? Are there safeguards to minimise bias? i want to bring this back to the original question around the face of this as well. Obviously, Sirius are being transparent, as you said, and putting it out there and saying it's a bot, but they put a face to it. And there's something that doesn't sit right with me about this, that they've used you know, a very young, attractive girl's face called her Stephanie and put it out there.
00:15:46
Speaker
I'm not sure about that idea. Yeah. Well, I've got to say, when I looked at that face, it was like, so why not an older bloke? I mean, Stephanie suggests some ethnicity. She's clearly not completely white.
00:16:02
Speaker
I mean, I did a quick Google image search and I came up with a couple of people, a couple of women, pretty similar to Stephanie. One was an academic and one was an accountant, both based in the US.
00:16:15
Speaker
So treading a bit of a fine line there, I would have thought. And I think if I recall rightly, there were some comments to Sirius Post introducing Stephanie. Yeah, there's a mixed response to it. Some people are saying, you know, great idea to be transparent and be out there putting it out there that you're using a bot and giving her a name. But certainly there was mixed response of people saying that they didn't think she should have a human face. And I must agree with that. you know Why does she have a human face and why is she so attractive and young? On the surface, Sirius are creating human face. I contrast this with you and were at the Bullhorn Roadshow last week. Bullhorn were talking about their product, Amplify, where effectively it's this. like It's a screening tool you can request of candidates that they complete screening questions at a time of their convenience. But in Bullhorn's case, they're not putting any human face on it. It's very transparently, we're asking for more information. And if you would like, please provide this additional information. And all candidates for the same job are asked for the same additional information. I fundamentally don't have an issue with the tool. you know I work with Roy AI and it does something very similar. We have the capacity to screen candidates prior to the recruiter having to be involved to speed up the process, to gain deeper understanding about the candidate and give more information to the recruiter to make decisions. But I think it's the element around tool versus a face. There's something around the AI here that isn't
00:17:53
Speaker
quite right and the law doesn't cover these things. It's not caught up. The tech is moving so fast and it just doesn't seem to be the right move, I think. So, is it more to do with senior candidates? Because in a previous question of the week, we've discussed your son's successful application to gain a job at McDonald's and he engaged with a bot as part of that process. And correct me if I'm wrong, I think he went through a series of questions or responded to a series of questions from the bot and then got booked in for an interview from which point he was hired after a face-to-face interview.
00:18:33
Speaker
Yeah, that's correct. He was employed using the McHire bot that they've got. They tell them that it's a bot. It's very transparent that they're going through the process.
00:18:44
Speaker
But to me, they ended up at the same outcome. the The bot just sped up the process and did it faster than waiting for a human to connect with him and him to answer back or to fill in a questionnaire. It just seemed to be able to go back and forth really quickly and get him to the same outcome of getting in front of the manager in the store and getting offered the job.
00:19:02
Speaker
correct Again, correct me if I'm wrong, but he wasn't really a skills-based question. Wasn't it more availability and right to work and other more, let's call them binary questions? Yeah, I think that's what I'm trying to outline with this, that if you're using these tools maybe to ask more assessment-based questions, the ethics of this have a question mark for me.
00:19:25
Speaker
m I mean, we're right at the frontier here because when I think – like people to people, they've had a ah bot on their website for at least three or four years, I think. So I think it's really, I mean, as you raise, it's really the human face. So what's your prediction all? Do you think other recruitment agencies are going to go down this path of naming and providing a human face to their screening bot? Because let's face it, everyone's going to have one if they don't have one already. Well, I don't know if everyone's going to have one. That's still a question mark in itself. I think the naming of it, I think... You know, being transparent about it is fine.
00:20:03
Speaker
you know, maybe it could have had a more caricature image rather than a real human face. i think there's lots of question marks around the way this has been done. It's their choice. It's it's a marketing ploy. It's, you know, we wait and see whether it's successful for them or not. I still have some real concerns and I'm uncomfortable about it. You know, it Stephanie looks fantastic. If I start seeing her birthday announcements or her lying on a beach drinking a cocktail in Bali, I'm done. Well, I suspect the marketing department is serious ah plotting out Stephanie's life in a way that's going to take up many, many LinkedIn posts in the future. So I think it's be afraid, be very afraid if that's the future for agency recruitment bots.