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Episode 27
419 Plays1 year ago
News for the week beginning 4 September 2023 and Question of the Week: "Is there an issue with the Recruitment Industry's social license?
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Transcript
Job Market Trends in New Zealand
00:00:09
Speaker
This is the news for We're Commencing 4th of September 2023. Job ads in New Zealand declined 4% month on month in July and were down 26% compared to the same period a year ago, according to data from SEEK. Job ads are now just 1% higher than in July 2019. The overall decline was driven by manufacturing, transport and logistics down 8%, ICT down 7% and trades and services down 6%.
00:00:36
Speaker
Applications per job ad rose 11% in June 2023 compared to May 23 and are now at the highest level on record.
Ashley Services' Revenue Growth
00:00:45
Speaker
Revenue at ASX listed Ashley services increased by 22.1% in its fiscal year ended 30 June 2023 when compared to the same period last year.
00:00:56
Speaker
Revenue totaled $549.2 million, including $14.5 million and $25.2 million, respectively, from the acquisitions of Link Personnel and Owen Pacific Workforce. The Labor hire division, accounting for 97% of the company's revenue, grew sales by 22%, while the small training division reported revenue was up 39%.
00:01:22
Speaker
EBITDA was up 7.5% to $20.1m and net profit after tax was stable at $11.4m. Ashley Services has a market capitalisation of just under $100m.
Australian Perception of AI in Recruitment
00:01:37
Speaker
A recent survey conducted by Roy Morgan has unveiled that a majority of Australians, particularly women, believe that artificial intelligence causes more problems than it solves.
00:01:48
Speaker
The survey, which included nearly 1500 respondents, showed that 57% of Australians hold this view, although 67% of those who expressed concerns about the negative impacts of AI were women. However, women were much more positive about AI when it came to recruitment. The research revealed that women are 30% more likely to complete job applications when AI is involved in the recruitment process, suggesting women perceive AI as less biased than human evaluators.
Exploitation of Migrant Workers in New Zealand
00:02:18
Speaker
The New Zealand government has launched a comprehensive probe into the alleged case of exploitation of 115 Indian and Bangladeshi nationals who arrived in the country with the promise of employment that did not materialise. Despite paying significant sums of money ranging from $15,000 to $40,000 to various agents for their visas and related jobs, most of the affected workers were not provided with any paid employment.
00:02:44
Speaker
Immigration Minister Andrew Little said the Public Service Commission would review the accredited employer work visa schemes processes after a whistleblower came forward with allegations of abuse. As at the 9th of August, five New Zealand employers have had their accreditation suspended and six others have had their accreditation revoked.
AI Bias in Hiring and Legal Settlements
00:03:05
Speaker
A landmark case involving AI and recruitment was settled in New York earlier this month.
00:03:11
Speaker
The Equal Employment Opportunity Commission filed suit against a China-based online tutoring company, I-Tutor Group, for allegedly using an AI tool that automatically filtered through and rejected about 200 female applicants over the age of 55 and males over 60. One applicant discovered the error when she was quickly rejected, but decided to submit her same resume with a different birth date, which got her an interview according to the suit.
00:03:37
Speaker
The company agreed to pay $365,000 to more than 200 job applicants allegedly passed over because of their age. Although admitting to no wrongdoing, the company will create new anti-discrimination policies and reconsider all those wrongfully rejected applicants. This is the first time that EEOC and the US government that investigates employment discrimination complaints has settled a case involving biased AI tools used in hiring processes.
00:04:06
Speaker
The law requires a bias audit on any automated employment decision tool that scores or ranks applicants before it's used, and companies must notify applicants they're using the tools.
Labor Exploitation Fines and Issues
00:04:18
Speaker
Vulnerable migrant workers employed to sort waste in 2018 and 2019 at facilities across Melbourne were underpaid almost $200,000 by their employer, Polytrade, one of the biggest recycling companies in Victoria at the time.
00:04:32
Speaker
The federal court has imposed penalties of $138,600 against Polytrade for being an accessory in the underpayment of the workers. It also imposed a fine of $200,375 against the business formerly known as Polytrade Employment Services for directly underpaying the workers. PES was set up as a labor provider, employing workers and supplying them to work at Polytrade on an on-high basis.
00:04:59
Speaker
Additional fines of $27,720 and $8,820 were made against, respectively, Polytrade's husband and wife owners. The five affected workers were underpaid a total of $194,249 over a period of just 20 months. The workers were on protection visas and bridging visas after arriving in Australia as refugees from Southern Asia. They spoke limited English.
00:05:26
Speaker
Fair Work inspectors discovered that the five affected employees were paid a flat rate of $22 per hour, regardless of when they performed work despite being required to perform night, weekend and public holiday work.
Amazon's Office Attendance Warnings
00:05:41
Speaker
Earlier this month, Amazon staff in the US received a warning email from the firm for not spending enough time in the office after their attendance was tracked.
00:05:50
Speaker
Some employees were told they were not currently meeting our expectations of joining your colleagues in the office at least three days a week. Amazon's office attendance mandate for American employees took effect in May and stipulates they have to badge in to the office at least three days a week. The email sent this week and seen by the BBC targeted employees who came into the office fewer than three days a week for five or more of the past eight weeks or for three or more of the past four weeks.
00:06:19
Speaker
Some workers questioned whether the warnings were a sign of an even more strict attendance requirement to come. In a response to the concerns, Amazon said the message was sent to those who fell short of the policy despite their building being ready for staff's return. Amazon also admitted that the warnings may have been sent out by mistake in some cases.
Flexible Work and Staff Growth
00:06:39
Speaker
Meanwhile, new research from Scoop Technologies Inc. which advises organisations on how to coordinate hybrid staffing
00:06:47
Speaker
compared headcount growth at roughly 3,600 fully flexible hybrid and entirely in-office companies. It found that flexible outfits, those with hybrid, fully remote or electively remote staffs, added headcount at more than two times the rate of fully in-office counterparts during the March through May period this year. The research also found a strong correlation between the number of in-office days required per week and workforce growth.
00:07:15
Speaker
Companies with one day a week rules expanded staff by almost 5% over the past year, compared with 2.6 at five days a week businesses.
FTSE 100 CEO Pay Discrepancies
00:07:26
Speaker
In the UK, FTSE 100 CEO pay increased from ยฃ3.38 million in 2021 to ยฃ3.91 million in 2022, according to research from the High Pay Centre. Median CEO pay is now 118 times that of the median
00:07:44
Speaker
UK full-time worker earning ยฃ33,000, compared to 108 times in 2021 and 79 times in 2020. This is the highest level of median pay since 2017 and is an increase of 16% on the median FTSE 100 CEO pay in 2021, which stood at ยฃ3.38 million. Pascale Soreo of Ask
00:08:11
Speaker
of Seneca which the highest paid CEO in the UK making ยฃ16.85 million in 2022.
Recruitment Industry's Social License
00:08:24
Speaker
Our question of the week this week comes directly from the conference. There was a session at the recruitment conference for 45 minutes hosted by Charles Cameron with a consultant called Toby Ralph
00:08:39
Speaker
the session was entitled Heroes and Villains and it was a session about dissecting the recruitment industry's social license and it raised I think a lot more questions potentially than it answered but Ross and I thought we might tackle kind of an overarching one that came off the back of that which was, is there an issue with the recruitment industry's social license? It was the first part of what was posed
00:09:03
Speaker
that according to Toby's research there's a big issue with our industry's social license and so we're asking ourselves that question today Ross. So let's define social license to operate as a starting point. The SLO is created and maintained slowly over time as a company builds trust with the community it operates in and other stakeholders. A company must be seen
00:09:28
Speaker
to be operating responsibly, taking care of its employees in the environment, and being a good corporate citizen. So that's the definition. And I would say, unfortunately, our social license to operate is eroded every time there's a bad news story about, almost inevitably, a labor hire provider, almost inevitably,
00:09:53
Speaker
Exploiting a vulnerable group of workers, almost always migrants or people who are here on some form of temporary or student visa. And you don't see the good news stories. Very rarely do you see the good news stories published. So I think the issue is the narrative, which unfortunately the recruitment industry does not control.
00:10:21
Speaker
And that's the thing we should be having a conversation about, how we take back control or how we assert more control over the narrative. What do you think Adele? Yeah, I have to agree that, you know, based on the definition and the idea that Charles Cameron is posing to us to say, you know, there is an issue in our industry, you know, I think a lot of us would agree. We don't disagree that we are unfortunately defined by those
00:10:47
Speaker
really poor operators, those ones that hit the news headlines, and that defines our whole industry, as you said, Ross. The labour hire licensing scheme was supposed to weed these ones out, was supposed to rid us of these villains, rid us of these terrible operators and get rid of them, and it is doing that to some extent. It does
00:11:07
Speaker
obviously get rid of or fine or closed down companies like that. However, you know, the media, as we know, you know, want to sell news and, you know, bad news sells stories faster than good news. So they're always going to focus on that and it brings us all down. But so, yeah, at a surface level, I agree there's an issue. I think it could be addressed, as you said, potentially by us being better at how we promote it.
00:11:34
Speaker
And that kind of led into a second session that happened the second day of trying to perhaps further define what might be the path ahead that the RCSA might consider. And nothing has been decided there, of course, but a few ideas were thrown around and posed in that second session as well. Yeah, I think it opened up the conversation. It didn't offer, nor did it pretend to offer solutions.
00:12:04
Speaker
But a starting point is amongst, well, at least the RCSA members to acknowledge that it's a problem. It's a problem that we would like to solve or put some resources towards solving. And then the RCSA board can decide what path forward. And I, although
00:12:29
Speaker
you know, some aspects of the presentation. I was like, eh, you know, I could argue the toss on that and I'm not quite sure about that. I do think we have to acknowledge that it's something we should be concerned about and the love your work campaign that the RCSA, uh, has undertaken, I think has been a start, but any campaign costs money.
00:12:56
Speaker
As soon as you're talking about marketing and awareness raising and PR and getting the media interested in the good news stories, that all takes money. You've got to have resources to employ people to do this sort of work, to find the stories, to write the stories, to guide the time poor media towards these stories. And I just think, you know, we're a long way off that. The RCSA is barely 20 people. We need more money.
00:13:26
Speaker
And we need more people inside the RCSA to do that sort of work. Well, you're right. The RCSA employee group is less than 20, but the membership is much broader. And they could also assist some manpower in this sort of solution. The fact they haven't, Ross, is interesting. Is it an issue? That's what we're debating here. Is it really an issue? Is it causing us concern? Is it losing us business? Are we having an impact? Are we at a crisis point in our industry
00:13:56
Speaker
because of this idea of a poor social license. I really would love to hear from our listeners and hear what other people think of this idea. We are saying that there is indication that it is poor. Toby's research, albeit I have to say I wasn't totally convinced the research was as valid as it perhaps should be. Certainly the sample size was really small and the method in which it was collected may be questionable as well.
00:14:22
Speaker
I put all that aside, I don't necessarily disagree that there might be an issue there, but maybe people have not moved before now or done anything or really taken up the mantle on this because it really isn't that much of an issue.
Policy Influence with Tony Burke
00:14:37
Speaker
Well, I think the first place to start is the Office of the Minister for Employment and Workplace Relations, Tony Burke.
00:14:46
Speaker
Because from what Charles said, Tony Burke basically lumps the whole industry in with the poor practice labor hire operators, which is very concerning and is misguided or wrong as we think the minister's view might be. It is the minister's view. And clearly that's a very powerful view.
00:15:09
Speaker
in the context of the current federal government's policy and clearly that's a place to start. Let's start with the Minister and discussing our social license with him because he's the one who's got the most influence in terms of policy and perhaps we can worry about members of the community after that. To be continued Adele, I think is how summarize. I'm not sure how to end this one so I think you're right I think it's a continued conversation and
00:15:38
Speaker
We look forward to perhaps bringing you more info as it comes to light for us as well. But we open the conversation to all of you and please talk to us when you see us physically and online or talk to us and communicate through the channels that we release this podcast on. We'd love to hear what people think. Great. And the LinkedIn post for Recruitment News Australia for this episode, perhaps leave your comments for us to consider.