Become a Creator today!Start creating today - Share your story with the world!
Start for free
00:00:00
00:00:01
What are the unwelcome surprises of large volume recruitment contracts?
39 Plays4 hours ago
Epsiode 99 includes news for 4 March 2025 and Question of the Week, "What are the unwelcome surprises of large volume recruitment contracts?"
#RecruitmentPodcast #RecruitmentNnewsAustralia #Recruitment
Recommended
Transcript
Introduction to Bullhorn Engage
Event Highlights at Bullhorn Engage
00:00:08
Speaker
We're at Bullhorn Engage this week, Thursday the 6th of March, at Randwick Racecourse in Sydney. We know the event is a sellout, which is great news. What will you be doing there, Ross? Well, Adele, I'll be on stage. I'm presenting The Surprising Truth About the Australian Labor Market at 3.15pm.
00:00:28
Speaker
We will also be looking out for more content for ah RNA. ah yes. Come and let us know what you think of the podcast and perhaps pose a question of the week. We hope to see you at Bullhorn Engage this Thursday. Look out for us. We'll be in the black RNA t-shirts.
ADECO's Leadership and Recruitment Challenges
00:00:46
Speaker
This is the news for the 4th of March 2025. I'm Adele Last. ADECO Australia's Managing Director of Defence Force Recruiting, Jean Crow, quietly departed in January after 21 months in the role as the Australian reported last week that the performance period of ADECO's ADF recruitment contract had been extended by six months.
00:01:07
Speaker
Crow was appointed to the role by former ADECO ANZ CEO Nicholas Lee. Crow came to the role with no prior experience in military recruitment. Lee departed ADECO in March 2024 and was replaced by former ah RGF Staffing's local CEO Peter Aitchison, whose tenure at ADECO started just over five months ago.
00:01:27
Speaker
Crow's exit coincides with increased public criticism of ADF recruitment by Shadow Defence Minister Andrew Hastie, which started last November when Hastie, a former troop commander in the Special Air Force Regiment, noted in the House of Representatives, ADF recruitment is in a really bad state. In fact, reports I hear are that it's in a diabolical state.
00:01:49
Speaker
The Australian reported Odeco was meant to hire 10,500 recruits for the ADF and be able to make a prospective recruit from application to enlistment in 100 days. But Senate estimates revealed ADECO believed it could only deliver 7,400 recruits and was expected to process recruits in 150 days instead of 100.
00:02:08
Speaker
This is 71% of its target. Interviewed on ABC Radio last Tuesday, Hastie said in response to a question about how to increase ADF personnel numbers, have our best enlisted taking charge of recruitment.
00:02:22
Speaker
We've given it to civilian contractors for too long. They're not hitting their targets. They're doing woefully, in fact. Despite Hastie's comments about bringing ADF recruitment back in-house, such a move is not current Liberal Party policy.
00:02:36
Speaker
ADECO has not publicly commented about Crowe's departure or Hastie's criticism.
Impact of Automation on Recruitment
00:02:42
Speaker
Staffing firms that focused on full cycle recruitment automation in 2024 were more than twice as likely to see revenue growth, according to Bullhorn's GRID 2025 Industry Trends report.
00:02:54
Speaker
The report, which surveyed over 1,500 recruitment professionals across industries and around the globe, said the top factors that contributed to revenue gains in 2024 were engaging candidates, having the right job matches, and readily redeploying top talent.
00:03:09
Speaker
all of which are areas that artificial intelligence will make more efficient, Bullhorn noted. Recruiters currently spend an average of 14.6 hours each week searching for the right candidates to fill roles, and nearly 30% of firms say recruiter productivity is the biggest obstacle to reducing expenses this year.
00:03:27
Speaker
But, according to the report, fully autonomous search and match could save recruiters four and a half hours per week on candidate searches alone. in addition to 3.6 hours per week for screening and administrative tasks.
00:03:41
Speaker
2025 is the year that AI becomes mainstream for the staffing industry. Jason Hillman, Senior Vice President of Product, Automation and AI at Bullhorn said in a press release.
Slater and Gordon Email Scandal
00:03:53
Speaker
A high-profile law firm in Victoria has been left scrambling in the wake of a rogue all-staff email that detailed the pay of its entire workforce and lambasted key executives.
00:04:05
Speaker
The malicious email BCC'd on Friday 21st February to all Slater and Gordon staff revealed the salaries, bonuses and performance ratings of its 906 employees.
00:04:17
Speaker
The email titled CPO Handover appeared to be correspondence for the incoming head of HR. A spreadsheet was attached to the email containing salaries at the firm ranging from a Melbourne legal assistance salary of $22,916 the CEO's $690,000 per annum pay packet.
00:04:31
Speaker
to the ceo's six hundred and ninety thousand dollars per annum pay packet A yet-to-be-identified person sent the email from a Gmail account falsely using the name of the outgoing Chief People Officer.
00:04:43
Speaker
It also detailed specifics of internal HR and management issues, describing the firm as a textbook case of dysfunction. An ex-employee whose name is in the metadata of the spreadsheet has spoken out to say it was distressing that people believed she was the author.
00:04:58
Speaker
The former employee insisted her departure from the law firm last November was a mutual decision and governed by a non-disclosure agreement. She added that neither Slater and Gordon nor the police had contacted her since the email was sent.
00:05:10
Speaker
An ex-SNG employee told the Australian the leaking of salary information is going to have serious consequences come pay negotiation and bonus time. Several Slater and Gordon employees reportedly forwarded the email externally and are now believed to be facing disciplinary action.
00:05:27
Speaker
The matter has been referred to forensic experts and Victoria Police who confirmed Cybercrime Squad detectives are assessing a report of unauthorised access affecting the legal firm. ASX-listed multi-brand recruitment and
Financial Challenges in Recruitment Industry
00:05:40
Speaker
staffing company PeopleIn reported revenue for the July to December 2024 half-year of $572.6 million, dollars down 5% over the previous corresponding period.
00:05:52
Speaker
EBITDA declined 3.9% to $19.8 million, dollars with an after-tax loss reported of $3.4 million. dollars Revenue declined in all segments, with professional services, minus 18.3%, reporting the largest drop.
00:06:07
Speaker
Health and community declined 5.3%, and industrial and specialist services dropped 2.8%. two point eight percent The Edeco Group reported revenue of €5.87 billion euros for the fourth quarter, ending 31 December 2024, 5% lower on an organic trading days adjusted basis.
00:06:29
Speaker
Gross profit dropped 2% and operating income dropped 20% in constant currency to €144 million. euros Revenue in the APAC region increased 6%, but Edeco ANZ's revenue declined 10%.
00:06:45
Speaker
Edeco Group said its volumes were stabilising throughout Q4 and have shown improving momentum in early 2025.
00:06:53
Speaker
ASX listed HiMe reported July to December 2024 half-year revenue of $15.1 million, dollars an increase of 5.6% on the prior comparative period.
00:07:05
Speaker
Gross profit rose by 4.5% to $1.5 million, dollars despite the impact of a large contract completion during the period. IME's loss was reduced from the previous year by 23% to 474,000.
Trends in Job Ads and Market Stability
00:07:20
Speaker
Job ads in Australia rose 5.1% in January, the largest monthly rise since October 2021, according to SIC's employment report. The rise was welcome after three months of declining ad volumes, with a year-on-year decline of 7.2%, smallest decline two years.
00:07:36
Speaker
the smallest such decline in two years The rising demand was recorded across the country except for Tasmania and in all but the consulting and strategy sector. Leading the monthly rise was South Australia where job ads jumped 11.4% followed by WA with an 8.5% rise.
00:07:55
Speaker
Dr Blair Chapman, Seek Senior Economist said, Based on our data and economists' forecasts, we expect job ads to be broadly stable in the short term. so this kind of month-on-month jump is not yet indicative of any great change in trend in the market.
00:08:11
Speaker
Applications per job ad declined 0.1% month-on-month. The news was also positive across the Tasman, with Seek New Zealand reporting job ad volumes rose month-on-month by 4% in January, the most significant increase for six months.
Cassandra Knox's Legal Troubles
00:08:26
Speaker
The owner of a New Zealand recruitment agency that owes creditors just under $3 million dollars has admitted she evaded tax with her second agency but disputes how much she benefited.
00:08:36
Speaker
Cassandra Knox entered guilty pleas to charges of tax evasion related to her company Elite Employment Limited in the Christchurch District Court last Tuesday. Knox is alleged to have withheld an Elite Employment GST return for the periods ending July 31 and September 30, 2024, and to have withheld tax for a purpose other than payment to Inland Revenue.
00:08:58
Speaker
Knox registered elite employment in May 2024, just under three hours after her original recruitment agency, Trinity Employment Limited, was placed into liquidation. Trinity Employment owes just over $1.5 million dollars to Inland Revenue,
00:09:14
Speaker
$1.29 million dollars to unsecured creditors and $25,000 to former employees. Former Trinity staff spoke to news site The Press in August last year with claims of manipulation, an unhappy work environment and late wages blamed on the bank.
00:09:29
Speaker
Knox won the South Canterbury Chamber of Commerce Emerging Leader Award in 2022. Knox's lawyer said they dispute a number of facts related to the amount of personal gain Knox is alleged to have obtained, and they will be presenting relevant expert evidence at the next court date later this month.
US Economic Challenges
00:09:48
Speaker
Both businesses and consumers in the US have been quickly spooked by the actions of new Trump administration in the six weeks since it came into office. Business activity in the US expanded in February at the slowest pace since September 2023, dragged down by the service sector.
00:10:06
Speaker
The S&P Global Preliminary February 2025 Composite Index for Services and Manufacturers decreased to 50.4, the lowest in 17 months.
00:10:18
Speaker
Meanwhile, US consumer confidence fell in February by the most since August 2021 on concerns about the outlook for the broader economy.
Employment Law and Fair Work Commission Rulings
00:10:28
Speaker
A university lecturer sacked for allegedly buying one of his students' expensive Chanel perfume, giving lingering hugs, and telling her she should start an OnlyFans account because she was so sexy, has failed to win his job back.
00:10:41
Speaker
Sassitha Jayasinga, an academic in health and biomedical science at the University of Tasmania, claimed he was unfairly dismissed when the university found he had sexually harassed a postgraduate and research assistant on a project he was leading.
00:10:56
Speaker
J.S. Singer, who has five years' experience at UTAS, had attacked the university's Gestapo tactics and claimed the student was delusional, had an unsettled state of mind, concocted the claims and acquiesced to his behaviour.
00:11:13
Speaker
But in a scathing decision rejecting his claim, the Fair Work Commission found J.S. Singer's behaviour was egregious and further demonstrated that he has a near total lack of insight into his misconduct.
00:11:26
Speaker
And that's the news for the 4th of March
Discussion on Large-Volume Recruitment Complexities
00:11:29
Speaker
2025. I'm Ross Clennett. Stay tuned for Question of the Week.
00:11:37
Speaker
um
00:11:42
Speaker
Question of the Week, Adele. What are the unwelcome surprises in large volume recruitment contracts? So you must be referencing our news this week, Ross, with ADECO and the Australian Defence Force contract, I'm assuming.
00:11:57
Speaker
I am. I am. Because as we reported, there are unmet expectations, certainly according to the opposition, and certainly what they're finding out in the Senate estimates that 90% of applications to the ADF have subsequently been withdrawn by the applicant. So it just raises a lot of questions about these big contracts. And obviously this is the biggest contract and ADECO have been running it for couple of years now. so
00:12:32
Speaker
I've had no experience in large contracts, either winning them or executing them. You have. So I'd be interested, firstly, to start with when you're thinking about winning these things, what are the two or three most important things you need to consider when most small recruitment agency owners and recruiters probably wouldn't think about these sorts of things?
00:12:53
Speaker
Well, you're starting out by, I guess, guess looking at ah contract delivery. You're looking at ah can I deliver? Can I ah manage that contract? You're looking at the price.
00:13:05
Speaker
You're trying to work out whether you can make money from it. And I think... isn't that the whole point of any contract? You've really got to make money. it's something that you can see you can deliver a profit. And in my experience, I think many agencies pitch for these things really almost as a loss leader. i don't know. Is that unfair?
00:13:25
Speaker
No, no. And quite true. I've had experience of that personally, that there were contracts that, yeah, we did definitely bid for as a loss leader in order to be able to market that we were supporting that particular brand or leverage it into other areas of that market, of that sector.
00:13:42
Speaker
So once you've won these contracts, Adil, what, again, the things that might be surprising for smaller agency owners and recruiters, what what are the things that you need to immediately be considering and acting on to get the contract off to a strong start?
00:13:58
Speaker
Well, I think a lot of people probably don't realise that the contract is often non-negotiable. You're actually issued the contract by the client. So you don't get a lot of wriggle room to be able to negotiate terms within that contract.
00:14:12
Speaker
You're issued with the terms by them and you have to adhere agree or it's, you know, it's take it or leave it. I think a lot of agencies ah don't really manage the forecasting and the projected volumes very well. You know, all the promises are made but, you know, are you actually going to get that sort of work and, you know, how is that going to be managed?
00:14:35
Speaker
um What kind of resources you'll need to actually deliver the contract internally? So do you need to hire new staff? Do you need to train, redeploy your own staff to different areas in order to manage the contract?
00:14:48
Speaker
And what kind of systems do you need to put in place? Does your you know your own stack up? Is it going to provide um the kind of um volume processing that you need? Is it got the right reporting structures in it? So you might actually be up for some hard costs in hiring staff, training staff, putting in new systems.
00:15:07
Speaker
Yeah, hiring and training would immediately strike me as costs that maybe agencies don't ah expect. Well, certainly not to the size, and that that could really be a problem. I mean, just training brand new people to service a contract is going to be very resource intensive. It's going to take your best people away from earning or leading fee earners, I would have thought.
00:15:29
Speaker
Well, that's a choice you've got. You're either going to take your existing high performers and move them across to a valuable contract, and have to replace them on your existing work or you're going to bring in new people on the new contract and hope they, you know, can build a plane while they're flying it.
00:15:44
Speaker
And that's potentially the case with this one, you know. ah ah he was hired, um Crow was hired specifically for this contract having never done, you know, defence or military recruitment before.
00:15:58
Speaker
Yeah, and I did find it a little curious that – um Certainly looking at his LinkedIn profile, doesn't appear that he's ever done military recruitment. He's done mainly white-collar corporate recruitment volume contracts. And I ah just thought there's a lot to learn, surely, when you're thrown into something like a contract for the ADF, where really look you've got to cover the whole of the country.
00:16:25
Speaker
but Boy, I mean, that's a big job, isn't it? It's the whole of the country. It's all roles from, you know, entry-level recruits through to senior roles, internal roles for them as well.
00:16:41
Speaker
It's a really complex contract with um a multi-stakeholder client that um is yeah very diverse and and complex in itself.
00:16:53
Speaker
You've got high-risk roles in there. You've got cultural barriers, both – internally within an organisation like the ADF, but then you've got, you know, actual cultural barriers ah in the country as a whole ah in terms of bringing people in and and visas and, you know, you don't you don't have access to the full workforce to choose from because there's so many stipulative requirements that the client has around who can join and who can who they can take in.
00:17:22
Speaker
And public scrutiny. I mean, that's the other thing you don't get with any other big contract. Like the ADF contract clearly is subject to a lot of scrutiny by politicians.
00:17:33
Speaker
And as we've just seen, they're going to make a song and dance if they're not happy and they think they can make a political point if the outsource provider, in this case Sudeco Australia, is not doing, in their eyes, a good enough job.
00:17:47
Speaker
Oh, yeah. There's a lot of eyes on it, political eyes, as you said, and I think it's a lot harder than people think. I think the mainstream media loves to have jump on a story like this and and really can a deck over it for not you know meeting requirements. But there's definitely some unwelcome surprises in there that many people will just won't be aware of. i mean, even in a contract,
00:18:11
Speaker
In a large volume contract like this, there could be things like refund requirements for candidates that don't work out. There could be penalties for delays. There could be reductions in fees as the contract longevity continues or as the volumes increase. You know, these are the kind of things a lot of people aren't aware of.
00:18:30
Speaker
What about, you mentioned briefly the um multi-stakeholder environment. I came from an environment where mostly I was dealing with the hiring managers a little bit with internal recruitment or HR, but I'd imagine a contract like this or contract, big PSA contract has the significant complexity of multi-stakeholders. What's what's your experience and what sort of things did you find were rather unexpected or unwelcome?
00:18:56
Speaker
Yeah, absolutely. You've got procurement in there. you know You've got the procurement client, which is you know one of the hardest ones to win over because they're basing a lot of their decision-making on facts alone. So they're looking at price, they're looking at capability and capacity.
00:19:14
Speaker
And it's probably in about that order, I would say, too. They want to look at how much are you going to charge or are you accepting their proposed charge um or cost of delivery, Are you capable of delivering? Have you delivered this contract before?
00:19:27
Speaker
And, you know, where and and to what volume? And, you know, unless you are a deco, you haven't done that before. Manpower, you haven't done it before. And what is your capacity? How will you deliver it? How will you solve issues that come up? How will you make sure that, you know, all of the milestones are met?
00:19:43
Speaker
So you mean a recruiter just couldn't take procurement out for lunch and expect that a fancy meal at the top end of town with a nice bottle of wine is going to win in the contract? Is that what you're saying? Procurement won't sit alone with you. You know, there'll be 17 people in the room if you've got a meeting with procurement. Yeah, it's definitely not a yeah a lunch and a gentleman's handshake. That's for sure.
Historical Context on ADF Recruitment Contracts
00:20:05
Speaker
Well, I wrote a blog at the time that Chandler McLeod handed the contract back effectively to the ADF, who then handed it on to Manpower, who then taken it off. many Many people won't remember that because it's a long time ago now. 17 years ago, Chandler McLeod had the contract for seven months and 16 days and they handed it back.
00:20:25
Speaker
And I wrote a blog about it called Why PSAs Suck. And I'd be interested in my little summary of PSAs prompted by that particular um handing back. I said, like 40% of marriages, many other PSAs start out the same way, full of promise, high spirits, and huge expectations, and sadly end up the same way as those marriages, desperately disappointing, sometimes humiliating, and always costly.
00:20:54
Speaker
I do like your analogy, Ross, but I have to say you've got a lot more experience in marriages and therefore divorces than I have. So I'll take your word for that. ah bit like I've only been divorced once. so I'm only on my second marriage and hopefully it's my last marriage.
00:21:12
Speaker
But still, you have you've chalked up one marriage and no divorces. So, yep, I'll pay you that one, Adele. But I think you're right. Your summary you know is accurate. It is a bit like a marriage and then a divorce and and can end that way. So let's hope that's not the case for a deco.
00:21:29
Speaker
Let's hope so.
00:21:40
Speaker
If you're enjoying listening to Recruitment News Australia, why not tell a friend in the recruitment industry? You can access previous episodes via our website at recruitmentnewsaustralia.com or every week we send out the podcast link via LinkedIn.
00:21:56
Speaker
Thanks for listening.