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Episode 150 - Are you charging your candidates for services?
37 Plays2 hours ago
Controversial question this week about whether you should or could charge candidates for your services. News includes major leadership changes at Hays and Persol, acquisition activity and financial results across the sector, fresh SEEK market data, regulatory updates as well a a new consultancy Senitel Collective launches in Australia.
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Transcript
2026 Recruitment Playbook with Greg Savage
00:00:09
Speaker
Most recruitment agencies won't really change this year. They'll tweak around the edges, blame the market, push their teams harder. But the firms that grow in 2026 will do something different.
00:00:19
Speaker
This Thursday at 12pm Queensland time, Wingman presents part two of the 2026 recruitment playbook with Greg Savage, focusing on what to change, how AI fits your model and the structural shifts that separate growth from grind.
00:00:34
Speaker
If you're serious about building a resilient, profitable agency in 2026, This is a conversation worth being in. To join the webinar on Thursday, March the 5th, contact Wingman Recruitment via their website or LinkedIn.
Leadership Changes at Persol Apex
00:00:48
Speaker
Welcome to Recruitment News Australia for the 3rd of March, 2026. I'm Ross Klenit. And I'm Adele Last. but Let's start locally with a big leadership development. Persol Apex EGM for Australia and New Zealand, Kurt Gillam, has announced he's resigning and will finish with the company in three weeks' time.
00:01:08
Speaker
Gillam joined Persol through the acquisition of the Kelly Services business, which began as a joint venture with Persol in 2016 and was completed as a 97.5% buyout in March 2022. At the time, Gillum was EGM for Kelly Services Australia. He originally joined Kelly in 2012 after just over two years with Clarius, now known as Ignite.
00:01:30
Speaker
His resignation follows closely on the heels of the recent departure announcement by Persol APAC CEO Francis Coe, who's stepping down after nearly 20 years with the company.
00:01:42
Speaker
Gilliam's ANZ role will now be split. Sarah Swiderski has been appointed GM for Australia, promoted from her role leading WA, Victoria and Tasmania. And Claire Jackson has been appointed GM for New Zealand, stepping up from Deputy Country Manager for Programmed New Zealand.
00:01:58
Speaker
Persol is currently the third largest staffing business in Australia, operating under the brands Persol Australia and Programmed. So these departures and promotions are significant.
Hayes CEO Resignation and Interim Appointment
00:02:09
Speaker
Onto the yeah UK where Hayes has announced that CEO Dirk Hahn is stepping down with immediate effect for personal reasons after 28 years with the business.
00:02:19
Speaker
So what happened there, Ross? It's very unlike Hayes to have such a sudden change of senior leadership, especially the global CEO. It sure is, Adele, in fact, unprecedented. I think there's probably three things here that we can look at. Firstly, the most recent half-year results. Again, another disappointing set of numbers for the July to December half-year last year.
00:02:44
Speaker
Pre-exceptional operating profit was down 25% year-on-year just over million pounds from decline in group net fees. Second factor, share price, terrible, terrible.
00:02:59
Speaker
On Friday, closed at a record low of 40 pence. So it's down nearly two thirds from a pound and five pence on the day that Han started as CEO, which was the 1st of September 2023.
00:03:14
Speaker
And then the third reason, probably more significant, is that Dirk Hahn was away from the business for eight to nine weeks on sick leave after surgery. While he was away, the chair, Michael Findlay, took over as executive chair. And I suspect looking at his eight or nine weeks, he spent around the business, talking to people, investigating things,
00:03:37
Speaker
I suspect he didn't like what he found and heard, and that probably caused him to go back to the board with a report that probably wasn't very good news for Durkhan.
00:03:52
Speaker
I see Hayes has appointed Chief Digital and Technology Officer Mark Durnley as interim CEO while they're looking for a permanent successor. Durnley has been with Hayes less than a year, and he doesn't appear to have any experience in the recruitment sector.
00:04:06
Speaker
You're right, Adele. Again, very unusual for Hayes to do something like that. um Anyway, Dirk Hahn posted on LinkedIn the day after his departure, saying he was proud of his Hayes career and he wished the company and his interim success are the best for the future.
Launch of Sentinel Collective by Former Hayes Executives
00:04:22
Speaker
And back home, Adele, a new recruitment industry advisory firm has been launched by three former long-time Hayes executives. Sentinel Collective has officially launched, founded by Pete Knoblet, Dean Stellard and Christine Wright, positioning themselves as guardians of growth. The firm aims to help recruitment founders move beyond day-to-day operations and build scalable, enduring businesses.
00:04:47
Speaker
Well, they've certainly got a lot of experience between them. Pete Noblett spent 15 years with Hayes, departing as Senior Regional Director for ANZ and Asia. More recently, he's occupied senior roles at Interpro, Finite and Hudson Australia and now runs his own rec-to-rec and advisory firm.
00:05:06
Speaker
And Dean Stellard also spent just over 15 years at Hayes, leaving in 2020 as MD for Hayes Hong Kong and South China. And for the past three years, he has run his own REC2REC firm, Dean James Search.
00:05:19
Speaker
And Christine Wright spent nearly three decades with Hayes, leaving in late 2022. Subsequently, she was CEO of IT recruiter Bluefin Resources for nearly three years until October last year.
00:05:33
Speaker
yeah All three are heavy hitters, so no doubt it'll be fascinating to see how they go as co-founders.
PeopleIn's Major Acquisition in New Zealand
00:05:40
Speaker
PeopleIn has agreed to acquire 100% of New Zealand-based InfraWork, owner of Extra Staff Recruitment and Visa Hub, for $56 million New Zealand dollars.
00:05:51
Speaker
This is big, Adele. In fact, this deal is the biggest ever transaction in the New Zealand recruitment sector. It includes $24 million dollars cash up front and up to $32 million dollars in earnouts over three years. The deal is expected to be completed in the third quarter of this year.
00:06:09
Speaker
InfraWork delivers international workforce solutions to New Zealand's infrastructure construction sector. People in Forecast, the company, will generate $5 million New Zealand dollars EBITDA annually, will strengthen its trans-Tasman capability and expand its pipeline of skilled construction workers. What do you make of this, Ross?
00:06:29
Speaker
I see the move, along with last year's divestment of tech force personnel, as a sign that PeopleIn is pushing more deeply into the infrastructure, resources, construction sectors and away from specialist white-collar recruitment.
00:06:44
Speaker
It wouldn't surprise me if either their accounting and finance recruitment brand, Peragon Group, or their IT recruitment business, Halcyon Knights, were sold in the next year or two.
00:06:55
Speaker
Although this was a positive announcement along with people in significantly reducing net debt from $80 million to $14 million over the past year, the bad news for shareholders was an 8.2% decline in half-year revenue to $394 million dollars and a net loss of $27.14 million.
00:07:14
Speaker
The encouraging trend was both Peragon and Halcyon Knights reporting perm placement fees up 15% year-on-year.
00:07:23
Speaker
SEEK reported job ad volumes in January were up by 0.7% month-on-month and 1.1% year-on-year. All states and territories except the ACT recorded growth, with Tasmania up 1%, WA and South Australia both up 0.8%.
00:07:39
Speaker
By sector on a month-on-month basis, manufacturing, transport and logistics rose 1%, construction was up 1.2%, ICT declined and education and training fell
00:07:54
Speaker
Applications per job ad fell 1.8% month-on-month in December, the sixth consecutive decline, although still elevated. Senior economist Dr Blair Chapman says the labour market appears to be stabilising at a subdued level.
00:08:08
Speaker
Speaking of Seek, Adele, the recent plunge in the Seek share price was good news for seven of the company's 10 directors, who each took the chance to affirm their optimism about the company's future by topping up their respective holdings in the company.
Seek Directors Increase Holdings - Market Reaction?
00:08:23
Speaker
Last month, co-founder Andrew Bassett outlaid $2.8 million, dollars CEO Ian Narev just over $300,000. And carsales.com.au founder and SEIC chairman-elect Greg Roebuck parted with half a million dollars as part of 241,205 shares purchased by the seven directors.
00:08:43
Speaker
I know that this show of solidarity failed to move market sentiment as the SEIC share price dropped below $16 last week, bottoming out at $15.72 on Tuesday afternoon before recovering somewhat to close ah just above $16 yesterday.
00:09:00
Speaker
Yes, clearly this move by the SIC directors hasn't shifted market sentiment, or at least not yet. And it seems like a return above $20 per share, let alone anything close to 2025's high of $29.18 per share is a long, long way away.
00:09:21
Speaker
And that's the news for the 3rd of March, 2026. Stay tuned now for Question of the Week.
Is Charging Candidates for Recruitment Services Legal?
00:09:34
Speaker
question of the week. Are you charging your candidates for services? where Where is this coming from, Adele? This is coming from a very interesting online debate, let's say that started on LinkedIn from Michael McQueen, who is a global futurist. Some people will recognise his name and have heard him speak at RCSA events. He has been a keynote speaker.
00:09:57
Speaker
He was on Channel 7 Sunrise two weeks ago talking about a different recruitment model that in the world of AI filtering, candidates are hiring recruiters to find them a job.
00:10:12
Speaker
So engaging recruiters and paying them to find them a job. What? This is another bald, middle-aged white guy with glasses who's spouting off about something that is getting the rest of us bald, middle-aged white guys with glasses into difficulty. so Well, look, in Michael's defence, I did actually reach out to him and ah many people on his post actually commented to him, but I reached out directly and said, you're wrong. ah This is actually illegal in Australia. You can't charge a candidate for recruitment services. And you're kind of not helping our industry. He very politely replied to me and said the ah interview went down a path he wasn't quite expecting. But, right you know, we want to make sure that our listeners are well educated on this topic. Yes. So let's be absolutely crystal clear, Adele.
00:11:03
Speaker
Can a recruitment agency charge a candidate a fee for placing them into a job? No, to be very clear, it is in breach of consumer and fair trading law that you charge a candidate, as well as in breach of code of conduct under RCSA for those members as well. So no, you cannot charge a candidate for recruitment services, although it hasn't stopped some agencies. To be clear, you can charge candidates for some things.
00:11:33
Speaker
What things can you charge a candidate for with their permissions? So, yes, with their permissions, a very interesting point to make, but it would need to fall in the lane of consulting services, coaching services.
00:11:50
Speaker
Yes, exactly. Yes. So coaching, resume preparation services, effectively one way of ensuring that you're not breaching the law would be to document exactly what you are providing to the candidate for what consideration, in other words, how much you're charging them. and ensuring that you explicitly say that this service does not include a recruitment placement service.
00:12:21
Speaker
So you may engage with a candidate, update their resume, charge a fee for that particular document that's produced. But if you go on to then place that candidate because you've updated their resume and you've now ah got across their skill set, you place them in a job, you can't charge them a fee for that placement.
00:12:39
Speaker
A vast majority of operators in this country would understand that. Where you tend to see, let's call it the gutter end of our industry, charge a placement service, are those agencies that facilitate overseas workers coming into Australia. And because those workers do not know or are very ill-informed about Australian law, they agree to have what is effectively a placement service deducted from their wages. yes
00:13:13
Speaker
And perhaps that was the case that they were migrant workers in this recent example. Yes, there was actually a case like this, Ross, that was local here about 10 years ago. a company called Ausstaff were found to be in breach of this type of... um legislation in relation to labour hire that they were providing, which was cleaners, to Federation Square and Crown Casino. And they were charging what they called an administration fee to these employees, which was to do with ah their allowances and their payment, essentially like a payroll charge.
00:13:56
Speaker
And that is illegal unless you have the explicit candidate's permission and this deduction does not take the candidate's wage below the award minimum for that work.
00:14:10
Speaker
Yes, the Fair Work Ombudsman who oversaw this case said that they were illegal because they were not authorised by the employees and nor did they serve any benefit to the employees. So they made their wage less essentially as a result of deducting the fee.
00:14:25
Speaker
So what about this issue generally, Adele, about specifically a deduction on the payroll of a temp or a contractor? Would you say this is something that's occurring ah widespread across the industry or within particular niches in the recruitment industry, or is it not widespread?
00:14:47
Speaker
In my experience in the blue-collar sector and those agencies that I talk to regularly in that space, I'm not aware of any agencies charging something like a payroll or administration fee, but it doesn't mean that it's not happening. There most definitely will be agencies out there potentially maximising that opportunity and charging a fee.
00:15:07
Speaker
I'm hoping that they've got authorisation from the employee and that it is of some benefit, maybe something like, I don't know, superannuation advice or financial advice that might help the employee or a program that helps the employee with the money they're being paid.
Non-compliance in Payroll Deductions
00:15:22
Speaker
Well, I wrote a blog about this about 10 years ago, and certainly there were, I think, 18 comments on that blog, and a number of people commented who were clearly contractors or temps, and the agencies that they mentioned were predominantly IT t contracting agencies that were engaging in that practice of charging a a payroll administration fee of something between two and two and a half percent. Some contractors would feel it's like a gun against their head that they can't tell the agency no, because that may undermine their likelihood of either getting a contract, keeping a contract or being considered for a future contract.
00:16:00
Speaker
Yeah, I agree. I think the whole idea of getting the authorisation or consent is a really tenuous question, because who's going to deny that if they want the work? For sure.
00:16:12
Speaker
And I think this probably points to a broader issue across the industry. It's just broadly ignorance, whether it's the ignorance of um contractors or temps or the ignorance of agencies. This relates to a blog that I wrote in 2020.
00:16:28
Speaker
about the Australian Building and Construction Commission releasing a report called Labour Hire Campaign Report. And it was about the 63 compliance audits undertaken on labour hire employers across building and construction in Australia. The compliance was specifically focused on two things, that is pay, were the workers paid correctly in terms of their base rate of pay, penalty rates over time and allowances? And secondly, record keeping.
00:17:04
Speaker
Did the agencies keep appropriate minimum standard internal records and pay slips? 12 out of 63 were fully compliant. Do the maths, 79% were not compliant in some areas. And what were those areas, Ross?
00:17:25
Speaker
Okay, 64% of employers, so this is labour hire employees, were non-compliant in the payment of one or more of the following, base hours, overtime, allowances, penalty rates.
00:17:40
Speaker
Inspectors noted the errors mostly occurred due to the use of an incorrect or outdated award or agreement. In other words, it's not that necessarily those um overtime payments or allowances were not paid. It's just that they were not using, the agencies were not using the most up-to-date award.
00:18:03
Speaker
You said you wrote this in 2020. You know, there's been updates to technology then. There's been education in the industry. I mean, this sounds pretty pedestrian. Surely recruitment agencies today 2026 are not making these mistakes.
00:18:19
Speaker
ah I'd like to think so. i mean, one thing that leads me to be perhaps more optimistic that it's ignorance and when ignorance is pointed out, almost all agencies do the right thing, is what the commissioner said with respect to the non-compliant agencies in that report. And he said...
00:18:43
Speaker
These employers, in other words, the labour hire employers, provided full rectification and full cooperation. And that really sets this case apart or this audit apart from the other cases that I run. so I'd like to think that when shown that they were doing the wrong thing, that agencies involved were um probably embarrassed and more importantly, demonstrated contrition and made good on the
Legal Obligations for Wage Payments and Record-Keeping
00:19:17
Speaker
gaps. and So, it appears it might be just a bit of misinformation, misunderstanding and and error that causes these. And that's I guess, the crux of what we're saying with this question. Are you charging your candidates for services?
00:19:31
Speaker
If you are, you need to be very mindful of the things that we've commented on in this conversation and particularly posts or ah television segments that might give you the impression of incorrect information or give you give you the idea that this sort of service is common ah You need to make sure you do your research. That ignorance is not an excuse.
00:19:57
Speaker
Completely agree. And remembering that paying people correctly and ensuring that records are kept correctly is an obligation under law for all employers, including recruitment agencies, staffing firms, labour-hire businesses. It is not something that you should just assume that you're doing correctly, that that you should undertake an audit.
00:20:22
Speaker
to satisfy yourself that you don't just think that you're doing it correctly, that you are doing it correctly. And if you are charging for candidate services, same thing. Check that you're doing it correctly in the sense of gaining authorisation, that it is not for recruitment, it may be for other services that you provide and that you are keeping very accurate records of that.