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241 Plays9 months ago
SUMMER SERIES
Extended question of the week in the last podcast episode with Ross Clennett and Adele Last
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Transcript
Introduction and Key Question
00:00:08
Speaker
And welcome to Question of the Week this week, part of our summer series. It's an extended question of the week. Oh, firstly, I'm Ross Clennet. And the question of the week this week, what's the recruitment industry in Australia broadly getting right? Where are we doing well?
00:00:27
Speaker
and what needs to improve or what are the areas where there's still a long way to go. Let's start with the negative. Hello Adele. I'm going to ask you to kick off with what's something you're disappointed about or underwhelmed about in terms of the Australian recruitment industry at the moment.
Challenges in Training and Development
00:00:46
Speaker
Thanks very much Ross. Yeah, I would have to say it's right in our home ground. It's around training and personal development.
00:00:54
Speaker
I think this needs a lot more structure, support. It needs to be more formal as you and I both know and see every day in our training lives. People are still being trained by follow this person, watch that person. They're learning by mistakes rather than setting a high standard.
00:01:16
Speaker
for achievement so training and personal development is one that I think we don't do very well still. Yeah I think broadly I'd agree there is a minority in the industry that I think are very committed to high standards in this area but I suspect I don't know and I have no data to support it that you're right that there are still many many recruitment businesses in Australia where it's all learning by trial and error and don't get me wrong there is a
00:01:45
Speaker
role for trial and error, but clearly it's much better and it's more profitable to actually have a structured development program because then people have a chance of learning faster and not having to make mistakes to learn.
Ownership Concerns in Australian Recruitment
00:02:01
Speaker
What other areas do you see?
00:02:05
Speaker
I'm going to go macro here, Adele, and I've been around the recruitment industry in this country for 34 years, and it does disappoint me that effectively there are no buyers of large Australian recruitment businesses that are Australian. Because if you look at all the businesses that have been sold recently, they've been sold to overseas buyers, predominantly the buyers in Japan.
00:02:35
Speaker
So if you look at, um, you know, recruit, you look at will group, you look at outsourcing, all of those businesses, like they've purchased DFP, key appointments, people bank, Chandler McCloud, clicks, it recruitment, blue fin.
00:02:56
Speaker
Um, horizon one, I mean, I could go on and on and on. So if you want to sell your recruitment business, you're looking at an overseas buyer is what you're saying. You are predominantly. I mean, it really isn't. I mean, I'm struggling to think of any large business that's been bought by a local buyer. Probably the closest is when Richard Earl sold a chunk of talent to private equity in this country.
00:03:23
Speaker
But really, that's about it. Why does that make you sad, Russ? Well, it just means that
00:03:32
Speaker
For example, the success of Morgan and Banks as an ASX listed business, it's highly unlikely that's ever going to happen again, because Morgan and Banks was the very first recruitment business that was listed on the Australian Stock Exchange. And it went so well, it generated a lot of positive vibe about the industry. But sadly, many other businesses that were listed after that have not just not
00:03:58
Speaker
replicated Morgan and Banks's success, but have actually been outright failures and have been bankrupt like Rubicor would be an example, management recruiters and so on. So it's just, I just think a little bit sad that that part of the industry is gone. And although overseas buyers have deep pockets and the people selling recruitment businesses, I'm sure don't really care for me as an industry observer. It's something that I wish was different
00:04:26
Speaker
Yep, made in Australia tag might be long gone for our industry. Exactly. Another area that stands out to me as well and always has done is around having the two recruitment associations.
Industry Redundancies and Mergers
00:04:39
Speaker
So we have the RCSA and we have APSCO and we aren't a very big industry really as a whole. And so I feel like having the two associations is somewhat redundant whilst they both do great work and they some
00:04:54
Speaker
somewhat do things in slightly different areas. There's a lot of crossover as well. And I feel like we would probably be better, stronger, perhaps more powerful if resources were pooled and combined and we had one master association for the industry that everybody was members of. Yes, I completely agree with that. And that's no disrespect to either association. But I just think for your point to be valid,
00:05:24
Speaker
It's true. Resources in an industry like ours, where only a minority of players are a member of either association that we're diluting our resources to significantly. So I don't think that's going to change. But anyway, that's something that I completely agree with.
Internal Recruitment Practices
00:05:45
Speaker
For me, we don't recruit our own people
00:05:50
Speaker
very well. Still, it's like accountants being late filing their own bass or the plumber with the leaky pipes. It's kind of like the recruitment industry. We're still pretty shit at recruiting our own people. And depending on what figure you believe, the turnover, staff turnover in our industry, something between about 35% and 50% every year.
00:06:18
Speaker
It hasn't really changed over the whole time I've been in recruitment. And I just think it gets down to the fact that recruiters don't understand the success competencies that underpin people who will be successful agency recruiters. And they recruit people that they like. And as I've said many times,
00:06:40
Speaker
Nothing wrong with recruiting people that you like, but if they start the job and they can't do the job or are unwilling to learn the skills or be coachable, then you're not going to like them for very long. And that's something that I'm sure you see up close as well, Adele. Yeah, I do agree with that one for sure. And it certainly makes it hard to, you know, kind of cement our position as a profession, as a professional services industry when we have such high turnover.
Debating Recruitment Guarantees
00:07:08
Speaker
There's one final one that stands out for me, Ross, and it's a bit of a soapbox moment for me, overarchingly, in my career. I have always spoke about this very openly. I still do. It's something I would really like to champion, perhaps, through our industry. But I'd like to see an update to terms and conditions overall that are particularly outdated in our industry. And one in particular that bothers me is the recruitment guarantee.
00:07:36
Speaker
I really think that as a service-based, professional services-based industry, we are crazy to have a recruitment guarantee, guaranteeing essentially what should be our service and what ends up being is the outcome of our client's decision. I just think it's ludicrous. Explain that. Explain. Why do you think it's ludicrous? No other industry does it. This is what I say to people when I'm talking about it.
00:08:01
Speaker
The equivalent of your lawyer saying, if you're happy with the outcome, then pay the fee. Or it's the equivalent of your accountant charging you based on the return that they get each year. It's not about the outcome. It's about the service you're paying for. So people are paying for a service from us to find and source great candidates, bring them to the table, negotiate them to the position.
00:08:25
Speaker
We're not guaranteeing that they're going to stay in the job. We're not guaranteeing that they're going to have a great onboarding and training expense. We can't do that. And yet that's what we end up doing with that recruitment guarantee. So I would love to see that one, you know, gone or updated in some way. We shouldn't as an industry be guaranteeing candidate placements, in my opinion.
00:08:45
Speaker
Yeah, it's something over which we have no agency. We do not make the hiring decision, the client does. We do not induct the candidate as they're starting a permanent job, the client does. And obviously the day-to-day direction and leadership of that candidate is the hiring manager's responsibility. And yet we are guaranteeing, effectively guaranteeing,
00:09:06
Speaker
all of those things are going to go well and that is something I completely agree with you about Adil. It is a 20th century anachronism and we need to change it. Well let's turn to the positive though
Growth and Client Satisfaction
00:09:23
Speaker
Ross. We've got, we've ripped through the industry with our areas that need improvement but what are the things that the recruitment industry is getting right? What are we doing well in our industry?
00:09:33
Speaker
Well, I think broadly we're meeting our client's needs and what's the evidence for that? The growth of the recruitment industry. Recruitment industry is still growing. You see new agencies opening up every day. And despite the competition that the recruitment industry has from recruitment tech and from internal recruitment teams,
00:09:58
Speaker
Our industry is still growing. So clearly the end user client, a hiring manager is voting with her or his wallet and they are engaging recruitment agencies and they are paying recruitment agency fees and margins.
00:10:14
Speaker
because we're fulfilling a service, a valuable service, a service that they're not getting to the same degree from RecTech vendors or from their own internal recruitment team. And that's something that I think is overlooked in our industry. There are a lot of critics, mainly from the RecTech space about our industry. But ultimately, if we were doing a crap job,
00:10:43
Speaker
our clients would not be using us. They would be using alternatives. They are not using alternatives at the same rate that they're choosing to continue to use recruitment agencies and staffing businesses. So I think that's a very big plus. Fair point. Yeah, I agree with that one. You mentioned RecTech in there.
Technological Adoption
00:11:02
Speaker
I actually think that as an industry, that's something we also do really well is we actually adopt the use of technology really quickly.
00:11:10
Speaker
We are early adopters of anything new. We like to try things out. We try to find those efficiencies in the way that we do business every day in, in, you know, all different sized businesses. So I think as an industry, using technology, making the best use of it is something that we do really well. We explore things really quickly and get onto things quickly and use it to our best advantage to try and make the job as efficient as we possibly can. I think that's a real strength.
00:11:36
Speaker
Agree, and I think that's a factor of the recruitment industry generally, and I do say generally, being a young person's industry. So you have people who are entering the industry and who are the majority.
00:11:52
Speaker
of the industry that have been brought up on tech and so they want tech in their job they're seeking out how to use tech to make their job easier and by and large that's driving significant tech adoption within the recruitment industry and that
00:12:09
Speaker
That actually segues into my next point, which is I think the caliber of people joining the industry and starting recruitment agencies continues to be high.
Ethical Standards and Leadership
00:12:20
Speaker
I mean, most of the individual clients that I work with age between 25 and 40, and they are people who have started a recruitment agency sometime in the last five years. And without exception, these are impressive people.
00:12:33
Speaker
These are people who are ethical. They want to do the right thing. They want to look after their people. They want to deliver great service to their clients. They want to be great with candidates. And so I'm very encouraged by the continued because I think generally the standard's been very good in our industry. So I would say the continued high standard of people who are leading the growth of the recruitment industry into the next decade.
00:13:02
Speaker
Hmm. I definitely see that as well. I see that it's definitely on the up. I see that in a, in an upward trend in terms of the caliber and quality of people in our industry for sure is definitely growing. And I think that also then feeds into another point I would make around diversity in our industry, which has definitely improved. I think this one probably still needs to improve. And most people who've listened to this podcast through the year will know
00:13:30
Speaker
how I feel about that, that we definitely need to improve diversity overall. But I do see it heading in the right direction. I do see an improvement overarchingly in our industry around the quality, but also the different types of people in our industry. I'm specifically, I guess, referring to ethnic diversity and female leadership. What do you think on that side, Ross?
Diversity and Leadership Trends
00:13:55
Speaker
I'd agree definitely. My rookie program I run three times a year and typically these are people who are between the ages of 22 and 26 who are entering the recruitment industry and I would have said before about 2016-2017 it would have been 80 to 90% Anglo names who were participants
00:14:17
Speaker
And I would guess I'd be very confident to say that it's more like 50, 50, maybe even a majority of names are non-Anglo names now in the rookie program. So to me, that's very encouraging. Also looking at the owners again, the individual owners that I work with, more women, more
00:14:39
Speaker
Again, people with non-Anglo names, which is encouraging. And of course, the RCSA. We've just had Penny O'Reilly being elected as the president of the board, and she succeeded Nina Mapson-Bone, who succeeded Sinead Hurigan.
00:14:56
Speaker
And prior to Sinead, it was men, men, men, men. And the RCSAA National Board is five men and five women. So there is definitely a big improvement, certainly plenty more that we can do. Absolutely. But I'm encouraged.
00:15:18
Speaker
by how much progress we have made in the last five or six years. What do you think? Yeah, I think when I started in the industry, you know, the RCSA board was a lot of old white men. Excuse, no disrespect to those elder statesmen that were on the board when I joined a long time ago. But yeah, I think you see the diversity in those kind of leadership positions as inspiring for anybody in the industry and seeing
00:15:42
Speaker
more people of different ethnic backgrounds just makes us stronger, makes us relevant to our client base, relevant to our candidate base. So it's moving with the way the whole of our society is moving. And I think that's exciting. And we need to keep working on moving the dial in our own industry so that we can influence our clients in that capacity as well. But yeah, I'm excited to see that. I see a lot less English, Irish,
00:16:11
Speaker
expats being flown out and sponsored out here. Again, no disrespect to those hardworking individuals in our industry, but that used to be really the only source of new people coming in. Every second person you met in recruitment had an English or an Irish accent, and that's not common nowadays. It's not as common as it used to be. And speaking of accents, that's a really good point because it's not only people with non-Anglo names, but it's people who have, let's call it,
00:16:39
Speaker
English as a second language accent.
Multilingual Recruiters and Diversity
00:16:43
Speaker
So these are people typically who have not been brought up in a family environment where English has been spoken or they have not gone to primary school in Australia. So again, I'm very encouraged by people with a, shall we say, strong accent. I mean, that's ridiculous because of course, multilingual. Yes. Multilingual people whose accent previously I'm
00:17:08
Speaker
98% certain would have precluded them from receiving an offer from a recruitment agency are now people who are working as recruiters. So that to me again in the last five to six years has been a very encouraging development.
00:17:22
Speaker
And I can tell you through my program, not just working as recruiters, but working very successfully as recruiters as well. Yes. Yeah. It's good to see. Okay. What about a final one to take us out, Adil? What's something you can leave us with that you're feeling good about in terms of the recruitment industry as we head into 2024?
00:17:46
Speaker
What I'm really proud of Ross is around collaboration in our industry.
Collaboration over Competition
00:17:51
Speaker
I think that's something that we have moved the dial hugely on again. I think back to my early days of joining the recruitment industry and you were discouraged or you never wanted to go to any events for fear of being poached or
00:18:05
Speaker
You wouldn't talk to a competitor if you saw another recruiter in the street. You never made eye contact, you know. There was sort of a real very highly competitive and underhanded, undercover kind of element to our industry, which is gone. I really don't see that at all in our industry anymore. I feel like we collaborate as an industry. I see agencies working together. I see them sharing clients, sharing information, attending events and collaborating.
00:18:32
Speaker
across the industry agencies and suppliers alike. I think that's a really positive element to our industry that's changed dramatically. Yes, and Leslie at APSCO, Charles at the RCSA, they're people that can take quite a bit of credit for this because I know in terms of their individual
00:18:54
Speaker
focus, this is something that they're very keen on and that has spread. And it's, we are stronger together. And I mean, even just you and I, Adele, like at a surface level, we're competitors, but we're not really competitors, although we provide similar services, not exactly the same. But I regard us as stronger together in terms of producing a podcast,
00:19:21
Speaker
that with our combined experience and viewpoints adds more value compared to you doing one by yourself or me doing one by myself. Absolutely. I hope our listeners would agree with that too, those of you that are enjoying it. I hope you're seeing the value in a collaboration like the one that Ross and I have created. But yeah, there's lots of examples like that. And that's really encouraging to me as an industry professional. And I think that's kind of
00:19:50
Speaker
a reason why I would join an industry like ours, because what an exciting way to work with people across the industry. You know, you don't need to see them as competitors. You can see them as collaborators. Yeah, agree. Well, I'm sure we've missed plenty of things that other people feel strongly about. So please get in contact with us. The easiest way is on LinkedIn. Let us know. Did we miss something that you feel strongly about that the industry is doing well or not doing well?
00:20:15
Speaker
We would love to hear your opinion. Adil, thanks. I really enjoyed today's conversation. Good chat. Thanks, Russ.