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Episode 127 - What did we learn from the Ephram podcast?
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Episode 127
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Transcript
Introduction and Episode Overview
00:00:08
Speaker
Welcome to Recruitment News Australia. This is your news for the 9th of September. I'm Adele Last. And I'm Ross Clannett. Major piece of news this week is the Ephraim Stephenson podcast. Episode 1 dropped last week with his tell-all about the demise of Collar.
00:00:25
Speaker
We've had quite a bit to say about that and you can find that in question of the week after
OpenAI Enters the Job Market
00:00:30
Speaker
the news. So let's kick off with the other news. Firstly, Adele, OpenAI. Yeah, two big announcements on OpenAI this week. They are releasing a jobs platform, which is all about connecting skilled workers and employers through their tool and using AI to match those two parties together. So that will be very interesting The other part of news they released was that they've launched an AI academy, OpenAI Academy, which is about improving people's AI fluency. Basically, you get certified on ChatGPT and they're looking at launching that in the States with big companies like Walmart.
00:01:08
Speaker
And it's an interesting piece of news because it puts Microsoft um in that space where they haven't been before. Well, Adele, that's not entirely correct. Obviously, LinkedIn are owned by Microsoft.
00:01:22
Speaker
So Microsoft own 49% of OpenAI. And interestingly, that OpenAI i are collaborating very closely with Indeed. So from a global job ads basis, clearly Indeed and LinkedIn go head to head.
00:01:42
Speaker
So I suspect this announcement from OpenAI is... is probably the most significant threat to traditional job boards ever.
LinkedIn vs. OpenAI: AI in Recruitment
00:01:54
Speaker
So it'll be absolutely fascinating to see where this goes and whether the OpenAI functionality for this job platform is going to be so much better than what LinkedIn or Indeed have in their existing models that it effectively makes OpenAI's products the only one that candidates and employers will want to use. So it's a real watch this space.
00:02:20
Speaker
Well, LinkedIn has answered back by releasing its own AI hiring assistant functionality, which actually launches this month.
SEEK's Financial Strategy and Data Concerns
00:02:27
Speaker
So yeah, will be an interesting one to see how it plays out. All right. Related to this is in fact an article that ah Justin Hillier wrote who is the owner of Recruiter Insider, posted on LinkedIn yesterday, on Monday, about SEEK coming for agency placements.
00:02:50
Speaker
Well, Justin is saying that from his analysis of the most recent release of SEEK's results, that's for the 2025 financial year, that they mentioned placement four times.
00:03:04
Speaker
And he's saying that this is a fair indicator that SEEK's moving to an outcome based model. In other words, directly recruiting in a way that recruitment agencies recruited at the the moment. And he references the smart hire model, which is used in the SEIC Southeast Asia business where employers give SEIC the jobs directly, and then SEIC provides an AI matching shortlisting interview coordination service. So clearly that's something that with the developments in Gen AI,
00:03:37
Speaker
will only improve and clearly what we've just heard about open going into the job platform business, that that is a direct threat, direct long-term threat to the SEEK business model.
00:03:52
Speaker
So you think this is SEEK just pivoting again to try and survive going from changing their pricing model to the recruitment space to now potentially entering the recruitment space or providing some of that service?
00:04:05
Speaker
well yes, that they would call it moving up the value chain, providing something more valuable that recruitment agencies currently provide. It's what Seeker are calling selection signals. They're attempting to find out more about candidates to have richer, deeper candidate data, which will enable them to to develop the product more effectively that will make this offer this effectively direct hire offer a more valuable one than an external recruitment agency.
00:04:38
Speaker
So let me just recap, Ross, you're saying they're using a lot of the information and data which they have access to through the existing behaviours of recruitment agencies and employers advertising on their site, job seekers applying for jobs.
00:04:51
Speaker
They're picking up hundreds of thousands of pieces of data there and they're using that information to tailor a offering that would go direct to employers to say, we can match you up to candidates that are looking for work?
00:05:05
Speaker
I think broadly, yes. And what Justin's pointing to is SEEK's ownership of Sourcer and Sourcer is a product that integrates with the ATSs of recruitment agencies where, of course, they have access to how hires are sourced and Justin's suggesting, well, what if this information leaks all the way through to SEEK?
00:05:33
Speaker
Is that giving them powerful information that will enable them to have potentially a unfair competitive advantage in the product. That seems to be what Justin's saying.
Legacy of Dennis Waxman
00:05:48
Speaker
Interesting. Like big brother watching perhaps. So what are some of the concerns about this? What does Justin say? They're using information or they're using information in a way that may directly undermine the the customers who are providing them with that information. In other words, the agencies.
00:06:10
Speaker
There's a comment on Justin's posts from Shad Montgomery. He's one of the directors of Pure Source Recruitment in Brisbane. And he shared a screenshot where...
00:06:23
Speaker
He's clearly on job adder and then he's showing the job board defaults and the option he screenshot is seek. And it says there hiring signal sharing. So this is the category. And the question is, do you agree to share hiring signals to seek?
00:06:39
Speaker
The options are, yes, I do. No, I do not. And of course, Shad saying, Well, we're certainly going to click, no, I do not. And then Scott Van Hurek from Wood Recruitment in Perth has also commented saying, totally agree, need agency owners to be aware they are sending free CRM information to the competitor.
00:06:58
Speaker
As soon as Sourcer asks for details on each placement, specifically the client data, we decided to give that a miss as well. Look at the monthly winners on top of the Sourcer review list, but really on top of their hit list.
00:07:13
Speaker
And our final news story is some sad news, Ross, you posted about this during the week. Yeah, Dennis Waxman, the legendary founder of a Accountancy Personnel that ultimately became Hayes, passed away at the end of August. And yeah, just a massive, massive figure in our industry. Of course, most people in Australia wouldn't know Dennis Waxman. Tell us about why he was so legendary.
00:07:38
Speaker
Well, he was legendary because he set up what became accountancy personnel in 1968 and he formulated, let's call it the McDonaldization of recruitment.
00:07:50
Speaker
So previously, recruitment had been all kind of very much like search. It was all very formal and slow. And what Dennis did in London was really get on the phone and call clients to book in interviews without the client looking at a resume.
00:08:06
Speaker
And that was the whole model of accountancy personnel. And they became extraordinarily extraordinarily successful very quickly. And that was the model that I was trained in. When I first worked in recruitment, it was the beginning of 1989.
00:08:19
Speaker
As it turned out, the office that I got a job in was the ground floor office holding the consultants where the head office containing Dennis was a few floors above us. So I got to know the legendary man.
00:08:31
Speaker
He'd come into the office. And our manager was petrified that if Dennis walked in and we weren't on the phones, that Dennis would be wondering, why aren't you working? Because in Dennis's world, unless you're on the phone, you weren't working. And of course, this is in the era before phones. You know, faxes had only just been introduced into offices. So,
00:08:50
Speaker
it It was like ah another era entirely. And Dennis was a legendary leader in the sense that people loved working for him. He was tough but fair.
00:09:01
Speaker
And he knew that his model worked. And he was one of the people who really expanded the recruitment industry in a way that impacted, let's say, the average worker more so than before, which was very much more a kind of search type model.
00:09:20
Speaker
Sounds like we definitely owe him a lot. Thanks for sharing that, Ross. And if you want to find out more, as I said, Ross has posted a ah blog post on his website about Dennis and more details about his life.
Critique of Ephraim Stephenson's Podcast
00:09:36
Speaker
And that's the news for the 9th of September 2025. tuned now for question of the week.
00:09:53
Speaker
Question of the week. What did we learn from Ephraim's Tell All podcast interview? Are we going to save everybody an hour and 48 minutes, are we, Ross, and summarise here?
00:10:14
Speaker
Yeah, I think they could have cut a fair bit out of that. Yeah, I agree. It was a long podcast and it was hard to listen to. Tell us your overall thoughts. I just came away thinking Ephraim demonstrated, like to me, astonishing naivety about some of the realities of growing a business. I mean, he's not an inexperienced business owner.
00:10:39
Speaker
he started two previous businesses And the things that he highlighted as the main reasons for the company failing were things that even myself, who's not started a recruitment agency, like to me, they're pretty obvious things.
00:10:58
Speaker
I agree with you. And I also felt the podcast fell very short, in my opinion, of providing the pathway to the next stage for Ephraim. And I was kind of hoping that would be the case.
00:11:13
Speaker
I don't know Ephraim Stevenson personally. i only know the story like most people from the outside. And I was really hoping the podcast shed light on the whole topic that would give me a different perspective, that would actually show me ah side that I hadn't thought of or some of the answers to those questions. And I could, you know, pepper that with the knowledge that, you know, was out there in the media. But I was really disappointed. He had a person interviewing him that was, you know, not really pushing the questions very hard. He posed the questions, but he wasn't really drilling down with Ephraim.
00:11:47
Speaker
And I just felt it felt it fell short. Well, the interviewer, I don't know the interviewer, Jeff, clearly he's been a vendor to Ephraim at Collar Group in terms of helping with ah marketing and video production work there. And he seems to be doing something similar with Ephraim now.
00:12:06
Speaker
And again, If you look on YouTube, you look within the descriptor, it says, watch the episode and share your thoughts. I'm listening.
00:12:17
Speaker
And then comments were turned off. So it's like, come on on. Like, if you really want to hear what people have to say, leave the comments on. And I appreciate that clearly, as Ephraim alluded to in the discussion, he's felt quite intimidated by some of the things that people have said.
00:12:36
Speaker
Just don't say it. Don't say, me know what you think. and then turn the comments off. Let's pick through it a bit further, Russ. talk ah Let's talk about some of the detail of the podcast. Okay. Well, I mean, the obvious question that a lot of people have been asking, why silent? Why why has he been so silent for so long? Why has it taken months before we've heard from him? And, i mean, pretty straightforward. He said dealing with personal mental health challenges, he needed to process what happened, have a discussion with his wife about...
00:13:08
Speaker
well, are going to move overseas? Is he going to start a new career? But he said, 24 years in the recruitment industry, I felt I've still got something to give. I don't know anything else. I didn't want to move overseas. Australia's my home.
00:13:22
Speaker
And so therefore, this this was the option that he chose. And I don't think anyone in this country would begrudge him any of that. We've already said here ourselves that, you know, he has to earn a living and we understand this is all he knows.
00:13:36
Speaker
This is what he feels he's good at. i think what he's missed is that gap between what has happened and where he wants to go. There's a huge big, you know, crevice in the middle there that he hasn't bridged. He hasn't built an ah appropriate bridge across it.
00:13:53
Speaker
And I think, I still stress, I feel like he needs PR expertise on this. He needs somebody who knows how to turn a situation that is very negative from a brand perspective, a personal brand perspective into something very positive and how to bridge that gap for him because it doesn't appear if he is getting PR advice, I question the advice they're giving him because this podcast, as I said, I was hoping was going to be his salvation into bridging that gap and answering the questions and everyone, maybe they weren't going to completely forget, maybe a bit of forgiveness there, move on, let the man earn a living. But he didn't really give us what we wanted and that's why i feel like this is
00:14:32
Speaker
a missed opportunity for him and the PR advice he's getting or not getting is really doing damage. you know part Partly why he probably was quiet in that time. No one's telling him how he should be managing it.
00:14:43
Speaker
Well, I don't think any professional PR person who's got crisis management experience would recommend podcasts. They'd be saying, okay, if you want to have a tell-all, you've got to make it 30 35 minutes. We've got to be very clear about the questions. You've got to be succinct with your answers.
00:14:58
Speaker
And like none ah none of that happens. So, I've had to, we've both had to kind of trawl through it to find the relevant pieces and you didn't form a different view of him and that clearly is what crisis managers who are really good at their job um help their client do.
00:15:20
Speaker
What things did he admit? Ross, let's talk about those. Did he actually take some ownership and responsibility? Well, certainly in terms of the failure of Collar Group, he spoke about and this is sort of circling back to my earlier point about naivety, he spoke about ah too many high-paying people in non-billing roles, and he spoke about the reasons for wellness or wellbeing ah people, but of course they're in non-billing roles, very well-paid senior leaders.
00:15:52
Speaker
ah But ultimately those things are foreseeable. I mean, anyone that's grown a recruitment business knows there's a critical balance between the people who produce income and those that support those to produce income. And you seem to have got that well out of whack.
00:16:08
Speaker
investment in accommodation. He spoke about the regrets in the number of offices that they had and talking about, I think, three offices in Perth. Again, it just strikes me as incredibly naive when you, or hopelessly optimistic, maybe, that when you commit to real estate, when you're taking out a lease, then you're talking typically three plus three, like a six or nine year commitment. These are so substantial financial commitments that you're making. And he didn't make just one of them. I think Collar had maybe 13 offices at their peak.
00:16:42
Speaker
And clearly that's a big drain on cash flow. He also spoke about or addressed the allegation about undercutting or low pricing. And he said, oh, that wasn't deliberate. I didn't pay enough attention to that.
00:16:58
Speaker
And again, it's like, well, if you're paying big salaries for people to submit these contracts, then surely they're across that sort of thing as to what is an appropriate margin to get a commercial return or he's got some oversight about that.
00:17:14
Speaker
Again, just seem, you know, just very, very naive And then the whole cash flow management thing, again, one of my criticisms of the interview didn't really get into the tin tacks of that.
00:17:27
Speaker
Like exactly when did he know or was advised that there was a cash flow issue? And then what did he do about it at that point? That that wasn't addressed.
00:17:38
Speaker
And to me, again, it's a critical thing when you're growing a business, cash flow management, unless you've got ah untapped ah funds to draw on and very, very few owners do and clearly Ephraim didn't. That's something you've got to be right on top of. Weekly cash flow, cash in, cash out.
00:17:55
Speaker
What commitments have we got coming up? Like that's critical.
Analyzing Collar Group's Downfall
00:17:59
Speaker
And again, he didn't talk about that. so I can only assume he didn't have that or didn't pay attention to that. So again, it just goes back to my comment. It just, you know, it just seems incredibly naive.
00:18:10
Speaker
It raised a lot more questions than it solved. Think about that. you know One question, one answer that he gave, and you and I probably got 10 other questions we would have asked off the back of that. But you're absolutely right. I mean, he was very deflective of the ownership that he did take. I did hear him say, I'm sorry, and you know and I regret this, and those words were used. But in every answer, it was twisted around. So an example is he would talk about the inadequacies of his of his leadership team and their um lack of experience in a startup capacity, in a startup environment and, you know, what they didn't know. and
00:18:48
Speaker
but But he knew that, you know, and he he's the person at the end of the day where the buck stops. So like you said, he would have been getting cash flow reports. He would have been getting his P&L. He would have been assessing his business and looking at those levers and triggers that any business owner is looking at all the time.
00:19:05
Speaker
So even if you have a deficient leadership team who's spending too much money, you should have caught that months in advance. That shouldn't have been a last minute surprise. Well, ah Again, it's a ah pretty obvious thing. If you're hiring people from companies like Hayes and Chandler McLeod, then people who are in senior people leadership roles in terms of people leaders of fee earners, then it's not their job typically to be all over cash flow because they've worked in very big businesses where it's somebody else's responsibility to manage cash flow.
00:19:36
Speaker
So they go about making decisions and executing on those decisions, not thinking about cash flow implications or certainly not closely. So again, Ephraim's the director, Ephraim's the person who's funding this or responsible for the funding. And it's it's absolutely his responsibility to give those directors, managing directors or GMs writing instructions in terms of their budget and to closely monitor the spending decisions that they're making and
00:20:08
Speaker
Certainly from what I heard, he didn't appear to do either of those things, or or if he did, it wasn't effective. The other thing I had concern about, there's a couple of details I had concerns about I want to raise. One was the mention around, ah so he claims that the ATO made a payment arrangement with him, but then issued a direct penalty notice, which required him to make full payment in 21 days or go into voluntary administration. ah You know, he it appears he must have defaulted on the payment plan in order for them to come in.
00:20:37
Speaker
and issue the notice. it It doesn't make sense. Well, I mean, if i refer back to shortlist, seems assuming that this is accurate, what's been reported, administrators advise some creditors concerns about Stevenson's failure to meet his DOCA obligations, ah deed of company arrangement obligations, and INR advisory, the administrators, told creditors Stevenson had failed in four areas specifically,
00:21:07
Speaker
not made the monthly contribution for February 2025 of $200,000 into the deed fund. There was a shortfall in cash from the trading period during administration of around $660,000.
00:21:19
Speaker
Also, the amount of respect of non-continuing employee entitlements who resigned during the VA period, so it was about $94,000. And then they'd not met the ongoing, the company had not met the ongoing tax obligations, including superannuation obligations for the quarter ending 31 December 2024 that were due by the 28th of January. So there's four specific areas where the docker was not adhered to. And those were clearly the things that precipitated the slide into liquidation.
00:21:54
Speaker
Right. So this is what i was saying. He just, he wasn't really clear about that stuff and tried to kind of really skim over it in terms of his surprise in the way it transpired.
00:22:04
Speaker
The other element that I'm really concerned after listening to him is the way the redundancies were handled. And this was addressed in the podcast. But again, you know, he was allowed to skirt around the response.
00:22:16
Speaker
I'm not comfortable with his answer around it and the lack of detail about what he did or didn't do. And there's no doubt about making redundancies like that in the circumstances in which they had to be made was always going to be difficult. There's maybe no right way to do that. I get that.
00:22:34
Speaker
But there's certainly elements that most people off the street would say as a minimum you would expect. And one of those is to contact those people prior to it becoming public knowledge.
00:22:45
Speaker
And he had the opportunity to do that. Claims he didn't, claims that was taken out of his hand hands but doesn't actually explain Anything else he did after that, we don't know. he Maybe he did contact staff. We suspect he didn't because they were fairly disgruntled publicly online.
00:23:01
Speaker
But his whole handling of the redundancy, to me, is is really, really poor. Well, I think regardless of what he did or didn't do we can be clear that there's a significant number of former Collar employees who feel incredibly let down by him and what happened and still feel incredibly let down.
00:23:24
Speaker
And that's understandable because many, if not all of them, have lost money and some of them would still be owed substantial amounts and probably have very little likelihood of seeing any of that money.
Public Reaction to Ephraim's Revelations
00:23:36
Speaker
And understandably, you'd be pretty unhappy and feeling like the person responsible is attempting to move on without having fully addressed his culpability in what happened.
00:23:50
Speaker
And he's out there posting again this week that, you know, there's so many people that want to come back and work for him. That's on a recent post. So, again, that naivety is perhaps a fair word, Ross, but, you know, we ask ourselves the question at the top of this, what have we learnt from his podcast?
00:24:06
Speaker
Maybe we need to ask what has Ephraim learnt because it doesn't appear like it's much. Well, and also former staff, when they listened to what he said, Collar's former employees were. So to me, they're the ones who need to to say for sure with her whether they can hear anything different in what Ephraim's saying and provide any other context that might be missing. Because, of course, Ephraim's using the platform in his own way, for his own means which of course is what everyone does in a podcast but what don't we know or what would staff like other people to know publicly that might be relevant to the redemption story i suppose we'll just have to wait and see any last words advice comment you you would make around this people it's not that piled on to ephraim like
00:25:01
Speaker
Yes, it might be personal. Ephraim perceives it as personal and he talked about threats that he received, like I know where you live and something about one finger's worth this or one one of your toes is worth that. I mean, that's pretty confronting to have those sorts of threats.
00:25:21
Speaker
But overall, it's like, it's just an indication that people are very unhappy. And there's long, long way to go before i think a majority of people are really prepared to give Ephraim like a fair hearing.