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Episode 21
406 Plays1 year ago
News for the week beginning 7 August 2023 and Question: "What chance does a mature aged rookie have in succeeding in a career in recruitment?
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Transcript
Top Risks for CFOs: Talent Retention
00:00:07
Speaker
This is the news for we commencing 7th of August, 2023. Securing and retaining key talent remains the number one risk to CFOs for the fifth Deloitte's CFO sentiment survey in a row. However, the survey reveals net optimism about company financial prospects has fallen from 66% six months ago to just 29% lower than during the first wave of COVID-19. Despite the difficult environment, there are still more CFO optimists than pessimists
00:00:36
Speaker
when it comes to their own business performance, as CFOs still expect capital expenditure, employment and revenue to increase in the current financial year, although expectations have weakened in the last six months.
Hydric & Struggles Revenue Decline
00:00:51
Speaker
Hydric and Struggles reported second quarter revenue fell 9% on a constant currency basis, with Executive Search, the company's largest business line, falling 18.2% year over year.
00:01:04
Speaker
The Asia Pacific region was down 20% when compared to the prior year. The firm had 423 executive search consultants on 30 June 2023 compared to 388 12 months ago. Net revenue per consultant was 1.9 million US dollars during the most recent quarter compared to 2.6 million US dollars a year ago.
00:01:28
Speaker
Robert Walters reported revenue for the six months ending 30 June 2023 of 548 million pounds up 1% in constant currency when compared to the previous year. Group net fee income was down 5% in constant currency against a record prior year. Asia Pacific net fee income was up 5.4%. Group operating profit was down 57%. Group consultant headcount was up 6% year on year to 4,000
00:01:57
Speaker
280, although down 3%, quarter on quarter. The Deco Group reported revenue of just under 6 billion euros for the second quarter ending 30 June 2023, up 4% on an organic and trading days adjusted basis. Temporary net fee income was up 1% and permanent placement fees were down 9%.
00:02:21
Speaker
Group gross profit declined 1% and EBITDA dropped 12%. Adeko Asia Pacific revenue was up 10% although the ANZ result was flat, way by the end of a large government contract.
Canada's H1B Work Permit Surge
00:02:35
Speaker
A new Canadian program that offers open work permits for up to three years to H1B US visa holders and their immediate family members has been an immediate success.
00:02:46
Speaker
The H1B allows highly skilled foreign-born individuals to work in the United States for three to six years, but requires sponsorship by an employer and often provides no meaningful path to permanent residency. The Canadian program, a temporary effort to attract skilled and high-tech US workers to the country, only opened two weeks ago and within two business days its initial cap of 10,000 applicants was reached.
00:03:11
Speaker
The popularity of the program is a sign of mounting frustrations among skilled workers in the US who feel trapped in the limbo of a legal immigration system that they see as outdated and unfriendly. David Beer, the Associate Director of Immigration Studies at the Cato Institute said, the Canadian offer is, you come, immediately get to work for any employer you want, and you're going to have a clear path to permanent residency to stay. That's a very attractive offer.
00:03:38
Speaker
US staffing revenue fell by a median 6% year over year in June, among staffing companies taking part in SIA's latest Pulse survey. However, small companies appear to have less of a decline than large firms in the survey. Small staffing firms saw a median revenue decline of 5% compared to 15% reported by the larger firms. Real gross domestic product in the US grew faster than anticipated, increasing at an estimated annual rate of 2.4%
00:04:08
Speaker
in the second quarter of 2023, according to the US Bureau of Economic Analysis. Real GDP grew just 2% in the previous quarter. In state-by-state labor market data, New Hampshire and South Dakota posted the lowest jobless rates among all US states in June at 1.8% each.
00:04:28
Speaker
Nevada ranked its estate with the highest jobless rate in June at 5.4%. In total, 22 states had unemployment rates lower than the national figure of 3.6%.
US Recession Odds Lowered
00:04:39
Speaker
Alongside the positive GDP and labor market data, the odds of a US recession have receded according to Goldman Sachs, having lowered its odds from 25% to 20% that the US will fall into recession, saying the disinflation process can continue without the need for a more material economic slowdown.
Payroll Fraud at Manpower Group
00:04:58
Speaker
A former finance manager at Manpower Group Service Limited in India allegedly manipulated the company's payroll system and fraudulently added his unemployed wife to the payroll, ensuring that she received a regular salary for more than 10 years. The finance manager admitted that he had illegally transferred money to his wife's bank account from 2012 onwards. He also confessed to inflating his salary and transferring money to his account over the last several years.
00:05:28
Speaker
The total fraud resulted in a loss of 42 million Indian rupees to the company, the equivalent of just over three quarters of a million Australian dollars. Migrant workers reporting employer exploitation should receive a legislative guarantee they will not have their visas cancelled, unions and migrant rights activists have told the federal government. Unions New South Wales Secretary Mark Morrie
00:05:50
Speaker
said temporary migrants who wanted to speak up about and escape exploitation did so at the risk of being kicked out of the country. This is because the employer can retaliate by anonymously telling the Department of Home Affairs that the worker is in breach of their visa. He said this exploitative power imbalance damages Australia's migration system and international reputation. It also lets dodgy companies get away with continuing to bring in new workers to exploit.
00:06:17
Speaker
Earlier this year, the Albanese government announced landmark reforms aimed at cracking down on employers who exploit migrant workers. A Sydney woman who embezzled millions of dollars from the National Australia Bank has been jailed for a maximum of 15 years by a judge who described the crime as breathtaking in its audacity. A jury last year found Helen Mary Rosamond guilty of 90 charges including dozens of counts of corruptively giving a benefit and dishonestly obtaining a financial advantage by deception.
00:06:47
Speaker
The New South Wales District Court heard Rosamund falsified and overinflated invoices for her event management company Human Group to NAB which were approved by her co-offender Rosemary Rogers, the former Chief of Staff to the bank's CEO. The court heard the total financial advantage to Rosamund was $4.4 million while Rogers benefited by $5.5 million. The money funded a life of opulence between 2013 and 2017 largely for Rogers
00:07:16
Speaker
who had an extraordinary delegation of authority within NAB to approve expenditure of up to $20 million. The court was told this allowed the fraud to go on undetected for some time. During sentencing, Judge Sutherland detailed an extraordinary series of purchases funded by the deception including luxury holidays, business class flights, helicopter transfers and limousines for Rogers and her relatives. Rogers is currently serving an eight-year jail sentence for the role.
00:07:44
Speaker
Sharon Cook, NAB Group executive legal and commercial services said the bank acknowledges its prior failures in not having sufficient controls and processes.
Challenges for Mature Age Rookies
00:08:03
Speaker
Question of the week is, what chance does a mature age rookie have of succeeding in agency recruitment?
00:08:14
Speaker
Well, I'm going to say not a high chance. Not a high chance. So firstly, let's, let's really define mature age. So I'm going to say someone sort of 30 plus in terms of age. Let's, let's call them mature age. So here's my reason why, or main reason.
00:08:41
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When I worked, and I didn't work with a lot of mature age rookies, but I did work with some and I'd say most of them didn't succeed. And my interpretation or my assessment of why they didn't succeed is that almost all of them had established
00:09:03
Speaker
quite good momentum and status in their previous career. So they'd established some level of seniority and that they were giving that up effectively to start a new career in agency recruitment. And when you have been a manager of some description in a recognized company or recognized industry, that affords you status.
00:09:33
Speaker
with your social network, with your friends, in your work environment. And you're giving all of that up because as much as I love recruitment and the recruitment industry, no, it's not a high status industry. I wouldn't call it a high status job. It's not the sort of thing that your grandmother's urging you to do because it's impressive. And the people who didn't succeed
00:10:03
Speaker
didn't succeed quickly, like in other words, within two or three months, they just found it too wearing on the ego to be making calls and not getting very far or to not be generating a lot of placements quite quickly, even though their expectations may have been a little unrealistic. I just found the gap between the status that they had
00:10:31
Speaker
in their previous career and their current status was just too much and that they weren't willing to continue. Yeah, I've got a really different opinion on that. I think from my own experience and I'm thinking about a reasonably recent agency experience I've had of hiring two mature age gentlemen who came from the industry that we were recruiting in.
Success Stories of Mature Recruits
00:10:57
Speaker
So they had industry knowledge and experience and they had worked at very senior
00:11:01
Speaker
levels in those roles and were looking for a career change. I brought them into the organization and taught them recruitment, got them across the role and how to build themselves and their new brand and the desk. And it took a little bit more work, I do think, because there was a little bit of unlearning to relearn because they had ways of doing things. But it was hugely successful. Their life experience was incredibly valuable.
00:11:30
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just from a maturity perspective, but they also were able to just have instant credibility with the client base. They knew the jargon, they knew the industry, they had a network, they knew what they were talking about and they were able to instantly walk in to a client or sit down with a candidate and even just by visually seeing them and seeing their age, the client felt some level of trust and comfort factor in them even before that opened their mouth.
00:11:58
Speaker
I've had a really different experience in that. So a couple of things I'd say about that. Firstly, those two people were very...
00:12:07
Speaker
advantage because they had you to train them Adele so so I just that gave them a very big head start compared to many other recruiters and I think the other thing that you mentioned that was critical is that they were looking for a career change like clearly they had had enough of their existing career that they're plateaued or they were finding it boring they were looking for a different form of stimulation and so all of
00:12:34
Speaker
those sorts of things boil down to motivation that if you do have a mature age rookie who really wants to effectively burn the boats on their previous career is really determined to establish themselves in a different career than I think that absolutely can overcome a lot of those status concerns that I raised earlier.
00:12:59
Speaker
So bringing that experience with them then, as I said, and as you're saying, the motivation is something that, you know, builds that resilience. We're always looking for resilience in recruiters. So, you know, they come with this built in resilience that I just think the younger rookie really lacks. It takes them some time to build up that resilience muscle enough to be able to withstand what we know is coming with recruitment. Yes. Yeah. I'd say that that is absolutely true.
00:13:28
Speaker
that it's more likely a mature age rookie has had quite a few ups and downs in their career to date and they know how to well first firstly they're going to expect there's going to be ups and downs and then they're going to know how to navigate those
00:13:46
Speaker
Another factor that just kind of crossed my mind really is money. Like clearly in almost all cases, a mature age rookie is not going to receive a base salary in an agency equivalent to their earning in their most recent job. And they are relying on commission or a bonus to make up the difference and hopefully go beyond.
00:14:10
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what they were earning previously. So a person's financial resources that they can draw on while they're building up commission and momentum I think is pretty important as long as they are prepared to sort of weather that short financial storm, if there is a reasonable gap between what they were earning and what they're now earning as a base salary, then I think that can also be quite a significant factor.
00:14:38
Speaker
Yeah, I think you have to consider what they are bringing to the table. Like in the example I gave earlier, if they're coming from the industry where you're recruiting, you want to put some value to what they are bringing to the table. You're not treating them in quite the same way as you would a rookie with very little experience or very basic, maybe hospitality retail background experience. So you have to factor in some value to the salary package you offer a mature age rookie because they're bringing in that level of knowledge and industry experience and network. As I said,
00:15:08
Speaker
And they're likely to come up to speed more quickly. So I agree with you if they're probably gonna fail They're gonna fail really quickly as well. You're gonna know really quickly early in the piece but they're also going to come up to speed more quickly in the job and Hopefully be able to get back that to that earning capacity level that they may be used to before coming I'd certainly agree with that. I think once a rookie break a mature age rookie breaks through and succeeds the accelerated
00:15:37
Speaker
upward momentum is likely to be greater. Like once it clicks, then being able to leverage their existing networks and experience, I think will most likely have them succeed at an accelerated rate. All right. So have we convinced each other Ross, if you're starting a recruitment agency today, who are you hiring? A young rookie or a mature age?
00:16:01
Speaker
Well, there's another factor we didn't quite mention, but that's the culture of the agency. Like if they've got a culture of giving mature age rookies a chance and they've done it well, then I'd say yes, hire mature age
Agency Culture's Role in Recruitment Success
00:16:14
Speaker
rookies. But if you're in an agency culture that's full of 20-somethings and you're hiring a 35-year-old, I don't know. I don't know. I think the odds are a lot less. I think you're in trouble calling a 35-year-old mature age.
00:16:32
Speaker
Yes, yes, I suppose so. Given I'm 20-thumping plus years more experience than that, would anyone hire me, Adele? I don't know. Maybe if I can help train you, Ross. Well, exactly. All right. Well, I hope we've answered that question. I don't know whether we've answered it or not, but we've had a good conversation. What do you think, Adele? Thanks, Ross.
00:17:01
Speaker
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