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Episode 36
344 Plays1 year ago
News for the week beginning 6 November 2023 and Question of the Week: How psychologically safe is the recruitment industry?
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Transcript
APS Directive to Reduce External Consultants
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Speaker
I'm Ross Clennett and this is the news for the week beginning 6th November 2023. Heads of the Federal Bureaucracy have been tasked with reducing consultancy, contractor and on-high work. Last month's release of the Australian Public Service Strategic Commissioning Framework stated that
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Speaker
The core work of the APS must be done by our core workforce, APS employees. Two, all agencies must move away from outsourcing work that is the core role of the APS or the government agency. All core work must be performed by public servants. Targets have to be publicly reported in corporate plans starting next year and provided to the APSC. Progress on reaching the targets will be reported in annual reports.
00:00:52
Speaker
Using external workforces like contractors or consultants should be in limited circumstances. Examples given included when a permanent vacancy is unable to be filled in a timely manner, when independent advice is required or where services are non-core APS work, like property management, building cleaning and security. When there is a vacancy, the APS networks should be used first.
Consultancy Firms Face Job Cuts
00:01:16
Speaker
The use of consultants within the public sector has been under the spotlight recently due to the
00:01:21
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PwC confidential tax leak scandal. The Labor government said it would reduce the reliance on consultants and on high labor within the federal bureaucracy as one of its first commitments upon taking office last May. According to the Australian Financial Review, consulting firm KPMG has cut another 100 local staff after making 200 redundant in February. Rival Deloitte has cut dozens and 78 staff at PwC face an uncertain future
00:01:51
Speaker
after their planned move to spin-off sign was scrapped. A widespread slowdown in public and private sector demand this financial year has also led to the firms including EY and Accenture taking a variety of measures designed to reduce or defer costs such as performance managing underachieving personnel.
Recruitment Firms Financial Decline
00:02:10
Speaker
The five major firms are also variously cutting back on recruitment, cracking down on expenses and travel costs and deferring graduate start dates.
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Speaker
Four recruiters have recently released updated financial results. Robert Half's global revenue fell 14.7% year over year on a reported basis to US$1.56 billion for the third quarter of 2023, the group reported last week. On an adjusted basis, contract and temp income was down 16.4% and perm placement income was down 22.5%.
00:02:48
Speaker
Group Net Profit was $96 million, down 42.5% on a reported basis. Ambition Group Limited, in a recent letter to shareholders, reported results for the first nine months of their 2023 financial year, compared to the same period in 2022. Sales declined 4%. Net Fee Income declined 13%. EBITDA dropped 83%.
00:03:14
Speaker
and profit before tax plunged from $6.4 million to $400,000. Chair and Group CEO Nick Waterworth noted in the letter, the reduction in profit is driven by lower net fee income and exaggerated by the fact that we have increased sales heads from 148 in 2022 to 180 now. This positions us extremely well to capitalise on an upturn as and when this occurs.
00:03:42
Speaker
South African-listed AdCorp Holdings Limited, owner of local IT recruitment brand Paxis and blue-collar recruiter Labor Solutions Australia, reported revenue was up 10.2% over the previous year for the six months ending 31 August 2023. Operating profit was down 14%. The company reported Paxis' revenue was marginally behind the comparative period on an Australian dollar basis.
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Speaker
and Labor Solutions Australia's revenue was significantly higher than the comparative period. The ADECO group reported third quarter revenue of 5.96 billion euros, an increase of 3% organically and trading days adjusted. Gross profit was up 1% and net income was down 4% to 103 million euros. Revenue at ADECO APAC was up 21%
00:04:35
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and revenue at Adeko ANZ was up 73% on the back of the commencement of the Australian Defence Force recruitment contract.
Incentives for NZ Prison Guards
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The Northern Territory Government is aggressively targeting experienced New Zealand prison guards by offering individuals a $25,000 package to cross the ditch while families could get up to $35,000 Australian dollars. A sponsored social media campaign by Northern Territory Government is offering for a two-year contract
00:05:05
Speaker
a one-way flight, two-month accommodation, two weeks car hire, six weeks annual leave, and a $5,000 retention bonus every 12 months for the Alice Springs-based positions. The starting salary is about $10,000 higher than New Zealand salaries, while the cost of living is dramatically lower. Auckland's Mount Eden Correctional Facility is reportedly already short 140 staff before the NT campaign started.
00:05:31
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And there's concern in New Zealand that existing recruitment shortfalls are about to escalate with the new government campaigning on harsher sentencing. The Northern Territory government would not reveal how many workers it was hoping for but said so far 26 New Zealand corrections officers had applied. Official data released last week by the ABS showed a 1.2% increase over the September quarter in Australia's consumer price index up from 0.8% in the June quarter.
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a higher quarterly increase than most market expectations. This takes annual inflation in the year to September to 5.4%, down from 6% in the year to June.
Fair Work Ombudsman Recovers Wages
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The Fair Work Ombudsman recovered $509 million for 251,475 underpaid workers in 2022-23, the second consecutive year of more than half a billion dollars in underpayments recovered.
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More than half of last year's recoveries came from large corporate and university employers who together backpaid more than $317 million to more than 160,000 underpaid employees. The workplace regulator received more than 370,000 inquiries, resolved 16,812 matters and commenced 81 litigations. The report noted FWA's investigations into large corporate underpayments found that non-compliance
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is often driven by ineffective governance and a lack of investment in payroll systems, expertise and monitoring.
Flexible Work Arrangements and Trade-offs
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Employers across Australia are attempting to establish a middle ground as they give in to employees demands for flexible work according to a new report.
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Robert Half Australia's latest survey among 300 hiring managers revealed that employers are already introducing a variety of flexible work benefits for employees. However, a majority of employers want some kind of trade off for the flexibility that they've been granting staff. The most common arrangement offered to employees is to work hours that are more flexible than the traditional nine to five, which has been introduced by nearly half, 49% of the respondents.
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Other arrangements include access to additional leave days such as mental health days offered by 45% of employers, working from home three or more days a week, 44%, and staff choosing when they can come into the office offered by 42% of employers.
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In a step towards greater flexibility, 37% of employers said they are planning to introduce a four-day work week and another 32% said they intend to introduce a compressed working fortnight. It's 10 days of working hours to be worked in nine days.
Gen Z's Work Preferences
00:08:16
Speaker
New research from Employee Success Platform staff circle found that 73% of Gen Z 16 to 24 year old employees
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said they are more likely to leave an organization if they don't receive frequent managerial feedback and communication. On the other hand, only 52% of non Gen Z employees said the same. In August, 1,000 employees and 250 HR professionals were surveyed to find out the frequency of manager team member interaction. The outcome was just 15% of employees have regular weekly check-ins with their managers to discuss performance.
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A majority of employees, 76%, only have a check-in once per month or less, and of the HR professionals surveyed, 20% admitted their organization doesn't have any type of performance management process in place. Gen Z has a different outlook on things, said Mark Seaman, founder and CEO of Staff Circle. Their value ecosystem is different and their expectations of what good looks like is higher than previous generations. They don't feel change as much because
00:09:21
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of the fact that their whole early adulthood has been about change. Gone are the days where a young professional says they're going to stay in a job for five or six years.
Icelandic Strike on Gender Pay Gap
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Tens of thousands of women and non-binary people across Iceland, including the Prime Minister, stopped work two Tuesdays ago in the first strike of its kind in nearly half a century.
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Organizers want the strike to draw attention to the country's ongoing gender pay gap and widespread gender-based and sexual violence. The event marked the first full-day woman strike since 1975 when 90% of Icelandic women refused to work, leading to pivotal change including the world's first elected female president of a country.
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Despite being considered a global leader on gender equality, topping the 2023 World Economic Forum's global gender pay gap rankings for the 14th consecutive year, in some professions, Icelandic women still earn 21% less than men, and more than 40% of Icelandic women have experienced gender-based or sexual violence.
Psychological Safety in Recruitment
00:10:33
Speaker
The question of the week is how psychologically safe is the recruitment industry? And by way of definition, I guess, psychological safety is the idea around the ability in a workplace to have kind of no repercussion or punishment on failure or the ability to sort of be able to speak up and be heard, be acknowledged and not have a negative repercussion around that.
00:11:03
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It's also often defined as being able to be yourself, you know, without being made to feel dumb or, you know, unintelligent or insignificant in the culture. Is that how you define it as well, Ross? I would agree with that. And I'm just looking at the notes that I made from Dr. Gemma King's presentation at the RCSA conference recently, being able to speak with Candor
00:11:33
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being able to participate in an open environment without being concerned that you'll be thrown under the bus for a mistake, being able to ask for help. So they're all aspects of psychological safety. And certainly I listened to a podcast last week where someone spoke about it and said, ultimately, it's about creating a safe learning environment. Okay.
00:12:00
Speaker
So in answer to the question then, how psychologically safe is the recruitment industry, where would you give us on a scale of 1 to 10? If 10 is very psychologically safe, where do we sit?
00:12:13
Speaker
So I'm a little bit reluctant to assign a number, but I'll assign a seven. I do. I do think it's very difficult. I have just a small window into a very small number of recruitment businesses. So it's very hard to generalize, but I would say it's a seven.
00:12:32
Speaker
And the primary reason I'd say that is that it's so easy now to get another job. If you're a recruiter working in an environment where you don't feel safe and your experience is this is not going to change or get better, then it's pretty easy to go and find another job within the industry. So I think people being able to vote with their feet probably means that by and large, I think
00:13:00
Speaker
seven would be my guess. What would you say, Adele? Well, whilst I don't disagree with the idea that you're saying people can kind of, you know, vote with their feet, so to speak, I think I'm going to disagree and say that I think whilst we're much improved, I'm not giving it much more than a five, a four to five out of 10, to be honest, as an industry. It's pretty harsh, I know. But as I said, I think it's improved. I think in the 20 odd years that I've been in recruitment.
00:13:27
Speaker
It's certainly gotten better from the earlier days, but I still think there's a long way to go in terms of, you know, calling ourselves a psychologically safe culture or an industry with a psychologically safe culture. And I think some of it comes down to what we do. It's not necessarily the fact that we're, you know, we're a bad industry or anything like that. I think it's because we have performance based employment. And so with that, there's an element of risk that sort of,
00:13:56
Speaker
hangs over your head at all times. You're always monitoring and making sure that you're performing at a certain level in order to make sure that your job is safe. You know, we are sales driven by nature and sales is focused on results. And so there's always going to be that, you know, stress and stressors around feeling like you need to perform and
00:14:18
Speaker
perhaps that's more of a focus than worrying about being able to speak up or being innovative or any of the other things that might indicate psychological safety is present.
00:14:30
Speaker
Sure. I suppose as you were talking, I'm thinking, well, I mean, one thing is for sure about this job. We're dealing with a lot of rejection all day, every day. I mean, every single recruiter, no matter their experience or tenure, is going to feel that rejection because they want to ring up a candidate and the candidate's not interested in going forward to the job. They recommend a candidate to a client. The client says no.
00:14:56
Speaker
I mean, these are experiences that every single recruiter deals with every single day. These are the common elements of this industry. And therefore, even if there's a, let's call it a good leader, there's still that slide into negativity that a recruiter can go into because they're experiencing this constant rejection.
00:15:23
Speaker
Yeah, I mean, if we think about our own experiences, Ross, you know, I'm sure we would be able to draw on experiences both positive and negative in the industry. But, you know, you would have to say, you know, overarchingly, you know, years ago, I think it was it was pretty terrible. As I said, I do think there's an improvement, but I still think given that we work in a very highly competitive environment,
00:15:47
Speaker
You know, it isn't the place to be if you're suffering other mental health issues. It's a hard job to do if you're struggling with mental health. It is. It is. But I mean, you said pretty terrible. I mean, was that your own experience at all? Like, did you would you say you worked in an environment? I mean, you've had a few different employers, but you know, is there one that you'd say looking back now? Yeah, I felt psychologically unsafe. Obviously, you wouldn't have defined it that way then, but
00:16:13
Speaker
Now, with the benefit of hindsight, will you have defined any work environment that you were part of, psychologically unsafe? Yeah, I think in the early days I would. I think, you know, those very traditional environments of, you know, master control kind of situations in terms of leadership style meant that you were fearful. You had to perform and you were fearful of not performing and you certainly didn't speak up and you certainly just got on with the job.
00:16:43
Speaker
and you kept your head down and your nose clean and all of those things because you were worried about what the repercussion might be. It's now looking back on it, not psychologically safe. Obviously, as you perhaps mature and as the industry's matured, I think there are places and plenty of organizations I'm sure would be listening to this and disagreeing and saying, no, no, we are, we're very safe in our workplace. And I'm not saying that that's not the case in many workplaces. Today, I think it's better, but I still think there's a way to go.
00:17:14
Speaker
I suppose if I'm thinking about my own experience there was certainly one specific period of time where looking back now I would say absolutely I did not feel psychologically safe. My mental health definitely suffered and I think there was just a lack of
00:17:37
Speaker
certainty about what I was going to get from this particular leader day in day out. They seemed very erratic I think. Whereas compared to other leaders I've worked for, although they might have been tough and although there might have been times when they spoke to me in a way I'd prefer they didn't, there was a degree of consistency and certainty. So I kind of knew what I was going to get but that
00:18:06
Speaker
But that one time where I felt psychologically unsafe, it was just the unpredictability that made me go home at night wondering what was going to happen the next day and relieved to get to the end of the week. And I certainly wouldn't want to repeat that type of experience ever again.
Impact of Lack of Psychological Safety
00:18:28
Speaker
I think something you said earlier is really relevant. Recruitment is all about failure. So if the definition that we started this conversation is about a safe place in where failure is not seen as punishable, where you can be yourself, where you can speak with candor, recruitment provides that environment certainly. So it's filled with elements of failure and having to pick yourself up and get back on with it. We call that resilience as we know in the industry.
00:18:56
Speaker
What's our summary around this, Ross? I mean, we have to harness that resilience, right? We definitely do. And I think one of the things that I jotted from Dr. King's presentation, which really strikes me as true, she said, if your employees don't feel safe, you are paying them a full-time wage and they are actually working part-time.
00:19:21
Speaker
I think that's absolutely true because if you're worried about what's going to happen as a consequence of you, let's say, failing, then you're not focusing on the job. And as you said earlier, this is a performance-based industry. And if you're not focused on the things that you can control, like candidates and clients, and you're focusing on something you can't control, like your bosses,
00:19:46
Speaker
state of mind or temper then that's very unhelpful very unhelpful for mental health very unhelpful for performance and Actually, it's very unhelpful for the reputation of our industry as a whole All right, it's a really interesting conversation today hopefully some key points there for people to take away and would love to hear people's opinions about this topic is this
00:20:11
Speaker
Is this something you feel strongly about? Please post on LinkedIn. We'd love to hear from you. And now you're up to date with your recruitment news. And for all previous episodes, visit our website at recruitmentnewsaustralia.com.au. And connect with us on LinkedIn. Ross Clannett and Adele Last.