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Episode 58
86 Plays8 months ago
News for the week beginning 22 April 2024
and Question of the Week: "What are the major reasons candidates withdraw from the hiring process and what can we do about it?"
#rna #recruitmentnewsaustralia #recruitmentpodcast
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Transcript
Introduction to Employment Issues
00:00:09
Speaker
This is the news for we commencing the 22nd of April, 2024. I'm Adele Last.
Candidate Experience Challenges
00:00:14
Speaker
Unemployment at near historic lows across the developed world has still not prompted an improvement in the experience delivered by employers to candidates, according to the latest annual research from the Candidate Experience Benchmark Research and Awards Program. The latest published research analyzes hiring data collected in 2023.
00:00:34
Speaker
150 organisations from all regions around the globe along with survey feedback from 240,000 job candidates.
Reasons for Candidate Withdrawal from Hiring
00:00:42
Speaker
According to the research results, 36% of candidates in the US reported no contact from employers one to two months after they applied for a role. The top three reasons why candidates withdrew from the hiring process were their time being disrespected due to poor communication or never receiving feedback,
00:01:00
Speaker
the process taking too long and salary not meeting their expectations. Company values were the most sought after information by candidates with 45% of all candidates citing it as most important, down slightly from 2022, but still up 96% from 2021. That's followed by specific information about what the employer does, career sites in multiple languages, diversity and inclusion information and answers to why people want to work there.
Global Recruitment Firm Challenges
00:01:29
Speaker
The most recent quarterly results of four publicly-listed global recruitment companies offered little comfort as both gross profit and fee-earner headcount continued their respective declines. Haze, ANZ reported March 2024, quarter gross profit fell by 23% on a like-for-like basis. TEMP decreased by 16% with PERM down 33%. Private sector GP decreased by 25% with public sector GP down 13%.
00:01:59
Speaker
By country, Hayes Australia's gross profit was down 20%, while Hayes New Zealand's gross profit dropped 45%. By region, ACT declined the most with a 29% drop. By specialism, construction and property, the largest specialism in Hayes ANZ dropped by 25%. Hayes ANZ headcount dropped from 895 at the end of December last year to 832 at the end of March.
00:02:25
Speaker
a 7% decline in the quarter. For the 12 months until 31 March 2024, Hayes ANZ reduced fee earner headcount by 263, a 24% decline. On a group basis, gross profit was down 14%, with temp down 12% and perm down 18% compared to a record high quarter in March 2023.
00:02:50
Speaker
Page Group reported Group Gross Profit for Q1 2024 decreased by 12.8% on a constant currency basis to ยฃ220 million, with PERM fees down 16.7%.
00:03:03
Speaker
and temp net fee income down 6.7%. In Asia Pacific, gross profit was down 15.7% to ยฃ32 million, with Page Group Australia reporting a 32% year-on-year decline. Fee owner headcount for the APAC region was down by 64, predominantly in Australia and China.
00:03:24
Speaker
Robert Walters reported group net fee income for Q1 2024 was down 16 percent in constant currency with Robert Walters Asia Pacific dropping 16 percent to 32.9 million pounds. Robert Walters Australia's gross profit was down 23 percent year on year and New Zealand's was down 28 percent.
00:03:46
Speaker
Manpower Group reported group quarterly revenue for Q1 2024 was down 5.5% in constant
WA Police Recruitment Struggles
00:03:53
Speaker
currency. Earnings before tax were down 42% to $57.5 million. Manpower Australia's results were not reported. WA Police has failed to adequately stem the flow of officers leaving its ranks, falling well short of its target to bolster its front lines.
00:04:13
Speaker
The WA government has announced a suite of measures over the past year to boost the number of officers, including recruiting internationally and doubling the availability of training courses. Their promise was 950 new police officers to be added to the front line by the middle of this year. But Police Commissioner Cole Blanche, speaking at a parliamentary committee hearing into WA's Police's annual report, said the force had only reached about half that target.
00:04:40
Speaker
We are still some 450 to 500 recruits short of that 950 target, he said. In 2022, 570 officers left the force, with 473 resignations and 97 retirements. Mr Blanche said he believed international recruitment strategies, such as hiring from the UK and Ireland, had succeeded significantly, but people were gravitating towards more flexible jobs. We offer part-time. We offer certain shifts. It's working very well, but it is limited.
00:05:09
Speaker
It is a competitive environment we can't compete with," he said.
Australia's Employment Landscape
00:05:14
Speaker
Australia's unemployment rate rose 0.1% to 3.8% in March, although the number of hours worked in the month rose by nearly 1% in data released last Thursday by the ABS. The number of unemployed people increased by 20,000 after dropping by 52,000 the previous month. Total employment growth for the 12 months to March 2024 was 365,000
00:05:38
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a 2.6% increase. According to the JSA Recruitment Experiences and Outlook survey of over 1000 employers in March 2024, the Outlook for Employment has stabilised with 49% of employers recruiting during the month, the same as last month.
00:05:55
Speaker
A slight decrease in recruitment activity in capital cities was offset by an increase in recruitment in rest of state areas. The recruitment difficulty rate decreased by 4 percentage points over the month to 50% of recruiting employers.
00:06:10
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The peak recruitment difficulty rate was 75% in July 2022. The recruitment difficulty rate was significantly different in the capital cities compared to rest of state areas with 46% of recruiting capital city employers experiencing recruitment difficulties compared to 58% of rest of state employers.
00:06:33
Speaker
Recruitment difficulty for larger businesses is significantly compared to smaller businesses. Only 38% of larger businesses reported recruitment difficulty in March compared to 58% of smaller businesses. 22% of employers were forecasting an increase in headcount in the upcoming three month period and 4% were forecasting a reduction in headcount.
00:06:58
Speaker
March was the worst month on record for business collapses, a leading credit reporting agency says, as data once again shows construction sector businesses to be more at risk than any other sectors. Over 1,200 Australian businesses faced external administration in March according to the latest credit to watch business risk index release last week. That figure is 20% above the previous month and comfortably above any other monthly business risk index reading stretching back
00:07:27
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to pre-pandemic 2019. Construction sector businesses which currently contribute a high proportion of monthly business collapses are uniquely vulnerable due to their tax liabilities, creditor watch added. The credit reporting agency holds 15,000 tax debt default records from the ATO, which refer to outstanding debts greater than $100,000. Of that number, 23.8% are now held by businesses in the construction industry
00:07:55
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almost double the percentage of professional scientific and technical services businesses, the next most represented industry category. CEOs across the globe expect a decline rather than improvement in economic conditions this year.
CEOs' Economic Outlook and AI Impact
00:08:10
Speaker
although the level of pessimism is significantly lower than last year. PwC's 27th annual global CEO survey collated the responses of 4,702 CEOs in 105 countries and territories through the 2nd of October through the 10th of November last year. The extent to which generative AI will impact headcount in their company in the next 12 months saw 25%
00:08:36
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of CEOs responding that it will lead to a minimum of 5% headcount reduction, with CEOs in the media and entertainment sector the most bullish about reductions, 32%, with banking and insurance, both 28%, next highest. CEOs in the engineering sector were the most bearish about AI impacting headcount, with just 12% nominating AI implementation will lead to a minimum 5% reduction in company headcount.
00:09:03
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Hiring was nominated as the equal third highest area of administrative inefficiency by the CEOs just behind procurement process and emails, clearly indicating CEOs will be looking closely at how AI and large language models can significantly reduce hiring costs and improve service standards.
Australian Job Security and Growth Optimism
00:09:24
Speaker
Australians are optimistic about the future of work, according to research by payroll firm ADP.
00:09:31
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Despite ongoing apprehensions about AI, cost of living and other concerns, eight out of 10 Australians still report being quite or very optimistic about work over the next five years, influenced by workplace factors such as job security, career satisfaction and professional growth. ADP surveyed 1,400 Australian workers across various industries and demographics for its people at work research.
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The findings also revealed Australians working in IT and telecoms 96% and construction 88% and finance 83% have the most positive outlook on their careers. The report also shed light on other factors spurring optimism in the workplace with increased flexibility high on the priority list for most Australians with 84% of Australians who regularly work from home across all industries report feeling positive about the future of their role for the next five years.
00:10:26
Speaker
And that's the news for the week beginning the 22nd of April, 2024. I'm Ross Clennett.
Why Do Candidates Withdraw?
00:10:44
Speaker
Question of the week this week is based on our lead news article. What are the major reasons candidates withdraw from the hiring process and what can we do about it?
00:10:56
Speaker
Adele? Yeah, this was from the survey results that we reported on a survey that was taken to the latter part of last year. 240,000 candidates provided feedback around why they may withdraw from the recruitment process. And the top three were listed as poor communication or lack of feedback through the process, taking too long with the process and the salary being too low for a role.
Hiring Process Inefficiencies
00:11:21
Speaker
And this was results relating to employers direct, of course.
00:11:26
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But we wanted to pose this to recruiters. What can we do about it when we're faced with these sorts of scenarios? Starting with the first one, poor communication or lack of feedback from the client.
00:11:37
Speaker
Very common, unfortunately, and very close to home. I mean, this is five years ago now, but my wife was looking for a new job, and she's a senior HR executive. She was formerly HRD of Hallmark Cards Australia, and she went for a new job with a tech company based in South Melbourne. And she drove in twice for interviews with the CEO,
00:12:04
Speaker
and the leadership team. So that's basically a two and a half hour round journey, just the traveling, let alone the time spent in the interview. And they said, great, we'll take references and we'll come back to you. They took references and she never heard from them ever again.
00:12:22
Speaker
Even after she followed up, she received absolutely nothing. So she has no idea what happened to the job. She has no idea why she did not get the job, but she got absolutely zero back. And I actually wrote a blog about it at the time and I named the employer.
00:12:38
Speaker
So I was pretty upset on her behalf. She was a little more kind of, oh, well, these things happen. But I was like infuriated. This is a very head of HR role. This is very senior. It wasn't like a customer service officer. Yes. Well, it shouldn't happen at any level. Well, you're right. It absolutely should. But you're right. At that level, even more so, that's shocking and surprising. And not to mention, obviously, she's at a senior level in the industry, connected in that industry.
00:13:06
Speaker
what a silly thing to do, but do you think clients just don't know how to reject or they don't want to reject people and so they avoid it? Is it an avoidance response or lack of response? That's absolutely right. They don't know what to say. They don't know how to frame it in a way that the candidate can hear. And because I think many employers are scared of
00:13:34
Speaker
discrimination claims being made. They finish up saying something as bland as, we just went for another candidate or you were unsuccessful and provide no feedback of any value. Or the recruiter or the hiring manager says, oh, we just went for someone with just more relevant experience.
00:13:56
Speaker
And it's just so unhelpful and very frustrating. And I think that, you know, in my experience, I've been in this business, I've been in this industry 35 years and it really hasn't changed across that whole time, even with all the advances in tech.
00:14:14
Speaker
Adele and the ease of giving people feedback. It's just, you know, calling people on mobile phones, sending emails. All of those things it does and the availability of all of those things don't seem to have led to any improvement in this area. It's definitely a difficult part of what we do as recruiters, but it is something that we need to do well. So
00:14:38
Speaker
I do encourage people who are listening to really push your clients around this because we empathise with you. The client isn't good at rejecting, perhaps is ghosting you, perhaps isn't giving you enough information or giving you two broad an answer. But as a recruiter, you really need to try and push one for your own benefit to get the feedback so you know how you are tracking or where you might have gone wrong with the candidate or the kind of candidates you're presenting. But more importantly, so you can get back to your candidate and give them some solid feedback that is useful.
00:15:07
Speaker
or at least an answer as to what's happening. But that's the second one is around taking too long. So what about when it's just a process that's just so long and drawn out? This has got to be just about clients not prioritizing the process, right? They don't understand the timing that we work much faster than they do.
00:15:26
Speaker
I think overall many, not all, but many hiring managers and internal recruiters, they actually don't consider how long it's going to take to go through everything and then to look ahead and go, okay, so first interviews will be this week, second interviews, then reference checking, are the people who are conducting interviews available? What is their availability? Can we realistically get all those interviews done in that week or not?
00:15:55
Speaker
what background checking might be required. I just think it's far too often reaction reaction. Yeah. Oh, they're definitely not thinking about any of that. They're saying we have a vacancy. Let's call a recruiter. Let's put an ad out and off we go. And they're not planning it at all. I guarantee that you're quite right.
00:16:15
Speaker
And as a result, in almost all cases, it takes longer than they expect it's going to take. And the candidates get frustrated because either it takes longer than what they've been advised or they just hear nothing. And again, it's just like, well, is the process still going on or not? And again, this is where an agency recruiter should be way better than internal recruiter because we should have other options
00:16:43
Speaker
If not immediately, then hopefully in the near term for that candidate. So we have much a much greater incentive to stay close to that candidate and ensure our relationships not damaged. Yeah. And then some extra advice would be around making sure you're keeping or taking or keeping control of the timeline on your recruitment process. So setting that expectation really early with your client about how long things will take and letting them know you're going to move much faster than they might be used to if they've done it themselves.
00:17:12
Speaker
If they've had an internal recruiter doing it or an HR team doing it, it may have taken them weeks to months previously to fill a role. And you know, you might be able to fill it in, you know, hours to days to weeks at the best, you know. So setting that expectation really early and letting them know we're going to have interviews, you know, next Friday. So let's make some time in the diary. We're going to have this happening. We're going to have that happening. So really mapping that out to the client at the start, at the start of the process.
00:17:37
Speaker
getting their commitment around that and letting them know that any process that takes more than whatever it is in your industry, more than two weeks, is going to potentially have them lose good candidates. So you've got to keep control of that as a recruiter.
00:17:51
Speaker
and supporting that Adele, most recruiters would have that conversation. But my strong advice is follow it up with an email. Follow it up where you send the email to the person you've been speaking to saying, as per our discussion, here's the timeline we agreed and
00:18:13
Speaker
Ask the client to confirm it. Put it in their diary. Well, yes. Put an invitation to save the spot, at least for an interview or to present a short list, something like that. It could be that vulnerable. But also there's bound to be other people involved. So ensuring that you understand and have confirmed with the person you're talking to all the other stakeholders, because this person that we're talking to might sort of have things under control from their own time management point of view.
00:18:41
Speaker
but they haven't actually managed the stakeholders and actually asked the question of those stakeholders, are they available when I expect that you're going to be available to be part of this recruitment process? And I think that's a factor that recruiters don't, agency recruiters don't think enough about who are the other stakeholders involved. Have I asked that question and have I asked my contact to check in with those stakeholders to ensure their availability
00:19:10
Speaker
around the timeline that's been agreed. And then the final one is around the salary being too low. And this is something obviously we encounter every day as recruiters. And I think this is about you assessing the salary that the candidate is considering or wanting to be considered at. Have they got the skills and experience that sort of justify that level of salary? You need to do your research. You can access lots of information now around salaries.
00:19:37
Speaker
you can ask the candidate around what they're basing that on. And if you know your market, you'll understand whether that is a relevant salary for their level of experience. And then obviously as a recruiter, you need to justify that to the client and decide whether you can still present the candidate to the client. I think that's obviously a quick summary of how to manage it when the salary you feel is too low or the candidate is coming in at a higher level. How do we close this one out, Ross? What's your final advice around this?
00:20:04
Speaker
Well, just before that, I think the other thing to say is the complaint about the salary being too low is predominantly when the candidate is not dealing with an agency recruiter because they may be contacted by an employer and an interview is booked and they don't have an opportunity to ask about salary in advance. It's only when they get to the interview.
00:20:25
Speaker
that the salary issue is canvassed. Whereas with an agency recruiter, that should never be the case. The agency recruiter should always know the salary and, or at least the range and confirm with the candidate their interest at that range before referring them. Okay.
Improving Candidate Rejection Management
00:20:42
Speaker
So our final advice around what we can do about candidates that are withdrawing from the hiring process is what? Well,
00:20:51
Speaker
Let's remember that the candidates who have the most choice are often the best candidates and it's those candidates that will be withdrawing and the candidates that are left may not be at the level that the client wants. So in almost all cases, it increases the likelihood that the client has a selection of quality people if they move quickly. And we hear this year after year after year,
00:21:18
Speaker
The candidates feel that a slow process reflects on that employer and mostly not very well. And it diminishes the employer's brand in the candidate's eyes, making them far less likely to accept an offer. Yeah, I think this comes down to recruiters managing what I call the art of rejection and understanding how important that is function in our in our process, in our skill set.
00:21:44
Speaker
as important as it is to engage a candidate at the start of the process, you have to learn how to let them go at the end of the process very well for your own brand protection and your clients. But I think that's a question of the week for another day, Ross, the Art of Rejection. Stay tuned, maybe we cover that one in a future question of the week. Let's put that down for a future question of the week. I'd love to talk about the Art of Rejection, Adele. Hey, are you liking listening to our podcast, Recruitment News Australia?
00:22:13
Speaker
If you are, it would really help if you could give Ross Kleiner and I a five-star review. On whatever podcast app you listen to it on, please hop onto the review section and give us a review next time you're listening on your favorite episode. And thanks for listening.