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Episode 30
341 Plays1 year ago
News for the week beginning 25 September 2023 and Question of the Week: "What are the major mistakes recruitment agency owners make in hiring experienced recruiters?"
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Transcript
Australian Job Growth: Record Year
00:00:09
Speaker
This is the news for the week beginning the 25th of September 2023. The latest employment data from the ABS shows that 410,700 new jobs were added to the Australian economy over the past 12 months, representing 3% growth, with August accounting for 64,900 of those new jobs.
00:00:32
Speaker
Over the same period, 82% of those new jobs were full-time jobs and 18% were part-time. Full-time jobs now account for 70.1% of all Australian jobs and part-time jobs account for 29.9%. Unemployment remained at 3.7% and the participation rate rose by 0.1% to 67%. 71.6% for men
00:01:02
Speaker
and it remained at 62.5% for women.
Temporary Sales Surge, Profit Margins Decline
00:01:07
Speaker
Staffing Industry Metrics has released aggregated and averaged financial data on the first eight months of 2023, compared to the equivalent eight months period in 2022, based on the results of 87 local recruitment agencies surveyed. The results include a 32% growth in temporary and contract sales, a 5% decline in gross profit as a percentage of sales,
00:01:32
Speaker
A 20% growth in permanent sales. Gross profit per income producer has declined from 262,000 to 217,000, representing a 17% drop in productivity. Operating expenditure has surged by 16%, and operating profit has declined by 22%.
Albanese Government's Apprenticeship Investment
00:01:53
Speaker
The Albanese government will spend an extra $41 million in a bid to double higher apprenticeships in the care economy.
00:02:02
Speaker
digitisation and net zero, three priorities identified by the employment white paper released by the treasurer, Jim Chalmers yesterday. The white paper outlines five objectives for the Australian government, delivering sustained and inclusive full employment, promoting job security and strong sustainable wage growth, improving productivity, filling skills needs and building the future workforce and overcoming barriers to employment and broadening opportunity.
00:02:32
Speaker
The white paper promises nine new policy initiatives, including a national skills passport and the bid to boost TAFE with six new centres of excellence around Australia. Labor will spend $31 million on TAFE centres and $10 million to develop higher and degree apprenticeships to develop bachelor level qualifications for clean industries in the care economy without going to university.
00:02:57
Speaker
According to the employment white paper, around 2.8 million people, 1.5 to the size of the total workforce, is either unemployed and looking for work or in a job, but underutilised.
US Staffing Revenue Decline: A Forecast
00:03:09
Speaker
Revenue in the US staffing industry is projected to decrease by 10% this year to $201.7 billion. According to staffing industry analysts, US staffing industry forecasts September 2023 update.
00:03:26
Speaker
This year's projected decline in revenue follows robust growth of 34% in 2021 and 20% in 2022. Commercial staffing revenue is forecast to fall by 8% this year with declines of 7% in office clerical and 8% in industrial. IT staffing revenue is expected to decline by 3%. Looking ahead to 2024, the report projects the full staffing industry to return to growth
00:03:54
Speaker
with revenue estimated to be up by 3%.
Australia's Population Dynamics
00:03:57
Speaker
Earlier this month, the ABS released the latest population data as at the 31st of March, 2023. Australia's population was 26.473 million people. The annual growth rate was 2.2%, or 563,200 people, of which just under one fifth came from natural increase that is live
00:04:22
Speaker
Earth's minus deaths and net overseas migration contributed slightly over four-fifths of the population increase. Victoria's population increased by the greatest number of people 161,700 followed by New South Wales 156,300 then Queensland 124,200. New South Wales lost the largest net number of residents to interstate migration
00:04:48
Speaker
30,213 and almost the same number of new residents was gained by Queensland.
AI Adoption in Recruitment: Are Companies Ready?
00:04:56
Speaker
According to a survey of 450 hiring managers, predominantly in the US, Australia and Canada, undertaken in July 2023 by recruitment industry vendor criteria, only 12% of hiring professionals say they are currently using AI in their recruitment or talent management processes.
00:05:15
Speaker
77% say they aren't using it while 11% aren't sure. Of the small number of organizations that say they are currently using AI, it is used predominantly in the technology, finance and professional services industries. Bigger companies were more likely to be using AI than smaller companies.
Grindr's Office Return Mandate Fallout
00:05:33
Speaker
The CEO of LGBTQ Plus dating app Grindr delivered an abrupt return to Office Ultimatum.
00:05:43
Speaker
and gutted the company staff when a large minority of employees failed to abide by the demand. Last month Grindr gave its all remote staff two weeks to pledge to work from an office two days a week starting in October or lose their jobs come the end of the month. Many declined to return. 82 out of 178 employees or 46% were sacked after rejecting the mandate according to the Grindr Union which went public two weeks before the ultimatum.
00:06:11
Speaker
The policy would have forced many of them to relocate to LA, Chicago, or San Francisco. The purge has dealt a blow to Grindr's unique queer-friendly workplace culture, which employees say was a rarity in tech. The Communications Workers of America, which represents the employees, filed two unfair labor practice charges with the US National Labor Relations Board against Grindr, accusing the company of unlawfully suppressing discussion of working conditions in company chats,
00:06:40
Speaker
and through an agreement that terminated employees were offered in exchange for severance pay. Grinder offered a relocation stipend to remaining employees and six months of severance pay to those who did not commit to in-office work. Company spokesperson Sarah Bauer says the return to office plan was unrelated to the workers decision to unionize. Grinder's union estimates that 70% of the engineering team, 80% of the product department and 85% of the product design team were cut.
00:07:09
Speaker
after the first phase of the return to office mandate took effect at the end of August.
OECD Economic Outlook: Strong Start, Weak Future?
00:07:15
Speaker
The global economy was stronger than expected in the first half of 2023, but the growth outlook is weak according to the latest interim economic outlook by the OECD. With monetary policy working its way through economies and a weaker than expected recovery in China, the outlook projects global growth of 3% in 2023 and 2.7% in 2024.
00:07:39
Speaker
A disproportionate share of global growth in 2324 is expected to continue to come from Asia despite the weaker than expected recovery in China. Headline inflation has been declining as energy and food prices have dropped but remains above central banks targets in many countries that OECD noted. Headline inflation is projected to continue receding gradually through 2023 in G20 countries from 7.8% in 2022 to 6% in 2023
00:08:09
Speaker
and 4.8% in 2024.
Staffing Firm Owner's Legal Consequences
00:08:13
Speaker
A Massachusetts staffing firm owner in the United States was sentenced to a year in prison in order to pay nearly $4 million in restitution to the Inland Revenue Service and $155,870 in restitution to Traveller's Insurance, the US Department of Justice announced earlier this month.
00:08:33
Speaker
The owner operated a temp business between 2015 and 2019 and cashed most of the checks rather than deposit the funds into her business account. She reported only the amounts in the business account to the IRS, thereby failing to pay federal taxes on more than $14 million of the company's income. The owner also failed to withhold taxes from $12 million of employee wages, resulting in a failure to pay more than $3 million in employment taxes, the DOJ said.
00:09:04
Speaker
And that was the news for week beginning 25th of September, 2023.
Mistakes in Hiring Experienced Recruiters
00:09:15
Speaker
This week, what are the major mistakes recruitment agency owners make in hiring experienced recruiters? Yeah, it's an interesting one, isn't it? I saw your blog this week for us around the fact that as recruiters we
00:09:32
Speaker
sometimes fail at our own job. We're not great at hiring our own people. So yeah, I thought it was a really interesting conversation to start. And you're right, I see so many agency owners making mistakes, perhaps jumping in too quickly, you know, perhaps feeling like they found somebody with experience and they need to move fast and make decisions quickly. And I'm a huge advocate for that. But you need to make sure you've got
00:10:00
Speaker
enough information, you know, you need to make sure that you've got enough of information about the candidate to make that sort of decision, which is a huge impact to your business. So, you know, I think about my own recruitment exercises where I've joined the companies, you know, even where I felt really sure after the first meeting, and they seem to really like me after the first meeting, I've asked for second or third or fourth meetings. In fact, one
00:10:25
Speaker
um, who might be listening or laugh when, uh, and he knows there were nine, there were nine meetings before I took the job. Yeah. And that was from me, the candidate, not necessarily from their side, but I just wanted to learn more. I wanted to understand more about the person and their business and the culture and really make sure I was making the right decision. And I think agency owners could do the same. I don't advocate for nine, a nine interview process. Don't get me wrong, but, um, but really certainly perhaps spending a little bit more time
00:10:54
Speaker
with the person on more than one occasion and really delving in deeper to find out more about the person. Is it you think the pressure that the owner feels, oh, this is an experienced person, they're bound to have quite a few options. If I don't move quickly, I'll potentially miss out. Do you think that's a significant factor? Yeah, I think that they
00:11:21
Speaker
fail in their own processes, like you've said in the blog. They don't put in place that rigor and look at a formal process. If you think about something like reference checking, there's often a lack of reference checking or reference checking with the right person or using particular tools, as I said, or processes that would make the process more rigid. Even though you know the person's experience, you should still be checking them out as thoroughly as a rookie or anyone else.
00:11:51
Speaker
Yeah, I absolutely agree with that. And I think for me, the thing that I would identify that I see most frequently as a mistake in interviewing experienced recruiters is just the assumptions that the owner or leader makes about the recruiter in front of them, that they assume that the person with three years experience is very effective at BD.
00:12:19
Speaker
or they assume that they are very adept at volume work.
00:12:28
Speaker
I mean, it really depends. I mean, certainly any agency owner assessing an experienced recruiter, if you're, for example, wanting someone with well-developed business development skills, then you want to ask the person, tell me about the most significant client you've won in the last six months. Take me through each step in the process that
00:12:51
Speaker
you went through to win this client or to win this piece of work or what's the assignment you're most proud of having filled recently or the most challenging assignment that you've filled recently. Like really dig into the details of those things because when you ask those sorts of questions and you really probe to get detailed answers, that will tell you a lot about the person's capabilities.
00:13:22
Speaker
Yeah, I think the blog, and if you haven't read Ross's blog, please hop on and read that. This was just recently this week, which was a really great blog around a checklist essentially for hiring managers in our industry and in hiring experienced people. And it was really question 11 on your checklist that stood out to me, Ross, around doing something called a pre-mortem. Do you want to talk a bit more about that?
00:13:48
Speaker
Yeah, sure. And that's a term that I read in the book Decisive, How to Make Better Choices in Work and Life by Chip Heath and his brother Dan Heath. So let me quote from the book. The psychologist Gary Klein, inspired by his research, devised a method for testing decisions that he calls the pre-mortem. A post-mortem analysis begins after death and asks what caused it.
00:14:17
Speaker
A pre-mortem, by contrast, imagines the future death of a project and asks what killed it. A team running a pre-mortem analysis starts by assuming a bleak future. Okay, it's 12 months from now and our project was a total fiasco. It blew up in our faces. Why did it fail? And so I took
00:14:43
Speaker
that concept of a pre-mortem and applied it to recruitment. And the question, question 11 that you're referring to is this, if I hired this person and they subsequently failed, what do I predict would be the single most significant reason for their failure? And the reason you would ask this question is you really want to surface the thing that if you're forced to say why this person failed
00:15:13
Speaker
in a future that you're hypothesizing about, it will hopefully surface using my earlier example, something like, well, achievement drive, the single biggest question mark I have and the reason that I would predict they would fail if they do fail would be, I just don't sense a strong enough competitiveness within this person. And so by asking the post-mortem question,
00:15:41
Speaker
it gives you the opportunity to then dig down and really test what's there or maybe not there about that particular doubt. So for example, in a reference check to really dig into the achievement drive, competitiveness, business development successes of that person, or in a second interview to really dig much deeper in that particular area that you flagged. So that's, that's really how I'd
00:16:11
Speaker
recommend people use the concept of a pre-mortem? I think it's a really powerful thing to do and it does two things in my mind is bring you down out of the clouds. Agency owners get really excited about meeting somebody with experience and they override some of those doubts and those niggles at times. We're really good, we're influential people, we're great at influencing outcomes and we influence things ourselves in our own brain. We influence our own
00:16:38
Speaker
thought process. So I think it brings them down out of the clouds a little and gets them to actually think about whilst you don't want to think that the person is going to fail before they start, but being realistic about if they are going to fail, why would they fail as you've outlined. But then if you're going to override it, have a plan in place then to mitigate the risk. If you've got a niggling doubt and it is something like achievement drive and the person doesn't seem very sales driven,
00:17:05
Speaker
And that's your doubt. What are you going to do? How are you going to address that in the job? What tools are you going to put in place? How are you going to support the person to be better at that? Or are you going to remove that from the job? Are you going to say, OK, well, I don't need them to be doing that part of the job. I'll remove it from the PD. So I think it gets you to be a lot more analytical about how you're going to solve any future issue. I love that. Yeah. And as I said in the blog,
00:17:33
Speaker
The things that I've listed and also what you've mentioned today and what I've mentioned today are things that are applicable in assessing anyone that you're hiring to be a recruiter. But the reason I'm stressing particularly for experienced recruiters is that it's far more costly for their failure because inevitably you're paying a salary premium for an experienced recruiter. So if you hire a rookie and you're paying them 60 to 65,
00:18:02
Speaker
And after three months, they fail. Well, it's cost you 25% of 60 to 65. Whereas if you've hired an experienced person and you're paying them 90, 95, 100, and they fail after three months, then it's 25% of 90 to 100K, which is a hell of a lot more money that has cost you. So that's why I'm particularly focusing on experienced recruiters or the hiring of experienced recruiters in that particular blog.
00:18:33
Speaker
Yep, great advice here today. Hopefully it falls to the right ease. Well, let's hope so, because our industry has a pretty lamentable track record in the hiring of our own employees, particularly experienced ones. And now you're up to date with your recruitment news. And for all previous episodes, visit our website at recruitmentnewsaustralia.com.au
00:19:02
Speaker
and connect with us on LinkedIn. Ross Clannett and Adele Last.