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Episode 136 - How do recruiters stay relevant in a gigafied labour market?
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Episode 136 How do recruiters stay relevant in a gigafied labour market? #recruitmentnews
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Transcript
Introduction and Sponsorship
00:00:06
Speaker
Today's episode of Recruitment News Australia is sponsored by Wingman Recruitment, helping recruitment agencies grow faster by taking admin off your plate. From sourcing to compliance, their remote professionals handle the busy work so your team can focus on revenue driving tasks.
00:00:23
Speaker
Less admin, more placements. That's the Wingman effect. Find out more at wingmangroup.com.au and click on the services tab.
SEEK's Market Expansion
00:00:34
Speaker
This is the news for the 11th of November, 2025.
00:00:37
Speaker
I'm Ross Klinett. And I'm Adele Last. Kicking off this week's news is SEEK's aggressive push into the traditional recruitment agency market, which is about to enter a new phase with the posting last month of the head of APAC commercial growth pay-per-hire role on their local job board.
00:00:55
Speaker
The ad promotes the opportunity as your chance to build SEEK's pay-per-hire business across four APAC markets. where you will play a pivotal role in launching and scaling SEEK's next-generation pay-for-placement solution.
00:01:10
Speaker
What is this one about, Ross? Well, it's just another step down the road of what SEEK have flagged for a while, and they reiterated this in their May 2025 investor presentation.
00:01:21
Speaker
This is outcome-based pricing. where their aim is to use AI to predict placement outcome and set price accordingly. Clearly, variable job ad pricing was the first step, and that's been relatively successful.
00:01:38
Speaker
The Seek Recruiter Network, where they matched employers with recruitment agencies and clipped the ticket, was not successful or certainly not sufficiently successful to ah broaden that out. So they closed it down.
00:01:51
Speaker
And so clearly, this is the next step. They've got the largest pool of employers in Australia. They've got the largest pool of candidates and job seekers in Australia. And they're attempting to bring them together and charge a contingent recruitment fee.
Impact of SEEK's Strategy on Recruitment
00:02:06
Speaker
Well, not just bring them together, Ross. They're using AI to do some predictive matching in there. They're looking at ways, as you said, to connect the employer directly to the candidate. Should the industry be worried about this?
00:02:20
Speaker
I mean, Seek have been treading on our toes for a while now. mean, Sidekicker's been effectively a temporary recruitment agency that's owned by Seek.
00:02:30
Speaker
I mean, this is kind of what LinkedIn have always done. I mean, it's just another version of these big tech companies playing in the space of the recruitment agencies.
00:02:43
Speaker
They see there's a lot of money to be made. They see what an employer yeah will pay for an ad, and then they'll see what an employer will pay a recruitment agency. agency in terms of a recruitment fee for a placement.
00:02:54
Speaker
And clearly, an ad is a very small proportion in terms of cost of they recruitment agency fee. So, they're thinking, well, how can we capture some of the gap between those two things? Yeah, that's exactly why this one's got me a little worried. i think they have very deep pockets and they're going to spend a lot of money and invest in this next phase of their, as you said, outcomes-based pricing.
00:03:17
Speaker
Look, Without doubt. But so far, have they destroyed the recruitment industry? No. Are they an annoyance because they're playing in our turf? Yes. But ultimately, as long as recruitment agencies are genuinely adding value in the eyes of their clients, then I don't see this as serious competition.
Unemployment Figures vs. Reality
00:03:41
Speaker
Ross, did you know the unemployment rate is not true? Well, I'm pretty sure you could convince me of that, Adele, but tell me more. There were nearly 1.2 million people who wanted a paid job in June 2025.
00:03:54
Speaker
However, only 630,000 are classified as unemployed for official ABS data collection purposes, as you have to actually be actively looking for work to be counted as unemployed.
00:04:05
Speaker
Right. So what you're telling me is there's almost as many people unofficially unemployed as officially unemployed. And that's why there's so much more to the labour supply in this country when you look beyond the unemployment rate.
00:04:20
Speaker
The recent ABS release called Barriers and Incentives to Labour Force Participation in Australia tells us there were 800,000 people who worked part-time and wanted more hours.
00:04:32
Speaker
Around 700,000 people had a long-term health condition and wanted to work but weren't available to start within four weeks because of their health. And 110,000 people caring for young children who wanted part-time work but couldn't find days or hours that fit with their availability.
00:04:48
Speaker
And I know for those that were surveyed and want to work, but were unable to start work within four weeks, that the main reason for women was caring for children.
00:05:00
Speaker
And the main reason that men were unavailable to start within four weeks was long-term health condition or disability. Yeah, this one I can relate to. Ross, have a cousin at the moment who has young children, but they're all at school now.
00:05:14
Speaker
And she would definitely work if she could find a role that would fit with the flexibility that she needs. but she wouldn't be counted in these stats because she's not actively looking. I'm sure everybody knows somebody who fits into this category of the hidden
Financial Updates from Recruitment Firms
00:05:28
Speaker
unemployed.
00:05:28
Speaker
Turning to results and generally good news. Executive search firm Hydric & Struggles reported third quarter revenue rose 14.2% globally year over year in constant currency to US$324 million. income for the quarter rose 19%.
00:05:45
Speaker
group net income for the quarter rose nineteen percent to $17.5 million. u s dollars A Deco Group reported their revenue of 5.77 billion euros for the third quarter was an increase of 3.4%. EBITDA was up 8%.
00:06:02
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ebiter was up i say to 195 million euros. ADECO APAC was up 9%, although ADECO ANZ was down 3%. Recruit Group, who own Chandler McLeod and PeopleBank, reported a 0.8% rise in their staffing business revenue for the second quarter ended in 30th September, although recruits non-Japanese businesses, which they call the international business comprising Europe, USA and Australia, was down 3.9%.
00:06:38
Speaker
Japanese firm Will Group, who own local brands Ethos, Beef, Chapman, key appointments UNU and DFP, reported revenue was up. for the six-month period ended 30 September by 1.7% when compared to the same period last year. Gross profit was up 3.8% and profit before tax rose 80% to US$10.1 million.
00:07:01
Speaker
u dollars New Zealand's seasonally adjusted unemployment rose by 0.1% from the June 2025 quarter to reach 5.3% in the September 2025 quarter. to reach five point three per percent in the september twenty twenty five quarter its highest level in nearly nine years, according to figures released last week by Statistics New Zealand.
00:07:22
Speaker
The unemployment rate has been over 5% for the last four quarters. The last time that the unemployment rate was 5.3% was in the December 2016 quarter. The national unemployment rate in September 2024 was 4.9%.
00:07:38
Speaker
And the bad news keeps coming for New Zealanders, unfortunately, Adele. It's on the back of... Statistics New Zealand data from the previous month about migrants and there were two unwanted records set with respect to migration.
00:07:53
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So they New Zealand had nearly 74,000 migrant departures for the July 2025 year and a second record of a net migration loss of nearly 48,000 people for the same people for the same year And of course, it's Australia where they are heading to.
00:08:10
Speaker
Net migration loss of nearly 30,000 people to Australia. This is for the year ended March 2025. 18,300 arrivals from Australia to New Zealand, but nearly 48,000 migrant departures from New Zealand to Australia.
00:08:28
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And in fact, 58% of New Zealand citizens that leave the country are headed to Australia.
New Zealand's Economic Challenges
00:08:36
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And another key indicator, the New Zealand Consumer Confidence Index was also down in the third quarter of 2025 compared to the second quarter, remaining at historically weak levels.
00:08:48
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Westpac said the decline reflects ongoing pressures on households as rising living costs and economic uncertainty weigh on sentiment in New Zealand.
Upcoming Recruitment Conferences
00:08:57
Speaker
Talent X is back, back in 2026. RCSA have announced it'll be held on Thursday, the 21st of May in Melbourne at Jeff's Shed, or more formally known as the Melbourne Convention and Exhibition Centre.
00:09:13
Speaker
Hours are 8.30am to three thirty p m And of course, that same day in the evening is the RCSA Industry Awards. Early release tickets are only $199 plus GST and discounts are available for three or more people.
00:09:30
Speaker
Yes, I believe they've released the keynote speaker as Matt Jones. He's the co-founder of Four Pillars Gin, who's going to do a deep dive into experiences and the importance of mastering all the ways that you can make people feel the things you need them to feel to help drive business success.
00:09:46
Speaker
But I believe you have a keynote that's coming up sooner than that, Ross. Yes. Next ah Thursday, Adele, that's the 20th of November. I'll be speaking in Sydney at the NPA conference and it's at the Crowne Plaza, Darling Harbour.
00:10:01
Speaker
I believe they've opened this up for the first time to non-members. How do people get tickets? That's right, non-members are able to register. So if you just Google NPA Worldwide Power Up 2025, and if you are interested in attending, there is a speaker referral discount of 20%.
00:10:22
Speaker
So I have a code that I can give you. So just message me on LinkedIn. I'll be happy to furnish you with that code.
Predictions on Gig Economy Growth
00:10:28
Speaker
But registrations do close this Friday, the 15th of November.
00:10:33
Speaker
So you can get your Ross Clennant fix at a 20% discount. Love it. That's right. I'll be speaking on generative AI and the disputed future of jobs, careers, sectors and the recruitment industry.
00:10:44
Speaker
Looking forward to it.
00:10:49
Speaker
um
00:10:53
Speaker
Question of the week. How do recruiters stay relevant in a gigafide labour market? So, Adele, this has come from quite a stimulating article in Forbes that was published first week of July.
00:11:09
Speaker
Headlined, CEO said your replaceable prepare for the white-collar gig economy. And into the article, the author speculates on how all this could unfold.
00:11:22
Speaker
So, four phases. do you want to hear the four phases? Yes, please. All right, phase one happening now. Companies freeze hiring for any role that AI can partially do. When someone quits, their work gets parceled out to contractors using ai tools.
00:11:37
Speaker
Marketing manager leaves, five freelancers with chat GPT replace them at half the cost. Phase two, mass restructuring eliminates entire departments.
00:11:49
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Surviving managers become vendor relationship coordinators overseeing networks of gig workers and AI systems. Your accounting department becomes one controller managing 20 fractional bookkeepers.
00:12:02
Speaker
Phase three, the full gig transformation. Need a financial analyst? Post it on the internal gig platform. Need a marketing campaign? Another gig?
00:12:13
Speaker
Legal review? Gig lawyer with AI does it in two hours instead of two days. Phase four. The companies that survive have 20% of their previous full-time headcount, but 500% more gig relationships.
00:12:29
Speaker
Corporation becomes a hub, not a hierarchy. So, Adil, firstly, how realistic do you think those four phases are?
Recruiters Adapting to Gig Economy
00:12:40
Speaker
This is so interesting, Ross. And I think the phases, you know, push the boundaries a little in some aspects. But some of it is reality, like phase one, you say happening now is right. As people start to freeze headcount, as people leave, yeah managers, CEOs are assessing what who can do that job. Can AI do that job? That's happening right now. There are whole teams of people you know losing their jobs because they're being replaced by those AI functions. So some of this seems pretty close to home. Some of this is reality now.
00:13:14
Speaker
Some of it is the not-too-distant future. But regardless of whether you agree with it or not, I think the recruitment sector, the recruitment industry has a huge opportunity here. There are a number of things that we can do to adapt if this was the way of the world, if we're taking a little um glance into the future there.
00:13:33
Speaker
But we have to start moving now. Like there's some things that the industry needs to start to adapt to now. Okay, well, let's toss a few ideas around and just see um where this takes So I'm going to start with that I think this is going to make recruiters who are in contracting now or the contracting part of the recruitment sector much more like traditional talent agents that work in, say, the movie business.
00:14:06
Speaker
where you represent talent. And I know that some recruitment businesses act like that, but a very small minority. But I think pretty quickly, it's going to become, well, quickly, i say quickly in the context of the recruitment industry, so maybe the next five years, that that's going to become a much more predominant model for recruitment businesses that have contracting workforces.
00:14:33
Speaker
I do agree with that one. And if it we're driven by the gig, the gig being the piece of work, then yes, he who hold holds the talent that can complete the gig is the one that that, you know, gets paid or wins.
00:14:45
Speaker
I think in order for that to really be a fundamental change in our industry, though, it's going to need to change the paying customer element because that's where it always falls back to where we sort of, you know, go back to serving, servicing our client as such, which is the paying customer, the you know the company, the entity.
00:15:05
Speaker
The candidate is not charged anything and therefore we don't feel as closely aligned to represent them. But I think there's a potential for what you're saying to be true, but I think it might be that people then pay us as an agent. So the candidate makes payment on that.
00:15:18
Speaker
Yes, agree. And that then probably sort of moves to an expanded point that Traditionally, as contract recruiters, we've found contractors' jobs and paid them, and that's kind of been the end of it, whereas now I think it's going to be ah ah much greater level of responsibility because if we're representing that person, we're probably representing them exclusively, and that means they're going to want more from us.
00:15:48
Speaker
So we've got to provide professional development. We've got to give them access to products and services that are relevant to their job as ah a gig worker. And if we're doing all that and the person's succeeding, then just like a movie star provides a cut to their agent for the work, the you know, the movie roles that they line up, it be a similar principle, I would have thought.
00:16:14
Speaker
I think the next level of that extension of that is also to look at um the payment being related to the body of work, to the statement of work, to the to the outcome that the person is producing because AI should, according to all accounts, allow us to do our job in a shorter period of time. I think you talk in there um in this article about phase three being you can hire a lawyer to do with AI to do the job. What used to take two days now takes two hours.
00:16:43
Speaker
So if that's the case, the recruitment industry is going to want to move away from an hourly hire model. Yes. into an outcome model where if the lawyer you hire from us has produced the contract you needed, we're going to get paid for that piece of work.
00:16:55
Speaker
It doesn't matter how long it took the lawyer to make it. Yes, correct. So I think those recruitment businesses that have already um commenced a statement of work business are probably ahead of those that are still just working in the traditional contract space.
00:17:11
Speaker
And then further extension of that, we're going to be summarising, categorising people based on their skills, accomplishments and outcomes rather than job titles. Yes, without doubt.
Future Role of Recruiters as Gig Platform Concierges
00:17:23
Speaker
The whole ah resume aspect of a hiring manager considering somebody where they're looking at, well, who have they worked for, for how long, what have been their job titles, their total amount of experience, that'll become far less relevant because the conversation will simply be, what outcomes has this person produced in what timeframe and give me some evidence of that. And that'll be far more powerful than those traditional...
00:17:51
Speaker
resume-based um factors of hiring somebody. What other things do you see happening in this utopian world, Ross? I think we're going to see that potentially, extending that candidate agent thing further, that we become gig platform concierges, that instead of the gig worker being all over these different platforms,
00:18:19
Speaker
that we potentially as recruiters are doing that, that we're going in and looking at opportunities and representing our candidate. I think i think that's that's potentially what's going to happen, which means at the other end,
00:18:35
Speaker
we're not going to be representing 80% or 90% of the workers. We're only going to represent a very small proportion, the high ah highly skilled people, because all of that, let's call it grunt work, the traditional hourly rate work will be work that many more people will be scrambling for.
00:18:54
Speaker
The rates will go down and there'll be almost no margin for recruitment agency recruiters to be worthwhile in playing in that space. I think you're really right on this one and it's an interesting concept because I guess the same thing happened with LinkedIn. You know, when LinkedIn came into the market, it was supposed to be a means or a platform in which employers could directly find employees or future employees and recruitment was going to come to an end.
00:19:22
Speaker
We know that as an industry that's not occurred and we've harnessed that platform. And so what you're suggesting there is a similar model where we look at these gig platforms and we go, oh, that's not for us. It's got nothing to do with recruitment.
00:19:33
Speaker
But I think the reality might be that those platforms will become just as hard to navigate, just as hard to find the right people or fraught with, you know, negotiation issues. So recruiters could become those agents in between, as you said, the concierge between you're looking for um gig work and you're looking for someone to do a gig. Let us facilitate that for you.
00:19:53
Speaker
Yeah. yeah And I think um extending that to the client side business development, that all of those traditional very high margin accounting and management consulting and IT services firms,
00:20:09
Speaker
They're all going to be under huge threat. I mean, if we think the recruitment industry is under threat, I think all of those types of businesses, because they're effectively charging hourly rates. You know, they're not, I mean, some of their work is outcome based, but a lot of that work is an audit on an hourly rate or making a quote based on headcount.
00:20:32
Speaker
certain you know senior partner at this hourly rate, junior person at this hourly rate, all of that's going to disappear quickly because it's just going to be the outcome. And if those professional services firms don't act quickly enough, then clearly recruiters who've got access to people, many more people than those professional services have, i mean, potentially we could be going in and undercutting those traditional firms and still making a reasonable margin ourselves because we've got people who can deliver the outcomes.
00:21:02
Speaker
Well, we haven't just got people, Ross. Think about this. We might have robots. We might have bots that can produce the outcome. And suddenly we are agents for robots as well as people.
00:21:13
Speaker
Well, AI agents as well. Do we represent people, robots, AI agents? Like any type of technology, whether it's human or man-made technology that can produce an outcome, is I mean, is that an opportunity?
00:21:29
Speaker
Such an interesting conversation. If we've frightened any of our listeners off, we're sorry. please ah Please enter the conversation and tell us what you think. Well, and I also think, just just to finish, that traditional national boundaries that have been generally the limits of any firm that has a physical location, I think they're going to go away.
00:21:52
Speaker
Because like LinkedIn, like you can access any LinkedIn profile potentially no matter where the profile holder is in the world. So does that mean because of where the work is and talent is going to work remotely that potentially the world is any of recruiter's oyster?
00:22:11
Speaker
Regardless if you agree or disagree with our provocative conversation, the potential expansion of the gig economy is likely to have a significant impact on the recruitment industry.
00:22:22
Speaker
So the time to act is now if you want to remain relevant.