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Episode 78
152 Plays3 months ago
News for the week beginning 2 September 2024 and Question of the Week, "What is the surprising truth about attracting and retaining Gen Z?"
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Transcript
Introduction and Upcoming Events
00:00:09
Speaker
An update from our sponsor Bullhorn. On Thursday, the 6th of March, 2025, Bullhorn will be hosting Engage, Australia's leading recruitment conference at the Winx stand of Royal Randwick Racecourse and Recruitment News Australia will be there. Discover how to more effectively engage talent, leadership and learn about the future of recruitment at Engage. This event is for recruitment leaders and practitioners alike to come together for unparalleled industry insights.
00:00:36
Speaker
Engage is the perfect place to make new connections and learn from the brightest minds. Super early bird tickets for owners and employees of recruitment agencies are now on sale for $199 each or 10 for the price of nine. You can find more information at engage dot.bullhorn dot.com with all the details.
Recruitment Activity Trends
00:00:55
Speaker
This is the news for the week beginning the 2nd of September 2024. I'm Ross Clennett. According to the Jobs and Skills Australia Recruitment Experiences and Outlook survey of over 1,000 employers nationally, recruitment activity rebounded quickly in July with 44% of all employers surveyed, recruiting for at least one vacancy in the month, a five-point jump compared to June. In the past 12 months, Capital City employers have scaled back recruitment more significantly, down nine percentage points, compared to non-Capital City employers, down only two percentage points.
00:01:30
Speaker
47 percent of recruiting employers reported recruitment difficulty in July, an eight point drop compared to June. The share of Australian employers expecting to increase their staffing levels in the upcoming three months remained steady at 18 percent.
Superannuation Entitlements Shortfall
00:01:47
Speaker
Women and those in lower paid jobs have been the worst hit by the growing problem of employers not paying workers their compulsory superannuation payments. According to an analysis of ATO data,
00:01:58
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ah the Super Members Council. Employers are required to contribute at least 11.5% of their employees' earnings, but according to the new analysis released by the super industry, one in four workers are missing out with an average underpayment of $1,800 per worker. The latest available data shows that in 2021-22 alone, 2.8 million Australians missed out on $5.1 billion dollars in legal super entitlements, which compounds by the time they retire.
00:02:29
Speaker
Over nine years, the analysis suggests that Australians have missed out on $41.6 billion dollars in unpaid super with women, people in casual work, migrant workers and younger workers more likely to have been unpaid.
Financial Reports and Impacts
00:02:43
Speaker
ASX listed People In, owner of 20 recruitment brands including Halcyon Knights, Peragon, AWX and Carestaff, reported revenue for the full year ended 30 June 2024 of $1.17 billion, a slight fall of 1% when compared to the same period a year ago. Normalised EBITDA plunged 40% to $37 million dollars with after-tax profit dropping 41% to $22.2 million. dollars The company attributed the drop in profit to an increase in the volume of lower margin rolls, in particular strong growth in Food Industry People Group, which attracts lower margins relative to the rest of the group, and a significant reduction in permanent placement revenue down $14 million dollars from the previous financial year.
00:03:30
Speaker
ASX listed Ashley services reported revenue of $556 million dollars for the financial year ended 30 June 2024, a growth of 1.3% when compared to the same period a year ago. On a like for like basis, revenue declined 6% and billable hours declined 8% after excluding the results attributable to Owen Pacific Proprietary Limited acquired on the 6th of February last year.
00:03:56
Speaker
after tax profit plunged 88% from $10 million dollars in the prior year to $1.35 million dollars this year. The result includes a $3.2 million dollars impairment, primarily relating to the write-down of customer relationships and goodwill associated with the purchase of link personnel in 2022. Ashley Services shares are trading at a 52-week low, having declined by two-thirds since August last year.
00:04:22
Speaker
company's market cap is currently around $39 million. dollars Australian IT recruiter Talent bucked the trend of year-on-year falls in sales and profit of large international recruitment agencies with a 4.4% climb in revenue to $992 million dollars and a 1.2% uptick in EBITDA to $26.1 million dollars despite fees from permanent recruitment declining 27% year-on-year.
00:04:50
Speaker
Contractor growth was most significant in Queensland and Western Australia, while Talon's technology project delivery and consulting business, Avec, grew sales nearly 50% to reach $48.6 million. dollars Headcount in Avec increased year on year from 47 to 83 employees. Talon exited the UK market during the year to focus on its growth regions of Australia, New Zealand and the United States.
Employment and Policy Changes
00:05:16
Speaker
The CSIRO has confirmed hundreds of jobs will be lost as the National Science Agency seeks to save $100 million dollars in operating costs. A CSIRO spokesman said between 375 and 500 jobs will be affected during the final wave of its program of reform across the non-research part of the organisation. Up to 120 staff are expected to be cut from the CSIRO's data and digital arm, data 61,
00:05:44
Speaker
and it's likely 65 more jobs will go from the Environment Business Unit. The so CSIRO spokesperson said the reforms were being undertaken to ensure the organisation could direct its resources towards research and it was working on ways to implement the changes with minimal impact on staff, including natural attrition and voluntary redundancy.
00:06:05
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but w A WA-based billionaire mining boss who has already been working from home has said he does not want staff to step out of the office for coffee either. Chris Ellison, the Managing Director of Mineral Resources, said the industry could not afford to continue down the path of flexible working and that his company was investing in amenities at the firm's head office in Perth to keep people from leaving the building.
00:06:27
Speaker
I want to hold them captive all day long, Ellison said during a financial presentation last week. I don't want them leaving the building. I don't want them walking down the road for a cup of coffee. We kind of figure out a few years ago how much that cost.
00:06:40
Speaker
The company's head office has a restaurant, nine staff psychologists, a gym and a daycare center with room for up to 105 children and other facilities designed to encourage staff to stay in the office during the day. Ellison, who has paid $6 million dollars last year, criticized other businesses that allowed their staff to work from home. His ASX listed company, which is worth about $8 billion and employs just over five and a half thousand people, formally banned the practice last year.
00:07:08
Speaker
I have a no-work-from-home policy," Ellison said. I wish everyone else would get on board with that. The sooner the better. The industry can't afford it. The Bank of Queensland, BOQ, has confirmed it will act 400 roles in a move to simplify and digitise operations. In a statement to shareholders, the bank said a range of new transformative measures will boost productivity and leave hundreds of full-time jobs redundant.
00:07:34
Speaker
BOQ is working closely with those affected offering redundancies or redeployment opportunities. The job cuts are included in the conversion of all existing 115 owner-operated branches to company branches, estimated to cause BOQ a restructuring charge of $25-35 million post-tax, but it will save the bank about $50 million dollars annually.
00:07:57
Speaker
MasterCard reportedly plans to lay off 3% of its global workforce of 34,000 as part of a reorganisation announced earlier this year in which it plans to realign its organisational structure into three interdependent units. As these changes are made, we plan to redeploy resources into growth areas, a MasterCard spokesperson said.
00:08:17
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The layoffs follow MasterCard's Q2 2024 financial results, which exceeded forecasts to show net revenues increased by 11% to US$7 billion u s dollars and net income was up 15% to US$3.3 billion. u s dollars The United States is home to only a third of the company's workforce, with the remaining two thirds located in 80 other countries. It's unknown how many Australian-based MasterCard employees will be affected.
US Economy Insights
00:08:45
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Despite last month's stock market turbulence after the release of the July US job data, initial applications by US job workers for unemployment benefits in the most recent four-week period showed no statistically significant change from the previous period. In further good news, GDP in the United States rose at a 3% annualized rate during the June quarter, up from the previous estimate at of 2.8%, according to the Bureau of Economic Analysis figures published last Thursday.
00:09:14
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The economy's main growth engine, personal spending, advanced 2.9 percent compared to the prior estimate of 2.3 percent, indicating consumer confidence in the United States remains relatively strong.
00:09:27
Speaker
Last week in the United States, a Texas federal judge permanently barred the implementation of a controversial Federal Trade Commission regulation banning employee non-compete clauses in employment contracts that would have invalidated tens of millions of existing non-compete agreements and precluded the adoption of new covenants. Judge Ada Brown of the Northern District of Texas issued a summary judgment which effectively ends the rule for now, although the FTC said it intends to keep fighting.
00:09:56
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The decision may be appealed to the Fifth Circuit Court of Appeals, although Staffing Industry Attorney George Reardon noted that that court is regarded as the most conservative of the federal appellate courts. Ultimately, the question of the non-compete ban could reach the US Supreme Court. Separately, Job Board Monster found that 94% of workers it surveyed supported the banning of non-competes.
00:10:23
Speaker
And that's the news for the week beginning the 2nd of September, 2024. I'm Adele Last.
Generational Workforce Preferences
00:10:39
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Question of the week. What is the surprising truth about attracting and retaining Gen Z? Well, the main attractors to the workplace for Gen Z are accessible and approachable leadership, learning and development opportunities, and career progression opportunities. Right. And why is that surprising? Well, this comes from a presentation made at the RCSA Shape Conference by Ashley Fell for Macrindle Social Research. And she was talking about different generations and specifically Gen Z is categorized as
00:11:18
Speaker
people in the workforce from the ages of 15 to 29 years old currently in the workforce. And that data that I just quoted was a study that they did, a survey that they did around what are the attractors to the workplace. So as I said, Gen Z, accessible leadership, learning and development, career progression. What's surprising, though, Ross is Gen Y, who is the next generation. They're currently 30 to 44 years old in the workplace. Their attractors to a workplace were flexible working hours convenient location and then accessible and approachable leadership. but Very, very different. Hang on. what what what So seriously, so the top two for Gen Y weren't even in the top three for Gen Z. Correct. Correct. And very different focus, you know, Gen Y we've got focused on flexible hours and location and, and, you know, impactful and meaningful work. And, you know, this is the generation that wanted to save the planet.
00:12:19
Speaker
um You know, it's a very different generation to Gen Z. And what's surprising to me when I sat in this presentation was that I think we group them together. I think we kind of say young people as a whole, and we think of anyone, you know, 40 and below as young, younger than us, and we kind of go, they're all the same, and we treat them the same, and we try to attract them in the same way.
00:12:41
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but we're talking about two very different generations here. Well, I suppose considering my own experience with Gen Zs, my three children at Gen Z, but my eldest two are in the full-time workforce. So my son Guy graduated, took a job, graduate job with a big global employer and he quit after four months because guess what?
00:13:03
Speaker
He didn't get any feedback. He asked for feedback and his boss said, oh, we don't do that here. It's like astonishing and guy quit without a job to go to did get a better job at less money. He took less money.
00:13:19
Speaker
to join the organization he's at at the moment and he's been there 15 months and they're just about to start recruiting for his replacement because he's going to be promoted. So he's thrilled. He told me about the conversation he had with the COO about his career. Like I wasn't that pushy or career oriented at his age. I mean, I stayed in the same job for four years. I was a recruitment consultant for four years. I didn't think about being a team leader, and I always felt like I had to do my time first. And my son does not have that view at all. Well, sorry, I shouldn't, sorry, I should clarify. He certainly thinks he needs to prove his skills, but he doesn't have to be in a job for a certain amount of time if he's already proven his skills. And that is really consistent with the further results of this survey, which indicate that for Gen Z,
00:14:13
Speaker
58% of them are wanting constructive feedback. They actually want to be told whether they're doing a good job or how to correct that. And 38% of them are wanting conversations about career progression. and And I think it's much earlier than any of us realize. I think us Gen Xers and Boomers are expecting, as you said, that they'll sit and do their time. And what they're thinking about is, have I mastered the skill and can I move on? And that could happen much earlier than we're anticipating.
00:14:43
Speaker
So what does that mean for recruitment agency owners and leaders? ael I mean, you're closer to this because you find rookies and train them and you place them into recruitment agencies. So what are you seeing and what would you advise recruitment agency owners and leaders do in ensuring that they attract and keep Gen Z? Yes, interesting conversations I do have around having it much earlier than they're expecting. So most of my client base are probably boomers or, you know, at the higher end of Gen exes and they are expecting people to come in and sit and do the job and and not want to progress or move or be given any very much feedback, like like you mentioned with your son, until you know they're ready to do it. But I tell my clients, you need to be having those conversations much earlier in the piece. In fact, you know day one, week one um almost, you know you need to be able to plan out the path and map it out for them so that they understand
00:15:39
Speaker
where they where they're going and what what the opportunities are. Granted, they may not get there you know it's not they're not expecting that to happen the next day, but if you don't have the conversation early, you'll lose them. You won't engage in and keep them in the business. Yeah, ah I'm certainly seeing that. My daughter was the same. She felt very disconnected from her boss and her first job after completing her um chef qualifications and like her brother,
00:16:08
Speaker
She was there maybe three, four months and then quit, begin without a job to go to because she just felt like boss didn't care, didn't speak to her, didn't set out any path. And I mean, as you would know, most people would know if you've got um a qualification in hospitality, it's not that difficult to find another job. Yeah. I think this is also a conversation that recruiters need to be having with their clients. I think they need to be explaining those differences, you know, put yourself in an expert position here to tell your client about the variations between the two current generations coming through the workforce, who they're probably interviewing currently, and how it's very different, ah how those two generations are very different. And then again, of course, they're very different to the current other two generations of ex and boomers in the workforce. So speak to your clients about those differences, speak to your clients about setting up good induction programs that address these things early on
00:17:05
Speaker
um in the interview process being really open about the culture of providing feedback or making sure they have a mechanism to provide feedback. And this is a large percentage of the workforce. I've got to say, I was surprised when Ashley mentioned the percentage of the current Australian workforce that's Gen Z. Can you remember what percent? Yeah, it's 27% currently. yeah And of course, growing as they get older and and move through the workforce and the boomers start to exit. So it's a big portion of our workforce and you and your candidate base, essentially. And you need to be making sure, as I said, that you're having those conversations with the client, asking the questions in the job briefing stage about what is the feedback mechanism here in this organization? How is feedback provided? How often is it provided? And what is the pathway for this candidate coming through? They're going to want to ask these questions in interview. And if they don't see what they like, then they're bold enough to walk and go
00:18:02
Speaker
somewhere else or not not take a job as you you know as you said. And also remembering the candidate may not ask the question, but that doesn't mean they're not interested in the progression. So an employer or hiring manager should not assume just because it's not raised in the interview, it's not of interest. I'd be recommending very strongly hiring managers should be on the front foot, regardless of whether the candidate asks the question or not about the progression, lay it out anyway.
00:18:29
Speaker
but also make it really clear. It's um quid pro quo. In other words, nothing's guaranteed. My son was prepared to do the work to build the skills. And that's sort of the bargain effectively that needs to be laid out explicitly. It's like when you're talking to a candidate, it's emphasizing in doing this job well in building the skills, we don't have a specific timeframe in mind, it's up to you how quickly you can progress. And then in terms of your skills and then the potential, the potential for other roles might be, you know, A, B, C, D, whatever it might be. And I think that that's a very important point to make. You don't just gain the opportunities because of tenure, you gain the opportunities or the access to the opportunities because of skill and capability and performance.
00:19:24
Speaker
And that's really, I guess, the most surprising and somewhat exciting element of Gen Z, I think, in managing them in the workforce now. And as I said, understanding the difference to Gen Y, because this is a generation that is focused on developing the skills and capability as a means, as you said, as the lever, as the mechanism for greater opportunity for career progression. So in some ways, it's kind of easier to motivate them. It's easier to manage them.
00:19:47
Speaker
because you play the pathway out in front of them. You give them the the indicators, the milestones they need to hit in order to um in order to achieve it. Just remove the timeframe is what we're saying. You know, don't don't say to them, you have to do that for the next three years and then we'll consider you for a promotion. Put the challenge in front of them and watch them go. I mean, it's a really interesting um generation that I'm excited actually to see coming through. It's different to any other we've seen before.
00:20:15
Speaker
And you and I both have ah children who are close to finishing secondary school. And I know my son, my younger son, who I wouldn't have regarded as sort of ambitious in the same way, perhaps his brother is.
00:20:30
Speaker
is already happy to engage and wanting to engage about a career and about where that might take him. And again, I compare that to me and at the same age, 17, I frankly, I wasn't even thinking about university at that point, let alone a career. I was just thinking about year 12. Yeah, no, they're very different, different breed this one. And yeah, you're right. My, I've got a 15 and 17 year old and the conversations are all about, yeah, where does this lead? What career?
00:20:59
Speaker
and is this leading me into? And I find that really interesting. Like you said, yeah, at at the same age, we were probably just, you know, happy to get a job um and get an opportunity and and put our head down and work. So be ready for Gen Z, be surprised by their differences, but don't be unprepared is my advice.
00:21:18
Speaker
And of course, although um the children both at Dell has and I have are all Gen Z. We're not Gen Z experts in terms of the workplace. So Ashley Fell is the person we'd encourage you to connect with Ashley. So it's Fell as in F-E-L-L and check out McCrindle Research and there's plenty of great stuff on their website.