Engage Event Overview
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Did you attend Paul Horn's Engage this year, Ross? I did, Adele. It was a great day. And would you recommend our listeners attend Engage next year? You bet. A full day of recruitment-specific speakers, networking, food and drinks. It's hard to beat. Well, I'm sold. But when is Engage being held next year? Thursday, the 6th of March, 2025. It's at the Wingstand Royal Randwick Racecourse in Sydney.
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And for such a great day, I'm guessing at least $1,000 a ticket. Would you believe it, Earl? Early bird tickets are just $249 each. How's that for value? Discover how to more effectively engage talent and learn about the future of recruitment at Engage. For more information, visit engage.bullhorn.com. This is the news for the week beginning the 28th of October, 2024. I'm Ross Clennett.
Recruitment Trends in September
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National recruitment activity rose in September, according to the JSA Recruitment Experiences and Outlook survey of over 1,000 employers. 45% of employers had or were recruiting in the month, a 2% point jump compared to August.
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There was a 10 percentage point difference in recruitment activity between capital city employers, 41% hiring, and non-capital city employers, 51% hiring. September's recruitment difficulty rate of 52% of recruiting employers was a 2% point rise compared to August. The share of employers expecting to increase their staffing levels in the upcoming three months remained steady at 22%.
Legal Ruling on Qantas Dismissals
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Qantas is facing a multi-million dollar compensation bill after it illegally sacked hundreds of workers during the COVID-19 pandemic, with the Federal Court ordering three former employees will receive a share of $170,000. Last year, the High Court ruled that the airline broke the law when it stood down 1,700 grand crew in August 2020 after Qantas appealed to previous Federal Court verdicts. At the Federal Court in Sydney last Monday, Justice Michael Lee ruled that Qantas would be required to pay varying degrees of compensation based on three test cases. Justice Lee ordered that the three workers would be awarded compensation of $30,000, $40,000 and $100,000 respectively for non-economic loss. While the total compensation amount is yet to be calculated, the ruling means Qantas is set to face a substantial compensation bill worth tens of millions of dollars.
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In his judgment, Justice Lee warned both parties to resolve the matter, which had been tied up in court for four years. Speaking outside the federal court in Sydney, Morris Blackburn lawyer Josh Bornstein said the focus would now be on determining how much each sacked worker is owed. TWU Assistant Secretary Nick McIntosh said the union expects the total compensation bill to be over $100 million. dollars In a statement, Qantas CEO Vanessa Hudson said the airline accepted the federal court's ruling.
Manpower Group's Financial Report
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Manpower Group reported 2024 Q3 revenue fell 1.8% year over year on a constant currency basis, the US$4.53 billion. u s dollars Gross profit was down 3.7%, and operating profit was down 26% to $22.8 million. dollars APAC revenue was down 1.6%,
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to $563 million. dollars Revenue in the company's manpower division was down 2% on a reported basis. Expirus, manpower's IT staffing division, reported a 10% revenue fall. Talent Solutions, which encompasses the company's RPO, MSP and outplacement businesses, reported a 7% rise in revenue.
Workplace Misconduct Case
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Robert Half's global revenue fell 7.7% year over year in the third quarter when adjusted for the effects of currencies and billing days. Temp fees and permanent fees both fell 13.2%. Operating profit dropped 31.5% to US$61.5 million. u s dollars A sacked solicitor who called an opposing lawyer the C word and engaged in conduct that deeply sickened her colleagues has failed in her bid to appeal a fair work decision that her termination was fair. The Fair Work Commission's original finding that there were multiple valid reasons for men's legal service in Darwin to terminate Deborah Brackenreg's employment in January this year was upheld last week. The reasons for termination included altering billable hours to secure financial gain for a junior colleague, failing to follow directions amid an investigation into her conduct,
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and calling an opposing solicitor, she had accused of gouging clients the C word. According to her termination letter, Brackenreig's failure to also comply with court orders caused colleagues to become deeply sickened and place them in an untenable professional position. Brackenreig's claim, she was denied procedural fairness because her application for an attendance order was denied and reply materials were not submitted because they were filed a day late. In refusing permission to appeal, the presiding fair work deputy presidents rejected the submission that it was in the public interest and did not consider that the original decision contained any significant errors of fact.
Innovations in Robotics and AI
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Mayra Pro-S, the next generation robot conductor, made her debut earlier this month in Dresden. Her two performances in the Eastern German city were designed to showcase the latest advances in machine maestros and music written explicitly to harness 21st century technology.
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The artistic director of Dresden, Sinfonica, Marcus Reint, said the intention was not to replace human beings, but to perform complex music that human conductors would find impossible. In the second half of the Sinfonica, a three-armed robot clutches a trio of stubby lightsabers, each with a different color to mark time.
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The ensemble is divided into three parts, each responding to its own batten to create cross-rhythms. To pull off a two-decade long dream, artistic director Wright worked with specialists from the University of Dresden pursuing innovation based on the principle that robots and people can cooperate rather than compete.
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Ryan told MDR here the idea of stepping aside for a sophisticated robot 23 years ago while rehearsing an intricate composition. One of the bassoonists told the conductor, you're conducting the clarinets in three-quarter time and I have five-eighths, a totally different tempo. What should I do? No one is conducting me. And the conductor answered, I'm not a robot. In another landmark step for AOS development, Sotheby's used to sell its first work credited to a robot The painting, created by AI Dar Robot, the artist robot and brainchild of British gallerist Aidan Mellor, depicts Alan Turing, the English mathematician and Second World World cryptanalyst, who is remembered as a pioneer in AI and computer science. The painting is estimated by Sotheby's to sell for up to US$180,000.
Corruption Concerns in Government Hiring
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Three quarters of Victorian government employees consider their organisation vulnerable to corruption, a survey reveals with recruitment assignments, especially lacking in process that minimise the likelihood of corruption occurring. This is one of the findings of a survey of more than 9,000 people summarised in the latest perceptions of corruption survey conducted by the independent broad-based anti-corruption commission. The respondents, including state and local government workers, also believed that corruption in the workplace was rife with breaches of professional boundaries in action and favouritism or nepotism as the primary causes of concern. A previous Victorian government report detailed several Eibach and Ombudsman's investigations which found recruitment was especially vulnerable to corruption, specific examples being a senior manager at Places Victoria previously sacked from a private company for serious misconduct, awarded more than $8 million dollars in contracts to entities that were effectively under his direction and control.
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The former chief of V-Line did not advertise for a new rolling stock general manager and appointed someone lacking the required qualifications. A member of Victoria Police was promoted to Sergeant despite more than a dozen complaints about his behaviour and an officer at the Metropolitan Fire Brigade employed both her sons, having previously hired one using the same fraudulent process when working for Parks Victoria. A recent IBAC survey found a quarter of state government employees had seen family or friends hired for public sector jobs rather than a merit-based recruitment process being followed. IBAC Deputy Commissioner David Wolf said the findings made evident Victoria is perceived as a corrupt state but hoped that the data would help drive initiatives for change.
Benefits of Remote Work
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The Implications of Remote Work conference held at Stanford University earlier in the month heard presentations from various researchers that suggested return to office mandates were not working. The key findings of the various studies presented at the conference were Office usage had no impact on future profits or stock returns. Despite ah RTO mandates and attention grabbing headlines, work from home days had been broadly unchanged in two years. Office occupancy had flatlined at 50% of 2019 levels. Employees value two or three days hybrid working to be worth around 8% more pay. Remote work appears to have zero impact on productivity, but does increase employee happiness
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demonstrated by quit rates falling by about a third for those companies who offer remote work options. RTO mandates tended to be implemented as a reaction to bad corporate results were more likely in firms run by older, male CEOs, led to the resignation of longer-tenured employees and led to employee sentiment falling.
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Professor Nick Bloom, who has studied remote work for more than two decades, concluded the conference by sharing research that showed, compared to pre-pandemic levels, employment outcomes in the US have improved by a statistically significant amount for people with a disability, minorities and women, suggesting that remote work has been an important equalizing factor in improving labour market participation.
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And that's the news for the week beginning the 28th of October, 2024. I'm Adele Last. Stay tuned now for our Question of the Week.
Debate on Recruitment Guarantees
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Question of the Week. How does your placement guarantee stack up? ah Placement guarantees. This is ah One of my pet peeves, this is ah a red flag to a bull, Ross, for me. Really? Okay, so tell me why. I really hate the fact that we offer a guarantee on a service. I hate that the recruitment industry provides a guarantee on a service, but not just the service, it's the enjoyment or the benefit that the client ah gains from our service.
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so Our service is sourcing candidates, assessing candidates, um and referring candidates, recommending them to a client. That's the end of our service. The client makes a decision on the candidate, they onboard the candidate, they train them, they supervise them, they make sure they want to stay in the business with their culture and, you know, everything else. I don't understand why we guarantee any period of that. Why would you be guaranteeing something that you have no control over?
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And that's my pet peeve about it. I would like to see recruitment guarantees completely wiped out of our industry or at least enforced in the way they should be, which is we should be guaranteeing our part of the service was done appropriately. So if I'm supposed to provide a service to you and I haven't provided that service, then I should guarantee that. I shouldn't be guaranteeing the the candidate. Sure. and I certainly agree wholeheartedly.
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Without knowing the origins of the guarantee, I suspect the origins are that when employment agencies first started charging, let's call it, reasonably sized placement fees, employers, of course, were not used to this because typically governments have provided placement services for free.
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So when a fee was going to be charged to have the employer feel more comfortable or at least accepting of the fee, the guarantee was offered. So I suspect that was the origin of it. But I absolutely agree that we guaranteeing something, we have zero control over and that is a problem.
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And most agencies guarantees are the same, correct? Everybody does the same kind of guarantee. Well, funny you should say that because this week on Shortlist, we have a new sheriff in town when it comes to a replacement guarantee. Would you like to hear please what's just happened? So the Shortlist story, agency offers to share risk with lifetime placement guarantee.
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A recruitment company is challenging industry custom by offering a lifetime guarantee for permanent placements. The recruitment company, have you heard of the recruitment company at all? TRC, IT recruitment. They are.
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relatively small IT t recruiter. The recruitment company began offering the guarantee at the beginning of October and has received a great response from clients and prospects since TRC Group CEO Jeff Miller told Shortlist. Like most recruitment companies, TRC will replace permanent hires for free if the candidate leaves within six months and with a 50% discount, that is discount on an additional fee, if they leave within six months. So to be clear, they're not giving 50% of the feedback if the candidate leaves, it is on a new fee. The difference is that TRC's guarantee for the role remains in force on a permanent basis, offering the client a 25% discount forever on its usual fee.
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And it applies to roles that become vacant for any reason at any time, including through promotions or redundancies. So Adele, what do you think? OK, so they offer a replacement guarantee in the first three months standard of what most agencies do. Yes. They're offering a 50 percent return or credit or discount. No, 50 percent discount at six months and 25 percent for the life of the role as it exists, no matter what reason, if it becomes vacant at any time. So essentially, they've created a model where the client is compelled to come back to you again and again so to refill a job over and over and over. um They are still getting a fee. They're not offering it to them replace for free, except in the first three months. They're getting a fee. They're just offering a discount on the fee.
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Yes, so effectively in my world, that's not a guarantee. It's a guaranteed future discount on a future fee. It's not a replacement guarantee on the existing placement because in my world, if that was being offered, 25% of the original fee would be refunded for the guarantee to to be a true guarantee for life. But that's not what's happening.
00:15:58
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Yeah, so it's a bit of a bit of a play on the words there of lifetime guarantee. But look, all all you know props to them for trying to disrupt what is, I think, as I said, a very broken model of offering a guarantee in the first place. So I love that someone's having a go at looking at it differently and saying, how can we make this more attractive to clients? Or how do we um derive some benefit from it? But I don't think that they're offering a guarantee. They're offering an opportunity to reward the client for continuing to come back and offering a discount. ah No mention of, if they can't place it, no mention of changes to the job. Okay, so let me, so on TRC's website, there is an FAQ page. So all of these questions are answered. So I can answer those questions. So here we go. um
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Can I use the lifetime guarantee multiple times on the same role? Yes, we guarantee the role for the life of our company. You can use the guarantee to refill the role as many times as needed. In other words, you can keep claiming the 25% discount in Finitum. We are here to support you.
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Okay, so the other question you asked, which is answered in the FAQs, what if you can't refill the role? Do I get a credit or a refund? No. We will make every effort to refill the position, but if we cannot refill it after a reasonable amount of time and effort, we will need to admit defeat. No credit or refund will be owing. This will only occur in situations where expectations are unrealistic and we have submitted a number of suitable candidates with no results. So there you go.
00:17:52
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So they have a slide out clause there. Should they wish to get out of it? They could say that they can't fill it or they could attempt to fill it. And if the client is too difficult, then they've got a kind of out and out clause there. Yes, they do. um And yeah, it's really interesting. I mean, who's saying that they haven't put the fee up by 25% at the start? Well, this is the thing. When I looked at the FAQs, I thought exactly that Adele. I thought, are they guaranteeing the same fee not the actual dollar amount but the percentage amount when they do the replacement, FAQs silent on that fact. And frankly, so they should be, um TRC, I don't think it's smart business to guarantee the same percentage because clearly markets change and smart recruitment businesses gradually
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raise their percentage fee over time. So does this mean that to fund this TRC are going to methodically over the next let's say 10 years inch their fee gradually up for permanent placement? So what was a job filled at 20% in the future might be 25% less the discount that applies 25%, which would make the fee just under 20%. So therefore, the same percentage as before, but on higher actual dollar amount, because in three or four or five years' time, inevitably, the salary will go up. Yeah, that that's the bit we don't know. And we don't know whether there's different terms for this, different pricing for this already upfront. So even if they say, no, we're not going to put our fees up, we don't know whether they're saying
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Our standard fee is 15%, but if you want to access this lifetime guarantee offer, it's at 18% or 19%. You're already going to pay more at the start to get to get a buy-in on this particular offer. yeah and To be clear, they do say,
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It's not available on all placements. Interestingly, they do say it doesn't have to be exclusive. If um you just read the shortlist article, certainly my interpretation would be it's just on exclusive roles. The website makes it clear it's not necessarily, but there does have to be an agreement. It doesn't automatically apply, which I think is clearly smart. But the thing that I think about is what if the consultant who originally made the placement leaves and then there's the replacement consultant who's having to fill a job at a 25% discount
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compared to the normal fee. Now, will that consultant complain because they're not getting the full normal fee or will they be grateful because this job came in without them doing any business development simply because of the impact of that 25% lifetime discount? I think that's probably how they're seeing it. I think they're seeing it as a way, as I said, to tie the client in for the lifetime of that role um and potential several, same you know, several roles within a client um and it's coming money money coming in regardless. So a 25% discount.
00:21:00
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offer fee that's coming in that you didn't have to chase is probably so being seen as a positive, I think. But I don't think we can answer this one. Ross, how does your placement guarantee stack up? We've given an example of a disruptor in the market. I guess we put it out to our listeners. How does your own guarantee stack up to this? Does anyone think this one sounds like one worth adopting?
00:21:21
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And also, do you agree with us? It's not really a guarantee. It's a discount on a future fee. And frankly, I know I'm being pedantic, but I don't think that's a lifetime guarantee. It's a lifetime discount. And that's a different thing. Hey, are you liking listening to our podcast, Recruitment News Australia? 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,
00:21:51
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please hop onto the review section and give us a review next time you're listening on your favorite episode. And thanks for listening.