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222 Plays9 months ago
News for the week beginning 19 February 2024 and Question of the week is: 'Right to Disconnect' - How might this new legislation impact the recruitment sector'?
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Transcript
ADECO Challenges in Australian Defence Recruitment
00:00:08
Speaker
This is the news for recommencing the 19th of February 2024, I'm Adele Last. ADECO Australia appears to be under pressure to improve its performance as the Australian Defence Forces recruitment partner, if public comments last week by Defence Personnel Minister Matt Keough are any indication. In July 2022, ADECO was announced as the winner of the 10-year $1 billion Defence Force recruiting RPO, a head of incumbent manpower and other tenderers Accenture and Toll.
00:00:39
Speaker
The ADF RPO is the biggest recruitment contract in the country and it comes with significant challenges. Declining enlistments and accelerating separations place significant pressure on a deco to work closely with the ADF to turn things around. Defence Chief General Angus Campbell last week revealed the Army was currently 2,891 personnel under strength, the Navy had a shortfall of 881 members and the Air Force was 534 people below target.
00:01:08
Speaker
Minister Keogh interviewed on Radio 2GB last week, hinted at early problems with the new contract. We inherited a situation where it was taking 300 days for us to actually get them enlisted. That was ridiculous. People find other jobs, they move, they find a partner and don't want to join the defence force anymore or something else, he said. We're now targeting bringing that down to 100 days or even shorter if we can. We have a new recruitment partner to do that, a deco, they've only just come on board.
00:01:37
Speaker
Certainly, we've had a few teething issues with them coming on board, and we're working closely with them to get through those issues, the minister concluded. Minister Keoh's language was restrained, but the message was polite but clear. A deco needs to do better.
Market Disappointments: SEEK and Randstad's Revenue Declines
00:01:53
Speaker
SEEK Limited's 2024 first half results for the July to December 2023 period and the lowered guidance for the remainder of the current financial year disappointed the market
00:02:04
Speaker
after group revenue was down 5%, EBITDA declined 11% and reported net profit after tax plunged 74%. SEEK ANZ revenue dropped 10% and EBITDA declined 13% to $241 million. The 13% rise in yield due to dynamic pricing and the reduction in lower yield customers
00:02:25
Speaker
was insufficient to counterbalance the 20% decline in job ad volumes. On announcement day, seek shares dropped more than $1 from the previous day's high of $26.84. Randstad, the world's largest staffing firm, reported revenue for the fourth quarter ending 31 December 2023 of 6.18 billion euros, a 8.6% year-on-year decline in organic revenue per working day.
00:02:53
Speaker
EBITDA fell by 26% and operating profit dropped 43% year-on-year for the quarter. Total Q4 revenue in the Asia-Pacific region was down 3% organically, with Randstad ANZ's revenue down 9%. Group revenue for the full year stood at €25.42 billion, down 6% on an organic basis when compared to the previous financial year.
Resilience Amidst Challenges: Purcell and Talent International
00:03:20
Speaker
Purcell, the Japanese owner of local brands, programmed, and Purcell Kelly Australia, reported a 15.6% rise in revenue for the nine months ended 31 December 2023 when compared to the corresponding 2022 period. Revenue in Purcell Kelly increased by 11.4% and programs revenue was up 3.8%. Group operating profit declined 4.7%.
00:03:47
Speaker
Australian global IT recruitment and consultancy business Talent International recorded improved sales in EBITDA in the six months to December 2023, according to results reported by industry news service shortlist last week. Revenue was up 7% to $505 million and EBITDA was up 3% to $14.1 million, compared to the corresponding period in 2022, despite
00:04:14
Speaker
a 27% decline in permanent placement income.
Government Crackdown: Job Agencies Returning Payments
00:04:20
Speaker
Australia's outsourced job agencies have been forced to hand back more than $8.5 million in government payments in one year, more than double the previous 12 months, after an apparent crackdown on faulty claims. Under the employment services system, providers are funded with so-called outcome payments for placing their clients into employment or courses
00:04:41
Speaker
and they can claim reimbursements for money spent helping job seekers prepare for work. The Workforce Australia Scheme, which is under review by the Albanese Government, is expected to cost more than $9.5 billion over the next four years. A spokesperson told Guardian Australia the most common reason for recovery was because the provider supplied inadequate documentary evidence when claiming payments or had wrongfully made a claim.
00:05:06
Speaker
Data obtained by Guardian Australia shows in the past four financial years, the government has recovered $17.5 million from employment services providers, with $8.6 million of that recovered in the most recent financial year. The government said the money had been recovered after random sampling of expenditure and more targeted investigations.
Labor Market Trends: Unemployment and Job Growth Pause
00:05:28
Speaker
The number of unemployed job seekers hit 600,000 for the first time since November 2021,
00:05:34
Speaker
as the January 2024 labour market data released last Thursday indicates a major pause in job growth. The unemployment rate rose from 3.9% to 4.1%, although total employment still climbed by a modest 7,400 jobs in contrast to the 2023 calendar year average of nearly 38,000 monthly jobs gained. Online job advertisements at the national level decreased in January 2024 by 2%
00:06:03
Speaker
to stand at 254,500, according to Jobs and Skills Australia Internet Vacancy Index released last week. Low skill jobs bucked the trend, with skill level 5 jobs recording a 1.8% rise, with jobs at skill levels 1-4, all recording declines. By occupation category, demand for labourers rose by 1.7%, while the other 7 categories recorded either flat or negative job ad growth.
Dual Employment and Compliance Issues: Airwallex and Commonwealth Bank
00:06:33
Speaker
The number of shift employees juggling multiple jobs reached a 25-year high of 7% in 2023, according to employee scheduling and workforce management platform, DEPUTY. DEPUTY's The Big Shift report revealed that all major industries across Australia saw an increase in the number of shift workers with multiple jobs and the majority of multi-job holders are young female shift workers. Delivery and postal workers as well as security personnel
00:07:00
Speaker
saw an increase in multiple job holders defying the historical trend of these occupations. The hospitality industry saw the highest number of multi-job holders with 8% followed by health care at 7% and retail industry 6% according to the report. Australia's 7% of multi-job holders is higher than both the United States at 5.2% and the United Kingdom 4.9% and is a reaction to both the cost of living and ongoing housing pressures.
00:07:30
Speaker
Two external audits warned Australian payments giant Airwallex that it was not adequately performing basic probity checks on staff, including screening for criminal history or exposure to sanctions, as required by anti-money laundering regulator Austrac. Compliance gaps also included confirming the identities of staff members, reference checking and working rights checks, according to internal messages leaked to the AFR. At least one review found some staff weren't background checked at all.
00:07:59
Speaker
The messages suggest executives inside the company, including billionaire founder and chief executive Jack Zang, resisted moves to improve screening systems because of the cost. Multiple sources who spoke to the AFR on the condition of anonymity said high staff turnover took a toll on the completion of compliance work at Airwallex. PwC first identified issues with Airwallex's employee background checking program in 2020.
00:08:23
Speaker
and Slack messages between executives show Grant Thornton identified similar deficiencies in a 2022 review. The Commonwealth Bank of Australia and its subsidiary ComSec have been fined a combined $10.3 million after it underpaid a total of $16 million to over 7,400 employees between 2015 and 2021.
00:08:48
Speaker
The penalties were due to CBA and comm sex failure to properly implement its enterprise agreements and individual flexibility arrangements, which left thousands of employees underpaid for years. In imposing the penalties, Federal Court Justice Robert Bromwich said, the simple fact is that the obligations were readily able to be complied with and proper checks to ensure that was taking place were not hard to implement. That did not happen and the message needs to be loud and clear
00:09:17
Speaker
that this is not good enough and will not be tolerated. The Fair Work Ombudsman Anna Booth said the penalties were the highest ever secured. It is extremely disappointing that companies with such extensively resourced internal human resources and legal functions could have such a poor approach to ensuring they paid their staff their basic lawful entitlements, Booth said.
Work-Life Balance: Slack's Survey and New Legislation
00:09:39
Speaker
The latest results from the Workforce Index Slack survey of more than 10,000 desk workers in the US, Australia, France, Germany, Japan, and the UK show that 37% of desk workers are logging on outside of their company's standard hours at least weekly, and 54% of these workers say that it's because they feel pressured to, not because they choose to. Employees who feel obligated to work after hours register 20% lower productivity scores than those who log off at the end of the standard workday.
00:10:09
Speaker
Employees feeling obligated also reported greater work-related stress, lower satisfaction with their overall working environment, and twice as much burnout as non-obligated employees. David Ard, Senior VP of Employee Success at Slack said, focus time, collaboration time, connection and rest are like the macronutrients of a workday. The right balance gives you the energy you need to work your best. We cannot consider these critical components of our work in silos.
00:10:37
Speaker
To be our most effective, we must create the space for collaborative work and for focus work. On average, desk workers say the ideal amount of focus time is around four hours a day and more than two hours a day in meetings is the tipping point at which a majority of workers feel overburdened by meetings. Of those desk workers who work between 3pm and 6pm, only one in four consider these hours to be highly productive.
00:11:01
Speaker
Slack survey found the most productive people use time management strategies, such as blocking time to complete specific tasks, only checking email at specific times and setting focus timers. And that's your news for the week beginning the 19th of February, 2024. I'm Ross Clennet.
00:11:27
Speaker
The question of the week this week came from one of my clients with a call I received during the week around the changes on the Closing the Loop whole legislation, which has been passed through parliament and specifically the clause around the right to disconnect. And if for any of you that might not be 100% across the meaning of that, it's defined as an employee can refuse to monitor, read or respond to contact or attempted contact.
00:11:55
Speaker
from an employer or a third party outside of their ordinary working hours, unless the employee's refusal is unreasonable. So this is on its way, it's coming. And I'm curious to understand what we think will be the impact to the recruitment industry. Ross, as I said, I was asked this direct question this week. So tell me, what do you think about the right to disconnect clause and how this new legislation might affect the recruitment industry?
00:12:25
Speaker
First of all, it's not really going to impact recruiters who do permanent recruitment. It's more about those who do contract temp, labour hire. Contract? Not really, because most contract recruitment is like it's not specific to a 24-hour turnaround in most cases.
00:12:53
Speaker
It's going to impact people who are responsible for labour hire or shift placements and to some small degree office temporary placements. And this predominantly applies to people who are on call. So when I was a temporary accounting recruiter, I didn't regard myself as on call. I was doing white collar placements
00:13:21
Speaker
in the Sydney CBD. I was not receiving calls after six o'clock on a weekday. I was not receiving calls on the weekend for temp placements that needed to occur the next working day. So it didn't impact me. However, if you're in the world of labour hire placements, or you're in the world of shift workers,
00:13:50
Speaker
where you could get from a client.
00:13:54
Speaker
a requirement to fill 10 shift workers starting at seven a.m. in the morning because your client suddenly got a surge in demand and the production line needs to be filled, that is where the problems are going to start. Because if your normal hours of work are, say, seven till three and you leave at three, if you're on call
00:14:23
Speaker
Or formally, if you've been on call, does that mean now you can't be called? Does this mean that you have to incorporate on call hours as part of your normal hours? So therefore you're giving permission to your employee to contact you because you are effectively at work.
00:14:48
Speaker
And I think this is the big question mark, Adele, in terms of on call. Are you on call and getting paid for being on call, even if you don't do any work? Or if you're on call and you do do work, I suspect in many recruitment agencies, you're not paid additionally for that, but it would flow through potentially to a conditional bonus payment if you make the placements. I think this is the big gray area. What do you think?
00:15:19
Speaker
Yeah, there's a couple of things while you're talking there, Ross. I think you're right. Primarily, its impact is to people that work in the labour hire and shift placement recruitment space. But I do think it could spill over into other areas as the other permanent recruiters and people who are senior in a business, in fact, even if you're a senior leader in a business, there's that feeling, that obligation that
00:15:45
Speaker
you are going to be available outside of hours to do work, particularly if your staff are not. So if your staff are more junior and they're not available, it's going to fall to you. So I think this could be even wider reaching. I don't think it is just labor hire work. I think it could be all little pockets within the recruitment industry could be affected. And then of course it's that issue around this idea of what's reasonable or what's unreasonable as outlined in the clause. So, you know, we all know that that,
00:16:15
Speaker
always leaves it open for interpretation based on your own circumstances, what I consider reasonable, you may not, and vice versa. And so that leaves a really great area for both the employer and the employee to sort of set some ground rules. And I think you're right. Like, do you have to actually sign something? Do you have to get your employees to sign something that says, I agree to be contacted out of hours and that negates this clause? Or do you have to pay a little extra to have them on call?
00:16:44
Speaker
Do you have to start rostering people? Would you have to change recruiters working hours so that you're able to have them start later and finish later, and therefore their standard work hours become maybe 10 a.m. to 10 p.m. day or something like that? So lots more questions than it raises than it answers, actually.
00:17:10
Speaker
I think straight away, I'm no lawyer, so just putting that up as a caveat, in employment contracts, owners or employers will need to denote that as part of your employment as a recruiter,
00:17:30
Speaker
there will be contact outside of these hours and this is a reasonable and standard component of the job of a third party recruiter. So I suspect that if they don't already say something like that they're going to have to say that upfront to set expectations and then I certainly think
00:17:52
Speaker
it's incumbent upon the employer to then communicate, well, what is reasonable? What is likely to happen in a standard week or standard month and ensure that the employer or potential employer
00:18:10
Speaker
actually understands that because you and I who have been in the recruitment industry our whole lives, what we would regard as reasonable based on our history is probably not likely to be the benchmark of reasonable for someone who's 24 or 25 and just entering the industry and has no context other than what they've learned online or what they found out at the interview.
00:18:39
Speaker
I think flexible working arrangements throw another light on this or an issue around this as well because we now have moved into this workforce mode of either hybrid working or flexible working or working outside of what is normal hours. I think this type of legislation kind of makes sense if we all clock in at nine o'clock and we all clock off at five o'clock and the employer or your clients is perpetually calling you out of those hours
00:19:08
Speaker
and you're working solid for those eight hours a day. But we often know the reality might be that you may work a big chunk of time during the day, but you may also finish a little earlier or go and duck out to go and pick up the kids from school and miss an hour in the day and log back on later at night and you're still making up the full amount of time. The employer's happy with that arrangement. It works for you. Again, suddenly that becomes out of hours contact.
00:19:36
Speaker
I think this is a really, really interesting debate that is going to play out in the coming months as it gets rolled out and I hate to unfortunately see the first sort of case law that gets tested with it.
00:19:48
Speaker
Well, I think it all boils down to effective communication and collaboration. So if I was a recruitment agency owner, I'd be firstly giving some thought to the potential implications of the legislation and its impact on the employees of the agency, and then sit down, call a meeting with the employees and have a conversation about
00:20:15
Speaker
This is the legislation. This is the reality of the role inside the business. This is what I would regard as reasonable. What do you think, or maybe not the owner state first off, but to throw it to the employees? What would you regard as reasonable contact outside of ours? And just hear the variety of views. Because I think if you do that,
00:20:43
Speaker
with a collaborative approach, you've got a much better likelihood of coming to an outcome that everyone can agree to, or at least align with. Then, of course, you've got to ensure that that's communicated to new employees. But I think that's probably a pretty good starting point. Yeah, that sounds like some really good advice there, Ross. I like the sound of that approach.
Navigating New Legislation: Advice for Recruitment Agencies
00:21:09
Speaker
If you'd like to continue the conversation with Ross and myself, feel free to reach out to us through the regular channels or directly to us and look forward to finding out more about how this rolls out in coming months.
00:21:22
Speaker
And let's be clear Adele, of course, nothing that we've said constitutes any form of legal advice. So please, given this is legislation, we invite you to contact your favourite industrial relations lawyer who can give you qualified legal advice about the legislation or of course the industry associations, the RCSA and APSCO, I notice are beginning communication about the legislation.
00:21:51
Speaker
and we'd invite you to participate in whatever events they have to inform members about the implications of the legislation. Hey, are you liking listening to our podcast Recruitment News Australia? If you are, it would really help if you could give Ross Clannan 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 favourite episode. And thanks for listening.