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Episode 129 Could you survive if you could only place from your database?
146 Plays21 days ago
RNA episode has the news for 23 September 2025 including the latest ABS labour market update, Collar Group's $28 million debt, the JSA Recruitment and Experiences employer update for August, APSCo finalists for the 2025 awards and our Question of the Week is drawn from our observations about how terrible recruiters are with database protocols and updates, "Could you survive if you could only place from your database?
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Transcript
Introduction and Employment Data Overview
00:00:08
Speaker
Welcome to Recruitment News Australia. This is the news for the 23rd of September. I'm Adele Last. I'm Ross Klenitz. and Let's start with the all-important employment data. The ABS had their labour market update for August.
00:00:24
Speaker
Unemployment rates stayed at 4.2%. It did. and that's slightly misleading in terms of the state of the labour market because total employment declined. It declined 5,100, which wasn't anticipated.
00:00:40
Speaker
And unfortunately, it's signed that the most recent trend in the labour market has been, well, it's kind of stagnated.
Job Creation Comparison
00:00:49
Speaker
Okay. there Are there any other stats that support this? I had a look at the most recent six-month period compared to the same period last year.
00:00:59
Speaker
So March to August this year, the economy added 59,000 jobs. And if you look at March to August last year, it was 198,000 jobs. In other words, more than three times as many jobs were created in the March to August period last year compared compared to this year. So that is clearly a significant difference. And I'd imagine the federal government's pretty concerned. Okay.
00:01:23
Speaker
We also have some data from SEEK ads as well. Yes, and this tended to almost contradict the the data we saw from the ABS because job ad volumes rose only slightly, 0.8%, and it was the fourth consecutive month of
Employer Sentiment vs. Media Headlines
00:01:45
Speaker
rises. So that That was certainly good news, but it seems largely it was Victoria and New South Wales and largely community service workers and hospo.
00:01:59
Speaker
So it's not widespread. And then also other... information which suggests the economy might be moving to a better place in terms of job creation is the JSA recruitment experiences and outlook survey because they ask ah a range of questions of a survey of a thousand employers and one of the key questions is are you forecasting to add to headcount in the next three months and guess what result they got to do
00:02:30
Speaker
So this is a bit more about their sentiment, right? This is interesting in contrast to the results. Correct. And what happened was that if you look at the last six months, it was pretty consistently 18%, 19%, 20% of employers expecting or forecasting to add to headcount, 25%.
00:02:46
Speaker
twenty five percent in August. So it went up six percentage points, which is a huge increase in the context of that survey. So that, again, seems to suggest quite a degree of optimism amongst employers, which seems in contrast to the actual job data. So, frankly, i don't know what to make of it all.
00:03:08
Speaker
ah Once again, the stats not supporting what we're seeing or feeling perhaps on the ground. Well, certainly recruiters, because recruiters, most recruiters, are dealing with volume clients.
00:03:19
Speaker
And certainly, they're not hiring. You look at CSL, ah going to cut 4,500 jobs. You look at ANZ, cutting 3,500 jobs. So, the headlines in the mainstream media are not great.
00:03:32
Speaker
And yet, when you look at what a broader cross-section of employers are saying, it doesn't appear that it's quite that bad.
Ephraim Stevenson Financial Troubles
00:03:40
Speaker
People are desperately keen to hear more about Ephraim.
00:03:43
Speaker
Ephraim Stevenson and Collar Group. What do you reckon, Adele? there There can't possibly be any more news about Ephraim Stevenson. Surely we've done it all now, Ross. um Well, I happened to acquire a copy of the Liquidators report.
00:03:58
Speaker
Oh, they released that, did they? Well, no, no, no. that Well, they didn't officially release it. They released it to the people who were still owed money. But I just... um I just acquired a copy. It kind of fell off a truck. like can't you might I don't want to know any more. Let's talk about what you found out. Tell us about the details of this creditors report.
00:04:18
Speaker
Well, I don't want to bore people, but there are really three major insights from the report. Firstly, the liquidators' conclusions as to why the company failed, the amount of money that was owing at the time of the company failure, who it was owed to, and then finally, the potential charges that or offences that may have been the cause of the liquidation that the director was responsible for, in other words,
00:04:48
Speaker
Ephraim Stevenson charges that ASIC may bring ah to him. So we can perhaps talk about those in a minute. And I know you wrote a blog about this just this week, Ross, and the thing that stood out to me actually was the number 28. Why is that?
00:05:05
Speaker
Well, it seemed to repeat through the story. It was the 28th of February when the liquidators um came in and took over the business. He had $28,000 in the bank And he owed $28 million dollars to his creditors. it was just funny that there was a repeat of that number.
00:05:23
Speaker
And actually, the Liquidators report, the one that I wrote the story on, was released on the 28th of May. So there you go. That sounds like a bad luck number for ah for Ephraim and the Collar Group, by the sounds of Yes, very much.
00:05:35
Speaker
You did identify in the blog a couple of key contributing factors. I think that's what people want to know. What are the Liquidators saying ah the contributing factors to the failure of the company? And you list them in the blog as...
00:05:47
Speaker
inadequate working capital due to rapid expansion without sufficient funding, rising operating expenses from increased staffing facilities and technology investment, high financing costs from invoice factoring and ATO payment arrangements, loss of three major clients in early 2023, reduced profit margins due to aggressive pricing, internal systems and processes did not scale effectively with the growth creating adding costs and inefficiencies,
00:06:16
Speaker
and there was an undercapitalisation of insufficient cash flow, poor strategic management, and sustained trading losses. It's pretty damning. It is pretty damning. And they also added that they believe the negative publicity associated with the docker and what they meant was that the fact that the company was sold back to Ephraim and the uproar that that caused was also ah key factor.
00:06:40
Speaker
And as we know from listening to Ephraim's podcast, he believed that All his competitors were white anting him at that point. But I would say it's a very minor factor when you consider those other things that the liquidators identified.
00:06:54
Speaker
And how much money did he owe? Well, would you believe $28 million dollars the company was in the hole for? twenty two $22 million of that was owed to the ATO.
00:07:10
Speaker
Employee entitlements, nearly $4.5 million. just over We had three employees owed between and
00:07:21
Speaker
we had then three employees ohd between forty nine and seventy two k And then fortunately, a majority of people were owed less than 10K. But I don't want to downplay that because any money out of pocket could cause significant hardship.
00:07:38
Speaker
um So he's not paying his tax bills. He's not paying his worker entitlements. These are really significant offences, so to speak. You said there are going to potentially be some charges laid.
00:07:52
Speaker
Yes. So the charges that the liquidators have suggested might be appropriate and liquidators can only write a report to ASIC and it's up to ASIC to take action. So here they are.
00:08:06
Speaker
Failing to take sufficient provision to meet statutory liabilities due to the ATO. Failure to lodge and satisfy liabilities
Appsco Awards Finalists
00:08:14
Speaker
with respect to statutory returns, i.e. tax returns, business activity statements.
00:08:19
Speaker
Poor strategic management of the business. Failing to comply with the terms of the docker. Failing to appropriately manage the affairs of the company while it was subject to a docker.
00:08:33
Speaker
entering into potentially uncommercial transactions and unreasonable director-related transactions, company failing to pay its liabilities as and when they feel due, and failing to cease trading at an earlier date. In other words, potentially trading while insolvent.
00:08:53
Speaker
Wow. i i Honestly, I'm speechless. to you know We knew most of this, but to see this detail is unbelievable. To see how badly it failed and why it failed is really, really terrible. We knew all of these things.
00:09:09
Speaker
Is this the end of this story? What's next? Well, unfortunately, the most difficult part of the story for the creditors would be the liquidators saying that Ephraim Stephenson has basically no assets.
00:09:23
Speaker
He's the joint owner of a property, a residential property that has a mortgage, and he has no other assets of any value. Therefore, any charges that may be made against him in terms of to...
00:09:39
Speaker
gain money from him are almost certain to fail because he has no assets to claim and liquidate. That's terrible. Is there any precedent around jail time or anything around of that nature in this sort of these sort of instances?
00:09:54
Speaker
Certainly from what the liquidators are saying, there's not a criminal offence unless they discover that there's been fraud and they haven't used the f word like in the report.
00:10:07
Speaker
in the report But I don't know, unless ASIC then decide to investigate and they or they discover fraud because they have an investigations department. And if that happens and they believe that there's enough evidence for it to stand up in court, then they may prosecute him under a criminal offence. But it seems unlikely at this point. Okay.
00:10:29
Speaker
I suspect there are many people using the F word when it comes to Ephraim Stevenson.
Recruitment Databases and Management
00:10:34
Speaker
But yeah. That's another story. um And our final news piece about the Appsco Awards. Yeah, just simply the finalists have been announced. So very quickly, back office team of the year, finalists, Allegis Group, Talent International, Wisdom, MediPeople, Best Brand, Horizon One People Bank, Lotus People, Candidate Experience, Lotus People, Trade, Wind Australia, Kaleo Resourcing, Client Service, Edge Recruitment, Preactor, Trucoot, Lotus People, Guidant Global.
00:11:05
Speaker
Environment, Social and Governance, Wisdom, Kaleo Resourcing, MSP of the Year, CXE, Manpower, Guidant Global, Commensura, Employer of the Year, Mawson ACR World, Horizon One, Six Degrees Executive, RPO of the Year, Manpower Solved by Talent, Reactor, Harrier, Specialist Firm of the Year, Leaders IT, t Preactor, The Network, Technology and Innovation, Commensura, Preactor, Zed, Staffing.
00:11:36
Speaker
Best of luck to all the finalists and I look forward to seeing the winners announced. at the gala dinner on the 16th of October in Sydney. ah look forward to seeing you there. Stay tuned now for our question of the week.
00:11:53
Speaker
the
00:11:58
Speaker
Question of the week. If you could only place from your database, would you survive? What has happened to us? What year are we in Have all the job boards exploded? What's going on?
00:12:10
Speaker
Exactly, Adele. A thought experiment. It's 2025 and all the job boards have disappeared, including LinkedIn. There is no way to put an ad up and the only thing you can do is draw on your candidate database to make placements. How would you go?
00:12:28
Speaker
how do you think most of the recruitment industry would go? This is a great question and I'm very scared to say that I think a lot of people would not survive. i think they would struggle. Well, I know.
00:12:40
Speaker
they would really struggle because there's research that indicates how poorly people use their database. Now, first caveat, it's slightly old. So it's from July 2021.
00:12:54
Speaker
twenty twenty one It's highly credible. It's HHMC. So that's Rod Hall and Richard Haywood. Most people, certainly owners would know ah those two gents, very well respected in the mergers and acquisition space. In the HHMC Business Intentions Report July 2021, this is what respondents provided when questions were asked about their database.
00:13:20
Speaker
You ready? Mm-hmm.
00:13:24
Speaker
47% responded that their recruiters don't know how to do detailed searches with within their ATS. forty five percent 45% believe their ATS data is flawed with incorrect tags or poor keywording rendering search useless.
00:13:41
Speaker
forty two percent 42% agreed with the statement, it's easier to post on a job board than extract candidates from our own database. And 26% responded that not all applicants are added to the database.
00:13:58
Speaker
Oh, my goodness. Those numbers are huge. They're damning, aren't they? It's hugely damning. And you're saying that's a few years old, but I think that's still current. I think that would still be the case. I know that's the case from companies and clients I'm speaking to every day at the moment.
00:14:13
Speaker
I would be very surprised if it's significantly better than that. And frankly, it wouldn't even surprise me if it was slightly worse. Right. But they sound like easy fixes too, you know, 47% don't know how to search their database.
00:14:28
Speaker
Surely that's just a training issue. It's scary. And Adele, do you know how long I've been banging on about this issue? i dread to think, right?
00:14:42
Speaker
Well, I'm looking at a blog of mine called Recruitment Database Crimes, Chapters 1 to 14, and I published that on the 14th of October, 2008. So
00:14:55
Speaker
it's nearly 17 years ago. 17 years. And you're a crime writer too, by the sounds of that. oh The things that I write. Shall I quickly go through the list?
00:15:07
Speaker
Yeah, please. Okay. ah Crime number one, not all consultants use the database all of the time. Crime number two, source of candidate referral is not entered. Crime number three, candidate availability status is not updated.
00:15:20
Speaker
ah Candidates aren't skilled or experience coded or rated. The best candidates aren't flagged as better than others. Client contact details incomplete. Consultants keep parallel spreadsheets.
00:15:32
Speaker
consultants don't search for candidates prior to posting a job ad. I could go on, but I think I should stop. And all of it true because we know it. We see it every day. And those of you listening out there will be nodding your heads and going, yes, yes, yes, we agree with that.
00:15:48
Speaker
ah It's been going on a very long time. um Yeah, why can't we stop this? You're right. If we could only place from our database, maybe that needs to be a challenge, Ross. that we lay out there to our colleagues in the market to say, don't you... I think it'd be a great Yeah. Why don't you see how many you... I mean, first of all, start with finding out what you've currently got. You know, how many placements did you make in the last 12 months from your database?
00:16:12
Speaker
Are you tracking that properly? Are you tracking the source properly and and get that number? Have a look at and and analyse those that you did place and look at the kind of engagement that was involved with the candidate in order to ensure that you could place them from the system. How were they entered?
00:16:27
Speaker
Because you mentioned there heavily around the quality, the data is flawed and the quality of the data. So presumably, if you improve that, that would help with the searching, correct? Without doubt. I mean, if the consultants have confidence in the integrity of the data, they will use the database. Now, that's what I did when I was a recruiter. Now, this is so long ago. it was DOS, Adele. Like, it wasn't even Windows. Yeah.
00:16:51
Speaker
And I still was able to rely on my data because I knew as a temp recruiter, this made a significant difference. I had a competitive advantage when I'm talking to the client on the phone about their vacancy, and I can use the database to run a list of, or do a search and get a list of candidates in front of me so I could talk confidently about the likelihood that I was going to find an appropriate candidate for that job. Now, how many temp recruiters these days do you reckon do that?
00:17:17
Speaker
I don't know any that would do that. They would probably be running it off a spreadsheet, like you've mentioned, or having some other little under-the-desk list. And um it's amazing how we got here because when I first started in recruitment, I remember the size of the database was a huge asset. You went around telling clients that. Yeah. went around saying, we've got 50,000 people on our database.
00:17:38
Speaker
ah It used to be a ah tender question. I remember tenders and bids used to ask you how many candidates, which category do you have on your database? Yeah. Yeah, it was a big deal.
00:17:48
Speaker
So do you know why this is a big problem? Tell me. you know the source of this? What's the source? Okay, so there a couple of things. The first thing is that there's no protocol, very little in the way of protocol. So in other words, when somebody starts in that agency, they're not given a list of this is exactly or training on exactly how you're going to use the database.
00:18:07
Speaker
And then they're audited against that. to ensure that there's compliance. Because you know what recruiters do, whatever they've had an induction, they then go back and do the shortcuts or whatever the other recruiters are doing. So it's got to be a culture.
00:18:20
Speaker
That's absolutely the first thing. The second thing is the culture around when a job comes in, the first thing you do is check the database, not run an ad. And I think way too many recruiters, the first thing they do is run an ad. And that's a cultural thing.
00:18:37
Speaker
It's also because people feel like they're being busy and they get KPI'd on candidate interviews. not pulling candidates off the database.
00:18:48
Speaker
And that's why I've never liked candidate interviews as a KPI. to me, it's much better to have candidate referrals because that will cover candidates that have already been interviewed, but you've pulled from the database.
00:18:59
Speaker
So I think those are probably three pretty significant reasons why you have many recruiters with bad habits when it comes to database. I think you're absolutely right with this because the first two points you make around you know protocols and and and which is behavioural and cultural, you know, norms of, you know, don't worry about the database, we'll just put an add on. they They are definitely rife and and we know systems have changed this, you know. Our our friends at Bullhorn will um and certainly other systems, they have things like mandatory fields, right, so you can set protocols.
00:19:31
Speaker
You don't even need to actually train people's behaviour in that. You make it so the system can't do anything but what you want them to do. so Exactly. It's got to be outside of these systems. It's not the database's fault. It's not the brand ah or the type of platform you're using.
00:19:45
Speaker
This is cultural behavioral norms in the organization. like As you said, measuring and monitoring and rewarding where you want to see the activity. We say that about everything else. You want more client visits, then make clients visits a KPI or a target.
00:19:59
Speaker
You want to make use of the data you hold, then make placements from your database a key KPI. Yeah, but ah there's there's absolutely no doubt. And you know what?
00:20:10
Speaker
there's worse news ahead unless people get with the program here. There's two reasons two major reasons. The first is that Seek and investor presentations are very proud to say that they're continuing to align price with value.
00:20:24
Speaker
And do you know what that's code for, Adele? Price increase. That's right. Price increases. so Seek are very clear in their communication to their investors that they'll be continuing to raise prices. So if you've got complaints now about prices, they're only going to get are worse.
00:20:41
Speaker
And then the second thing is that candidates are very quickly learning how to use Gen AI to apply for jobs. And do you think they're learning how to apply for a lot of jobs at one time, Adele? There's a whole term for it called mass supply. Candidates can mass supply now. They've got AI helping them, so very insignificant cost to them, mass supply.
00:21:05
Speaker
And then you've got their resumes that have been sculpted, shall we say, to maximise the likelihood that the algorithm assessing applicants on the recruiter side is going to select that candidate.
00:21:20
Speaker
and So you've got a bot applying and you've got a bot assessing. The two bots are ah talking to each other. You've got bots talking to bots. And by the time it gets to a human, you're going to find recruiters who look at someone on paper who looks good and then they interview them and find out, guess what? They're not actually that good.
00:21:39
Speaker
So the costs, not just direct costs, but the indirect costs in terms of time, I think are going to skyrocket. for those recruiters that rely on going out and fishing in the external candidate market. The alternative, of course, is not to just run an ad, but to actually have very targeted candidate outreach. In other words, recruiters calling or networking and targeting the candidates they want rather than having to screen out 95% of the candidates that they don't want.
00:22:10
Speaker
So this Armageddon situation you're proposing, this thought conversation could be reality. It could be a situation where you will need to rely on your own data, your own information, your own networks in future, far greater than we do today.
00:22:25
Speaker
Well, I certainly believe that if you don't do that, the costs of not doing that will dramatically escalate. And I said this at the Bullhorn Engage event in March, the issue of data integrity in recruitment agency databases is the number one issue for owners to get completely on top of in the next 18 months because I absolutely promise you that those that do not, it won't be too long before they look back ruefully and see how far they are behind their competitors because they haven't done that.