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00:00:01
Episode 67
139 Plays4 months ago
News for the week beginning 24 June 2024 and Question of the Week "Why is the recruitment industry the fall guy for government labour supply issues?"
#RNA #RecruitmentPodcast #RecruitmentNewsAustralia
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Transcript
00:00:09
Speaker
This is the news for the week beginning the 24th of June 2024. I'm Ross Clennett. The ongoing NSW Independent Commission Against Corruption Inquiry has heard the former manager of the Works and Projects Unit at Canterbury Bankstown Council, Benjamin Webb, deny he accepted more than $230,000 from a friend in return for helping his friend's company win valuable council labour hire assignments. Webb's friend, former Council contractor Pietro Cosu, used a company to supply subcontractors to the Council between 2020 and 2022 via RANSTAD and SPINFX recruiting without disclosing his financial interest in the subcontractor supply company.
00:00:51
Speaker
Last Thursday the inquiry heard Kossu had paid Webb hundreds of thousands of dollars while Webb worked at the council. Webb said he hadn't disclosed the payments to the council as he was very busy at the time and it never entered his mind. The inquiry heard Kossu had given Webb a bank card for his account. Webb had withdrawn cash from the account before he deposited the money into his own account under his parents' names. Under cross-examination from the Council's barrister, Arthur Moses SC, Webb accepted he should have disclosed the payments because he was in a position to award valuable contracts to KOSU. But he denied the transactions and an associated sham software company were in an attempt to hide the fact that he was receiving payments from KOSU in return for giving him valuable contracts at the Council.
00:01:41
Speaker
Nearly 50 workers will lose their jobs after the federal government has axed a 26-year-old jobs program with little warning. Last month's federal budget confirmed the end of the Harvest Trail services and Harvest Trail information service on June 30, saving $47.3 million dollars over the next five years. The free services connected farmers with backpackers and Australian job seekers on the Harvest Trail which comprises thousands of fruit, vegetable, grain and grape farms throughout Australia. As part of the services, contractors conducted background checks on both parties. On-farm exploitation has been a major concern for workers, government, the public and many farmers with a fair work harvest trail inquiry recovering more than a million dollars in wages for two and a half thousand workers in 2018.
00:02:33
Speaker
The cuts surprised the service providers with all four confirming there was no consultation. MADEC, the contractor responsible for facilitating the employment of approximately 5,000 people on the harvest trail this financial year, will make 40 staff redundant and close six offices in Renmark, Shepparton, Coffs Harbour, Sale, Griffith and Caboolture. Best employment will cut four staff and close its Stanthorpe and Gatton offices While Rural Enterprises Australia, the sole provider in WA, will cut one job and one office. Despite the government referring to the HTS website as the best place to find harvest jobs in Australia, the budget stated the cuts were about redirecting spending to higher quality areas. In a statement, a Department of Employment and Workplace Relations spokesperson said there had been a sustained and significant decline in the use of the harvest trial services by both employers and job seekers.
00:03:30
Speaker
The National Employment Outlook is broadly consistent with the existing 2024 trend, with 47% of employers recruiting during the month, a one percentage point decline from last month, according to the JSA Recruitment Experiences and Outlook survey of over 1,000 employers in May. The recruitment difficulty rate has surged, increasing by three percentage points over the month and six percentage points over the past two months, to 56% of recruiting employers. The recruitment difficulty rate was 57% for capital city employers, up 4% from April and up 11% from March, and 53% for rest of state employers. 19% of employers were forecasting an increase in headcount in the upcoming three-month period, a 1% fall compared to April.
00:04:22
Speaker
4% of employers surveyed in May forecast a reduction in headcount in the next three months, unchanged from last month and the month before. Following surprise inspections, the Fair Work Ombudsman has recovered $281,729 for 305 underpaid food outlet employees in suburbs in and around Newcastle. Fair work inspectors investigated 43 businesses in Newcastle's fast food restaurant and cafe sector, mostly cheap eats venues. The inspections were prompted by intelligence from a range of sources, including anonymous reports. Of 41 investigations finalised, the FWA found workplace place law breaches in 73% of food outlets. The most common breach was underpayment or failure to pay penalty rates in 29 businesses.
00:05:15
Speaker
which variously included evening and night rates and weekend and public holiday loading, as well as casual loading, followed by an underpayment of minimum wages for ordinary hours in 19 businesses. Following investigations, the FWA issued 26 compliance notices, which resulted in some employers rectifying underpayments without enforcement notices. The highest amount recovered from any one business was $82,583 for two casual fast food workers who were not paid their casual minimum wages and their public holiday and weekend loading. Fair Work Ombudsman and a Booth said improving compliance in the fast food, restaurant and cafe sector was an ongoing priority for the regulator.
00:05:58
Speaker
Female Commonwealth public servants earn an average of $19,000 a year less than men, according to a Gender Equality Scorecard released by the Workplace Gender Equality Agency, WGA, last week. Women working in the Commonwealth public sector earn just over 86 cents for every dollar earned by their male counterparts. However, the public sector gender pay gap of 13.5% is significantly lower than the 21.7% pay gap in the private sector. In the Commonwealth public sector, women account for 43.5% of the total workforce.
00:06:35
Speaker
Other findings show almost half of all Commonwealth public sector employers have gender balanced management teams compared to just over one quarter in the private sector. Despite equal representation of women and men members on Commonwealth public sector governing bodies, only 42% of women hold the chair position. However, this is significantly higher than in the private sector where women hold only 19% of chair positions. The scorecard is the first of a new annual report series publishing the results from mandatory Commonwealth public sector gender equality reporting to WGEA against a suite of gender equality indicators. The scorecard is based on 116 Commonwealth public sector employer reports representing nearly 340,000 employees provided during 2022.
00:07:29
Speaker
The scorecard captures data from 37 public sector employers not previously covered by APS Commission or WGA's reporting, including NBNCo, CSIRO, the Reserve Bank and Australia Post. A report from the Burning Glass Institute claims that generative AI will particularly impact companies across finance and insurance, professional services and IT. Burning Glass's ranking published in partnership with the Society for Human Resource Management mapped the scope of likely generative AI workforce impacts on Fortune 500 firms based on their employee composition. Robert Half is listed towards the top of the ranking in 16th place with 84.6% of occupations assessed as being exposed to AI. Manpower Group appeared lower in the ranking with an exposure score of 68.7%.
00:08:22
Speaker
While these are the only staffing firms out of the 500 companies assessed, the relatively high scores underline the significant disruption the staffing industry faces. The report said ah HR roles may be completely transformed as AI automates routine tasks, reorientating a small team of HR professionals to serve more strategic functions. The finance and insurance sector is assessed as having the most exposure to AI. Overall, the study found that generative AI is expected to have a broad impact across nearly all categories of white collar work.
00:08:55
Speaker
PwC has launched a round of silent layoffs in the UK with affected staff told they must not inform colleagues why they are leaving and have to follow a suggested wording if they want to send goodbye messages. The big four accountancy firm has launched a new voluntary severance programme across multiple yeah UK offices in recent weeks, but has not made any official announcements internally about the move. People familiar with the matter told the Financial Times. In guidance sent to affected employees, PwC said, should you decide to accept this voluntary offer, it is possible for you to send out a note to a defined group. However, this must not refer to the voluntary severance offer or the circumstances of leaving. Naturally, it must also not be derogatory to PwC, its partners or employees. It is down to business discretion as to when this message can be sent out and if the business wishes to review messages before they are sent out.
00:09:52
Speaker
The latest move comes after PwC cut around 600 UK-based rolls at the end of last year, following a significant drop in resignations and other voluntary departures. The global recruitment process outsourcing market size is expected to reach US$24.32 billion u s dollars by 2030, registering a compound annual growth rate of 16.1% from 2023 until 2030, according to a recent report by Grandview Research. The rising demand for streamlined recruitment processes and new hiring methodologies has augmented the RPO market's growth prospects as organisations seek greater external input in the areas of talent strategy and process improvement, the report says.
00:10:37
Speaker
and that's your news up to date for the week commencing the twenty fourth of june twenty twenty four i'm adele last
00:10:56
Speaker
Question of the week this week is, why is the recruitment industry the fore guy in government labour supply issues? I know this is a red flag for you Ross, red flag to a bull. So go tell me about why we are the fore guy. Well this has um got my attention again Adele because of the recent announcement that the New South Wales government was putting aside $6 million dollars in the upcoming budget to look into the feasibility of them running a health recruitment agency specifically for locums because they say that too much money, millions and millions is going to private recruitment agencies when that's money that could be better spent on the care of patients.
00:11:47
Speaker
Look, it's ah unfortunately, it's um an easy thing for politicians to do, to have a go at the recruitment industry. We don't have a constituency out there in voter land. And it's always going to sound good when politicians give us a bit of a whack. And this is really annoying. And and I've written it about this a few times. And we know one thing for sure, whatever the feasibility study says, it simply won't work. The government will not be able to create a recruitment agency that does a better job than the private sector in terms of the allocation of scarce healthcare workers in and across New South Wales. I mean, you could say anywhere, but that particular proposal is talking about New South Wales.
00:12:42
Speaker
You seem pretty sure of that. Is that based on previous data, previous case studies that have happened? Well, if you look ah globally, I don't, as far as I'm aware, nowhere else has this happened successfully. In fact, I don't even know if they've, if it's even been attempted. This is a classic example Adele of what on paper looks like something that should work, but we know in reality, it simply won't work. And you know why it won't work? Why is that?
00:13:16
Speaker
Because with all respect to both my parents, who were both public servants, public servants are not the people to effectively allocate scarce labour in the most cost-effective and time-effective way recruitment agency consultants are. Okay, so what sort of um solutions should the government be looking at? I mean, you're saying you've been critical pretty critical here that it's not going to work and that it never works. But, you know, this is our own little utopia at Recruitment News Australia. We can solve all the problems we like. What's the solution for the government? Well, Adele, very simply, it's a supply issue. Like, recruitment agencies are being demonised, but we're allocating scarce labour. The government's role is to make the labour less scarce.
00:14:10
Speaker
And when you've got scarce labor, what happens is that bureaucratic recruitment processes never deliver you the workers that you need quickly enough. And of course, all the recruitment processes that most healthcare providers have, they're very bureaucratic. And so they either don't get people applying that are good enough or they don't move quickly enough to hire those people because commercial recruitment agencies, as soon as they know of the availability of those sorts of healthcare workers, whether nurses, doctors or whatever, they move and place them quickly.
00:14:44
Speaker
And this is the whole problem. It's not an allocation of labor issue. It's a supply of labor issue. We all know that there's a um ah massive issue with health care supply, even more so with teaching. And what role does the government have to reduce the cost? the Victorian State Government has um made um nursing training free. And there's been a huge surge in applications and people registering to do nursing training. And of course, the government has a lot to do with the pay. The prey the pay of workers in the teaching sector and ah the the pay of health care
00:15:24
Speaker
workers and of course you're going to retain people more easily if you pay them more you're also going to retain them more easily if you provide better support for them in their workplace and i'm talking particularly about teachers so they're the things that the that the government do can do or could do or should do to deal with the supply issues because that's really the issue here because what happens we go outside our borders And most people would know that the healthcare care sector is now reliant on people coming in from outside Australia, workers coming in from Southeast Asia and other countries to help with particularly low paid healthcare jobs, particularly jobs aged care ah workers and other people who are sort of semi skilled.
00:16:16
Speaker
That's an area where not enough Australians are choosing to do that sort of work. Why? Again, the cost of the training and you don't get paid enough. So that's the real issue here, Adele. So you're saying there that governments like the New South Wales government talking about opening their own internal recruitment agency to control the supply is essentially getting out of their lane and focusing on the symptom and not the cause. They're not really treating the disease at its core where they should be focused, where a government should be focused around why is there a supply issue and how do we make sure that that is solved in the longer term.
00:16:54
Speaker
Well, they should rely on the market to solve the allocation issue and they should um ah deal with the supply issue. And this has come up in another context. So I'll just give you another example that listeners may remember Mabel. So Mabel is a. Basically, it's a recruitment agency, really, but it's a tech platform. It's an employment marketplace that was given government contracts by the ah federal government in the COVID crisis to place healthcare care workers into aged care facilities. Because of course, existing health workers sorry not what healthcare care workers, aged carers, people who were getting COVID and weren't able to go to work.
00:17:43
Speaker
Now, all the people who supplied those sorts of stuff in the recruitment industry, the owners, they needed to to get full accreditation to be able to place people into people's homes when they were private. aged care services offered, and then also into facilities. But Mabel didn't. Why? Because Mabel was just a marketplace. It wasn't actually um part of the employment relationship, so they asserted
00:18:18
Speaker
And so the government that requires all of this registration and then provides compliance and oversight, we're basically saying the recruitment industry has got to do all that. Oh, but this employment marketplace that's actually funded by our mates doesn't. And that's what I hate about this issue because governments shouldn't be allocating money without a tender. Let me tell you, Adil, the recruitment industry didn't even get an opportunity to tender for that work. It went to Mabel. And guess what? The results that were published afterwards showed that RCSA members outperformed Mabel by how much, do you reckon? I hate to think.
00:19:03
Speaker
2,045%. No way. So we absolutely smashed Mabel and yet Mabel got the funding or effectively got the leg up and they weren't burdened, and I use burdens in Averacommas, by compliance and regulation. like RCSA members are and we still outperform them. Showing of course that recruitment agencies and the recruitment industry is excellent at the allocation of labour and the government needs to stick to supply issues. So they need to focus on what they can impact and not try and win quick votes perhaps is what you're saying. They're trying to go out into the media and say
00:19:50
Speaker
Hey, look at this. We're going to save X amount of money um from recruitment agencies and and look good for a media article in the short term. Of course. Of course. They need to stay in their lane Adele. They're not staying in their lane. And governments have a very important role to play in the labor supply or supply of labor. And they should let recruitment agencies and the recruitment industry play their role in the efficient allocation of labour. Because when the government goes outside its lane, inevitably it wastes a lot of money and does a terrible job. Well, we wait for the outcome of this feasibility study. Six million dollars wasted on the feasibility study alone. That could go a long way to helping
00:20:36
Speaker
um certainly issues with doctors and teachers I'm sure as well but yes stay tuned maybe for part two. Well Adele I think maybe we should make a suggestion um to the New South Wales state government. We can say look we'll save you six million dollars you give us the point three of a million so you and I can split the three hundred thousand Adele and we will take a month and write a comprehensive report that will give them everything they need to know to have them see that in fact it's a really dumb idea to proceed with this and I promise you they'll get it faster, they will save six million dollars and the right decision will be made. What do you reckon? I love it, I'm up for it Ross, let's go.
00:21:21
Speaker
To stay up to date with every episode of Recruitment News Australia, subscribe via our website RecruitmentNewsAustralia.com.au, follow our LinkedIn page Recruitment News Australia, and subscribe via your favourite podcast app. For more details about my services, simply go to RossClenet.com. And for more information about what's happening on my desk, you can visit CareerLassoo.com or the captainstable dot.com.au website.