RCSA Web Survey Round 29 – February 2009

Executive Summary Summary  Both business confidence and expectations of growth have risen slightly from their historic lows last round. Business confidence had a rise of 1.5% to 44.5% while expectations of rose from -0.8% to -0.7%  Location differences have reduced again this round and become almost negligible meaning that the economic situation is forcing all places to confront the same issues  It hasn’t been easier to find appropriate applicants since the survey began in September There is a better choice of skills and attitudes as well  Staff turnover has risen rapidly to 50% pa and organisations have contracted by 24.6%. Both are at historically high and low levels respectively  There has been a 21% increase in permanent full-time placements while on-hire employment and contractor placements have dropped 25%. The latter is numerically greater. Part time placements have also dropped. 12.5% of on-hired employees converted to permanent positions in the last six months while permanent employees converting to on-hired employment was 6%. Obviously there is flight to permanent employment if it is available  Accordingly, as a proportion of total placements, permanent placements have increased by 4% to 9% while on-hired replacements have dropped by 3% to 91% Note: If locational differences are not mentioned, the differences are insufficient for comment

Executive Summary Summary – issues of most concern  Concerns about the state of the economy and the lack of hiring intentions of clients remain stable at 94% and 88%. Concerns about maintaining profitability levels have increased to 82% along with it concerns about price undercutting to 77%. Finding suitable candidates has dropped 40% to 8th place oNSW and Queensland are not substantially different from average oVIC less concerned about the cost of advertising and immigration issues oSA is the most different state and is more concerned about price undercutting, workers compensation and immigration while it is less concerned with finding suitable candidates, retaining recruitment staff and financing growth oWA is less concerned about retaining recruitment staff oNZ is more worried about restructuring industries and the cost of advertising Note: If locational differences are not mentioned, the differences are insufficient for comment

Executive Summary - Skills  The demand for health professionals nurses and medical technicians appear almost recession proof. Demand for these have risen to 41%, 36% and 34% respectively. The first two are in top place.  Non-building professional engineers, associates and technicians experienced drops in demand of 3% to 5%.  The demand for business professionals has slumped for the third survey in a row by a further 10% to 11% now occupying 26th place.  The demand for building professionals has also dropped 4% to 14%.  Demand for teachers has risen 6% to 21% into 5th place.  Demand for other skills had generally dropped 8% - 10% and is consistent with a general easing of the economy and labour market conditions . The top 12 skills shortages are: oHealth professionals oNurses oNon-building professional engineers oMedical technicians oSchool teachers oNon-building engineering associates and technicians oNon-building electrical/electronic trades oElectrical trades (building) oRail drivers oSocial professionals oBuilding associates and technicians oIT and telecommunications professionals

Excutive summary cont’d  The majority of respondents (80%) source candidates by approaching passive candidates. This has dropped by 14% because candidates are now more likely to approach the company. A two thirds use niche or specialist internet job boards while nearly two thirds use refer a friend incentives oVIC less likely to use refer a friend incentives oSA is more likely to use social networking sites and refer a friend incentives  Nearly half offer identification and selection of talent while less than a quarter offer identification and selection of talent within business for new roles  38% have introduced new services in the talent management & productivity field to supplement traditional recruitment/on-hire services (for example coaching or education offerings)  14% of clients have requested non-traditional offerings  Two thirds have investigated or created innovative services, three quarters are addressing lower recruitment by changing services and of those, half have found it helps while nearly a half aren’t sure

Process  Web survey o business heads in both NZ and Australia o158 responses oData collection began early February 2009 and completed 25 February 2009

Demographics of sample The number of sole traders in the sample remains stable at16% Location differences: There are a higher proportion of sole traders in NZ

Demographics of sample The total annual revenue of respondent companies is $7.78 billion the same as to last round. Total Annual revenue $m Total Australia=$7.32b Approx 94% of revenue

Demographics of sample The proportion of $100m+ companies increased by 2% from last round to 7%.

Number of clients in the last 3 months

Both business confidence and expectations of growth have risen slightly from their historic lows last round. Business confidence had a rise of 1.5% to 44.5% while expectations of rose from -0.8% to -0.7% Scale: 0=strongly disagree 50=neutral 100=strongly agree Differences None Location differences: No substantial differences

Staff turnover has risen rapidly to 50% pa and organisations have contracted by 24.6%. Both are at historically high and low levels respectively Location differences No substantial differences

It hasn’t been easier to find appropriate applicants since the survey began in September There is a better choice of skills and attitudes as well. Scale: 0=strongly disagree 50=neutral 100=strongly agree Location differences No substantial differences

There has been a strong lift in the capability, skills and attitudes of available applicants -36% -17% +31% -23% +21% +7% +15% -11% +11%

Staff placed and on-hired workers There has been a 21% increase in permanent full-time placements while on-hire employment and contractor placements have dropped 25%. The latter is numerically greater. Part time placements have also dropped. 12.5% of on-hired employees converted to permanent positions in the last six months while permanent employees converting to on-hired employment was 6%. Obviously there is flight to permanent employment if it is available February 2009 Note: variability may arise because of a few large numbers – this is a problem of small data sets November 2008

As a proportion of total placements, permanent placements have increased by 4% to 9% while on-hired replacements have dropped by 3% to 91%

Accordingly, the proportion of revenue from on-hired employment has dropped by 4% to 50% while that of recruitment services has dropped 3% to 39% Location differences No substantial differences

A substantial proportion of companies have neither contractors nor on-hire employees.

The majority of respondents (80%) source candidates by approaching passive candidates. This has dropped by 14% because candidates are now more likely to approach the company. A two thirds use niche or specialist internet job boards while nearly two thirds use refer a friend incentives Location differences VIC less likely to use refer a friend incentives SA is more likely to use social networking sites and refer a friend incentives

Concerns for the present and near future (all respondents) Concerns about the state of the economy and the lack of hiring intentions of clients remain stable at 94% and 88%. Concerns about maintaining profitability levels have increased to 82% along with it concerns about price undercutting to 77%. Finding suitable candidates has dropped 40% to 8 th place.

Concerns for the present and near future (National issues) Concerns about national issues remain stable and of relatively low concern compared with the economy. Local concerns range from 44% to 14%.

Location differences have reduced again this round and become almost negligible meaning that the economic situation is forcing all places to confront the same issues Note: <50=less than neutral 50=neutral >50 = greater than neutral Compared to average NSW and Queensland are not substantially different from average VIC less concerned about the cost of advertising and immigration issues SA is the most different state and is more concerned about price undercutting, workers compensation and immigration while it is less concerned with finding suitable candidates, retaining recruitment staff and financing growth WA is less concerned about retaining recruitment staff NZ is more worried about restructuring industries and the cost of advertising

Skills shortages by occupation

Skills shortages by occupation – top 20 The demand for health professionals nurses and medical technicians appear almost recession proof. Demand for these have risen to 41%, 36% and 34% respectively. The first two are in top place. Non-building professional engineers, associates and technicians experienced drops in demand of 3% to 5%. The demand for business professionals has slumped for the third survey in a row by a further 10% to 11% to 26 th place. The demand for building professionals has also dropped 4% to 14%. Demand for teachers has risen 6% to 21% into 5 th place. Demand for other skills had generally dropped 8% - 10% and is consistent with a general easing of the economy and labour market conditions. Total shortage

Skills shortages by occupation – bottom 20 Total shortage

Top 10 skill shortages by location  NSW 1.Health professionals 2.Non-building professional engineers 3.Nurses 4.Medical technicians 5.Non-building engineering associates and technicians 6.School teachers 7.Social professionals 8.IT and telecommunications professionals 9.Rail drivers 10.Electrical trades (building)  VIC 1.Non-building professional engineers 2.Health professionals 3.Medical technicians 4.Nurses 5.School teachers 6.Non-building engineering associates and technicians 7.Social professionals 8.Mobile plant operators 9.IT and telecommunications professionals 10.Rail drivers

Top 10 skill shortages by location  Queensland 1.Health professionals 2.Medical technicians 3.Nurses 4.Non-building professional engineers 5.School teachers 6.IT and telecommunications professionals 7.Social professionals 8.Non-building engineering associates and technicians 9.Rail drivers 10.Mobile plant operators  South Australia 1.Non-building professional engineers 2.Health professionals 3.Medical technicians 4.Nurses 5.School teachers 6.Social professionals 7.Rail drivers 8.IT and telecommunications professionals 9.Mobile plant operators 10.Non-building engineering associates and technicians

Top 10 skill shortages by location  Western Australia 1.Non-building professional engineers 2.Health professionals 3.Medical technicians 4.Nurses 5.School teachers 6.Social professionals 7.IT and telecommunications professionals 8.Non-building engineering associates and technicians 9.Rail drivers 10.Mobile plant operators  New Zealand 1.Health professionals 2.Non-building professional engineers 3.Medical technicians 4.Nurses 5.School teachers 6.Rail drivers 7.Social professionals 8.IT and telecommunications professionals 9.Mobile plant operators 10.IT and telecommunications technicians

Special section Recruitment and the global economy

Non-traditional services offered to clients Nearly half offer identification and selection of talent while less than a quarter offer identification and selection of talent within business for new roles

 38% have introduced new services in the talent management & productivity field to supplement traditional recruitment/on-hire services (for example coaching or education offerings)  14% of clients have requested non-traditional offerings

Two thirds have investigated or created innovative services, three quarters are addressing lower recruitment by changing services and of those, half have found it helps while nearly a half aren’t sure. 0%50%100% You have investigated and or undertaken work to create innovation into your services to your clients? Are you addressing lower recruitment by improving expanding or otherwise changing services This has this helped your business to increase or maintain profitability %Agree%Neutral%Disagree