RCSA Web Survey Round 28 – November 2008

Executive Summary Summary  Business confidence has dropped to the lowest since 2001, a drop of 21% while expectations of growth have become negative for the first time with a drop of 5% to -0.8%  There has been a strong increase in the number of applicants for positions and become considerably easier to find appropriate applicants for positions. Conditions have improved back to those experienced in April 2004 oAll locations are finding very similar labour market conditions except NZ is getting more applicants for positions  Staff turnover has remained stable at 36% pa organisations have contracted by 2.1% and become negative for the first time since December 2001 oQld has 10% higher staff turnover and 7% greater staff loss  There has been a substantial drop in permanent full-time placements while on-hire employment and contractor placements have increased slightly. 12% of on-hired employees converted to permanent positions in the last six months while permanent employees converting to on-hired employment was 5%.  Permanent placements have dropped by 4% to 5% thus on-hired replacements have become proportionally more significant with a rise of 3% to 94% of the total number of placements  Accordingly, the proportion of revenue from on-hired employment has risen by 6% to 54% while that of recruitment services has dropped 3% to 42% oSA and WA get a larger proportion of revenue from on-hired employees & contractors oNZ gets a larger proportion of from recruitment services 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 have jumped again from 84% to 94% while lack of suitable candidates has dropped to 3rd spot. Concerns about the lack of hiring intentions of clients has jumped again from 3rd place to 2nd with concerns increasing 21% to 88%. Concerns about maintaining profitability/fee levels have also increased 20% to 70% an along with it concerns about price undercutting oNSW is more financing growth and least about employment legislation oVIC is not substantially different from average oQLD is more worried industrial relations oSA is more concerned retaining suitable recruitment staff, workers compensation, employment legislation, and unfair dismissal and less worried about finding suitable candidates, restructuring industries and the cost of advertising oWA is more concerned legal issues about on-hired staff and immigration issues and less concerned about finding recruitment staff oNZ is more worried about finding and retaining suitable recruitment staff and restructuring industries and less worried about the cost of advertising and industrial relations Note: If locational differences are not mentioned, the differences are insufficient for comment

Executive Summary - Skills  The 2 skills with the biggest shortages are non-building professional engineers, associates and technician experiencing a 6% - 8% drop in demand.  The demand for health professionals and nurses remains static while rising to in place.  The demand for business professionals has slumped for the second survey in a row by a further15% to 21% from 4th to 14th place.  The demand for building professionals has also slumped 10% to 18%.  Demand for other skills had generally dropped 3% - 8% and is consistent with a general easing of the economy and labour market conditions  The top 12 skills shortages being: oNon-building professional engineers oNon-building engineering associates and technicians oHealth professionals oNurses oMedical technicians oElectrical trades (building) oNon-building electrical/electronic trades oMobile plant operators oBuilding associates and technicians oCarpenters and joiners oPlumbers oMetal trades

Excutive summary cont’d  The majority of respondents (94%) source candidates by approaching passive candidates. A two thirds use niche or specialist internet job boards while nearly two thirds use refer a friend incentives oNSW is more likely to use social networking sites oVIC less likely to use internet job boards oQLD is less likely to use refer a friend oSA and WA are more likely to use refer a friend incentives oNZ is more likely to use internet job boards  Nearly two thirds took action to address the market downturn in the last three months and nearly half addressed marketing expenses. The next priority is the number of recruiters per staff member followed by international revenue

Process  Web survey o business heads in both NZ and Australia o177 responses oData collection began early October 2008 and completed 7 November 2008

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 $7.7 billion up from $6.0 billion last round. This large increase is due to an increase in large companies responding Total Annual revenue $m Total Australia=$7.45b Approx 97% of revenue

Demographics of sample The proportion of $100m+ companies increased by 2% from last round to 5%.

Number of clients in the last 3 months

Business confidence has dropped to the lowest since 2001, a drop of 21% while expectations of growth have become negative for the first time with a drop of 5% to -0.8%. Scale: 0=strongly disagree 50=neutral 100=strongly agree Differences None Location differences: NSW and WA are slightly less confident while SA is slightly more confident

Staff turnover has remained stable at 36% pa organisations have contracted by 2.1% and become negative for the first time since December 2001 Differences Qld has 10% higher staff turnover and 7% greater staff loss

There has been a strong increase in the number of applicants for positions and become considerably easier to find appropriate applicants for positions. Conditions have improved back to those experienced in April Scale: 0=strongly disagree 50=neutral 100=strongly agree Differences All locations are finding very similar labour market conditions except NZ is getting more applicants for positions

There has been a lift in the capability, skills and attitudes of available applicants -10% -7% +8% -9% +12% +9% -10%

Staff placed and on-hired workers There has been a substantial drop in permanent full-time placements while on-hire employment and contractor placements have increased slightly. 12% of on-hired employees converted to permanent positions in the last six months while permanent employees converting to on-hired employment was 5%. August 2008 Note: variability may arise because of a few large numbers – this is a problem of small data sets November 2008

Permanent placements have dropped by 4% to 5% thus on-hired replacements have become proportionally more significant with a rise of 3% to 94% of the total number of placements

Accordingly, the proportion of revenue from on-hired employment has risen by 6% to 54% while that of recruitment services has dropped 3% to 42% Difference from average SA and WA get a larger proportion of revenue from on-hired employees & contractors NZ gets a larger proportion of from recruitment services

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

The majority of respondents (94%) source candidates by approaching passive candidates. A two thirds use niche or specialist internet job boards while nearly two thirds use refer a friend incentives Differences NSW is more likely to use social networking sites VIC less likely to use internet job boards QLD is less likely to use refer a friend SA and WA are more likely to use refer a friend incentives NZ is more likely to use internet job boards

Concerns for the present and near future (all respondents) Concerns about the state of the economy have jumped again from 84% to 94% while lack of suitable candidates has dropped to 3 rd spot. Concerns about the lack of hiring intentions of clients has jumped again from 3 rd place to 2 nd with concerns increasing 21% to 88%. Concerns about maintaining profitability/fee levels have also increased 20% to 70% an along with it concerns about price undercutting.

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 30%.

Location differences have reduced this round Note: <50=less than neutral 50=neutral >50 = greater than neutral Compared to average NSW is more financing growth and least about employment legislation VIC is not substantially different from average QLD is more worried industrial relations SA is more concerned retaining suitable recruitment staff, workers compensation, employment legislation, and unfair dismissal and less worried about finding suitable candidates, restructuring industries and the cost of advertising WA is more concerned legal issues about on-hired staff and immigration issues and less concerned about finding recruitment staff NZ is more worried about finding and retaining suitable recruitment staff and restructuring industries and less worried about the cost of advertising and industrial relations

Skills shortages by occupation

Skills shortages by occupation – top 20 The 2 skills with the biggest shortages are non-building professional engineers, associates and technician experiencing a 6% - 8% drop in demand. The demand for health professionals and nurses remains static while rising to in place. The demand for business professionals has slumped for the second survey in a row by a further15% to 21% from 4 th to 14 th place. The demand for building professionals has also slumped 10% to 18%. Demand for other skills had generally dropped 3% - 8% 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.Non-building professional engineers 2.Non-building engineering associates and technicians 3.Health professionals 4.Nurses 5.Medical technicians 6.Electrical trades (building) 7.Mobile plant operators 8.Non-building electrical/electronic trades 9.Drivers 10.IT and telecommunications technicians  VIC 1.Non-building professional engineers 2.Non-building engineering associates and technicians 3.Health professionals 4.Nurses 5.Medical technicians 6.Electrical trades (building) 7.Non-building electrical/electronic trades 8.Metal trades 9.Mobile plant operators 10.Drivers

Top 10 skill shortages by location  Queensland 1.Non-building engineering associates and technicians 2.Non-building professional engineers 3.Health professionals 4.Nurses 5.Medical technicians 6.Electrical trades (building) 7.Non-building electrical/electronic trades 8.Mobile plant operators 9.Plumbers 10.Metal trades  South Australia 1.Non-building engineering associates and technicians 2.Health professionals 3.Non-building professional engineers 4.Mobile plant operators 5.Nurses 6.Electrical trades (building) 7.Medical technicians 8.Non-building electrical/electronic trades 9.Metal trades 10.Machine and stationary plant operators

Top 10 skill shortages by location  Western Australia 1.Non-building engineering associates and technicians 2.Health professionals 3.Non-building professional engineers 4.Nurses 5.Medical technicians 6.Mobile plant operators 7.Electrical trades (building) 8.Non-building electrical/electronic trades 9.Machine and stationary plant operators 10.Metal trades  New Zealand 1.Non-building engineering associates and technicians 2.Health professionals 3.Medical technicians 4.Drivers 5.Non-building professional engineers 6.Nurses 7.Mobile plant operators 8.IT and telecommunications trades 9.IT and telecommunications technicians 10.Electrical trades (building)

Special section Recruitment and the global economy

Nearly two thirds took action to address the market downturn in the last three months and nearly half addressed marketing expenses. The next priority is the number of recruiters per staff member followed by international revenue.