1. RCSA Web Survey Round 30 – May 2009

2. Executive Summary Summary  Overall there appears to have been a stabilising of the business environment with small signs of improvement of business conditions for the companies. This has to be countered by the fact that overall demand for occupations has dropped considerably. Obviously members are adjusting to the economic conditions and have cut overheads  Both business confidence and expectations of growth have again risen slightly from their historic lows two rounds ago. Business confidence had a rise of 4% to 49.5% while estimates of future business volumes have moved from negative to positive with a rise from -0.7% to +1.0%  The number of clients interacted with in the last 3 months has increased by over 40%. Obviously the marketing effort of members has increased as a response to the current economic climate  Location differences have increased slightly this round meaning that the economic situation is not so bad that businesses are all forced to confront the same issues. In Australia, employment issues and unfair dismissal are back on the table  While it hasn’t been easier to find appropriate applicants since the survey began in September 2001 little has changed since last round. In other words, the supply of appropriate labour hasn’t increased substantially over the last quarter.  Staff turnover has risen slightly to 55% and organisations have contracted by 33.3%. Both are at historically high and low levels respectively. Members are shedding staff and not replacing them  There has been a substantial drop in the number of full-time placements and the number of on-hired employment & contractors has nearly doubled  Accordingly, as a proportion of total placements, permanent placements have decreased by 5% to 4% while on-hired replacements have increased by 5% to 96% Note: If locational differences are not mentioned, the differences are insufficient for comment

3. Executive Summary Summary – issues of most concern  Concerns about the state of the economy remains stable at 94% while concerns about lack of hiring intentions of clients has worsened 3% to 91% as has maintaining profitability levels increasing to 86%. Concerns about price undercutting has eased slightly to 75%. Finding suitable candidates stabilised at 34%. Finding and retaining recruitment staff has dropped to last places and is a concern for only 22% and 14% oNSW, VIC and Queensland are not substantially different from average except NSW is less worried about immigration issues oSA is the most different state and is more concerned about industrial relations, workers' compensation legislation, employment legislation, legal issues about on- hired staff, immigration issues, OH&S Issues, unfair dismissal and casuals and less worried about lack of suitable candidates and financing growth oWA is more concerned about advertising costs and legal issues about on-hired staff oNZ is more worried about hiring intentions of clients and less worried about finding suitable candidates, retaining recruitment staff and industrial relations Note: If locational differences are not mentioned, the differences are insufficient for comment

4. Executive Summary - Skills  Demand for specific occupations has declined considerably and average demand has dropped from 13% to 9%.  While the demand for health professionals, nurses and medical technicians remains strong, the demand has dropped approximately 8% to 33%, 28% and 27% respectively.  The demand for non-building professional engineers, associates and technicians remains stable while the demand for business professionals has also stabilised.  The top 12 skills shortages are: oHealth professionals oNurses oMedical technicians oNon-building professional engineers oNon-building engineering associates and technicians oNon-building electrical/electronic trades oElectrical trades (building) oSchool teachers oBuilding associates and technicians oPlumbers oBusiness professionals oSocial professionals

5. 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

6. Process  Web survey oE-mail business heads in both NZ and Australia o179 responses oData collection began early May 2009 and completed 9 May 2009

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

8. Demographics of sample The number of sole traders in the sample has dropped to 11% Location differences: There are a higher proportion of sole traders in NZ

9. Demographics of sample The total annual revenue of respondent companies is stable at $7.8 billion. Total Annual revenue $m Total Australia=$7.3b Approx 94% of revenue

10. The number of clients interacted with in the last 3 months has increased by over 40%. Obviously the marketing effort of members has increased as a response to the current economic climate May 2009 Feb 2009

11. Both business confidence and expectations of growth have again risen slightly from their historic lows two rounds ago. Business confidence had a rise of 4% to 49.5% while estimates of future business volumes have moved from negative to positive with a rise from -0.7% to +1.0% Scale: 0=strongly disagree 50=neutral 100=strongly agree Differences None Location differences: WA and NZ are less than the other locations

12. While it hasn’t been easier to find appropriate applicants since the survey began in September 2001 little has changed since last round. In other words, the supply of appropriate labour hasn’t increased substantially over the last quarter. Scale: 0=strongly disagree 50=neutral 100=strongly agree Location differences No substantial differences

13. The labour market for suitable applicants has stabilised +7% -6% +6%

14. Staff turnover has risen slightly to 55% and organisations have contracted by 33.3%. Both are at historically high and low levels respectively. Members are shedding staff and not replacing them Location differences No substantial differences

15. Staff placed and on-hired workers There has been a substantial drop in the number of full-time placements and the number of on-hired employment & contractors has nearly doubled February 2009 Note: variability may arise because of a few large numbers – this is a problem of small data sets May 2009

16. As a proportion of total placements, permanent placements have decreased by 5% to 4% while on-hired replacements have increased by 5% to 96%

17. Accordingly, the proportion of revenue from on-hired employment has increased by 2% to 52% while that of recruitment services has dropped 2% to 37%. Since the revenue for on-hired employment and contractors hasn’t risen as fast as the number of placements the margins appear to have been squeezed Location differences No substantial differences

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

19. The majority of respondents (87%) source candidates by approaching passive candidates. This has increased by 7% most likely because the labour market is beginning to tighten slightly. Two thirds use refer a friend incentives while nearly two thirds use niche or specialist internet job boards Location differences VIC less likely to use refer a friend incentives SA is less likely to use social networking sites and approach passive candidates and more likely use refer a friend incentives

20. Concerns for the present and near future (all respondents) Concerns about the state of the economy remains stable at 94% while concerns about lack of hiring intentions of clients has worsened 3% to 91% as has maintaining profitability levels increasing to 86%. Concerns about price undercutting has eased slightly to 75%. Finding suitable candidates stabilised at 34%. Finding and retaining recruitment staff has dropped to last places and is a concern for only 22% and 14%.

21. Concerns for the present and near future (National issues) In Australia, concerns about employment legislation and unfair dismissals and casuals have jumped 11% to 60% and 50% respectively. In NZ concerns about the employment relations act have decreased 27% to 16%.

22. Location differences remain negligible this round except for South Australia. Respondents from that state seem particularly concerned. Note: <50=less than neutral 50=neutral >50 = greater than neutral Compared to average NSW, VIC and Queensland are not substantially different from average except NSW is less worried about immigration issues SA is the most different state and is more concerned about industrial relations, workers' compensation legislation, employment legislation, legal issues about on-hired staff, immigration issues, OH&S Issues, unfair dismissal and casuals and less worried about lack of suitable candidates and financing growth WA is more concerned about advertising costs and legal issues about on-hired staff NZ is more worried about hiring intentions of clients and less worried about finding suitable candidates, retaining recruitment staff and industrial relations

23. Skills shortages by occupation

24. Skills shortages by occupation – top 20 Demand for specific occupations has dropped considerably across the board. Average demand has dropped from 13% to 9%. While the demand for health professionals, nurses and medical technicians remains strong, the demand has dropped approximately 8% to 33%, 28% and 27% respectively. The demand for non-building professional engineers, associates and technicians remains stable while the demand for business professionals has also stabilised. Total shortage

25. Skills shortages by occupation – bottom 20 Total shortage

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

27. Top 10 skill shortages by location  Queensland 1.Health professionals 2.Non-building professional engineers 3.Nurses 4.Medical technicians 5.Non-building engineering associates and technicians 6.Rail drivers 7.Building associates and technicians 8.School teachers 9.Business professionals 10.Building professionals  South Australia 1.Health professionals 2.Non-building professional engineers 3.Nurses 4.Medical technicians 5.Business professionals 6.Rail drivers 7.Electrical trades (building) 8.Building professionals 9.Building associates and technicians 10.Non-building engineering associates and technicians

28. Top 10 skill shortages by location  Western Australia 1.Health professionals 2.Nurses 3.Medical technicians 4.Non-building professional engineers 5.Non-building engineering associates and technicians 6.Rail drivers 7.Building associates and technicians 8.Building professionals 9.IT and telecommunications professionals 10.School teachers  New Zealand 1.Health professionals 2.Nurses 3.Medical technicians 4.Non-building professional engineers 5.School teachers 6.Electrical trades (building) 7.Non-building electrical/electronic trades 8.Building associates and technicians 9.Non-building engineering associates and technicians 10.Building professionals

29. Special section Open questions

30. Current challenges and actions  Reduction in client hiring intentions oReducing staff or staff hours oDiversifying into other services oIncreasing client visits oImproving quality of consultants oCold call potential clients oTraining staff to be alert to opportunities oLook at other markets oPartnerships in other locations or with other suppliers oMarketing oTry harder with clients  Increasing competition oGet close to clients  Price undercutting oWait for them to ‘go belly up’  Declining revenue oManage debt  Clients not paying oBadger them  Economic uncertainty oBe ready to move quickly to staff up meet identified trends oVigilance in identifying the expected upturn oBalance savings and growth  Clients wanting more for less oFlexible pricing structures  Declining revenue oManage debt oAlign cost structures oImprove reporting oChange sales program and incentives

31. Current opportunities  Clients keen to hire but finding it difficult to finance oMake flexible offers  Clients in a buyers market oExploit dissatisfaction with present supplier to cause defection  Time to see clients and diversify  Competitors are reducing oPossible to gain new clients oGood position when economy picks up  M&A opportunities  Exploit synergies with other suppliers  More resume help for candidates  Restructure own workforce oUse freelancers and contract consultants