1. RCSA Web Survey Round 31 – July 2009

2. Executive Summary Summary  Overall there appears to have been a considerable lift in business expectations  Both business confidence and expectations of growth have risen rapidly from their historic lows two rounds ago. Business confidence had a strong rise of 14 points to 63.3 (where it was a year ago) while estimates of future business volumes have moved strongly positive with a rise of 4.4 points to 5.4% for the next quarter. Expected growth rates are now close to pre-GFC levels  The number of clients interacted with in the last 3 months has dropped by over 23%. Obviously the marketing effort of members is declining as a response to the improving current economic climate  Location differences have increased this round meaning that the economic situation is not so bad that businesses are all forced to confront the same issues. I  After the big jump in availability of applicants in past rounds, the labour market is showing signs of tightening. While it is still moderately easy to find appropriate applicants the measure has gone from slightly positive to slightly negative (52% to 48% where 50 is neutral). Critically the measure peaked six months ago and appears as though it will drop steeply. Expect tight labour market conditions again soon! oAs the labour market tightens, the proportion of applicants with the right mix of skills is again dropping. Not only is the labour market tightening but there will be problems in finding the right skills as well.  Despite increasing business confidence, staff levels continue drop. Both turnover and growth are at historically high and low levels respectively. Members are still shedding staff and not replacing them oStaff turnover is highest in NSW and organisation contraction the least in NZ  There has been a substantial drop in the number of full-time placements and the number of on-hired employment & contractors has dropped by 11%  As a proportion of total placements, permanent placements have decreased by 1% to 3% while on-hired and contractor placements have increased by 1% to 97%  Accordingly, the proportion of revenue from on-hired employment has increased by 1% to 53% while that of recruitment services has dropped 2% to 35% Note: If locational differences are not mentioned, the differences are insufficient for comment

3. Executive Summary Summary – issues of most concern  All concerns have dropped. While concerns about the state of the economy remains high, it has dropped 5% to 89%, concerns about lack of hiring intentions of clients has also dropped 6% to 85% as has maintaining profitability levels dropping to 79%. Fears about price undercutting has also dropped. oVIC and Queensland are not substantially different from average except Qld is less worried about hiring intentions of clients, employment legislation and unfair dismissal and more worried about getting recruitment staff while VIC is less worried about immigration issues oNSW is more worried about lack of candidates and financing growth, industrial relations, employment legislation, legal issues about on-hired staff and unfair dismissal oBoth SA and WA are more concerned with industrial relations, unfair dismissal and casuals, immigration issues, OH&S Issues and less concerned with restructuring industries. SA is additionally concerned with legal issues about on-hired staff, employment legislation, maintaining profitability/fee levels, price undercutting, workers' compensation legislation and less worried by cost of advertising oNZ is more concerned with restructuring industries, financing growth, lack of hiring intentions by clients, difficultly in retaining suitable recruitment staff and less concerned with unfair dismissal and casuals Note: If locational differences are not mentioned, the differences are insufficient for comment

4. Executive Summary - Skills  Demand for specific occupations has risen considerably across the board. Average demand has risen from 9% to 15%, in other words, nearly doubled.  The demand for health professionals, nurses and medical technicians remains strong and the demand has risen to 42%, 41% and 33% respectively.  The demand for non-building professional engineers has risen 11% to 33% while non-building technicians has almost doubled to 27%. Metal trades have jumped 9 positions to 9th with demand more than doubling to 20%  The top 12 skills shortages are: oHealth professionals oNurses oNon-building professional engineers oMedical technicians oNon-building engineering associates and technicians oNon-building electrical/electronic trades oIT and telecommunications professionals oElectrical trades (building) oMetal trades oCarpenters and joiners oIT and telecommunications technicians oPlumbers

5. Excutive summary cont’d  The majority of respondents (93%) source candidates through mainstream job boards followed by networking events (78%) and in-house job boards (77%) oSA & WA are more likely to use a broader range of methods to source candidates while VIC and NSW use virtual methods such as Twitter more. NSW uses business networking sites more

6. Process  Web survey oE-mail business heads in both NZ and Australia o184 responses oData collection began early July 2009 and completed 30 July 2009

7. Demographics of sample The proportion of $100m+ companies decreased by 1% from last round to 4%.

8. Demographics of sample The number of sole traders in the sample has increased to 17% Location differences: There are a higher proportion of sole traders in Victoria and NZ

9. Demographics of sample The total annual revenue of respondent companies has dropped slightly to $7.6 billion. Total Annual revenue $m Total Australia=$7.2b Approx 95% of revenue

10. Both business confidence and expectations of growth have risen rapidly from their historic lows two rounds ago. Business confidence had a strong rise of 14 points to 63.3 (where it was a year ago) while estimates of future business volumes have moved strongly positive with a rise of 4.4 points to 5.4% for the next quarter. Expected growth rates are now close to pre-GFC levels Scale: 0=strongly disagree 50=neutral 100=strongly agree Differences None Location differences: There are no substantial location differences

11. The number of clients interacted with in the last 3 months has dropped by over 23%. Obviously the marketing effort of members is declining as a response to the improving current economic climate May 2009 July 2009

12. After the big jump in availability of applicants in past rounds, the labour market is showing signs of tightening. While it is still moderately easy to find appropriate applicants the measure has gone from slightly positive to slightly negative (52% to 48% where 50 is neutral). Critically the measure peaked six months ago and appears as though it will drop steeply. Expect tight labour market conditions again soon! Scale: 0=strongly disagree 50=neutral 100=strongly agree Location differences No substantial differences

13. As the labour market tightens, the proportion of applicants with the right mix of skills is again dropping. Not only is the labour market tightening but there will be problems in finding the right skills as well. +7% -5% -9% +11% -5% -6% +6%

14. Despite increasing business confidence, staff levels continue drop. Both turnover and growth are at historically high and low levels respectively. Members are still shedding staff and not replacing them Location differences Staff turnover is highest in NSW and organisation contraction the least in NZ

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 dropped by 11%. July 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 1% to 3% while on-hired and contractor placements have increased by 1% to 97%

17. Accordingly, the proportion of revenue from on-hired employment has increased by 1% to 53% while that of recruitment services has dropped 2% to 35%. Location differences Revenue as a percentage of the total from On-hired employees and contractors is highest in SA and WA Recruitment services is lowest in SA and WA and highest in NSW

18. A substantial and increasing proportion of companies have neither contractors nor on-hire employees, the proportion has increased by 2% to 17%.

19. The majority of respondents (93%) source candidates through mainstream job boards followed by networking events (78%) and in-house job boards (77%) Location differences SA & WA are more likely to use a broader range of methods to source candidates while VIC and NSW use virtual methods such as Twitter more. NSW uses business networking sites more

20. Concerns for the present and near future (all respondents) All concerns have dropped. While concerns about the state of the economy remains high, it has dropped 5% to 89%, concerns about lack of hiring intentions of clients has also dropped 6% to 85% as has maintaining profitability levels dropping to 79%. Fears about price undercutting has also dropped.

21. Concerns for the present and near future (National issues) In Australia, concerns about legal issues about on-hired staff has jumped 7% to 56% while unfair dismissal has dropped 10% to 50% respectively. In NZ concerns about the employment relations act have risen to 35%.

22. Location differences have become larger this round. South Australia, Western Australia and New Zealand are most concerned while NSW is most positive. Note: <50=less than neutral 50=neutral >50 = greater than neutral Compared to average VIC and Queensland are not substantially different from average except Qld is less worried about hiring intentions of clients, employment legislation and unfair dismissal and more worried about getting recruitment staff while VIC is less worried about immigration issues NSW is more worried about lack of candidates and financing growth, industrial relations, employment legislation, legal issues about on-hired staff and unfair dismissal Both SA and WA are more concerned with industrial relations, unfair dismissal and casuals, immigration issues, OH&S Issues and less concerned with restructuring industries. SA is additionally concerned with legal issues about on-hired staff, employment legislation, maintaining profitability/fee levels, price undercutting, workers' compensation legislation and less worried by cost of advertising NZ is more concerned with restructuring industries, financing growth, lack of hiring intentions by clients, difficultly in retaining suitable recruitment staff and less concerned with unfair dismissal and casuals

23. Skills shortages by occupation

24. Skills shortages by occupation – top 20 Demand for specific occupations has risen considerably across the board. Average demand has risen from 9% to 15%, in other words, nearly doubled. The demand for health professionals, nurses and medical technicians remains strong and the demand has risen to 42%, 41% and 33% respectively. The demand for non-building professional engineers has risen 11% to 33% while non- building technicians has almost doubled to 27%. Metal trades have jumped 9 positions to 9 th with demand more than doubling to 20%. Total shortage

25. Skills shortages by occupation – bottom 20 Total shortage

26. Top 10 skill shortages by location  NSW 1.Nurses 2.Health professionals 3.Medical technicians 4.Non-building professional engineers 5.Non-building engineering associates and technicians 6.Non-building electrical/electronic trades 7.IT and telecommunications professionals 8.Electrical trades (building) 9.IT and telecommunications technicians 10.Metal trades  VIC 1.Nurses 2.Health professionals 3.Non-building professional engineers 4.Medical technicians 5.Non-building electrical/electronic trades 6.Non-building engineering associates and technicians 7.Metal trades 8.IT and telecommunications professionals 9.Electrical trades (building) 10.IT and telecommunications technicians

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

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