1. RCSA Web Survey Round 32 – October 2009

2. Executive Summary Summary  Both business confidence and expectations of growth have risen slightly and are well clear of their historic lows three rounds ago. Business confidence had a small rise of 2 points to 65.5 while members expect next quarter’s business volumes to also rise 5.7% compared with last rounds 5.4%. 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 17%. This is the second consecutive quarterly drop. Obviously the marketing effort of members is declining as the economic climate improves.  The labour market is showing signs of tightening. While it is still moderately easy to find appropriate applicants the measure is now trending down steeply and has dropped a further three points to 44. Expect tight labour market conditions again soon! oAs the labour market tightens, the proportion of applicants with the right mix of skills remains unchanged but there is easier to find work ready attitudes and capabilities..  Despite increasing business confidence, staff levels continue drop but at a reduced rate from last round. While both turnover and growth have pulled back from their historically high and low levels respectively, members are still shedding staff and not replacing them. oStaff turnover is highest in WA along with a faster reduction in staff growth  There has been a drop of around 13% full-time placements and on-hired employment & contractors.  As a proportion of total placements, both permanent placements and on-hired and contractor placements remains stable at 3% and 97% respectively  However, the proportion of revenue from on-hired employment has increased by 4% to 57% while that of recruitment services has dropped 2% to 33%. Note: If locational differences are not mentioned, the differences are insufficient for comment

3. Executive Summary Summary – issues of most concern  Almost all concerns have dropped slightly although concerns about lack of hiring intentions of clients, the state of the economy and maintaining profitability remain high. Fears about price undercutting has increased 3% to 74%. While difficulty in retaining suitable recruiting staff is still the lowest concern, it has risen 10% to 27% while difficulty in recruiting suitable staff has risen 11% to 45% to become a middle ranked concern. oVIC is less concerned about industrial relations oNSW is more worried about financing growth and less concerned about employment legislation, immigration and OH&S oQLD had no significant variations from average oSA is more concerned about retaining recruitment staff, industrial relations, workers compensation legislation, employment legislation, legal issues about on-hired staff, immigration, unfair dismissal and OH&S and les concerned about financing growth, the cost of advertising and finding suitable candidates oWA is more concerned about employment legislation, immigration and OH&S oNZ is less concerned finding suitable recruitment staff Note: If locational differences are not mentioned, the differences are insufficient for comment

4. Executive Summary - Occupations  Shortages of high demand occupations has eased a little particularly in medical and non-building engineering fields while demand for the other occupations has increased slightly.  The top 12 occupation shortages are: oHealth professionals oNurses oNon-building professional engineers oMedical technicians oNon-building engineering associates and technicians oBuilding professionals oElectrical trades (building) oNon-building electrical/electronic trades oBuilding associates and technicians oMetal trades oBusiness professionals oCarpenters and joiners

5. Excutive summary cont’d  The majority of respondents (96%) source candidates through mainstream job boards followed by networking events (76%) and in-house & niche job boards (69%) oSA is most likely to use niche notice boards oQLD is most likely to use other methods

6. Process  Web survey oE-mail business heads in both NZ and Australia o201 responses oData collection began early October 2009 and completed 16 October 2009

7. Demographics of sample The proportion of $100m+ companies increased by 2% from last round to 6%.

8. Demographics of sample The number of sole traders in the sample has decreased to 9% from 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 increased from $7.6 billion to $8.6 billion. Total Annual revenue $m Total Australia=$8.3b Approx 97% of revenue

10. Both business confidence and expectations of growth have risen slightly and are well clear of their historic lows three rounds ago. Business confidence had a small rise of 2 points to 65.5 while members expect next quarter’s business volumes to also rise 5.7% compared with last rounds 5.4%. 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 17%. This is the second consecutive quarterly drop. Obviously the marketing effort of members is declining as the economic climate improves. October 2009 July 2009

12. The labour market is showing signs of tightening. While it is still moderately easy to find appropriate applicants the measure is now trending down steeply and has dropped a further three points to 44. Expect tight labour market conditions again soon! Scale: 0=strongly disagree 50=neutral 100=strongly agree Location differences NZ is more likely to agree that there at least as many applicants for positions as needed

13. As the labour market tightens, the proportion of applicants with the right mix of skills remains unchanged but there is easier to find work ready attitudes and capabilities. +5% +7%

14. Despite increasing business confidence, staff levels continue drop but at a reduced rate from last round. While both turnover and growth have pulled back from their historically high and low levels respectively, members are still shedding staff and not replacing them. Location differences Staff turnover is highest in WA along with a faster reduction in staff growth

15. Staff placed and on-hired workers There has been a drop of around 13% full-time placements and on-hired employment & contractors. July 2009 Note: variability may arise because of a few large numbers – this is a problem of small data sets October 2009

16. As a proportion of total placements, both permanent placements and on- hired and contractor placements remains stable at 3% and 97% respectively

17. However, the proportion of revenue from on-hired employment has increased by 4% to 57% while that of recruitment services has dropped 2% to 33%. Location differences Revenue as a percentage of the total from On-hired employees and contractors is highest in WA Recruitment services is lowest in SA

18. The proportion of companies with neither contractors nor on-hire employees has dropped by 2% to 15% with a corresponding increase in the number of companies with more than 20,000.

19. The majority of respondents (96%) source candidates through mainstream job boards followed by networking events (76%) and in-house & niche job boards (69%) Location differences SA is most likely to use niche notice boards QLD is most likely to use other methods

20. Concerns for the present and near future (all respondents) Almost all concerns have dropped slightly. Concerns about lack of hiring intentions of clients, the state of the economy and maintaining profitability remain high. Fears about price undercutting has increased 3% to 74%. While difficulty in retaining suitable recruiting staff is still the lowest concern, it has risen 10% to 27% while difficulty in recruiting suitable staff has risen 11% to 45% to become a middle ranked concern.

21. Concerns for the present and near future (National issues) In Australia, concerns about legal issues about on-hired staff, employment legislation and unfair dismissal and casuals have all increased 3% to 5%. In NZ concerns about ACC levies and immigration issues have risen to 36% and 31% respectively.

22. Location differences have reduced this round except for South Australia which remains the most concerned while the other locations remain reasonably close. Note: <50=less than neutral 50=neutral >50 = greater than neutral Compared to average VIC is less concerned about industrial relations NSW is more worried about financing growth and less concerned about employment legislation, immigration and OH&S QLD had no significant variations from average SA is more concerned about retaining recruitment staff, industrial relations, workers compensation legislation, employment legislation, legal issues about on-hired staff, immigration, unfair dismissal and OH&S and les concerned about financing growth, the cost of advertising and finding suitable candidates WA is more concerned about employment legislation, immigration and OH&S NZ is less concerned finding suitable recruitment staff

23. Occupational shortages

24. Occupational shortages – top 20 Shortages of high demand occupations has eased a little particularly in medical and non-building engineering fields while demand for the other occupations has increased slightly. Demand for drivers has increased considerably. Total shortage

25. Occupational shortages – bottom 20 Total shortage

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

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

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