1. RCSA Web Survey Round 25 – December 2007

2. Executive Summary Summary  Both business confidence and expected changes in volume of business have remained exactly the same as last round at 70.5% and 5.3% respectively - there are no substantial differences between locations  There has been a slight improvement in the mix of skills and capabilities of applicants but the number of appropriate applicants hence the labour market remains tight oAll locations are finding very similar labour market conditions except oWA has the most problems finding candidates for positions  Staff turnover has risen 4% to 33% pa and staff growth has dropped by 10% to 1.5% pa making this the lowest since July 2002. Obviously a tight labour market is taking its toll on staff growth oThere are no substantial locational differences  There has been a substantial increase in permanent full-time employment and contractor placements with a fall in on-hire placements  The majority of placements are on-hire and the proportion of those placements as part of the total has fallen from 92% of all placements to 80% - however caution needs to used in interpreting this level of change as a few large operators can skew the results  The proportion of total revenue for all services has remained stable except that recruitment services has risen 5% to 48% of the total oSA & WA get a larger proportion of revenue from on-hired employees oNZ gets a larger proportion of from recruitment services while SA and WA get less Note: If locational differences are not mentioned, the differences are insufficient for comment

3. Executive Summary Summary – issues of most concern  Lack of suitable candidates remains the top concern. Difficulty in finding suitable recruitment staff remains in second place although it has eased by 5%. The state of the economy has risen to 3rd place followed by cost of advertising. Maintaining profitability and price undercutting in the industry has dropped in concern oNSW is most concerned about the state of the economy, financing growth and more concerned about employment legislation and OH&S issues oVIC is more worried financing growth and less worried about the state of the economy and legal issues about on-hired staff, otherwise is average oQLD is less worried about financing growth, maintaining profits, price undercutting, industrial relations and OH&S issues oSA is more worried about retaining and finding recruitment staff, maintaining profitability, industrial relations, workers compensation, employment legislation, legal issues about on-hired staff and immigration issues and less worried about financing growth oWA is more concerned retaining suitable recruitment staff and less concerned with financing growth, restructuring industries, the cost of advertising, workers compensation, employment legislation and legal issues oNZ is least worried about finding and retaining staff, price undercutting, the state of the economy and industrial relations and most worried about lack of hiring intentions of clients and restructuring industries Note: If locational differences are not mentioned, the differences are insufficient for comment

4. Executive Summary - Skills  The top 5 skills with the biggest shortages are business professionals and non-building professional engineers, associates and technician. These are followed by building professionals and electrical trades (building). Other trades remain in short supply. The shortage of health professionals and nurses remains substantial as does the shortage of receptionists and telephonists  The top 12 skills shortages being: oBusiness professionals oNon-building professional engineers oNon-building engineering associates and technicians oBuilding professionals oElectrical trades (building) oBuilding associates and technicians oNon-building electrical/electronic trades oReceptionists and telephonists oIT and telecommunications professionals oHealth professionals oMetal trades oOther clerks

5. Excutive summary cont’d  Special section – New media  Use of new media to source candidates is common with 88% approaching passive candidates, 77% using niche or specialist internet job boards followed by refer a friend incentives 62% and social networking sites such as Facebook, LinkedIn and MySpace (38%) oNSW is more likely to specify other oVIC is less likely to use social networking sites, niche internet job boards and other oSA is more likely to use social networking sites, refer a friend incentives, niche internet job boards and approaching passive candidates oWA is more likely to use refer friend incentives, approaching passive candidates and other oNZ is more likely to use social networking sites, niche internet job boards and less likely to use refer a friend incentives, approaching passive candidates and other

6. Executive summary cont’d  Special section – Effects of the labour shortage on respondents  Candidate shortages result in 91% using more time and resources and almost as many expect this to increase. The shortages are creating challenges for the organisations (81%). 85% are changing their methods including using new media (65%) oThe only significant difference is SA says the candidate shortage is causing more problems for their business than other locations

7. Process  Web survey oE-mail business heads in both NZ and Australia oData collection began late November 2007 and completed 18 December 2007 oThe total annual revenue of respondent companies is $1.87 billion up from $3.02 billion last round. The change is largely due to a smaller sample (126 cf 175 last round) oThe number of sole traders in the sample has dropped 4% to 10%

8. Demographics of sample The number of sole traders in the sample has dropped

9. Demographics of sample The total annual revenue of respondent companies is $1.87 billion up from $3.02 billion last round. The change is largely due to a smaller sample (126 cf 175 last round) Total Annual revenue $m Total Australia=$1.22b Approx 92% of revenue

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

11. RCSA members confidence about business improvements in the next three months has increased slightly Differences None

12. Both business confidence and expected changes in volume of business have remained exactly the same as last round at 70.5% and 5.3% respectively. Scale: 0=strongly disagree 50=neutral 100=strongly agree Differences None

13. Staff turnover has risen 4% to 33% pa and staff growth has dropped by 10% to 1.5% pa making this the lowest since July 2002. Obviously a tight labour market is taking its toll on staff growth Differences There are no substantial locational differences

14. There has been a slight improvement in the mix of skills and capabilities of applicants but the number of appropriate applicants hence the labour market remains tight Scale: 0=strongly disagree 50=neutral 100=strongly agree Differences All locations are finding very similar labour market conditions except WA has the most problems finding candidates for positions

15. Labour market scores indicate a slight easing of the labour market but it remains tight +5% -10% +5% -8% -6%

16. Staff placed and on-hired workers There has been a substantial increase in permanent full-time employment and contractor placements with a fall in on-hire placements. December 2007 September 2007 Note: variability may arise because of a few large numbers – this is a problem of small data sets

17. The majority of placements are on-hire and the proportion of those placements as part of the total has fallen from 92% of all placements to 80%

18. The proportion of total revenue for all services has remained stable except that recruitment services has risen 5% to 48% of the total Difference from average SA & WA get a larger proportion of revenue from on-hired employees NZ gets a larger proportion of from recruitment services while SA and WA get less

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

20. Concerns for the present and near future (all respondents) Lack of suitable candidates remains the top concern. Difficulty in finding suitable recruitment staff remains in second place although it has eased by 5%. The state of the economy has risen to 3 rd place followed by cost of advertising. Maintaining profitability and price undercutting in the industry has dropped in concern.

21. Concerns for the present and near future (National issues) In Australia concerns legal issues (56%) and employment legislation (53%) remain the top issues while in NZ immigration issues have risen 3% and remain the top issue

22. Location differences Note: <50=less than neutral 50=neutral >50 = greater than neutral Compared to average NSW is most concerned about the state of the economy, financing growth and more concerned about employment legislation and OH&S issues VIC is more worried financing growth and less worried about the state of the economy and legal issues about on-hired staff, otherwise is average QLD is less worried about financing growth, maintaining profits, price undercutting, industrial relations and OH&S issues SA is more worried about retaining and finding recruitment staff, maintaining profitability, industrial relations, workers compensation, employment legislation, legal issues about on-hired staff and immigration issues and less worried about financing growth WA is more concerned retaining suitable recruitment staff and less concerned with financing growth, restructuring industries, the cost of advertising, workers compensation, employment legislation and legal issues NZ is least worried about finding and retaining staff, price undercutting, the state of the economy and industrial relations and most worried about lack of hiring intentions of clients and restructuring industries

23. Skills issues

24. Skills shortages by occupation – top 20 The top 5 skills with the biggest shortages are business professionals and non-building professional engineers, associates and technician. These are followed by building professionals and electrical trades (building). Other trades remain in short supply. The shortage of health professionals and nurses remains substantial as does the shortage of receptionists and telephonists Total shortage

25. Skills shortages by occupation – bottom 20 Total shortage

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

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

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

29. Special section

30. Use of new media to source candidates is common with 88% approaching passive candidates, 77% using niche or specialist internet job boards followed by refer a friend incentives 62% and social networking sites such as Facebook, LinkedIn and MySpace (38%). Difference from average NSW is more likely to specify other VIC is less likely to use social networking sites, niche internet job boards and other SA is more likely to use social networking sites, refer a friend incentives, niche internet job boards and approaching passive candidates WA is more likely to use refer friend incentives, approaching passive candidates and other NZ is more likely to use social networking sites, niche internet job boards and less likely to use refer a friend incentives, approaching passive candidates and other Other includes Network groups Referrals from other business SMS subscriptions Conferences

31. Candidate shortages result in 91% using more time and resources and almost as many expect this to increase. The shortages are creating challenges for the organisations (81%). 85% are changing their methods including using new media (65%) Difference from average The only significant difference is SA says the candidate shortage is causing more problems for their business than other locations