Stand tall – a great message to start 2016

A Shortlist Article prompted a discussion with Kris Flowers from Arthur J. Gallagher re insurance claims related to terminations and whether there are  any trends that can be seen in insurance data, as opposed to what is published in court rulings.

Kris commented that AJG “has observed that over the last 12 months there has been an increase in claims for termination, wrongful dismissal and bullying. Most claims are spread evenly across both the white collar & blue collar space and some have resulted in decent amounts paid to ex- employees. In saying that the ITCRA Members in our client pool have had the lowest number of claims across this space.

ITCRA Members include Management Liability Insurance (with AJG enhancements) in their overall insurance package and, along with quality risk management, seem comfortable with their protection levels.

The ITCRA Member claims that have occurred (almost nil) in this space, have been settled very quickly. The documentation presented to the insurer’s is usually spot on and has assisted with successfully defending the matter. This pattern of consistency has kept the claims cost down allowing ITCRA Members to benefit from even better insurance deals.”

Example PTM CertificateAs risk management and quality documentation are the cornerstone of the recently released Certex People and Talent Management Standard, which is supported by ITCRA,  I followed up Kris’s comments in a discussion with Dianne Gibert from Certex to understand what she saw as the key principles in this fraught area of people management.

Dianne re-iterated Kris’s point that “quality documentation and record keeping is key in any people management process but added that documentation can be first class but if it isn’t supported by robust policies, procedures and training then it can prove a nightmare, in difficult situations, where emotions are running high or decisions are challenged.”

Dianne also said that, “in working with various sectors to develop the People and Talent Management Standard she has come to realise that many companies often face unique risks in their people management strategies, particularly if an HR Resource is not part of the personnel structure.

Using resources such as the Standard to reference the key areas of managing talent, whether directly or through contract and recruitment partners, is proving to be a highly desirable risk mitigation investment”

ITCRA recognises this Standard because the core modules: Recruitment Management, Talent Management, Immigration Management, Privacy Management, Safety Management and Quality Management did not magically materialise, they are the result of more than twenty years of work with business across all sectors and of all sizes and structure – recruitment companies and their clients. Well documented complaints, incidents and/or subsequent litigation can quickly bring a business undone – as has been evidenced over recent years.

As the CEO of ITCRA I am thrilled to note that ITCRA Members have been the first to embrace the Standard, maybe because so many of the Members have quality and compliance as a business goal. The evidence is already clear that those who have completed modules under the Standard have not, in general, been found wanting – which would support the insurer’s comments about this sector BUT, I would hasten to add, there is never room for complacency.

A great positive message about our Members  – no better way to start 2016 in my view! Belated Happy New Year everyone.

Download a summary of the Standard here.

 

 

What to do when the ‘base + incentive’ equation doesn’t add up anymore

Julie Mills 091014-1If there wasn’t enough change already occurring in the recruitment sector, we are now witnessing a regular questioning and rethink of the remuneration models.

How companies remunerate their recruiters (base + incentive of 40% to 110%) has been the subject of much discourse at ITCRA’s recent CEO Circle meeting, in the media and no doubt during recruiters’ coffee breaks and contract reviews.

Why? According to many analysts, the current approach is simply not financially sustainable.

Recruitment companies are being challenged on several fronts: they are now feeling the squeeze on fees from clients, fighting intense competition from in-house recruitment, social media is taking its share of the market, as I alluded to in a previous blog, and clients are rewarding staff who bring in talent through ‘refer a friend’ programs.

Compounding this situation, some recruiters are heading to in-house roles where they earn 15% to 20% more in fixed pay and trading off their high bonuses for salary certainty and other workplace perks.  SEEK’s September data, also shared at ITCRA’s CEO Circle, hinted at this trend showing there had been an 11.5% increase in job ads year on year for internal recruitment positions, compared to a lesser 8.7% increase for agency recruitment roles.

So what do you do when the traditional ‘base + incentive’ equation doesn’t add up anymore?

Firstly, addressing costs. Many companies are increasing recruiters’ base salary while decreasing incentives (akin to the in-house model). This was discussed in Shortlist earlier this year – in particular the importance of communicating the reason for the change. Commentary suggests many companies have already adjusted to this remuneration approach.

Secondly, consider an alternative pricing and service model. At the CEO Circle Chris Hart proposed two service models to both meet the needs of clients and ensure the viability of the sector – the vanilla and the deluxe version (my words, not his).

The “vanilla” option is akin to the social media providers, in which contracting and recruitment companies provide an online service where clients enter data and receive a computer-generated shortlist.

This reduced human interface approach would also be offered at a lower fee. In other words, learn from the online world competitors but leverage it with high-quality candidate data, analytics, brand name and reputation for finding the right candidates.

The deluxe option is a full service, high-touch approach with a dedicated team working with the client to gain a deep understanding and responding to their human resourcing needs. In short, becoming their HR trusted adviser. This would continue to be charged at a premium.

There are, of course, many other options and hybrids of these approaches. I’ve heard and seen enough of the sector to know it is comprised of savvy and entrepreneurial operators who are right now, creating competitive options. Those who get the new reward and remuneration equation, and their service model, in alignment, will certainly reap the rewards.

And, as a suggestion, the first step is to participate in the Hart Remuneration and Benchmarking Survey to see where your model fits, against the market trends.

Knowledge – use it or lose it!

Peter Drucker, the well-known management thinker once said: “knowledge has to be improved, challenged, and increased constantly, or it vanishes.”

In other words – use it or lose it!

Richard Earl, CEO of Talent, echoed this sentiment at ITCRA’s most recent CEO’s Circle held in Sydney. He reminded those in the room that, between them and the broader contracting and recruitment sector, there is more information about talent, workforce participation, market needs and skills than any other aggregation of data and we must harness the collective knowledge and use it!

For me, ITCRA’s ICT Employment Trends Report is a great example of harnessing the industry’s collective knowledge. We regularly capture data from many of Australia’s key ICT contracting and recruitment firms, and supplement this with data from BurningGlass and SEEK on Australia and New Zealand – not to mention analysing every relevant economic indicator we can get our hands on.

I would like to take this opportunity to say THANK YOU to those Member firms that so diligently provide their monthly stats to ITCRA. Your ongoing support is GREATLY appreciated!

So back to Drucker’s point. Yes we are capturing the knowledge. I can certainly say it is often challenged, as there is regularly a healthy blog response and dialogue in social media that accompanies each quarterly report. We are also enjoying an increased depth of information thanks to introduction of SEEK data for Australia and New Zealand.

Finally – are we using it? I know of several Member firms that use all the analysis we make available (Trends, RIB, R&B) that ITCRA Makes available as part of Membership, to assist in their forecasting, business planning and informing their clients.

I am also proud to say we are also using our data to inform Governments.

Most recently Russell MacDonald, ITCRA past-president, attended a roundtable discussion with the Victorian Department of Economic Development on my behalf. The discussion highlighted their appetite for greater data on the ICT professional services sector. Russell, a strong advocate of ITCRA’s ICT Employment Trends Report, provided them with a copy of the latest Report and monthly dashboard and some detailed commentary on why it was so relevant to the roundtable discussion.

A number of State and Federal agencies subscribe to ITCRA to receive data updates and request unique reports, as well as our white papers and issues commentary.  It is a strong message, to be known as the “go to” source for information that matters.

I am firmly of the view that the more ITCRA disseminates this unique market information to Government the more we will, as a voice for our Members, help create productive debate and consequently support informed policy formation on workforce planning and talent management across Australia and New Zealand.

And talking about ITCRA research, we recently released at latest ITCRA ICT Employment Trends Report for the July to September quarter. The data indicates that the Australian market is continuing to show signs of maturity and strength.

Contract roles still dominate the market, however the data shows that the proportion of permanent to contract roles shifting slightly each quarter from a ratio of:

  • 9% to 81% in Q1,
  • 11% to 89% in Q2, and
  • 14% to 86% in Q3.

Nothing dramatic – but worth watching.

In New Zealand the market is still variable. Over the last 12 months the number of ICT Job Ads have decreased by 21% according to SEEK, however the good news is that there was a pick up in activity in September.

You can read more in our report here.