Recruitment & Hiring

Recruiting’s new challenge… OHS in a mess… Super’s extra cost… India beckons… Stocks, dollar rebound… Economy roundup

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Recruiting’s new challenge


Chief executives are being forced to change the way they recruit and the type of people they target as the skills shortage worsens.


About 68% of CEOs say it is harder to find staff this year than it was last year, according to a survey by The Executive Connection.


Nearly half of the CEOs say they are looking to recruit overseas, mainly for staff in professional services, trades and middle management.


The need to hire is being driven by the rosy outlook, with 80% of the 286 Australian chief executives surveyed saying they plan to increase revenue, staff numbers and fixed costs this year.


“Nearly 70% of recruitment is for new positions – to handle organic business growth or to expand into completely new areas of business,” says TEC chief executive Mike O’Neill.


And there has been a significant drop in the CEOs who recruit based on potential and ability to train (from 63% to 40%). “This could be related to the fact that very few new hires, less than 30%, are expected to stay over five years with a company,” O’Neill says.


Barry Upfold, regional chairman of TEC in Queensland, says the results reflect the Y Generation’s attitude to work. “Younger people expect to stay for a shorter period of time with people aged 35–45 prepared to stay for longer.”


The survey also found that fewer chief executives are using money to keep staff (40% compared to 51% last year); training is down to 32% from 48%; and promotion is down to 26% from 42%.


The big incentive to stay is a positive organisational culture, cited by 69% of chief executives. “That means making people feel wanted and listened to,” says Upfold.

See also: How entrepreneurs beat the skills shortage


– Amanda Gome



OHS a mess in NSW, say employers


Occupational health and safety is becoming an increasingly hot issue in the NSW election as business groups ramp up their criticism of the state’s onerous workplace safety regime.


The Iemma Government has pushed back the finalisation date of a review of the state’s OHS laws by retired judge Paul Stein until after the March 24 election in an attempt to keep the divisive issue off the political agenda.


Paul Ritchie, a spokesman for the NSW Business Chamber, says there is no doubt OHS is a big election issue in election for NSW employers, many of whom believe the system is “unfair” and “geared against them”.


“The NSW OHS system has the highest level of prosecutions, the highest level of fines and the highest number of inspectors and yet injury rates above the national average: that says the system that’s been developed isn’t working,” Ritchie says.


Businesses are particularly angry about the absolute duty of care for workplace injuries, which effectively reverses the onus of proof to make employers guilty until proven innocent, Ritchie says. “The system is a major burden on businesses, but it doesn’t improve safety. There needs to be reform.”


The comments come after a survey by industrial relations service provider Employers First found that OHS and workers compensation is a major concern for over half of the 360 NSW businesses surveyed.


Employers First chief executive Garry Brack told the Australian Financial Review that “there’s an absolute need for reform but because [if] the unions don’t want it, it doesn’t happen.


– Mike Preston


Business to be blindsided by hidden super costs


Many employers will be forced to absorb a 10% increase in wage costs when superannuation changes take effect on July 1, 2008, because they are unprepared, according to a survey released by Mercer Human Resource Consultants yesterday.


After July 1 next year, employers will be required to use the wider salary definition of Ordinary Time Earnings (OTE) as the earnings base for calculating employee’s superannuation entitlements. OTE includes items such as performance bonuses, commissions and shift loadings.


The Mercer survey of over 300 businesses found that:

  • 15% were completely unaware of the changes.
  • 60% simply planned to absorb the costs of the increase.
  • 70% per cent of organisations have not factored the changes into their next remuneration review, potentially the last before the OTE definitions take effect.


By not factoring the change into pay negotiations, many employers will effectively deliver a windfall to employees without any correlating increases in productivity, according to Mercer chief executive Peter Promnitz.


“For many organisations, the complex nature of OTE will mean changes in remuneration policies, superannuation and payroll systems,” he says. Businesses should consider reducing the annual salary review increases to help deal with any increase in super contributions.


– Mike Preston


Big opportunities in India


India could become the world’s fastest-growing economy within 40 years, driven by its high-tech sector, says a report from the Department of Foreign Affairs and Trade.


The report, India’s Service sector: Unlocking the opportunities, suggests Australian service companies should develop an Indian strategy and take advantage of the many opportunities, particularly for Australia’s SME sector.


More sectors are being open to foreign investment including telecommunications, power generation, banking, insurance, engineering, infrastructure design, wholesales and retail trade, health care and mining services, it says.


Tim Harcourt, Austrade’s chief economist, says 1800 Australian companies now export to India, 90% of them SMEs. “The changing demographics is driving the boom. You just have to look at the huge shopping centres being built for the middle class and see the success of companies like Cookie Man and Gloria Jean’s Coffees. There are also huge opportunities with the Commonwealth Games coming up in Delhi in 2010.

See also: Tim Harcourt


– Amanda Gome


Stocks, dollar rebound from US shakes


The S&P/ASX 200 has regained 1.23% to sit at 5812.8 at 11.45 this morning, recovering much of the value lost in yesterday’s US-triggered selling stampede. The Australian dollar is up strongly to US78.58¢ as buyers re-enter the market.


A report by the US Mortgage Bankers Association showing a big increase in loan failures in the US, particularly in the low-doc sector, prompted a wave of pessimism about the US economy that caused sellers to knock 2.1% off the S&P/ASX 200 yesterday.


Commodity prices were also hit by the news, driving further selling of resources stocks. This morning’s recovery has been led by BHP Billiton and Rio Tinto, both of which received a boost after oil and copper prices rallied.


A report from investment bankers Lehman Brothers that bad home loans won’t impact on earnings released yesterday also helped restore market confidence, resulting in a 0.5% gain in the US Dow Jones Industrial Average last night.


The Australian dollar has been supported by the resurgent market and the return of “carry” traders borrowing cheap Japanese yen to invest in higher yield Australian stocks.


– Mike Preston


Economy roundup


Unemployment increased 0.1% to 4.6% in February (seasonally adjusted), according to Australian Bureau of Statistics Labour Force figures released today.


Employers hired 22,000 new people in February, while the number of people seeking part-time jobs increased from 19,000 to 156,900.


Inflation will stay unchanged at 3.2% in March, according to the Melbourne Institute’s consumer inflationary expectations survey.


The number of survey respondents expecting annual inflation to fall within the Reserve Bank of Australia’s 2–3% target declined to 21% in March from 23.3% in February.


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