Employment Services 2015-2020
Exposure Draft
Submission of the
Recruitment and Consulting Services Association
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Introduction to RCSA
The Recruitment and Consulting Services Association Australia & New Zealand (RCSA) is the leading industry and professional body for the recruitment and the human resources services sector in Australia and New Zealand. It represents over 3,200 company and individual Members. RCSA members provide full-time, part-time, casual and on-hire workers to a range of businesses across almost all industries throughout Australia and New Zealand.
On-hire workers are often referred to as ‘labour hire workers’, ‘agency workers’, ‘temporary employees’ and a range of other titles. The term “on-hire” has been incorporated into Modern Awards and will be used within this submission for the purpose of clarity.
Members of RCSA provide advice, information, support and guidance in relation to recruitment and employment matters to employers and workers from small and medium sized business to
multinationals.
The RCSA membership is focused on promoting positive outcomes for business, workers and workplace relationships across Australia. The RCSA sets the benchmark for recruitment and on-hire industry standards through representation, education, research and business advisory support. All RCSA member organisations and Accredited Professionals agree to abide by the ACCC authorised RCSA Code for Professional Conduct.
RCSA members work first hand with the Fair Work Act and Modern Awards on a day to day basis. Their knowledge, understanding, interpretation and support of the aims of the Act are evident in dealings that they have with their clients and employees on a day to day basis. RCSA Code for Professional Conduct
RCSA has a Code for Professional Conduct (the Code) which is authorised by the ACCC. In
conjunction with the RCSA Constitution and By Laws, the Code sets the standards for relationships between Members, best practice with clients and candidates and general good order with respect to business management, including compliance. Acceptance of, and adherence to, the Code is a pre-requisite of Membership.1
The Code is supported by a comprehensive resource and education program and the process is overseen by the Professional Practice Council, appointed by the RCSA Board. The Ethics Registrar manages the complaint process and procedures with the support of a volunteer Ethics panel mentored by RCSA's Professional Practice barrister.
RCSA’s objective is to promote the utilisation of the Code to achieve self-regulation of the on-hire worker services sector, wherever possible and effective, rather than see the introduction of additional legislative regulation.
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RCSA Member Service Categories and Terminology
RCSA believe that the absence of precise terminology is contributing to the confusion and lack accountability amongst any non-compliant element of the industry. RCSA has been instrumental in developing and promoting the following categories of services and terminology, with a view to identifying the various forms of third party employment and contracting services.
Put simply, the term ‘labour hire’ is now used to describe most a-typical forms of employment and is no longer descriptive of genuine on-hire employee services, which results in misinformation,
misrepresentation and ultimately harbours both intended and unintended non-compliance. See attached diagram for RCSA definitions and service categories along with additional information, which provides some context around on-hire worker services.
Employment Categories Casual Fixed Term Trainee/ Apprentice Seasonal Part Time Limited Tenure/ max term Full Time
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On-hire
Employee Services
A commercial service where an organisation, in return for an hourly fee, assigns one or more of its employees to perform work for a third party (client) under their general management and instruction. Managed project/ Contract services Sub-Contract Employees Sub-contract
Individuals Partnerships Company Trust
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Contracting Services
A commercial service where an organisation, in return for a fee, completes a defined scope of work for a third party (client). Such services may be performed utilising employees or sub-contractors employed or engaged by the service provider.
Contract Management Independent Contract Recruitment
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Contractor
Management Services
A commercial service where an organisation, in return for a fee, recruits independent contractors on behalf of a third party (client) and, following direct engagement of the independent contractors by the client, the organisation manages the ongoing supply of the independent contractors and their contract performance.
Candidate Placement
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Permanent Placement
Services
A commercial service where an organisation, in return for a fee, recruits on behalf of a third party (client) candidates that match a desired profile for employment or
engagement by the client.
Occupational Health & Safety EEO Employee Relations HR Management Change Management Outplacement Career Management
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Workforce Consulting
Services
A commercial service where an organisation, in return for a fee, identifies and/or responds to client workforce issues and implements strategies designed to assist clients to achieve business success.
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On-Hire Work in Context
The following information is provided for the purpose of outlining the size and significance of the on-hire industry to the Australian economy:
1. The on-hire employment industry is a significant contributor to the Australian economy Research completed by the Australian Bureau of Statistics and IBIS World indicates that the on-hire services industry generates revenue in excess of $20 billion within Australia, more than that of accounting services and more than that of legal services.
2. Most on-hire employees employed by RCSA Members are either skilled or professional workers
RMIT University research1 found that 61% of RCSA on-hire employees are skilled or professional workers with the remaining 39% being semi-skilled or unskilled. 2
3. An increasing number of on-hire employees are employed on a permanent basis RMIT University research found that 16% of on-hire employees are now employed on a permanent basis.
4. Where on-hire employees are employed on a casual basis they have improved opportunities for ongoing work as they are supplied to alternative workplaces
RMIT University research found that half of all on-hire casual employees employed by RCSA Members are immediately placed in another assignment following the completion of their initial assignment. That is, they enjoy ‘back to back’ assignments without having to search for new work like those engaged in direct hire casual employment.
5. An overwhelming majority of people choose to work as an on-hire employee and the reasons for this choice are not what you may expect
RMIT University research found that 67% of on-hire employees chose to work as an on-hire employee and 34% prefer this form of work over permanent employment.
The most important reasons for choosing on-hire employment are diversity of work, to screen potential employers, recognition of contribution and the payment of overtime worked.3 6. Business uses on-hire employees to help with recruitment and urgent labour requirements,
not to reduce cost or pay
RMIT University research found that the main reason that organisations use on-hire employee services is to resource extra staff (30%), cover in-house employee absences (17%), reduce the administrative burden of employment (17%) and overcome skills shortage issues (9%). Only 2% of organisations surveyed indicated that the primary reason for using on-hire employees was related to pay.
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Brennan, L. Valos, M. and Hindle, K. (2003) On-hired Workers in Australia: Motivations and Outcomes RMIT Occasional Research Report.
School of Applied Communication, RMIT University, Design and Social Context Portfolio Melbourne Australia
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RCSA Submission – Fair Work Australia Draft Model Consultation Clause 10.12.13:i:\data\affinity
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7. Business is more productive and competitive because of the use of on-hire workers RMIT University research found that 76% of organisations using on-hire workers were more productive and competitive as a result.
8. On-hire employment creates jobs and doesn’t necessarily replace direct hire employment opportunities
RMIT University research found that 51% of organisations using on-hire employees would not necessarily employ an equivalent number of employees directly if they were unable to use on-hire employees. In fact 19% of organisations said they would rarely do so.
Furthermore, 19% of RCSA Members’ on-hire employees eventually become permanent employees of the host organisation they are assigned to work for, according to RMIT University research.
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Background
The Department of Employment is seeking comments and feedback to the Exposure Draft of a proposed Request for Tender for Employment Services 2015-2020. RCSA applauds the Government’s commitment to building a strong and prosperous economy that promotes participation in the workforce.
This is a once in a generation opportunity to refocus the employment services programme and to significantly increase opportunities for job seekers to participate in the workforce.
Only through greater collaboration will pathways to employment be re-opened to job seekers. Substantive collaboration will be fundamental to increasing the level of knowledge and
understanding about the world of work among all participants, and to building job readiness among Job Seekers that achieves sustainable employment outcomes.
An enhanced level of knowledge and understanding will provide a platform from which to achieve the key objective of the new model, to promote stronger workforce participation by people of working age and help more Job Seekers move from Welfare to work.
Background to Recruitment Industry Collaboration with the Employment Services
Programme
In 2008, the RCSA made a submission to the then Minister for Employment warning of the negative outcomes for job seekers as a result of the Labour Government’s decision to extinguish
arrangements through which private recruitment agencies had worked with employment service providers to place over 2.7 million job seekers into work between 2002/2003 and early 2008. Unfortunately changes to those arrangements came to be and a key pathway to employment was closed. In its submissions to Government at that time, RCSA identified three inherent challenges in the formation of effective collaborations between private recruitment agencies and employment service providers.
In a letter to the Minister for Employment in March 2008, the RCSA noted:
The level of coordination between employment services and private recruiters has historically been inconsistent and fragmented which we feel has resulted in reduced opportunities for job seekers;
And, there exist a number of preconceptions as to the employability and work readiness of candidates available from Australia Job Search and employment services;
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Since 2008 the service provision nature of the Employment Services model has not recognised the inherent benefits of those forms of work in providing pathways to employment for job seekers. It has also not kept pace with changes in the world of work and the preferences of workers for flexible and other forms of work.
In its submission: The Future of Employment Services in Australia, A Discussion Paper from June 2008 the RCSA noted that:
Job Placement organisations (ie: recruitment agencies) work with employers every-day and are trained in job search techniques. This differs greatly to the work Job Network providers who typically focus on the preparation of Job seekers for work.
Job search and job readiness are two separate skills requiring experienced and highly capable practitioners in both areas to successfully achieve employment outcomes for Job Seekers. The private recruitment sector is expert in recruitment and employment.
About On-Hire work as a Pathway to Employment
The Recruitment and Consulting Services Association Australia & New Zealand (RCSA) is the leading industry and professional body for the recruitment and the human resources services sector in Australia and New Zealand.
The RCSA represents over 3,200 company and individual Members who work in 7,000 branches and locations across Australia and employ 15,000 professional staff.
Every-day, RCSA member agencies on average employ over 327,000 (FTE) workers in roles around the nation. RCSA member agencies open pathways to employment for many workers and provide an opportunity for workers who may have otherwise been unable to participate in the workforce. In a recent survey of members for Ciett, the International Confederation of Private Employment Agencies, RCSA found that:
31% of workers with RCSA member agencies cited the opportunity to gain experience as their primary reason to work with an RCSA member agency;
45% of workers RCSA member agencies cite the opportunity for flexible work as their primary reason for work with an RCSA member agency;
And; for 75% of workers RCSA member agencies the average length of engagement is between 1 and 3 months.4
Research by RMIT University found that 51% of organisations using on-hire employees would not necessarily employ an equivalent number of employees directly if they were unable to use on-hire employees. 5
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http://www.ciett.org
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Brennan, L. Valos, M. and Hindle, K. (2003) On-Hired Workers in Australia: Motivations and Outcomes RMIT Occassional Research Report.
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On the international stage, on-hire (also known as labour hire work) work is widely recognised as a stepping-stone to helping workers to enter the labour market and then to transition smoothly to ensure that they remain in employment.
RCSA has contributed to a report; Adapting to Change, How private employment services facilitate adaption to change, better labour markets and decent work, the labour markets, prepared by Boston Consulting Group for Ciett (the International Confederation of Private Employment Agencies). 6 Chapter three of this report finds the private employment sector internationally serves to:
Drive inclusive labour markets and increase participation – particularly among the more disadvantaged groups in society. It therefore contributes to reducing segmentation. Private employment services help to drive up labour market participation. They are not only agents of job creation but they also increase the range of job options being made available in the labour market.
Private employment services were also found to:
Contribute to the elimination of market segmentation by facilitating transitions, upward and sideward mobility. These can be from education to work, from unemployment to
employment, from temporary positions to permanent posts and from jobs to jobs. It also stays close to the workplace in order to enable transitions across sectors in line with demand and economic growth.
The report also found some 35% of agency workers are under 25 years of age and agency work is often their first exposure to the labour market. On-hire work was found to:
It provides work experience for those entering the workplace and reassures them that they will be working with a quality employer and undertaking decent work. It also allows students to complement their studies by gaining concrete work experience.
The sector was also found to be particularly effective in placing disadvantaged and under
-represented groups of society such as youth, women and the long-term unemployed and providing a way for them to start to access the job market and join the world of work.
One of the many services private employment services offer to disadvantaged workers is facilitating access to the labour market (taking care of the job search function on behalf of the jobseeker), allowing employers to recruit these disadvantaged workers with a low risk (probation period) and offering contractual arrangements that meet the constraints of these workers (need to gain confidence again by working part-time or for a limited period of time to start with).
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Adapting to Change, How private employment services facilitate adaption to change, better labour markets and decent work, the labour markets. Ciett & Boston Consulting Group. www.ciett.org
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Source: Regards croisés sur l’intérim, l’Observatoire des Métiers et de l’Emploi, July 2010
This stepping-stone function provided by private employment services is largely recognised by workers, who widely acknowledge (from 59% to 92%) that agency work is an efficient way of finding a first job but also of securing a permanent, full time position (see table above).
RCSA Submission
RCSA welcomes the Government’s intent to place an increased premium on the value of true
collaboration between providers of Employment Services, private-recruiters and employers through: Criterion 2 of the Exposure Draft carrying a 30% assessment weighting and the requirement for tenderers to demonstrate their organisations ability and capacity to move Job Seekers into work: How your organisation will be able to move Job Seekers into Work
The arrangements you will put in place to:
o Identify jobs for Job Seekers and the support you will provide to ensure Job Seekers are equipped to meet the needs of employers and, once placed, remain in the job long term
How your organisation will work with other organisations which play a role in moving Job Seekers into work
Criterion 3 similarly carrying a 30% assessment weighting asking tenderers to demonstrate the general and local strategies your organisation will use to meet the needs of employers.
Work with other Employment Providers to meet the needs of medium and large employers in a region so that these employers have coordinated access to all Job Seekers in an
Employment Region. 92% 86% 85% 84% 82% 80% 71% 59% 0 20 40 60 80 100 UK BE PL FR ES NL IT DE
Is Agency Work Effective to Find a First Job?
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Committed collaborations will require the active engagement of private-recruitment agencies in order to achieve sustainable and long-term employment outcomes. A recruitment agency provides multiple pathways to employment, be that as an employer of job seekers through its on-hire business, or through participation in collaboration with an Employment Services provider to directly place job seekers with a client employer.
The RCSA believes a clear framework for collaboration is required in order to provide guidelines around the basis for sustainable partnerships in which all parties are fully vested and committed participants and that reflect the commercial realities and the role of all parties in the employment services environment.
Recruitment agencies support their client to identify the most appropriate candidates and pathways to employment for those candidates. While employment service providers support their clients to prepare for work.
In this submission will focus primarily on two areas:
1. The importance of putting in place a framework within which high-value collaborations may flourish.
2. The role of targeting education and training to more closely align with the skills and workforce requirements of employers.
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Framework for Collaboration
The RCSA recommends a clear framework for collaboration is required in order to provide the basis for sustainable partnerships in which both parties are fully vested and committed.
Greater collaboration is sought by Government in the employment services programme which will require the active engagement of private recruitment agencies in order to achieve sustainable and long-terms pathways to work. A successful tenderer will be accountable for realising these
partnerships and collaboration.
The experiences of RCSA member agencies over a number of years has identified the need for a clearly defined environment in which employment service providers and private recruiters may collaborate on a consistent basis that defines the roles, responsibilities and the investment of time and resources by each party to promote stronger workforce participation by people of working age. In considering possible models for such a framework, RCSA refers to the Department of Finance’s National Collaboration Framework (NCF) which was created to assist Australian Government agencies, State/Territory and Local jurisdictions to work collaboratively to achieve government objectives.7
The NCF is recommended for use in any intra or cross-jurisdictional project which would typically use a memorandum of understanding. It provides a tiered approach for agencies to follow when seeking to collaborate and reduces costs, time and risk associated with program or project development and delivery.
The RCSA believes the tiered approach and ease of use of a framework such as the NCF should be a requirement for tenderers and employment service providers, both as part of their tender response as well as within the contract framework in order to achieve sustainable and outcomes focused collaboration.
Given the inter-agency nature of the employment services programme, and a stated desire to reduce red-tape to better meet the needs of employers, RCSA believes a Collaborative Head Agreement such as is identified in the process table below, provides a sound framework. This Agreement should seek to minimise administrative requirements and focus the greatest amount of effort on front-line services that open pathways to employment for job seekers.
Tier One In principle commitment to collaborate Statements of Principles to Collaborate:
Explicitly recognise and capture the principles and values that guide collaborative service delivery across jurisdictions
Tier Two Business commitment to collaborate Statements of Intent: Agree in advance the
business basis to collaborate across multiple initiatives
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Tier Three Collaborative Head Agreement Collaborative Head Agreement: Agree in
advance those elements of a cross agency agreement that can be reapplied to multiple collaborative initiatives
Tier Four Commitment to collaborate on specific
projects
Project/Initiative Specific Agreements:
Agree those elements that are specific to a particular project/initiative
Tier Five Commitment to collaborative tools,
standards and procedures
User Guide: Includes checklists specific to
collaborative service delivery
Source: Department of Finance, http://www.finance.gov.au/collaboration-services-skills/national-collaboration-framework/#tier_2
Education and Training
The exposure draft calls for education and training to be more tightly aligned and targeted to meet the needs of employers and the skills and aptitude job seekers will require in the workplace. A lack of job readiness has been identified by RCSA member agencies as an inhibitor to employment for unemployed job seekers.
The proposed programme makes available 4, 12 and 26 week placement outcomes which provides employment service providers with an option for short-term placement of job seekers into on-hire work opportunities as a means of gaining experience, fulfilling a short-term assignment or ‘road-testing’ an employer or industry sector.
This will place a renewed focus on the job readiness of job seekers and the capability and capacity of employment service providers to prepare job seekers for work. As referenced earlier, RCSA member agencies have for many years expressed their concern about the lack of job readiness and the misconceptions as to the employability and work readiness of candidates that exists. This remains a factor for member agencies in choosing not to engage with employment service providers.
While Government, through the Exposure Draft, seeks tenderers to present innovative and new proposals to address the measures identified in Criterion 2 and 3, RCSA recommends that education and training pathways should be clearly mapped by tenderers in their submissions. Tenders should be required to clearly identify within their collaboration proposal, the:
1. education and training partners
2. how these education and training partners will deliver programmes that directly target employer needs
3. what education and training programmes will be delivered
We make this recommendation on the basis that relevant and targeted education and training pathways are a key tool in which to open pathways to employment. The first-hand experience of RCSA member agencies shows that on-hire work present an ideal pathway to work for job-seekers, however the generally low level of job readiness of job seekers must be addressed in order to realise these outcomes.
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Conclusion
In conclusion, the RCSA believes a Framework for Collaboration will provide the basis for effective and outcomes focused collaboration between private recruitment agencies and employment service providers, as will a clear definition of education and training pathways provide in order to increase participation in the workforce.
The RCSA welcomes the opportunity to discuss this submission further with the Department or to provide recruitment industry inputs to the design of a Collaboration Framework.
