18 October 2017

Weinstein behaviour is all-too common: Men have to change, now

Come sit down here beside me honey
Let's have a little heart to heart
Now look at me and tell me darlin'
How badly do you want this part?
Are you willing to sacrifice
And are you willing to be real nice
All your talent and my good taste
I'd hate to see it go to waste
King of Hollywood (Glenn Frey, Don Henley) - Eagles (from The Long Run, 1979)

You could hardly miss the biggest news story of the past fortnight. It’s been everywhere: on mainstream media, blogs, TV current affairs shows and it’s filled thousands of column inches in print and online.

Of course I am referring to the allegations made against movie mogul, Harvey Weinstein, with respect to his long-hidden ongoing sexual harassment of female actors and female employees, which were finally given a public airing when The New York Times broke the story on 5 October.

After initially announcing that Weinstein was taking a ‘leave of absence’ the Weinstein Company Board quickly escalated the issue and 48 hours later Weinstein was fired.

Since then an avalanche of further claims against Weinstein, and other powerful men in Hollywood have hit the media with Jennifer Lawrence and Reece Witherspoon sharing their own stories of harassment and humiliation. 

It seems like 2017 might be the year when skeletons really come out of the closet to haunt the, seemingly, never-ending parade of pathetic ‘powerful’ men and their appalling behavior.

Across April and May we saw the high profile sackings of conservative media icons Bill O’Reilly and Roger Ailes after their respective histories of serial sexual harassment were revealed.

In the wake of Weinstein’s firing Amazon Studios boss, Roy Price, resigned this week after a producer working for Amazon alleged he sexually harassed her.

Women (and some men) in the online world have responded immediately and in unison to the call of actress Alyssa Milano to use the hash tag #MeToo when sharing , or identifying with, their own stories of sexual harassment or worse. Just a brief review of what has been written elicits a range of emotions in me from shock to bewilderment to anger.

I find it hard to comprehend that so many men all over the world behave in such a way, although I completely accept that they do.

I was raised with three sisters. My first four bosses in recruitment were all women, fantastic women. Each one of them I totally respected and learned much from. Each of these women had high standards and demanded plenty of me as an employee but they treated me with respect and showed care and compassion on the occasions when I was confronted with personal challenges that spilled over into work.

I took that example and did my very best to be the same sort of boss with all the employees, regardless of gender, who reported to me over the years. I never witnessed anything from another male employee that I now wish that I had acted on, or spoken up about.

Yet, clearly, my experience is not in the majority.

Last month, closer to home, the treatment of 7 Network (Adelaide) cadet journalist, Amy Taeuber, after she made a sexual harassment complaint about a senior male journalist, was nothing less than disgraceful. 

The recording that Taeuber made of her 'meeting' with HR when she was presented with, unsubstantiated and anonymous, allegations about her own behaviour, demonstrated exactly how far a powerful employer was prepared to go to demonise young women who make complaints about the inappropriate behaviour of their senior male colleagues. Humiliated and denied her rights Taeuber, understandably, was shocked and devastated to be treated in such a way when she had done nothing wrong and was simply following accepted practise for reporting inappropriate workplace behaviour. 

No prizes for guessing what message the other Channel 7 female employees would have received from Taeuber's treatment.

What can be done?

Blogger Helen Vnuk has some suggestions for men about what we can do:
To acknowledge that this is real, this is pervasive; this is a serious issue that needs to be addressed.
To listen; to not tell a woman what she should have done, but try to understand why her reaction might have been to freeze, or do nothing.
To look out for harassment; to not laugh along with harassers; to do what’s in your power to stop them; to be the good one, the strong one.
To not harass; to read women’s stories, and ask yourself if your sexual comments or jokes or advances or touches have constituted harassment.
And… this is the hardest one… to question yourself, really deeply, about your sexual encounters. US writer Kate Stayman-London, in a Facebook post, has asked the men in her life to think back on their sexual history – to the times when they were overly insistent, or when their partner was “pretty drunk” or “mostly asleep”.
“I need you to think back to the most uncomfortable moments in your sexual history, and I need you to ask yourself if maybe they were worse than uncomfortable for your partner,” she wrote. “I’m asking you to search your soul and think if any of these encounters might have been sexual assault.”
Here’s a personal story published on US recruitment site ERE that tells the story many women could relate to, no matter what country they live in; the reality of men in a position of power acting unconscionably toward a junior, younger, female employee.

What are you going to do to help stop this?

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11 October 2017

Recruitment Tech stocks fall: Are they all sizzle and no steak?

On Monday this week The Age carried a story headlined Freelancer: Australia's fallen tech star.

Age journalist John McDuling briefly lays out the Freelancer story from its well-publicised listing on the ASX in early 2013, its brief moment as a $1 billion capitalised company and the sober reality of its record low share price of 46 cents last week (valuing the company at just over $210 million).

As McDuling notes, the very real problem for Freelancer and its high profile CEO, Matt Barrie is that the expected Freelancer revenue and profit growth have both failed to materialise.

In less than three years, and with start-up funds of just a few million, (Barrie) has built Freelancer into one of the world's leading outsourcing websites, with more than three million users; it has turned over more than $110 million since its inception, and last year transactions worth over $35 million passed through the site, of which Freelancer took $6.5 million. Barrie estimates that last figure will increase to between $10 million and $13 million this year. It's been near 100 per cent growth, year on year, and it doesn't look like slowing."

Well, unfortunately for Barrie the growth rate has stalled, as you can see below from the past five and half years of financial data:

2017 H1
Gross profit
Operating profit (loss)
Share price at 31 December





Currently 0.46

Note: The Freelancer financial year is 1 January – 31 December

Early in 2012 Barrie was quoted as projecting a full year’s gross profit of $10-$13 million. The actual figure was just over $10 million. The bold prediction of doubling of gross profit every year looks like hyperbole when contrasted with the reality of the five year period since 2012. In this period Freelancer’s gross profit has only risen to just under $50 million (had gross profit doubled every year since 2012, it would now top $400 million) with small operating losses being racked each year for the last three years, with this year (after the release of the first six months’ financial data) looking no different.

Maybe Wikipedia’s entry on this topic provides some insight into the dilemma facing Freelancer’s growth prospects.

Feedback from members suggests that web portals such as Freelancer.com tend to attract low paying clients that, although demanding very high standards, pay ~$10 per hour or less. Low-cost suppliers frequently offer to work at rates as low as $1–$2 per hour. Because most projects require bidding, professionals will not bid because they refuse to work at such rates. This has the effect of reducing the overall quality of the services provided.

There’s certainly no imminent crisis at Freelancer with $34 million cash in the bank. From a cursory review of Freelancer’s accounts, it appears that the company is generally well managed with costs being controlled contributing to operating losses gradually being reduced over the past four years.

The major problem is one of expectation. Matt Barrie has been Freelancer’s greatest asset in the PR stakes of tech companies. He has been consistently profiled and quoted in both mainstream and specialist media. Unfortunately Freelancer’s financial performance has not aligned to his profile and predictions.  

The Freelancer 2016 Annual report is a showcase of visual splendour. There are initiatives, graphs, photos, stats, case studies, personal testimonials and awards, all displayed in dazzling colour; across 30 of the first 35 pages.

However, having “Australia’s biggest Start Up and Growth Conference. Sold Out 6 years in a row” or “1 million + downloads of the Android app” or “23.3 million total users (31% growth rate from 2015)” or “10.6 million total jobs posted (53% growth rate from 2015)” or “500k messages sent per day” or winning “23 awards”, doesn’t automatically translate into sales or profit growth, as Freelancer shareholders are very painfully aware.  

Freelancer has also faced increased competition from cashed up new entrants into the market including Upwork (oDesk & Elance), Airtasker, Fiverr and Workana (Latin America).

Earlier this week, Airtasker raised $33 million from investors including Seven West Media to increase market share in Australia and launch into the UK.

What most readers would be unaware of is how a number of these competitors are related to SEEK. Paul Bassat’s Square Peg Capital was part of Fiverr’s $60m capital raising in Nov 2015 and SEEK was part of Workana’s $2m capital raising in Jan 2016

SEEK and its major shareholders clearly like what they see in these new marketplaces and are prepared to put their money where their mouth is. 

Just as the massive success, twenty years ago, of ASX-listed Morgan & Banks Ltd created a level of market expectation that almost all other listed Australian recruitment agencies failed to live up to so too has the massive success of Amazon, Facebook and Google created a level of expectation that is daunting for any tech stock.

One year ago, this week, ASX-listed The Search Party, a company offering access to an de-identified pool of CVs, sourced from the databases of recruitment agencies, reported its “strongest quarter to date” and CEO Ben Hutt, who raised nearly $15 million from investors, was predicting gross profit of $90 million within three years. Five months later Hutt had resigned. Last week industry news service ShortList reported that:

Embattled recruitment marketplace Search Party is seeking to delist from the ASX.

Among the main reasons for delisting is that the strategic review announced in April might lead to "confirmation that the fundamental premises of the product model are uneconomic", if the product and service offering cannot be revamped, company secretary Patrick Raper said in a statement. (my bold).

In other words; The Search Party can’t sell its product for a commercially viable price.

Might this problem be in evidence elsewhere across the recruitment technology space?

Gooroo, a company “building an online marketplace that directly connects employers with the world’s tech talent (initially Microsoft-certified candidates), making it easier for hirers to identify prospective candidates for a job vacancy” listed on the ASX (Gooroo Ventures Limited) on 19 October 2016 at 27 cents, a significant premium on the prospectus offer of 20 cents (raising a total of $4 million from the IPO).

In May this year Gooroo excitedly announced that its trial had ‘smashed’ its target with 8,500 candidates having been matched to 420 open roles. However it was a free trial; only $1000 was booked as revenue and cash in the bank was down to $2.9 million.

In June this year Gooroo won the The Big Data/Machine Learning Innovation of the Year award at the Australian Information Industry Association (AIIA) Victoria iAwards for innovation in the digital economy.

In the past few months, Gooroo have announced deals with Kinetic IT, KPMG and Halcyon Knights. Although these are not insignificant companies none of the three official announcements mention a minimum financial commitment; the agreement only turns into significant money if the counter-party makes it work commercially with, or for, their clients. At this early stage it’s all blue sky revenue with very little, if anything, in the bank right now as a result of these three agreements.

This is a big problem for Gooroo because at their current rate of cash burn, barring any additional capital injections, they have about 12 months left to make their business financially viable. Earlier this week GVL shares were trading at 10 cents.

In their annual report for the 1 July 2016 – 30 June 2017 financial year Gooroo declared total revenue of just $68k and a net loss of nearly $2.7 million. Among the many optimistic noises emanating from the report was this alarming, and revealing, paragraph:

In early 2017 the Company initiated a telephone sales campaign with the objective to offer a free trial access to the Gooroo hiring and matching technology. A third party telemarketing company based in Melbourne was engaged to conduct the trial outreach program. The collapse of the company, coupled with limited commercial returns delivered from this ‘free trial’ campaign directed management to refocus attention in Australia and to focus on mid-to-upper tier enterprises. This decision included a delay to plans to employ sales resources in the USA.

Gooroo Ventures Limited 2017 Annual report, Directors’ report, page 5

This reveals that Gooroo have not worked out how to reliably, or profitably, present their product to a large pool of potential customers. In my view this is absolutely damning information and is a very large pointer to a massive problem that Gooroo must solve before their cash runs out.

Gooroo board members and executives appear to be oblivious to the wisdom contained in, legendary Silicon Valley venture capitalist Peter Thiel’s classic book on investing in startups.

If you’ve invented something new but you haven’t invented an effective way to sell it, you have a bad business – no matter how good the product.

Superior sales and distribution by itself can create a monopoly, even with no product differentiation. The converse is not true. No matter how strong your product – even if it easily fits into established habits and anybody who tries it likes it immediately – you must still support it with a strong distribution plan. 

Zero to One: Notes on StartUps, or How to Build the Future by Peter Thiel with Blake Masters (Crown Business, 2014), page 130

Theil goes on to articulate what he calls the “distribution doldrums” which is the phrase he uses for the “hidden bottleneck” of distribution that afflicts many mid-priced products or services.

In essence, Thiel asserts that the product’s margin isn’t large enough or the potential volume isn’t high enough (at least initially) to employ a substantial personal sales force nor is the product, or its accompanying marketing campaign, sufficiently compelling to generate viral sales. As Thiel concludes “Most businesses get zero distribution channels to work: poor sales rather than a bad product is the most common cause of failure”.

Both Goroo and The Search Party appear to suffer from the same two core problems; a large focus on

i) Agreements, alliances and beta trials (all with impressive accompanying stats) that validate that the product works and people like it but not whether they will pay the commercially viable price

ii) Winning awards from panels of judges, or votes of the public, neither of whom significantly represent the target potential customer for the product.

The focus should have been on rigorously testing the product’s distribution model to ensure its commercial viability.

I’ll briefly mention another recruitment tech stock; Nvoi (“A two sided open market platform, directly connecting hiring managers and skilled professionals to eliminate friction points in contingent workforce management. Nvoi takes care of all the admin including payroll, taxes, superannuation and workers comp”). Nvoi raised $8 million to list on the ASX in July 2016 but in July 2017 reported a loss of $4.2 million and had $3.5 million cash remaining. Nvoi Shares reached a high of 13 cents shortly after listing last year; they current trade at 2.4 cents

In a recent Investor Presentation, Nvoi included the following comments about the recruitment industry: “Current landscape is inefficient … and large”, “Traditional recruitment process is painful, slow, inefficient, expensive, and lacks transparency”. Hmm, that sounds familiar, doesn’t it?

So far Nvoi has spent $4.2 million to generate $4k. Hmm, that sounds familiar, doesn’t it?

Freelancer remains in a much stronger position than The Search Party, Gooroo and Nvoi however one small piece of information contained in their annual report makes me wonder:

Wow, you have to transact a lot of projects at $167 average project value to make the sort of money tech investors are looking for.

Maybe old-fashioned recruitment agencies aren’t dead after all. We may not deliver steak all the time but at least we don’t pretend to sizzle. And we make real money.

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28 September 2017

Does anybody take CareerOne seriously any more?

"We’re not a job board anymore”: CareerOne

CareerOne has abandoned its job board in favour of a "skills marketplace" …….. the company is now actively working to change perceptions about its business.

ShortList, 11 March 2014

CareerOne strategy “Flipping 180 degrees”

CareerOne is refocusing on its core job board platform as part of a strategy and website overhaul, with renewed hopes it can rival SEEK's dominance.

ShortList, 7 July 2015

CareerOne launches “full recruitment service”

CareerOne has launched a new offering that it says will provide a full recruitment service for the same cost as advertising a job online.

ShortList, 3 August 2016

(Head of Career One Recruitment Services, Dorian) Van Zyl is aiming for CareeOne Recruitment Services to reach 200 employees by the end of the next financial year, only 22 months away and to break even before then.

InSight, 9 September 2016

CareerOne shutting recruitment service

CareerOne is closing its recruitment business, its new owner confirmed to ShortList.

The buyer group that acquired the job board earlier this month, headed by Octomedia CEO Oliver Ranck, wants to "wipe the slate clean" and won't be focusing on recruitment, he says.

ShortList, 15 August 2017

Another year, another change in strategic direction for CareeOne.

Thirteen months ago I met Dorian Van Zyl, the recently-appointed Head of Recruitment Services at CareerOne. This is what I wrote on this blog about my meeting:

Van Zyl is aiming for CareeOne Recruitment Services to reach 200 employees by the end of the next financial year, only 22 months away and to break even before then. A road show is currently underway along the Australian east coast to kick start the company's recruitment drive

Achievement of the growth target would, to my knowledge, represent the fastest growth of a recruitment agency, from scratch, in the history of the Australian recruitment industry.

Van Zyl wants CareerOne to deliver a world class recruitment service for the CareerOne clients.
The challenge will be doing this without a wholesale departure of their recruitment agency clients, sufficiently annoyed by CareerOne's play for ‘their clients', to withdraw their custom.

Van Zyle subsequently engaged me to run my Rookie Recruiter Training Program as an inhouse program for the CareerOne recruiters in both Melbourne and the CareerOne sourcing team in Manila. I ran this program across September, October and November. Van Zyl wanted to discuss further training services with me but I declined as I was not interested in working with a company that does not take its contractual agreements seriously (CareerOne paid my invoice seven weeks late).

The writing was on the wall for CareerOne Recruit when Van Zyl left Careeer One six months later, in May this year. In the same month CareerOne parent company, Acquire Learning went into administration, subsequent to an ACCC investigation about its sales tactics in selling courses to consumers, sourced from CareerOne’s job board candidate pool.
Octomedia, headed by CEO Oliver Ranck purchased Acquire Learning’s 90 per cent stake in CareerOne early last month for $250,000 and then recently purchased the remaining 10% from owners Randstad/Monster.

Ranck announced that CareerOne would be integrated into media publishing platforms to “broaden readers' access to jobs, and to help recruiters target passive talent”, according to the report in ShortList (15 August, 2017).
The site will continue under its current branding, and using Monster's technology, for the foreseeable future, Ranck adds.
The current focus is on stabilising the team and ensuring everyone's on board with the new strategy, which Ranck says will stay "very adaptive... changing as we go along".
Are you kidding me? CareerOne’s new owner publicly admits that he doesn’t have a clear strategy for a (much-maligned) asset his company just purchased?

It’s obvious why the recruitment industry doesn’t take CareerOne seriously anymore. Does anybody?

21 September 2017

The Power of Community: Thank you Robert van Stokrom and Charles Cameron

As I considered the impact of the 2017 RCSA International Conference: The Power of Community I started to write about the impact that the conference had on me. Then I read Aspect Personnel’s Founder and Managing Director, Matthew Sampson’s blog on the same topic.

Matt perfectly captured what I, and I suspect many other delegates, experienced : The sense of community with my fellow delegates, the Conference exhibitors and sponsors and, most importantly (for me), the Fijian people (especially school children).

This sense of community does not happen by accident.

It does not happen because some marketing person or event organiser coins a conference theme highlighting community and this automatically creates a sense of community.

A sense of community happens because a leader creates it. In the case of the RCSA, we have two leaders to thank for this; our retiring (after four years) National President of the RCSA, Robert van Stokrom and our Association CEO (of 16 months) Charles Cameron.

Robert has been tireless in his commitment to fulfilling the aims of the RCSA over his four years as National President. He has presided over one of the most significant transitions that an association can have, namely the installing of a new CEO and the inevitable changes that come from having a new association leader.
From where I view things, and from talking to other industry players (both RCSA members and non-members), it’s clear that Robert has nailed this critical part of his role.

Although it is still relatively early days, it is clear that Charles Cameron has been an outstanding appointment for our industry. Charles has led from the front. He has done the most important thing for our industry – he has been out there in each state, and across the Tasman to New Zealand, multiple times in order to meet and engage with RCSA members and non-members. Just as importantly, Charles has met and engaged with industry vendors and governments of both sides.

The building sense of community in our industry is creating momentum to fulfil on RCSA 2020 Leadership specifically the Mission; Through our leadership in the world of work, and empowerment of members, we will improve lives, communities and the economy.

At the Conference dinner, National Board member Steve Heather provided a wonderfully appropriate tribute to Robert (see photo). I was very glad to be there to witness it. Thank you Steve for doing Robert’s service some form of justice.

The Power of Community in the recruitment industry – it’s real, alive and growing. Thank you Robert and thank you Charles for your respective leadership in making this happen.

Everybody get on board - we have a very exciting future ahead of us! 

Note: You can view a six minute video capturing the mood of the 2017 International Conference here. 

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