16 February 2010

The 2010 Intergenerational report - some thoughts

In case you weren't paying much attention, in the first week of February the Federal Government released the much-leaked 2010 version of the Intergenerational Report.

Needless to say the contents hardly broke any new ground - it just confirmed what we have all been hearing anyway, namely:

Australia's population is increasing rapidly (projected to be 35 million within 40 years)

Australia's population is ageing (projected there will only be 2.7 people of working age to support each Australian aged 65 years and over by 2050, compared to 5 working aged people per aged person today and 7.5 in 1970)

Australia's workforce participation rate is expected to fall (from a average of around 65% in the past 40 years, to 61% in the next 40)

Government spending on health and aged care will continue to rise (from 22.4% of GDP in 2015-16 to 27.1% of GDP by 2049-50)

The one line summary of the report could be ‘we are in the (financial) sh*t unless our workforce productivity substantially increases and Government spending is cut in real terms.'

To quote from the report's executive summary:

‘With the ageing of the population, and a continuation of the productivity trends of the past 30 years, growth in real GDP per person is projected to slow to 1.5 per cent per annum. If productivity growth were increased to 2 per cent per annum, the economy would be over 15 per cent larger in 2049 50, GDP per person would be around $16,000 higher and fiscal pressures would be reduced as a result of an enhanced capacity to fund government services.'

What does all this mean for Australian recruitment agencies?

To me the report just reinforces the importance of recruitment agencies continuing to undertake the following:

1. Educating employers about the skills, competencies and motivation of older workers (Australia's current workforce participation rate of older workers still lags the US, the UK, Canada and New Zealand)

2. Educating employers about the skills, competencies and motivation of immigrants

3. Educating employers about the benefits of complementing their permanent full-time workforce with temps, contractors, consultants, part-timers and out-source providers and other components of a flexible workforce

4. Educating employers about the benefits of providing ongoing learning and development opportunities for their employees

You might think it odd that I see these types of conversations as being the responsibility of recruitment consultants when it would be easy to say ‘well, that's the government's responsibility'. Of course the Federal Government is ultimately responsible for the health of the Australian economy and hence undertaking education campaigns on issues that will make a big impact on our economic well-being.

However as we know governments (of all persuasions) are mostly deaf to the day-today realities of the marketplace. By contrast nobody is more aware of these realities than a well-connected and savvy recruitment consultant. Nothing impacts on individual organisational performance in quite the same way as hiring, developing and retaining top performers - the specialty of the recruitment industry.

The factor that will most ensure that the recruitment agency recruiter continues to thrive in the next decade and beyond, is the expertise of both the individual recruiter and the expertise within the recruitment agency they represent.

This expertise ensures we are the first choice destination for our candidates to gain reliable, relevant information about their career and the job market. This expertise also ensures we are the first choice destination for our clients to gain reliable, relevant information about their organisation's employer brand and the candidate market.

This expertise should, and has to mean that we deliver recruitment results better and faster than any other choice that both the client and the candidate have.

If we don't do this then I would suggest that we are going backwards - fast.

Don't take my word for it - in a recent interview, Alistair Cox, the (relatively new) global CEO of Hays PLC makes it absolutely clear that both recruiter ‘expertise' and training and development of Hays employees are two critical planks in his platform for Hays to be a truly global, and dominant, brand in the recruitment world.

Any recruiter worthy of the title ‘Recruitment Consultant' should already be well versed in both understanding and effectively communicating the relevant current trends in their niche market.

The recruitment consultant who becomes a ‘trusted advisor' in the eyes of both the clients and candidates, is one who can add to this existing expertise the understanding and effective communication of the broader medium to long term trends impacting the Australian economy.

It's unlikely you will use this expertise every day but when the opportunity arises (probably when you least expect it), this expertise could make all the difference to the impact that you create when you meet a GM, CEO or other person who could open the door to many new opportunities.

How are you building both your macro and micro expertise?

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