30 October 2014

Why a strong industry body creates a powerful industry

One of the most significant events in a series of events that lead to the replacement of Kevin Rudd by Julia Gillard as Prime Minister in mid-2010, was the massive anti-mining super profits tax campaign run by the Minerals Council of Australia. Minerals Council's (now former) CEO, Mitch Hooke, was already known as a formidable lobbyist prior to the May 2010 announcement of the new tax. Having had his ear close to the ground in Canberra, Hooke had, for some months, been anticipating something like the mining tax.

Immediately on the front foot after the Labor Government's announcement of the new tax, the Minerals Council unleashed a $17.5 million TV advertising blitz that averaged 33 ads a day during June 2010. By the end of that month, Rudd was gone and new PM, Gillard, in one of her first major policy statements, negotiated a significantly watered-down super-profits mining tax.

The mining companies do not need any convincing that a well-funded and effective industry body has a critical role to play in ensuring their voice is heard in the corridors of power in Canberra. This united front is still critical even when the CEOs of the three largest mining companies in Australia (BHP Billiton, Rio Tinto and Xstrata) could, in all likelihood, pick up the phone to any cabinet minister and have their call accepted, or returned.

The mining industry is about forty times the size of the recruitment industry in Australia (in terms of contribution to GDP) but they still don't take anything for granted in terms of their industry having an important say in policy that impacts its members.

The recruitment industry is dominated by very small companies; a majority of companies in our industry employ less than twenty staff.

Yet the areas of (both state and federal) government policy that impact our industry are significant. You only have to consider such issues as employment awards, 457 visas/skills shortages, working holiday visas, population growth, overseas students, occupational health and safety, payroll tax, workers' compensation and superannuation, to appreciate how impossible it would be for any recruitment company owner or manager to stay abreast of industry issues through their own means.

Then start to consider how a recruitment agency owner, or a small group of owners, would go about sparing the time or resources to invest in an effective lobbying campaign around an issue of importance to them. It would go nowhere as the respective owners would despairingly realise that their chances of success would be minimal and they are better off directing their efforts to their own business operations.

Lobbying is a (mostly) thankless and very time consuming task. Often it can be to ensure that the industry is no worse off than they are now. Members, with a short term focus grumble about ‘lack of progress', yet the status quo can often represent a win in the absence of policy change that takes the industry backwards.

As an example, just consider the ACTU's Secure Jobs campaign. Clearly this campaign has the potential to have a major impact on the recruitment industry, especially those companies that provide temporary, casual and contract staff.

Even though the current Federal Government is unlikely to provide any short-term joy to this campaign, a change of government might very quickly cause an adjustment to the landscape. A productive relationship with the Shadow Employment Minister (currently Brendan O'Connor) would be a prudent long term investment of time not just for the RCSA but for any industry lobbyist, given how employment legislation impacts all industries.

The role of any industry body is to build relationships and credibility across the whole political spectrum, for both current and future benefit.

You only have to see the impact of the recent changes to ACT's payroll tax regime on recruitment agencies, to understand the importance of being at the table before legislation is brought before parliament.

But! I hear you cry. Surely this tax change is an example of where our industry bodies (either the RCSA or ITCRA) should have prevented such lunacy being enacted into law?

The reality is that the RCSA employs fourteen staff and ITCRA employs six staff. The RCSA's total income for the 2013/14 financial year was $3.8 million. By contrast, the Minerals Council of Australia has twelve executive directors, all with teams underneath them and in the 2013 calendar year reported revenue from operations of $21.2 million.

The RCSA and ITCRA relies heavily on member volunteer labour to get as much done as it does.

Of course the RCSA and ITCRA have much broader roles than just government relations and advocacy. Consider the RCSA also undertakes much work in the areas of:

      i.        Professional development
     ii.        Workplace compliance (eg awards, contracts, OH&S, etc)
    iii.        Service delivery Standard
   iv.        Ethics and Code for Professional Conduct

I invite you to read the 2013/14 RCSA annual report to further understand the RCSA, its role, the work that it does and the volunteers and staff that undertake that work.

The unfortunate reality is that 816 recruitment agencies were RCSA members (both Australian and New Zealand) as at 30 June 2014. According to IBIS World there are approximately 6,800 recruitment agencies in Australia. Basic maths tells you that a very large majority of recruitment agencies in this country are not RCSA members.

Can you imagine what a potential difference even fifty per cent industry membership would make to the power and impact of the RCSA?

Employment, skills and the labour market are all critical areas for the efficient functioning of market economies such as those in Australia and New Zealand. The recruitment industry is a key stakeholder in all three of these areas.

A united, well funded industry body that represents a majority of the industry is a very important part of having our voice heard, and taken seriously.

I ask you to consider joining the RCSA or ITCRA as an individual member or as corporate member.

Your industry needs you.

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4 comments:

  1. Ross,
    An articulate and insightful article. As both a small recruitment business owner and as the current Vice President of the RCSA, I fully concur with your observations and thoughts. While reacting to industry threats is part of an association's purpose it's the pro -active efforts of the association which can prove most valuable long term. As you've pointed out, our income is limited by the level of memberships we hold. The hardworking team of employees, councillors and directors of the RCSA could achieve much more for our members if more Recruiters and Recruitment companies embraced the logic expressed in your commentary. I encourage those who have yet to join the RCSA to do so, it is a wise business investment.

    Peter Langford
    Director
    HORNER Recruitment
    Melbourne

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  2. Hi Ross,
    Thanks for your comments in your blog on a strong Industry body. Over the years the RCSA has seen the need for a higher profile and stronger representation at the tables of Government and Business. We have made significant inroads and more often we are included in the process for consultation when matters of employment, workforce and recruitment are up for discussion. We of course always seek greater recognition as an industry body, and indeed an industry which is intimately involved in the future of employment and productivity in Australia and New Zealand. Increased membership is a significant factor in the success of our goals.
    Robert van Stokrom CEO DFP and RCSA President

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  3. Excellent and thank you Ross.
    As an ex mine manager (qualified mining engineer) and now RCSA board member (20 years as a recruiter) I've seen the 'might' the mining industry brings to persuasion.
    Influencing through industry bodies such as the RCSA takes a massive effort by volunteers (as most of us are) and also bravery to stand and make points boldly so as to get noticed.
    Mitch Hooke as much as he was well funded used to irk me at times due to his blunt forthrightness, however, he surely go noticed and as a result often got a seat at the table.
    At the RCSA this is also part of what we are endevaouring to do but as you rightly say, at the core it requires a well funded executive and that requires members. We need more to further crank up the great work being done.
    Thank you again Ross for your support.
    Steve Heather
    Managing Director

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  4. Imagine if the RCSA across NZ and Australia had the teeth to drive business outcomes visa workforce planning and employee protection to help develop whole of country growth and productivity....just imagine#dontdreamit #justdoit

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