15 February 2017

Reputation: hard won and easily lost

Many years ago in the infancy of my stint as a Sydney temp accounting recruiter, I was asked by a very good client of mine, Thomas Cook (a brand no longer operating in Australia), if I could supply them with a secretary (as they were mostly called in those days) for a two week assignment. At that stage I was doing very well with my numerous accounting temps at the company and, with more than a slight whiff of hubris, decided that even though I had never interviewed let alone placed a secretary before, I was going to fill the job.

I can’t recall how I sourced the candidate but I certainly remember that it was a disastrous placement; the candidate didn’t have the skills to do what was required and I had to tell her that her services were no longer required after day one.

It was a dent in my, up until that point, very good reputation with the client. It caused my client embarrassment internally and, unsurprisingly, he didn’t allow me to forget it for a long time. My glowing reputation with the client was brought down to earth with a loud thud.

It was a lesson hard learned and not easily forgotten. Although there were other mistakes I made with assignments outside of my competence, the pain of a damaged reputation was never more acute than that Thomas Cook stuff up.

The value of reputation is especially critical in a service business such as recruitment. This trust is a very profitable part of a recruiter’s relationship with an individual client. A deep level of trust enables a temp recruiter to confirm temps into a job without the client requiring a resume to review or a candidate to interview. A perm recruiter’s similarly high level of client trust is displayed when the client does not need to make a decision on which referred candidates to interview – all the recommended candidates are booked in.

That trust is hard won and easily lost as a result of complacency or overconfidence or both.

Last week we saw an example of this when the Australian Financial Review published a story under the headline Australia Post used executive recruitment agency that underpaid workers. The story opened:
  
Australia Post is facing legal action for using an executive recruitment agency to engage low-level workers at below the minimum wage.
The arrangement under the supervision of a senior executive member of Australia Post saw a group of four casual data entry workers paid $19.48 an hour when they should have been paid at least $32.16 an hour.
The workers, most in their twenties, were not paid overtime or penalty rates and one was allegedly underpaid $4300 in just four weeks.
The Communications Electrical and Plumbing Union has taken Australia Post to the Fair Work Commission, accusing it of breaching its enterprise agreement which required it to notify the union if it contracted out work and to pay contractors the same as Australia Post workers.
The union alleges that in January this year national credit manager David Gibkus interviewed the employees for a short-term project and then directed them to sign up with executive recruitment firm Alex Kaar.
The workers signed employment contracts with Alex Kaar, which promised them $160 a day including superannuation, and then worked at Australia Post head office under the direction of Mr Gibkus.
At 7.5 hours a day, the pay equated to $15.59 an hour plus a 25 per cent casual loading, well below the minimum hourly wage of $17.70.
When I read this story, my first response was “What the hell was the Alex Kaar consultant thinking?”

Consider what you find on the Alex Kaar website:

Notice the tag line under the brand name: 'Executive & Board Appointments'. Notice that nowhere under Our Services does it list temporary recruitment (used to identify hourly rate, mostly award-level semi-skilled workers) distinct from Contracting Services (contractors who are, commonly but not always, daily rate non-award highly skilled workers).

It’s very clear, in this instance at least, that Alex Kaar provided services to Australia Post well outside its self-identified areas of expertise and competence.

To compound his company’s mistake, Alex Kaar MD, Chris Karagounis was quoted in the AFR story:

“….Karagounis said his firm did not normally engage low-level employees but would occasionally provide "payroll functions" to clients.

"We make no money from this, we do it as a favour," he said.
"We don't set the rates, we get told what to do."
Mr Karagounis said the underpayments were likely a mistake in the amounts provided by Australia Post.
"We will fix it on behalf of Australia Post because it's the right thing to do," he said.
I am not sure about you, but blaming your client for something you failed to do (check your legal obligations as the employer of the temps) in an area you don’t identify as part of your service offerings (therefore it’s even more obvious that you should be treading carefully) is not an approach I would recommend to any recruitment agency owner.
It also appears to be at odds with what can be found under Our Values on the Alex Kaar website:

Outstanding customer experience?

Integrity?

Partnerships?

Legal obligations?

Hmm, I am sure Australia Post would have every right to feel that Alex Kaar have not acted consistent with their service promise and brand values.

The result has been that Australia Post’s name has been dragged into the mud at an especially inopportune time. On the same day as the Alex Kaar story was reported, Australia Post’s managing director, Ahmer Fahoud, had his annual remuneration ($4.4m salary, $1.2m bonus) publicly revealed for the first time, leading to much negative comment, with even the Prime Minister, Mr Turnbull, weighing in with his views.

Credibility: it’s hard won and easily lost, especially attempting to deliver services in an area outside your stated competence. Just ask Alex Kaar.
  
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