June 2012.pdf - RCSA

international comment
Ciett Report
Adapting to change…
the new economic reality
In the March issue I shared with you
news that I would be releasing the Boston
Consulting Report Adapting to Change
which was commissioned by Ciett, at a
series of events for RCSA Members in
Australia and New Zealand during April and
May. This report demonstrates the critical
role that private employment agencies play
in adapting to the changes that economies
around the world are experiencing, the
creation of better labour markets and the
creation of decent work.
The findings of this report are particularly
important to ensure there is a balanced
debate when the ACTU releases the findings
of its enquiry in to what it refers to as “insecure
work” at the ACTU Congress in May.
Already elements of this report are being
leaked in the media and they paint a dim
picture of our industry. However, by comparing
agency work to all forms of non-permanent
employment, the ACTU report fails to recognise
the lifestyle choices that many of our
temporary workers and contractors are
making to gain greater control and flexibility
over their lives, the role we play in helping
disadvantaged job seekers secure more
regular employment, or the impact constantly
changing economic dynamics are having on
employers.
It is clear that economic cycles are becoming
more volatile and adapting to these new
dynamics is one of the greatest challenges
Steve Shepherd FRCSA (Life) and Immediate
Past President, is the RCSA’s representative
with Ciett and a member of the Ciett Board.
businesses face today. Economies across the
world are experiencing deep structural shifts
at sectoral, geographic and demographic
levels. Consequently, organisations are
struggling with a skills mismatch as business
requirements change rapidly. The increased
incidence of structural change (globalisation,
demographic evolution, sectoral and IT shifts,
increased volatility and complexity) in recent
years has brought a new set of challenges to
the labour market. These include unpredictable
and volatile employment markets, persistent
high levels of unemployment – particularly
among youths – a mismatch between the
supply and demand of skills, the increased
importance of transitions in the labour
market to reduce segmentation, and an
increased need for the development of
contractual arrangements that are not
detrimental to decent work. These are all
issues we see in Australia and New Zealand,
and our industry is part of the solution, not
part of the problem, as we help organisations
adapt to the impact that each cycle has on
their employment levels.
The Ciett Report found that our industry
provides innovative and reliable solutions
that enable organisations, whether public
or private, to manage seasonal fluctuation
in demand and adapt their workforce needs
accordingly.
Cyclical fluctuations, while less predictable,
are increasingly a fact of life as economies
alternate between periods of positive and
negative growth and, as leading service
providers, private employment agencies are
well placed to enable adaptation to these
structural changes. With our international
reach and specialised market knowledge, our
industry facilitates adaptation to this change.
Over the coming months, it will be important
that we all continue to deliver this message
to governments and employers to ensure we
continue to play a role in Australia’s and New
Zealand’s economic futures. In order to do
this I would like to share with you the key
findings of the Ciett Report, Adapting to Change.
Our industry enabled organisations to adapt
to new labour market conditions, facilitating
transitions for economies, businesses and
individuals, and driving social and economic
progress. We reduce time lags between
recovery and job creation and help companies
and economies to adapt better and faster to
cyclical and structural changes, and we help
economies to adapt to structural shifts by
re-skilling and up-skilling workers to match
supply and demand within the labour market
The report shows that in Germany,
companies using agency workers accelerate
faster out of a downturn (revenue growth in
Germany for companies using PrES is higher
than those not using PrES)
And 76 per cent of employers cite a quick
response to business demands and absorbing
activity fluctuations as the main reasons for
making greater use of private employment
services.
Private employment services
ensure better labour markets;
providing a stepping stone,
creating jobs and increasing
participation
Our industry increases labour market
participation and reduces frictional
unemployment by ensuring a better and
faster match between supply and demand of
work and increasing labour market transparency.
A key finding of the report is that 76 per cent of
organisations who use private employment
services would not consider hiring permanent
workers as an alternative to agency workers
therefore, private employment services
reduce structural unemployment by creating
new jobs which, in many cases, would
otherwise not exist. This is borne out by the
fact that in countries where there is a high
private employment services penetration
rate there is typically a lower unemployment
rate than those with lower agency
penetration rates.
The report also shows the probability of
a worker securing more permanent work is
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