President and Group Managing Director of Spherion Group, Andrea Galloway oversees more than 50 offices and 2000 employees. We catch up with her to discuss recruitment and training in Asia Pacific.
In a recent Spherion survey, you found that nearly 80 percent of Australian respondents were not happy with their jobs. What do you think is the reason behind this?
As we all know, times have changed. Our parents (and maybe even some of us) are of a generation where you had a job for life. You felt loyalty towards an employer and accepted the working conditions, whatever they may be. That was your job, that was the company you worked for, and that was where you would stay.
Now, we have the X and Y generations coming through and the rules have all changed. We now feel loyalty to our leaders and managers—not necessarily the company, and we only stay as long as we respect or accept that leadership. This generation wants freedom of choice, greater flexibility in work conditions and in return, are demanding greater responsibilities.
Over the past few years, employers have needed to become more flexible. They need to involve their employees far more in the business, consult with their employees more often, and offer them challenging careers in order to retain them.
At the moment we are seeing a period of adjustment, where companies are still working through these demands and letting go of the old ways. And while this adjustment is happening, we are seeing many employees that are no longer satisfied with their employer. It will certainly change, we are seeing the beginning of this already, and over time we expect this number to drop noticeably.
Research by IT&T recruitment agency newcomer Best International has found that 89 percent of corporate IT&T employers are dissatisfied with the value recruitment agencies add to the recruitment process. Do you agree? Why do you think this is (or is not) true?
I’m really surprised with this finding, and must admit, I don’t agree with it. There are many high quality, competent recruiters in IT&T in Australia. A good agency can bring much value to the recruitment process. It would have an extensive database of possible candidates, not just limited to the unhappy jobseekers who may see your ad in the paper or on the internet.
For example, using our internal database of registered candidates and Spherion graduates, we can quickly access the right people with the right skills and approach them on a client’s behalf. These same people, who may be currently employed and not actively looking for work, would never have seen your employment ad.
An agency, as an external third-party, is also better positioned to help a company understand and define its corporate culture. Those making the hiring decision are often too close to see this clearly, and aren’t always able to distinguish between candidates that make a good or mismatched cultural fit.
A good agency will place great emphasis on building and maintaining relationships, on getting to know your business, the company’s culture and your detailed requirements. It should also understand your market and the differences in each area, for example, what’s needed in Sydney is usually different from what you need in Adelaide. The agency should also be proactive, responsive to your needs and set service level agreements in consultation with you.
Is there an IT skills shortage in Australia?
Yes and no. Over the last couple of years, the IT industry has undergone many changes, not least of which is the state of the global economy. In 2000 there was a huge demand for IT workers and an under supply of skilled people—put simply, very favourable conditions existed for workers. The current market demand is around 25 percent less than in 2000.
We are now faced with the situation of having a large supply of skilled IT workers. However, while there is a demand for skills in the market, the majority of available candidates do not align with current market requirements. Meaning that there is a skills shortage in particular areas, but not overall.
Current employment opportunities require very specific skills, for example a focus on systems integration or architecture, which will assist companies to make existing infrastructure more robust and efficient. There are very few new, large-scale projects that require a large investment in technical resources and delivery.
Systems integrators and consulting firms are currently working in a very competitive market, and success in winning new business comes when they have a comparative advantage. That is, by having the most skilled and capable people. Hence, when employing new people only the most highly skilled are marketable, so people with general or minimal experience are difficult to utilise on projects.
In what areas does Spherion specialise with regard to its outsourcing operations?
Spherion provides a number of outsourcing services, and not just through our Outsourcing Solutions Division, which specialises in Human Resources Management Information Systems (HRMIS), and includes payroll and fully outsourced processing and systems management.
The other Spherion divisions have experience and strength in various outsourcing arrangements, too. Recruitment Solutions currently has agreements with a number of companies for a master vendor relationship, where we look after all recruitment requirements, including managing other vendors. Another strength in Spherion is call centres; for example, we have a global agreement with Cisco to manage its call centre operations located in Sydney, Amsterdam, Las Vegas, and San Jose. The local team is responsible for all aspects of recruiting, developing, and managing the staff in the Sydney centre.
Our Education division also partners with companies to manage their complete training needs. This can be as basic as running an onsite one-off short course, to a complex master vendor relationship, and everything in between. The Managed Training Service sees Spherion take responsibility for all training required by a company and also manage relationships with other suppliers as needed. Customers include the Department of Immigration and Telstra, who last year nominated Spherion for the Telstra vendor of the year award.
The Technology Solutions Division has a real strength in outsourcing, developing customised technology solutions often on a project basis. Our core focus and capability is based on supporting the application life cycle, from planning to design, development, testing, implementation, and support. For example, we developed the infrastructure behind the government’s first home owner’s grant.
According to a report by IBISWorld, Spherion Group was one of the top 20 money losing companies last year. What were the reasons behind this?
Due to changes in US laws regarding accounting practices, Spherion Group recognised a one-off goodwill write off of $178 million for the 2002 financial year. This relates to Spherion’s purchase of Computer Power, and is a result of the required annual review of intangible asset balances in accordance with SFAS No. 142, that implemented changes to the way that goodwill is measured for reporting purposes.
Without this charge, Spherion Group was performing very positively and would have achieved healthy profits.
Is Spherion going to be able to keep things in the black?
Looking forward, our agenda is to continue growing the business, and we are going to achieve this regardless of what the market is doing. If the market remains flat, then we’ll realise this by continuing to eat away at our competitors’ market share.
While remaining focused on external issues, we’ve also acknowledged that we need to get our own house in order. For the past year, we have really focused on becoming an integrated organisation, leveraging shared group services internally such as finance, HR, IT, and marketing to streamline our operations. Previously, Spherion acted almost as a holding company, with each division acting independently. This meant that we were doubling up, and sometimes quadrupling, some of these functions.
In a similar way, we’ve also been investing in systems and infrastructure, to further streamline our business. Spherion as it exists today, came together from a long history of acquisitions, and each new acquisition came with its legacy systems. Until recently, we had more than 50 e-mail points across the region, which were limiting interaction between the divisions and also office to office. These disparate points have now been rolled into one, and just eight servers have replaced the more than 50 server functions used previously. This is one example of the consolidation process we’ve been going through. It’s easy to see the efficiency and productivity gains this will translate to.
