1. RCSA Web Survey Round 27 – August 2008

2. Executive Summary Summary  Business confidence has dropped to the lowest since 2001, a drop of 7%. Expectations of growth have also dropped 2% to 4%. oSA is slightly less confident while WA is slightly more confident  Labour market scores indicate a strong easing in the difficulty of finding appropriate applicants while there remains issues with the skills, capabilities and attitudes oAll locations are finding very similar labour market conditions except SA is getting more applicants for positions  Staff turnover has risen 8% to 36% pa and staff growth has fallen by 1.8% to 7.6% pa oQld has slightly higher turnover and NSW less while SA had higher staff growth while NZ had less  There has been a substantial drop in permanent full-time placements and a rise in on-hire employment and contractor placements.  16% of on-hired employees converted to permanent positions in the last six months while permanent employees converting to on-hired employment was 4%  The majority of placements are on-hire & contractors and the proportion of those placements as part of the total has risen from 84% of all placements to 91% while permanent placements have dropped by 6% rise to 9%  The proportion of total revenue for all services has remained stable with recruitment services accounting for 45% while on-hired employment & contracting is at 50% of the total oSA and WA get a larger proportion of revenue from on-hired employees & contractors while VIC gets substantially less oSA gets a smaller proportion of from recruitment services Note: If locational differences are not mentioned, the differences are insufficient for comment

3. Executive Summary Summary – issues of most concern  Concerns about the state of the economy have jumped to the top at 84% while lack of suitable candidates remains the high at 2nd spot. Concerns about the lack of hiring intentions of clients has jumped from 5th place to 3rd. Difficulty in finding suitable recruitment staff has declined 10% to 59% oNSW is more concerned about immigration issues and least concerned about industrial relations oVIC is less worried about finding suitable recruitment staff oQLD is more worried about finding suitable recruitment staff and less concerned about price undercutting, hiring intentions of clients and price undercutting in the industry oSA is more concerned about 9 out of the 17 issues difficultly in retaining suitable recruitment staff, industrial relations, workers' compensation legislation, maintaining profitability/fee levels, legal issues about on-hired staff, OH&S Issues, unfair dismissal and casuals, employment legislation, difficultly in finding suitable recruitment staff oWA is more concerned about nine out of the 17 issues legal issues about on-hired staff, employment legislation, difficultly in retaining suitable recruitment staff, immigration issues, workers' compensation legislation, OH&S Issues, difficultly in finding suitable recruitment staff, unfair dismissal and casuals, price undercutting in our industry oNZ is more worried about lack of hiring intentions by clients, industrial relations, maintaining profitability/fee levels, price undercutting in our industry, restructuring industries and less concerned about difficultly in finding and retaining suitable recruitment staff Note: If locational differences are not mentioned, the differences are insufficient for comment

4. Executive Summary - Skills  The top 3 skills with the biggest shortages are non-building professional engineers, associates and technician 6% - 10% drop in demand.  The demand for health professionals and nurses remains static while rising to 3rd and 6th place. The demand for business professionals has slumped 15% and dropped from 2nd to 4th place.  Demand for other skills had generally dropped 6% - 10% and is consistent with a general easing of the economy and labour market conditions  The top 12 skills shortages being: oNon-building professional engineers oNon-building engineering associates and technicians oHealth professionals oBusiness professionals oBuilding associates and technicians oNurses oBuilding professionals oElectrical trades (building) oNon-building electrical/electronic trades oIT and telecommunications professionals oMetal trades oCarpenters and joiners

5. Excutive summary cont’d  The majority of respondents (84%) source candidates by approaching passive candidates. Nearly three quarters use niche or specialist internet job boards while two thirds use refer a friend incentives oWA and SA are more likely to approach passive candidates and use refer a friend incentives oNZ is less likely to use social networking sites

6. Process  Web survey oE-mail business heads in both NZ and Australia o191 responses oData collection began early August 2008 and completed 22 August 2008 oThe total annual revenue of respondent companies is $6.07 billion up from $2.29 billion last round. This large change is due to a change in the way the turnover of large companies is accounted for oThe proportion of $100m+ companies decreased by 7% from last round to 3% but the number remained similar as the sample size is larger

7. Demographics of sample The number of sole traders in the sample has increased 4% to 16% Location differences: There are a higher proportion of sole traders in NZ

8. Demographics of sample The total annual revenue of respondent companies is $6.07 billion up from $2.29 billion last round. This large increase is due to a change in the way the turnover of large companies is accounted for. Total Annual revenue $m Total Australia=$5.52b Approx 91% of revenue

9. Demographics of sample The proportion of $100m+ companies decreased by 7% from last round to 3% but the number is similar as the sample size has increased.

10. Number of clients in the last 3 months

11. RCSA members confidence about business improvements in the next three months has decreased considerably Differences None

12. Business confidence has dropped to the lowest since 2001, a drop of 7%. Expectations of growth have also dropped 2% to 4%. Scale: 0=strongly disagree 50=neutral 100=strongly agree Differences None Location differences: SA is slightly less confident while WA is slightly more confident

13. Staff turnover has risen 8% to 36% pa and staff growth has fallen by 1.8% to 7.6% pa Differences Qld has slightly higher turnover and NSW less while SA had higher staff growth while NZ had less

14. While still difficult, there has been an easing in the difficulty of finding appropriate applicants. Scale: 0=strongly disagree 50=neutral 100=strongly agree Differences All locations are finding very similar labour market conditions except SA is getting more applicants for positions

15. Labour market scores indicate a strong easing in the difficulty of finding appropriate applicants while there remains issues with the skills, capabilities and attitudes -8% -10% -14% +8% -8% +8%

16. Staff placed and on-hired workers There has been a substantial drop in permanent full-time placements and a rise in on-hire employment and contractor placements. 16% of on-hired employees converted to permanent positions in the last six months while permanent employees converting to on-hired employment was 4%. August 2008 April 2008 Note: variability may arise because of a few large numbers – this is a problem of small data sets

17. The majority of placements are on-hire & contractors and the proportion of those placements as part of the total has risen from 84% of all placements to 91% while permanent placements have dropped by 6% rise to 9%

18. The proportion of total revenue for all services has remained stable with recruitment services accounting for 45% while on-hired employment & contracting is at 50% of the total Difference from average SA and WA get a larger proportion of revenue from on-hired employees & contractors while VIC gets substantially less SA gets a smaller proportion of from recruitment services

19. A substantial proportion of companies have neither contractors nor on-hire employees.

20. The majority of respondents (84%) source candidates by approaching passive candidates. Nearly three quarters use niche or specialist internet job boards while two thirds use refer a friend incentives Differences WA and SA are more likely to approach passive candidates and use refer a friend incentives NZ is less likely to use social networking sites

21. Concerns for the present and near future (all respondents) Concerns about the state of the economy have jumped to the top at 84% while lack of suitable candidates remains the high at 2 nd spot. Concerns about the lack of hiring intentions of clients has jumped from 5 th place to 3rd. Difficulty in finding suitable recruitment staff has declined 10% to 59%.

22. Concerns for the present and near future (National issues) In Australia concerns about legal issues (45%) and employment legislation (42%) remain the top issues but have each dropped 10% while in NZ the employment relations act is the top issue. Immigration concerns have lessened 20%

23. Location differences Note: <50=less than neutral 50=neutral >50 = greater than neutral Compared to average NSW is more concerned about immigration issues and least concerned about industrial relations VIC is less worried about finding suitable recruitment staff QLD is more worried about finding suitable recruitment staff and less concerned about price undercutting, hiring intentions of clients and price undercutting in the industry SA is more concerned about 9 out of the 17 issues difficultly in retaining suitable recruitment staff, industrial relations, workers' compensation legislation, maintaining profitability/fee levels, legal issues about on-hired staff, OH&S Issues, unfair dismissal and casuals, employment legislation, difficultly in finding suitable recruitment staff WA is more concerned about nine out of the 17 issues legal issues about on-hired staff, employment legislation, difficultly in retaining suitable recruitment staff, immigration issues, workers' compensation legislation, OH&S Issues, difficultly in finding suitable recruitment staff, unfair dismissal and casuals, price undercutting in our industry NZ is more worried about lack of hiring intentions by clients, industrial relations, maintaining profitability/fee levels, price undercutting in our industry, restructuring industries and less concerned about difficultly in finding and retaining suitable recruitment staff

24. Skills shortages by occupation

25. Skills shortages by occupation – top 20 The top 3 skills with the biggest shortages are non-building professional engineers, associates and technician 6% - 10% drop in demand. The demand for health professionals and nurses remains static while rising to 3 rd and 6 th place. The demand for business professionals has slumped 15% and dropped from 2 nd to 4 th place. Demand for other skills had generally dropped 6% - 10% and is consistent with a general easing of the economy and labour market conditions. Total shortage

26. Skills shortages by occupation – bottom 20 Total shortage

27. Top 10 skill shortages by location  NSW 1.Non-building professional engineers 2.Non-building engineering associates and technicians 3.Business professionals 4.Building associates and technicians 5.IT and telecommunications professionals 6.Health professionals 7.Building professionals 8.Electrical trades (building) 9.Nurses 10.IT and telecommunications technicians  VIC 1.Non-building professional engineers 2.Non-building engineering associates and technicians 3.Business professionals 4.Health professionals 5.Electrical trades (building) 6.Non-building electrical/electronic trades 7.Building professionals 8.Building associates and technicians 9.IT and telecommunications professionals 10.Plumbers

28. Top 10 skill shortages by location  Queensland 1.Non-building professional engineers 2.Non-building engineering associates and technicians 3.Health professionals 4.Business professionals 5.Building associates and technicians 6.Building professionals 7.IT and telecommunications professionals 8.Electrical trades (building) 9.Nurses 10.Non-building electrical/electronic trades  South Australia 1.Electrical trades (building) 2.Non-building engineering associates and technicians 3.IT and telecommunications professionals 4.IT and telecommunications technicians 5.Non-building electrical/electronic trades 6.Carpenters and joiners 7.Non-building professional engineers 8.Nurses 9.Health professionals 10.Plumbers

29. Top 10 skill shortages by location  Western Australia 1.Non-building professional engineers 2.Non-building engineering associates and technicians 3.IT and telecommunications professionals 4.Electrical trades (building) 5.Business professionals 6.IT and telecommunications technicians 7.Health professionals 8.Non-building electrical/electronic trades 9.Carpenters and joiners 10.Plumbers  New Zealand 1.Non-building professional engineers 2.Non-building engineering associates and technicians 3.Building associates and technicians 4.Nurses 5.Health professionals 6.Non-building electrical/electronic trades 7.Metal trades 8.Electrical trades (building) 9.Carpenters and joiners 10.IT and telecommunications professionals