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Regulate Recruitment! Why? How?

In the face of the most recent call, this time from industry insiders, to regulate the Australian recruitment industry I am left asking two questions: Why? How?

It’s not that the industry might not be in need of regulation.  The furore about the alleged (mis)use of 457 visas; questions about candidate “ownership”; the charging of “candidate fees” to job seekers; the impediment to workforce mobility and labour market competition created by temp-to-perm fees and agency switching fees; the “sham contracting” debate; misleading job ads; privacy management and discrimination concerns are all reasons why there needs to be a coherent approach to ensuring that professional standards are maintained  in an industry that is increasingly conducted by e-commerce, across state and national borders, by members of an emerging profession, with very low entry barriers and in a rampantly competitive market.

Call it “regulation” if you want; but there seems little point in constructing another layer of bureaucratic interference when we still don’t know whether what we want “regulated” is an immigration; human rights; fair trading; industrial; revenue; consumer protection; privacy or discrimination issue – or perhaps something else. The truth is that a coherent approach to the industry needs to deal with all of these.  But there is already regulation in each of those areas.  What is missing is the coherent approach.

Is a licensing scheme really going to provide it? Probably not.

How well are the parochial licensing schemes working in the ACT; South Australia and Western Australia? Not very well .  How effective are they when the conduct which they attempt to regulate takes place across state and national borders from within un-regulated or de-regulated jurisdictions? Not at all.  How effective is the overly sophisticated Queensland statutory code of conduct supported by court powers to injunct an errant agency from engaging in specific conduct or even from continuing to operate in the industry? The provisions, enacted in 2005, when that State dismantled its licencing scheme, have never been used.

At this time, the only signs of any genuine effort at establishing professional standards are coming from within the industry itself – from the voluntary industry associations and from participants who are embracing a culture of professionalism, who are defining standards and who are making an individual and corporate commitment to ethical practice. And there are plenty of them.

But the cry goes up, “They have no teeth”. Spare us the gnashing of worn dentures! What is the need for any more teeth than are already provided to the statutory authorities that are charged with enforcing regulatory compliance in each of the fields in which recruiters engage? The regulation is already there. The teeth are already there.

Try explaining that to someone who thinks that you can actually “own” a candidate, or that a contract to supply recruitment services is somehow magically formed by winning a race to get a resume to a reluctant client more quickly than any one else – and that it will still be in place twelve months later, when the candidate on his or her own initiative succeeds in getting a job with that “client” – and that this somehow entitles the recruiter to a fee!

The good recruiters, the professional ones, already know that this is nonsense and they have rejected business models that are based on deeply entrenched and dangerous misconceptions. But for the ones who don’t, a licence is not going to fix it.

What is needed is a clearer understanding, on the part of industry participants and their clients, of the nature and value of the services that recruiters provide; and of why those services are still regarded as important elements in a flexible and well functioning labour market. What is also needed is an understanding of how regulation might improve the contribution that recruitment agencies make.

It is not until we reach those understandings that any sensible discussion about regulation of the recruitment industry can take place.  Without them, calls for industry regulation are at risk of being perceived as little more than the pursuit of a small agenda of self interest.

In the meantime, the law is there. It is effective and it does its work when called upon to do so. But I won’t be calling it “industry regulation” just yet.

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