Recruitment incompetence is sending businesses broke (and embarrassing governments)

Last Saturday night my wife and I went to a party; leaving our 15-year-old son to decide which of the normal array of takeaway options he would order in.

Against my wife’s better judgment he ordered McDonald’s, to be delivered by Menulog.

Fast forward two hours, despite multiple follow-ups, and an app message advising ‘order delivered’ a hungry Master 15 could wait no longer. He trudged 300 metres to the local pizzeria and had his hot Margherita a short time later.

Our son’s order and my wife’s $25 currently both remain in the possession of parties external to the Clennett household.

Our experience is, I suspect, one of many similar frustrating experiences that Australians deal with each week in attempting to have a basic service promise fulfilled by a B2C company.

What might appear to be a temporary hitch to the normal operations of these companies is proving to be far from that for a host of businesses whose profitability depends on serving customers quickly and effectively.

A common theme is flawed or ineffective sourcing, hiring, and retention of volume frontline workers.

Last week’s news that Ballarat-based food delivery service Delivr has collapsed into liquidation only five years after it was launched, provides a telling case study in the perils of underestimating the importance of effective hiring and retention practises in building, and sustaining, a profitable business.

Founded in 2017 by entrepreneur Alex Power, Delivr focused on regional Australian cities,  supposedly underserved by major food delivery players like Uber Eats and Deliveroo.

The 2020 and 2021 COVID lockdowns provided an immediate fillip to Delivr’s business that 2022’s return to normality could not sustain.

The danger signs were apparent last month when Delivr advertised a $100 sign-on bonus for drivers (above), subsequent to Smart Company reporting that Power identified a shortage of delivery drivers as central to the rapidly escalating cost of each delivery.

I know nothing of Mr. Power and his business, save what I read in the media, however, my experiences with various B2C entrepreneurs over the years are so similar I am prepared to speculate about the most likely scenario that led to the company’s collapse.

I suspect Mr Power and his confidants were so consumed by the challenge of building their product and winning customers that they never anticipated that attracting and retaining sufficient drivers to serve Delivr customers was likely to be a problem, or at least a problem worthy of devoting significant resources to.

A much higher profile CEO has experienced similar, but significantly more consequential, problems, to Mr. Power’s (now former) problems.

Alan Joyce outsourced QANTAS’s local baggage handling services assuming, incorrectly as it turns out, that relatively low-wage and low-skill permanent employees are not difficult to replace with even lower-paid low-skill casual labour.

The 2,000 jobs now carried out by outsourced to third-party providers on behalf of QANTAS at ten Australian airports are jobs that are now proving to be very difficult ones to find, hire, train and retain sufficient staff capable of delivering the outcomes Mr. Joyce and his executives took for granted.

The rage of dissatisfied QANTAS customers has been loud and constant.

Delivr and QANTAS, far apart on the B2C business complexity continuum, have (or ‘had’ in Delivr’s case) CEOs that, despite their respective undoubted general intelligence, each proved to be embarrassingly short-sighted and dead wrong about the simplicity of recruitment and retention.

The delusion about the potential difficulties inherent in volume recruitment is not just confined to founders of tech start-ups and overpaid airline CEOs.

Governments, at all levels and regardless of party, consistently show how clueless they are when it comes to understanding the competence required to deliver excellent recruitment outcomes in a consistent and timely manner.

The previous Federal Government was humiliated across the pandemic lockdowns by the inept performance of employment marketplace, Mable, in providing carers for short-staffed aged care facilities after Mable was gifted a $5.7 million contract without a competitive tender process.

Government recruitment initiatives, as well-intended as they may be, are also consistently shown to have a grounding in reality that defies rational explanation.

Exhibit A for the prosecution:

Last week SmartCompany reported, “A Queensland government scheme offering up to 1000 qualified tradespeople $1750 to move to the state has reportedly attracted 12 applicants to date, reflecting the extremely tight jobs market for tradies nationwide.”

Exhibit B for the prosecution:

Four months’ ago, The Age reported, “A Victorian government plan to hire up to 1000 overseas health workers to tackle severe staff shortages in hospitals has so far attracted only about 100 people, heightening concerns the state could soon lack enough qualified people in essential services.”

And, the almost-certain-to-be Exhibit C for the prosecution:

Last month, The Guardian reported, “The NSW premier, Dominic Perrottet, this week pledged $4.5bn to boost the state’s health workforce by more than 10,000 over four years, including the hiring 7,500 doctors, nurses and allied health professionals over the next 12 months.”

The failure of Premier Perrottet’s government to meet its self-imposed recruitment targets is as pre-ordained as my wife finding a new home improvement reality show to binge watch immediately after she finishes binge-watching her current one (is there no end to bubbly creative women and earnest creative men improving other people’s homes, or hosting shows about owners undertaking their own ambitious improvements?).

Delusion and incompetence in the serious task of sourcing, hiring, and retaining suitable workers is making a laughing stock of governments and sending, otherwise decent, businesses broke.

Leaders of governments and CEOs of enterprises (of all sizes) would do well to take recruitment very seriously indeed; ongoing employment in their existing position may very well depend on it.

Related blogs

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