According to Bullhorn’s 2017 Australian Recruitment Trends Report, released earlier this year, most Australian recruitment agencies are very optimistic: 85% of agencies expect to see some revenue growth in 2017, and 21% expect revenue growth of more than 25%. This is somewhat unsurprising, mainly because it continues the trend of prosperity the industry has experienced over the past few years.
Our report also examined the top business priorities for Australianrecruiters this year. More than half of agencies, 56%, highlighted profitability as a critical point of focus, while achieving top-line revenue growth, and managing client and candidate relationships, also stood out as crucial — both being cited as priorities by 38% of agencies.
Given the industry’s level of commitment to business growth and creating exceptional relationships with key stakeholders, agencies are well-positioned to succeed. However, there are still challenges to overcome.
Overcoming challenges with technology
Sixty-eight percent of those interviewed agree that a pressing concern for this year is pricing pressure and margin compression. The pressure of talent shortages is felt by 66% of agencies, and 53% worry about economic uncertainty.
This is a dangerous combination of challenges. It means that recruiters must find new ways to satisfy increasing client demands for better service, faster response time, and hard-to-find talent — all for the same or lower costs. The prospective reforms to Australia’s visa program may further exacerbate the situation in the future, but whether the political agenda will have any real impact on industry performance is yet to be seen. Nevertheless, tackling skills shortages and meeting client expectations are already proving to be significant challenges.
However, agencies tend to be better at satisfying their clients than they are at keeping their candidates happy. One of the biggest complaints candidates have is that agencies are slow to respond, but there are certainly many other factors that influence candidate satisfaction. Ageism, for example, appears to be another pressing issue in Australia: despite talent shortages, some recruiters may be overlooking talented candidates just because they are perceived to be too old for key roles.
Since the shortage in talent ranks in the top three industry challenges, recruiters must ensure the best experience possible to those candidates they do find. This means using technology wherever possible to make improvements in speed and efficiency. Providing a superior candidate experience that is consistentlyresponsive, inclusive, personalised, and well-managed will invariably boost an agency’s reputation and its application rates.
The balance between acquisition and retention
So, how are Australian recruitment agencies planning to boost profitability in 2017?
Most agencies are putting their energy into retaining and expanding their existing client accounts. According to our survey, 70% of recruiters expect to generate most of their revenue from current clients.
This makes sense. Leveraging existing client relationships reveals opportunities within their wider business networks — without the added expense of an acquisition campaign. That said, it’s important for recruiters to not focus solely on engaging existing clients at the expense of developing new relationships.
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Many recruiters take the opposite approach to their candidates and choose to chase new talent rather than refer to their existing database. An incredibly underutilised, yet highly valuable, asset is an agency’s candidate database. Recruitment agencies spend countless hours and thousands of dollars collecting candidate information, only for it to gather dust.
An internal database is a goldmine of information and represents a huge opportunity to fill placements quickly and effectively. It costs to build a candidate pipeline so it needs to deliver a return, and if agencies aren’t already using their internal database as their primary repository for placements, they should be.
Measure performance and get the results
Recruiters may say they’re working harder but, in the face of increased competition, pricing pressures, and candidate shortages, they need to deliver tangible, measurable results. ATS and CRM software has the clear added benefit of being able to measure performance and track client and candidate satisfaction. However, about a third of agencies don’t measure client satisfaction levels, and 40% don’t track candidate satisfaction at all.
Yet technology adoption continues to grow at a steady rate: more than three-quarters of agencies now use a customer relationship management (CRM) or applicant tracking system (ATS). This helps recruiters stay on top of all interactions and conduct their day-to-day activities more effectively. With greater visibility into metrics such as hit rate, fill rate, margin and revenue, as well as key performance indicators such as candidate engagement and retention, recruitment leaders can make more informed business decisions – and guide their teams more effectively.
Responsiveness is key to building loyal, long-term business relationships and, thus far, the Australian recruitment industry has benefitted greatly from its enthusiastic embracing of technology. Overall, agencies that take an optimistic approach to innovation and problem-solving, and adopt new technology, will be the first to achieve their key business objectives.
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