How to increase staff retention in recruitment agencies with a rising millennial workforce
Staff turnover in Australian recruitment agencies remains a significant problem and a rising millennial workforce will make this even more challenging.
Currently, the recruitment sector is experiencing its most buoyant period in 10 years. The economy is going well, business confidence is up and the demand for Perms is high. But, the industry is also experiencing significant change. In just 18 months’ time, one third of the adult workforce will be millennials. In 7 years’ time, this will rise to a whopping 75%.
Recent data from Staffing Industry Metrics shows that staff turnover in Australian recruitment agencies has eased slightly but still remains a significant problem. Staff churn measures the overall turnover in a recruitment agency’s staff as existing members leave and then new staff are hired. It’s usually calculated as the percentage of employees leaving the company over a 12-month period. The national average for recruitment agencies with a team headcount of 10 or less stood at 35% churn for FY18, while the better performing agencies were able to keep it down to an acceptable 10%. For those agencies with a headcount of 20 or less, the FY18 average was 34%.
While some staff turnover is inevitable, the current high rates of churn are costly and affecting profit, sales and morale. Finding, hiring, inducting and training new staff takes significant financial and emotional outlay with research showing new hires are not fully productive for nine to 12 months.
Think about staff turnover in the context of an increasingly-millennial workforce and this becomes an even more significant problem. Why? Because millennials are notoriously hard to lock down. When they’re seeking work, they’re less likely to trust recruiters – taking the job search into their own hands via online networking tools like LinkedIn, drawing on their own extensive personal contacts and keeping the number of opportunities available to them close to their chest. Even when they’ve secured a role, they’re not frightened to move on quickly if presented with a better offer and / or less-strenuous working conditions. Make no mistake – loyalty levels are low!
This means recruiters are doing the hard yards but aren’t necessarily getting results dropping through to the bottom line. Despite working harder than ever before in what is essentially an increasingly-demanding sales role, they don’t get paid unless the deal gets done. Unsurprisingly, the grass often looks greener elsewhere and staff churn in recruitment agencies is therefore notoriously high.
The good news is that this presents a big opportunity for recruiters who choose to target millennials specifically, adjusting their approach to suit this new and very different workforce.
So, how do you increase staff retention of millennial workers?
Take the time to understand them and adjust business practices accordingly
Baby Boomers are retiring and the new generation want to do things differently. Gone are the days of spending hours on the phone or (God forbid!) always conducting business face to face. While recruitment remains a delicate dance of romancing and matchmaking, firms must also be realistic about millennials’ desire for quick and easy, leveraging new technology like texting and social media.
Set time aside for staffing strategies
Regardless of how busy you are, try to devote a set number of hours per week to focus on internal recruitment. The goal is to grow the people and the business, not wear them out and expect them to do more as the team diminishes. Yes, the team may rise to the occasion, but if it happens too often this goodwill will end, and without notice. Remember, millennials have very little loyalty!
Make your agency more attractive
You may not need a fully-equipped games room and a fully-stocked fridge, but millennials do enjoy some perks. Don’t just rely on ad responses from SEEK or the R2R firms, think about how you could change your attraction strategies and methods so that you lure the next generation to your door.
Shake up your recruitment process
Likewise, look for ways to refresh your internal recruitment process. Make it a challenging but rewarding experience. Specifically, millennials want to know ‘How are you different? What’s in it for me?”
Yes, it’s personal!
In the majority of cases, the owner of an agency is the main reason why people want to join your business because they see great appeal in learning from your knowledge and experience. Try to turn this strong point of difference into a compelling attraction that comes to life through your actions, words and promises during the recruitment process.
Take staff turnover seriously
There’s no doubt the larger firms are throwing more time and money at recruitment to ensure they attract the next generation. If you’re a smaller firm, don’t get left behind. Recognise and act in response to this generational shift before it’s too late.
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