Median profit for recruitment agencies hits all-time high
2018 is shaping up to be a lucrative year for recruitment agencies, with record median profits recorded for the first half.
Recruitment agencies across Australia and New Zealand are on track towards their most profitable year, reporting record results for the first half of 2018. According to Staffing Industry Metrics, who analysed data from 102 recruitment agencies, median profits reached an all-time high in the January to June period, surpassing $400,000 for the first time. These results represent a staggering 61% improvement compared to the first half of 2017.
At an individual level, 2 out of every 3 recruitment agencies reported increased profits from last year, with 1 in 3 achieving their highest ever profit in the 6-month period. While not every agency made a profit, the number of firms running at a loss fell from 21% in 2017 to just 7% in the first half of 2018 – the lowest recorded figure in 7 years.
The right climate for record results
These figures show that, despite challenges in the market, the recruitment industry is thriving. In fact, the last time we saw both income streams – permanent and contract/temp – achieve median profit highs like these was in September 2008, before the global financial crisis (GFC).
How to leverage market conditions
It’s wonderful to see profits soaring, but this doesn’t mean recruitment agencies should get complacent. Although it’s clearly a busy time, it’s also the best time to make an impact. Rather than waiting until things quieten down (and every spare second is spent chasing work), now is the perfect time for agencies to implement plans for future growth. The current conditions are ideal, but as the GFC has shown, there’s no telling how long they will last. Plus, with the upcoming election looming, there could be changes in the landscape sooner rather than later.
The GFC devastated recruitment agencies across Australia and New Zealand, with hundreds of firms falling away and others halving within 3 months. It’s taken some agencies years to recover, but the results from the first half of 2018 indicate a strong upturn, which agencies should capitalise on.
Tips to finish the year strong
If your recruitment agency didn’t increase profits in the first half of 2018 – or if you simply want to finish the year on a high – read our recent post: Sales growth for recruitment agencies: 3 key success factors. With the right people, the right strategy and smart financial management processes, there’s no limit to what your recruitment agency can achieve.
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