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Here’s why this time of year does not always hit the sweet spot for recruiters.

It’s no secret that this time of year can have a dramatic financial impact on recruitment agencies – big and small. In particular, the public holidays around Easter affect recruiters cashflow because business intensifies to compensate for days off. And, in turn, this puts pressure on both consultants and finance departments.

To help understand more about some of the common recruitment industry trends around this time of year and – more importantly – how to plan ahead for them, we answer these five key questions. 

Q: What trends are recruiters likely to experience at this time of the year, and why?

A: With six public holidays to work around during the first quarter, including Good Friday, Easter Monday and Anzac Day all in April, recruitment companies tend to ramp up business leading up to this time to compensate. This puts pressure on consultants and finance departments, alike.

Q: Why is it important to have the foresight to plan ahead for these times?

A: Planning for cash flow during these cycles improves security and confidence internal staff have in their recruitment company employer. It also makes sure they have enough funds to cover all of their necessary expenses. Having an understanding of the marketplace and what the trends are is essential for increasing the capacity of recruiters when required and to plan to maintain their cashflow.

Q: Can you explain the dramatic financial impact businesses can suffer around Easter – particularly when it comes to recruiter cashflow?

A: There’s no doubt at this time of year, recruitment agencies need to find more finance for the likely increases in contractor payroll and to cover time off for internal staff. If you don’t give your financial institution advanced projections for these increases around Easter, or if you don’t have a suitable facility that accommodates seasonal fluctuations, it can be to the detriment of your cashflow.

Q: If recruiters are still trying to catch up from Christmas, how can they avoid the strain?

A: Usually by the time Easter rolls around, recruiters are still trying to catch up from Christmas, as many of their candidates get placed. This is why a recruiter’s database needs to be replenished on an ongoing basis. On top of this, they will need extra candidates to cover the increase in demand due to the public holidays and as the work ramps up.

Q: Are there any other external and internal staffing strains that business owners should be aware of during the first quarter?

A: Industry trends show that after Christmas, a business can be quiet until the end of January. As staff start to come back, the workload starts to increase. Being aware of these recruitment sector ebbs and flows, and planning ahead for them, will help to maintain your cash flow all year round.

Read about the recent blog about staff turnover and profitability here.

 

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