Another year is quickly coming to a close, with a brand new decade looming on the horizon. So, after the big man in red has snuck down the chimney and the bubbles have popped on New Year’s Eve, what can recruitment agencies expect in 2020 and beyond?
Nigel Harse of Staffing Industry Metrics says, “Looking ahead to next year and beyond, I can see a few signs which can’t be ignored. In Australia, we’ve enjoyed the best long-term run on record but this run is starting to slow down, partly due to the holiday and festive season slump but also because of a fall in vacancy rates and lack of demand for temps and contractors. While this is a predictable seasonal trend, the concerning underlying facts reveal that despite having enjoyed the best of times, recruitment agency profits for many have been in decline. At some point, the bubble is going to burst. The important thing is to act before it does!”
Undoubtedly, business is being squeezed from all directions with:
- Fee and margin pressure remaining a constant challenge
- Client and candidate expectations continuing to soar
- Consultant and staff remuneration packages increasing
- General operating costs through the roof
In a recent blog, The Bottom Line: 1 in 5 recruitment Firms Increase Profit in FY19 we outlined the dangers of today’s market where there is more work but less profit. With an even tighter and tougher 2020 ahead, the push must be on improvement rather than scale.
So, how can recruitment agencies get better rather than bigger?
1. Pause, ponder and prepare
Firstly, enjoy a well-deserved break over the festive season. In addition to some R&R, take the time to reflect on what has been, recognise it is the past and then ask yourself some important questions to get you moving forward, like ‘How can we operate more efficiently and improve our customers’ experience in the process?’ You need to return to work in 2020 with a yearning for improvement, ready to embrace change. Regardless of market predictions, this mindset is the best way forward to achieve success.
2. Improve efficiency with automation and AI
In the process of reflecting on where improvements can be made, there is likely to be a common theme that emerges. If the emphasis is on productivity in a challenging market, then the solution surely lies in achieving new efficiencies. But how? The implementation of automation and AI is a logical place to start – not just for your consulting staff but for everyone working within the organisation. The other proviso is that any technology upgrades must be adopted and employed effectively to eliminate double handling that wastes time, leads to errors and generally drives staff (and customers) mad. The true benefits are only realised when staff understand and buy in to the necessity for change. This is the ‘we want to get better’ frame of mind mentioned above, ensuring the improvement journey is engaging and collaborative.
3. Focus on your fill rate
Once you’ve asked yourself the hard questions and improved efficiencies across your agency, don’t be tempted to simply chase more work. Instead, look to improve the fill rate across the work you’re already doing. Currently, permanent recruiters fill on average only 1 in 3 jobs. That’s a massive 66% of the jobs they’re spending time on that go to waste. Many recruiters simply accept this as the way things are. But it doesn’t have to be. Instead of just filling orders, take the time to consult with your clients, craft job descriptions carefully and leverage people and technology to up your fill rate and improve profit without increasing your workload.
For some more easy-to-implement tips on how to get better not bigger, check out Ross Clennett’s blog. In the meantime, enjoy some Christmas cheer, let your hair down and come back to work in 2020 refreshed and ready to do things better than ever before.
How does your recruitment agency compare?
Discover how your business metrics stack up against a snapshot of current industry results with Staffing Industry Metric’s free Complimentary Benchmark Report. You’ll get access to a free sample dashboard, with 12 Fast Fact Reports highlighting benchmark comparisons specific to you.