Continuous improvement and innovation project
Making Headway The 2015 Australian Recruitment Trends Report
2
3 Introduction
4 Key Findings
5 Revenue and Growth 5 Revenue Expectations
6 Revenue per Consultant/Salesperson
6 Headcount and Branch Expansion
7 Agency Health 7 Revenue from Repeat Client Business
7 Use of Vendor Management Systems
8 Performance Benchmarks 8 Average Fill Rate in 2014
9 Average Hit Rate in 2014
10 Average Time-to-Fill in 2014
10 Average Number of Submissions per Hire
11 Percentage of Agencies’ Placements Made from Candidates in
Recruitment CRM
12 Remuneration 12 Remuneration Performance
12 Real Remuneration in 2014
13 Trends for 2015 13 Opportunities and Challenges in the Next Five Years
13 Skills Shortage
14 Insights 14 Candidate Sourcing Strategies
15 Aged Care
16 Conclusion
17 Demographics
17 About Bullhorn
Table of Contents
In December of 2014, Bullhorn conducted its third annual Recruitment Trends survey of 105 APAC
recruitment agency professionals. The resulting report comprises performance benchmarks, metrics,
and revenue and remuneration figures broken down by agency size, recruitment type, industry,
role recruited, and role of respondent. Recruitment professionals can use this report to compare
themselves and their agencies to their peers in the recruitment industry.
The Australian recruitment industry is in a stable, if not particularly thriving, place at the moment.
75% of respondents reported meeting or exceeding their revenue goals, for instance, and 86%
expect revenue to increase in 2015. While neither of these percentages compare favourably to rates
in North America or the United Kingdom, they aren’t disappointing on their own terms. Indeed,
APAC recruitment agencies reported significantly less trouble with finding skilled candidates in
the industries for which they recruit than both American and British agencies, with only 71% of
respondents experiencing a shortage of skilled candidates. Despite this relative strength, however,
APAC agencies reported issues with profitability, margins, and direct hiring. The developing state
of recruitment in Australia and other APAC regions, along with APAC businesses’ collective
hesitation to adopt recruitment agencies as their central source for candidates, appears to be
holding the APAC recruitment industry back from its full potential.
Please note: some figures may not add up to 100% due to rounding.
3
Introduction
4
Metrics
• 75% of respondents
met or exceeded their
revenue goals in 2014.
Meanwhile, 86% of
respondents expect
their revenue to
increase in 2015,
including 62% who
expect revenue to
increase by more
than 10%.
• 30% of APAC
recruitment agencies
plan to expand into
new offices in 2015,
including 16% that
plan on opening
new branches in
another country.
• The average fill rate
across all respondents
in 2014 was 47%.
The average hit rate
was 40%.
• Although only 13% of
respondents drove
more than half of their
jobs through VMS in
2014, 28% of
respondents plan to
do so in 2015.
• Respondents placing
candidates in
government jobs had
both the lowest fill
rate and hit rate among
all industries.
• Only 71% of APAC
respondents reported
a skills shortage in
the industries for which
they recruited in 2014,
less than in either
North America or the
United Kingdom.
• The top two sources
for qualified candidates
in 2014, as ranked by
APAC respondents,
were referrals from
successful placements
and existing candidates
from respondents’
recruitment CRMs.
• 80% of respondents
in the healthcare
industry support an
increase in immigration
in order to provide
Australia with more
potential candidates for
aged care positions.
Key Findings
Growth Candidates
Revenue Expectations:
75% of respondents from APAC recruitment agencies met or exceeded their revenue goals in
2014. While the 74% of contract agencies that met or exceeded their revenue goals falls in line
with this 75% average, this includes 44% that exceeded their goals, a mark that easily surpasses
the overall average of 35%. And though the 75% of permanent agencies that met or exceeded their
revenue goals was similar to contract agencies’ results, permanent agencies proved to be much
less volatile in 2014, with only 29% actually exceeding their goals. Meanwhile, 86% of recruitment
agencies expect their revenue to increase in 2015, including 93% of agencies specialising in contract
recruitment. In fact, 62% of APAC recruitment agencies expect their revenue to increase by more
than 10% in 2015.
5
Revenue and Growth
2014 Revenue Goals Results by Primary Recruitment Type
Overall
Exec Search – Retained
Temporary
Perm (non-exec search)
Contract
Exec Search – Contingent
0% 20% 40% 60% 80% 100%
35%40%25%
29%46%25%
31%31%37%
64%9% 27%
30%20% 50%
44%26% 30%
Fell Short
Met
Exceeded
% of Agencies That Expect to Increase Revenue in 2015 by Primary Recruitment Type
Overall
Contract
Perm (non-exec search)
Exec Search – Retained
Temporary
Exec Searh – Contingent
0% 100%
77%
80%
82%
88%
93%
86%
20% 40% 80%60%
6
Revenue per Consultant/Salesperson:
Revenue per recruitment consultant/salesperson was notably consistent across all agency sizes,
with the exception of lower-midsize agencies (11-25 consultants/salespeople), which generated
over $100,000 less per consultant/salesperson than agencies of any other size. Agencies of
this size may be struggling to adjust to growth, as individual consultants may not receive the
managerial attention that consultants at smaller companies benefit from. Decreased managerial
attention can lead to struggling performance, reduced billing, and ultimately, a noticeable impact
on revenue per consultant/salesperson. Meanwhile, larger agencies likely have the advantage of
mid-level team managers to take the pressure off of branch managers and their teams.
Headcount and Branch Expansion:
Hiring plans for APAC recruitment agencies are healthy, with 84% of agencies planning to
grow headcount in 2015, including 90% of agencies with 11 or more recruitment consultants
and salespeople.
Overall, 30% of APAC recruitment agencies plan to expand into new branches in 2015. This
percentage includes 16% of agencies that plan on expanding into another country. Additionally,
large agencies are particularly intent on expansion, as 64% of agencies with 75 or more recruitment
consultants and salespeople plan to open new offices in 2015.
1-10
11-25
26-74
75+
$0 $100,000 $200,000 $300,000 $400,000
$365,000
$356,000
$241,000
$365,000
Revenue per Recruitment Consultant/Salesperson by Agency Size
% of Agencies Planning Branch Expansion by Agency Size
1-10
11-25
26-74
75+
0% 20% 40% 60% 70%
64%
17%
44%
24%
10% 30% 50%
7
Revenue from Repeat Client Business:
The 75% of respondents who generated over 50% of their revenue from repeat client business is
a fairly modest percentage compared to U.S. and UK recruitment agencies, as APAC recruitment
agencies seem to have their eyes open for new clients. That said, the amount of revenue that APAC
recruitment agencies generate from repeat clients is still substantial, and a good sign of baseline
consistency.
Agency Health
25%
20%
15%
10%
5%
0% 0-9% 10-19% 20-29% 30-39% 40-49% 50-59% 60-69%
2%
70-79% 80-89% 90-100%
3% 5%
8%
7%
11%
18%
13%
21%
11%
% of Revenue from Repeat Client Business
Use of Vendor Management Systems:
Over the next year, APAC recruitment agencies plan to significantly increase their use of vendor
management systems (VMS), perhaps resigning themselves to the inclinations of larger clients.
While 39% of respondents drove less than 10% of jobs through VMS in 2014, only 28% plan on such
limited VMS use in 2015. Additionally, 13% of respondents drove 50% or more of jobs through VMS in
2014, but 28% of respondents plan to do so in 2015.
40%
30%
20%
10%
0% 0-9% 10-19% 20-29% 30-39% 40-49% 50-59% 60-69% 70-79% 80-89% 90-100%
28%
39%
8% 7%
18% 20%
10%
15%
11%
3%
8% 8%
0%
8%
5%
0%
3% 5%
2% 2%
% of Jobs Driven through VMS
2014
2015
8
Average Fill Rate in 2014:
The average fill rate of all APAC respondents was 47%. Sorted by agency size, smaller agencies
experienced more success in terms of fill rate than larger agencies. This is likely due to a lesser
quantity of job orders received by small agencies, but the efficiency necessary to fill over half of
all job orders is still impressive. For this report, we defined fill rate as the number of job orders filled
divided by the number of job orders received, multiplied by 100.
Performance Benchmarks
Fill Rate by Agency Size
Overall
1-10
11-25
26-74
75+
0% 20% 40% 60%
37%
38%
45%
51%
47%
Despite the struggling state of the Australian construction1 and manufacturing2 industries, fill rates
for these two industries, along with industrial placements, are the three highest among all sectors.
The reason for this success could be similar to the reason for the success of small APAC agencies –
there may simply be fewer jobs to fill (and a greater number of available candidates) in these
industries during this period of contraction, making the efficient filling of job orders an easier task.
Average Fill Rate by Industry
0% 10% 20%
39%
Overall
Construction
Manufacturing
Industrial
Business Services
Technology
Finance/Insurance
Healthcare
Telecommunications
Retail
Government
30% 40% 50%
35%
39%
44%
44%
47%
50%
51%
52%
53%
47%
60%
1 Delgado, Ivan. “Australian Construction Index: Fourth Consecutive Month of Contraction.” FXStreet. FXStreet, 05 Mar. 2015. Web. 16 Mar. 2015. 2 Frazer, Simon. “Weakening Economy Blamed for Manufacturing Shrinkage.” ABC News. ABC News, 01 Mar. 2015. Web. 16 Mar. 2015.
9
Average Hit Rate in 2014:
The overall average hit rate for APAC recruitment agencies in 2014 was 40%. Hit rate was defined
for respondents as the number of successful placements (starts) divided by total number of client
submissions (sendouts), multiplied by 100. Agencies serving the technology industry performed
notably worse in hit rate than they did in fill rate, perhaps because technology jobs require a greater
number of submitted candidates than jobs in most other industries. IT/technical jobs, in fact, had the
lowest hit rate of all roles recruited for by APAC recruitment agencies.
Average Hit Rate by Industry
0% 10% 30%
35%
Overall
Healthcare
Manufacturing
Business Services
Industrial
Telecommunications
Finance/Insurance
Construction
Technology
Retail
Government
20% 40%
33%
37%
37%
39%
40%
42%
44%
44%
47%
40%
50%
Average Hit Rate by Role Recruited
0% 10%
Sales
Office/Clerical/Admin
Marketing/Creative
Engineering/Design
Professional/Specialty/Managerial
All/Generalist
Finance & Accounting
IT/Technical
20% 50%
34%
35%
36%
37%
39%
40%
42%
46%
30% 40%
10
Average Time-to-Fill in 2014:
For this report, time-to-fill was defined as the number of days required to fill a new job opening.
This metric, segmented by primary recruitment type, did not vary wildly compared to reported
figures from the United States and United Kingdom. However, APAC contract recruitment agencies
did have a longer average time-to-fill than both American and UK contract agencies by a
significant margin, needing an average of 16 days to fill each job.
Temporary
Contract
Perm (non-exec search)
Exec Search – Contingent
Exec Search – Retained
0 10 20 30
28
28
20
16
6
Average Time-to-Fill by Primary Recruitment Type
Average Number of Submissions per Hire:
Overall, APAC recruitment agencies needed to submit fewer candidates per hire than either U.S. or
UK agencies. Broken down by primary recruitment type, however, contract agencies’ 6.2 submissions
per hire stands out – in other parts of the world, contract agencies were on the lower end of the
scale, with 4.7 submissions in the US and 4.1 submissions in the UK in 2014.
Average Number of Submissions per Hire by Primary Recruitment Type
0.0
Overall
Contract
Exec Search – Retained
Exec Search – Contingent
Perm (non-exec search)
Temporary
7.0
3.1
4.7
4.9
6.0
6.2
5.0
1.0 2.0 3.0 5.0 6.04.0
11
Percentage of Agencies’ Placements Made from Candidates in Recruitment CRM:
APAC recruitment agencies also had a higher rate of placements made from candidates in an
agency’s recruitment CRM than both U.S. and UK agencies, with a substantial 53%. Temporary and
contract agencies proved to be the most reliant on their recruitment CRMs, each making over 60%
of their placements from candidates in their CRMs. These types of high-volume, short-lead agencies
require a platform that can provide them with a sizeable quantity of readily available candidates, so
their relative need for a recruitment CRM system makes sense.
Average % of Placements Made from Existing Candidates by Primary Recruitment Type
Overall
Temporary
Contract
Perm (non-exec search)
Exec Search – Contingent
Exec Search – Retained
0% 70%
46%
50%
50%
62%
63%
53%
20% 40% 60%10% 30% 50%
Agencies placing candidates into the construction industry (the fill rate leader in this year’s report
despite industry contraction) used candidates from their recruitment CRMs to make a successful
placement 57% of the time, the third highest percentage among all industries.
Average % of Placements Made from Existing Candidates by Industry
0% 10% 30%
46%
Government
Telecommunications
Construction
Finance/Insurance
Technology
Healthcare
Retail
Business Services
Manufacturing
Industrial
20% 60%
45%
47%
48%
51%
53%
54%
57%
59%
61%
70%50%40%
12
Remuneration Performance:
Actual remuneration performance for employees of APAC recruitment agencies in 2014 was
fairly conservative, with 57% of respondents receiving a pay rise and 13% receiving a reduction in
pay. However, expectations for 2015 are high, with 81% of respondents anticipating a pay increase
in the next year.
Remuneration
30%
57% 13%
18%
81%2%
2014 – Actual 2015 – Expected
Increase
Decrease
Same
Real Remuneration in 2014:
CEOs earned the most money among recruitment roles ($146,000), while recruitment consultants
earned the least ($93,000). Interestingly, however, salespeople reported a higher average
remuneration than recruitment managers. Additionally, APAC recruitment agency owners and
CEOs earn far less than their executive counterparts in the U.S. and UK, with those CEOs averaging
more than $210,000 AUD in remuneration.
Average Remuneration by Role
CEO/Owner/Partner/Managing Director
Salesperson/Sales Manager/Account Manager
Recruitment Manager/Head of Recruitment
Recruitment Consultant/Sourcer
$0 $40,000 $80,000 $120,000 $160,000
$93,000
$116,000
$121,000
$146,000
13
Opportunities and Challenges in the Next Five Years:
Each of the top five opportunities for recruitment agency growth in the next five years identified
by APAC recruitment agencies was likewise identified by North American or UK recruitment
agencies. Social media, as ever, remains at the forefront of many respondents’ thought processes
when it comes to potential competitive advantages. Particularly in Australia, social media may yet
have some untapped promise, as many of Australia’s top CEOs have proved hesitant to fully engage
with even workforce-centric networks like LinkedIn.3
Many of the challenges acknowledged by APAC recruitment agencies were also noted by U.S. and
UK recruitment agencies – a shortage of skilled candidates, direct hiring, and increased competition
are familiar struggles. However, APAC agencies also identified profitability as a challenge, with
several agencies experiencing difficulty in coming to terms with clients over the fees required for
recruitment agency services. With some reports of uncomfortably tight margins, increasing costs
may lead inevitably to increasing recruitment fees, potentially exacerbating the already problematic
issue of profitability.
Trends for 2015
Opportunities Challenges
Social Media
Emerging Technologies
IT
Customer Service
Specialisation
Shortage of Skilled Candidates
Direct Hiring
Social Media
Profitability
Increased Competition
Skills Shortage:
APAC recruitment agencies had less difficulty finding skilled candidates than either American or
British agencies, as only 71% of APAC respondents reported a shortage of skilled candidates in the
industries for which they recruit. Agencies recruiting for government jobs experienced the most
difficulty in finding skilled candidates, perhaps contributing to government agencies’ last-place
performances in both fill rate and hit rate. The New South Wales and Queensland governments
recently implemented Fieldglass, a vendor management system, in an effort to generate high-
volume temporary hires, and 41% of government agency respondents report seeing an increase
in government job placements through VMS.
3 Boyd, Tony. “Top Australian CEOs Missing from LinkedIn and Twitter.” Financial Review. Financial Review, 9 Mar. 2015. Web. 17 Mar. 2015.
14
However, there is clearly still work to be done in order to increase efficiency and success for
government recruitment agencies, especially with funding cuts hitting the Queensland
government hard.
% of Respondents with Shortage of Skilled Candidates by Industry
0% 10% 30%
61%
Government
Industrial
Construction
Technology
Business Services
Telecommunications
Manufacturing
Retail
Finance/Insurance
Healthcare
20% 60%
53%
64%
64%
69%
69%
71%
71%
79%
80%
70%50%40% 80% 90%
Candidate Sourcing Strategies:
Overall, APAC recruitment agency respondents ranked common strategies used to source
candidates similarly to the way that U.S. and UK respondents ranked them, with referrals from
successful placements and existing candidates from one’s recruitment CRM garnering the most
favour, while aggregator sites and cold calling were least effective.
Insights
Average Rank of Candidate Sourcing Strategies
0.0
Best
1.0
Referrals from Placements
Existing Candidates from CRM
Job Boards
Social Media
Re-Hires
Cold Calling
Aggregator Sites
2.0 6.0
Worst
5.4
4.7
4.6
3.7
3.7
3.0
3.0
3.0 4.0 5.0
15
When broken down by size, in the case of several sourcing strategies, large agencies with 75
consultants or more behaved differently than smaller agencies. For instance, these large agencies
ranked aggregator sites as the fourth most successful source of candidates, behind referrals from
successful placements by the slimmest of margins, even though agencies of all other sizes identified
aggregator sites as the least useful sourcing strategy. Additionally, large agencies’ top ranking of job
boards and their last place ranking of cold calling were also divisive compared to those strategies’
rankings by agencies of other sizes.
Aged Care:
70% of APAC respondents recruiting for the healthcare industry have experienced difficulty in
finding talent to work aged care jobs. This finding is relatively unsurprising, given the ageing
Australian population and resultant recruitment challenges. Because of this struggle to find suitable
candidates to provide healthcare to an ageing population, 80% of respondents in the healthcare
industry support an increase in immigration in order to provide Australia with more potential
candidates for aged care positions.
Average Rank of Candidate Sourcing Strategies by Agency Size
Job Boards
0.0
Best
1.0 2.0 3.0 4.0
3.7 3.8
3.7
3.5 4.0
3.6
2.6
4.8
4.7 4.3
4.6 4.9
4.6 4.6 4.5
5.6
5.6 5.5
5.7 3.7
5.0 6.0
Worst
Social Media
Re-Hires
Cold Calling
Aggregator Sites
2.9 3.1
2.6
3.0 2.7
3.4
3.6
3.0
Existing Candidates
from CRM
Referrals from Placements
1-10
11-25
26-74
75+
16
Australian recruitment professionals recognise that they still must grapple with the problem of
clients turning to direct, in-house hiring methods rather than employing the services of a recruitment
agency. Because the volume of business is naturally lower than in places like North America and
Europe, Australian agencies have to balance the weight of their fees and their need for job orders.
In certain areas, efforts are being made by agencies to step up their game, including healthy plans
for branch expansion and the adoption of vendor management systems that are beloved by large
clients, despite their lack of personal touch.
The governments of New South Wales and Queensland, for instance, are now using the VMS
Fieldglass, and 28% of respondents indicate that they plan to drive over half of their jobs through
VMS in 2015. Additionally, APAC recruitment agencies are currently excelling when it comes to
construction, manufacturing, and industrial jobs, with a fill rate of over 50% for each segment. As
the Australian construction and manufacturing industries’ struggles continue, businesses in these
industries may find that they can rely upon recruitment agencies to efficiently provide personnel to
generate revenue. The key for the recruitment industry as a whole is to be able to display this type
of invaluable service as a concrete value proposition to businesses across all sectors.
Conclusion
17
About the Trends Report
In December of 2014, Bullhorn conducted its annual trends survey of 105 APAC recruitment agency
professionals. Below is a breakdown of respondents by:
Firm Size (total number of salespeople and recruitment consultants)
• 1-10: 54% • 11-25: 22% • 26-74: 17% • 75+: 7%
Primary Type of Recruitment
• Permanent and/or RPO: 37% • Temporary: 9% • Contract: 21% • Executive Search: 31%
Geographic Locations
• Australia: 50% • India: 14% • Singapore/Macau: 9% • Hong Kong: 9% • Japan: 8% • Other APAC Countries: 10%
Demographics
Bullhorn creates cloud-based customer relationship management (CRM) software solutions that
help businesses grow faster and run more efficiently. As the global market leader in staffing and
recruiting software, our innovations power the operations of fast-growing start-ups up through the
world’s largest staffing brands. Headquartered in Boston, with offices in St. Louis, Richmond,
Vancouver, London, and Sydney, Bullhorn provides a full suite of recruitment software including an
applicant tracking system, customer relationship management (CRM) system, back office solution,
VMS integration, and social recruiting product. The company has more than 10,000 clients
representing nearly 350,000 users across 150 countries.
For more information: please visit www.bullhorn.com or call 617.478.9100.
About Bullhorn