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