In December 2010, Bullhorn performed its annual survey of recruiting professionals seeking data and insights into their firms’ performance, goals and business practices, as well as individual compensation. The overall tone characterized in the responses was, “cautiously optimistic,” with many reporting a back-to-basics approach to best take advantage of the recovering market.
In 2010 the U.S. and other world economies started showing new signs of life. This renewal extended into the staffing and recruiting industry, with two thirds of firms reporting that they either met or exceeded their revenue goals, and most are setting aggressive goals for revenue growth in 2011. Similarly, more than half say that their total compensation increased in 2010 over the prior year.
The most effective means for landing candidates and securing new job orders remain the same and were chiefly related to networking. Recruiters are increasing their use of social media for finding candidates and clients, though many still struggle to maximize effectiveness. Respondents spent less time on sales, on average, than in 2009 as hiring freezes began to thaw and work shifted to filling job orders.
Bullhorn’s 2009 survey found that recruiters were bullish about the coming year. By and large, 2010 met expectations though it wasn’t as strong as recruiters had hoped. Approximately two thirds of firms said they met or exceeded revenue goals in 2010.
Overall, recruiters spent less time attracting new clients in 2010 than in 2009. A look at the extremes on the chart to the right illustrates the differences. Many recruiters are spending that extra time serving existing clients. As in 2009, recruiters find that the most helpful way of obtaining new clients is to attend networking events. Overall, the top 3 picks were the same as in 2010 as they were in 2009. Tried-and-true cold calling is still important despite the focus on new technology, proving “old school” methods are playing an essential role in generating new clients.
One firm owner noted that a key challenge for recruiters today is, “Unraveling the social media ‘noise’ and finding time to re-connect with the telephone.”
When asked what successful adjustments they’d made to their businesses in the past year, many had added staff or implemented new technology. Flexibility was also an asset; firms created new services during the course of the year, or expanded into different types of recruiting. “Moving beyond our retained search roots paid off for our firm,” said one firm co-founder. “We normally focus on direct hires, but have had a lot of success recently supplying temps while hiring freezes are still on,” noted a clerical-focused company. Other firms are now focusing more attention on existing customers and are spending less time chasing new job orders. “That way, our recruiters can give undivided attention to a specific job order, resulting in quicker placement and improving client satisfaction,” one respondent explains.
Interestingly, about as many firms reported increasing fees as did reducing them, indicating that pricing in some recruiting sub-segments may be more elastic than in others.
Setting goals and measuring progress against them are critical elements of staffing firm success. The number one metric used by firms to measure business effectiveness is total number of placements. Similarly, the top pick for measuring effectiveness of salespeople is total number of placements. The average placement ratio across all respondents decreased from 2009. As hiring freezes were lifted, the number of job orders increased. As recruiters tried to fill more open positions, fill rates were logically lower.
One firm explains, “tracking our salesforce to see what high performers were doing right is one of the best changes we made in 2010.”
As hiring resumed and job orders began to flow in 2010, the bottleneck naturally shifted to finding the right candidates. Recruiters continue to rely most on their Rolodex to find candidates. Job boards and social media were tied for least effective (though social media use is increasing nonetheless). Many firms are adding staff specifically focused on sourcing.
“Not professional recruiters but rather non-professional smile-and-dial types,” as one east coast firm owner described them. Finding quality candidates is a big focus and challenge for many firms. A May 2010 survey by job-placement firm Manpower found 31 percent of employers worldwide had difficulty filling key positions within their organization – a rise of one percentage point from 2009. Many echoed this sentiment.
“We’re seeing a lot of unemployable people who have been out of the job market too long, with no defined skill set,” one California staffing consultant said, adding simply, “We need more qualified candidates.”Social media is playing a growing role in recruiting and staffing, particularly for finding passive candidates. A growing percentage of recruiters currently use social media for business, and 85 percent report that social media will be an increased part of their recruiting efforts in 2011.
One recruiter commented, “Social media is breaking down geographic boundaries like never before. LinkedIn and other tools are extremely powerful, and while they represent threats to our business, if used in an innovative and intelligent manner, the possibilities are endless. LinkedIn has revolutionized how I conduct my business.”
This topic is of such high interest to the staffing and recruiting industry – and the dynamics are changing so rapidly – that Bullhorn plans to publish a more detailed analysis of its social media findings in a separate paper.
Many firms are pursuing a “less is more” strategy with regard to client development. “We’re being more selective on the job orders that we work on,” said one Engineering firm manager. “We take on only the ones that we are most likely to fill.” Another Midwest firm said, “We are concentrating on higher profit job orders.”
As last year’s survey respondents expected, 2010 compensation grew. And it’s poised to grow again in 2011. More than half of respondents – 56 percent – report that their total compensation increased in 2010 over 2009. 22 percent report that it declined. However, 88 percent believe it will increase in 2011.
Respondents are very optimistic about expected growth for the industry, and are more bullish about 2011 than they were about 2010. 91 percent believe their firm’s revenue will increase in 2011, with a significant portion predicting revenue growth of 25 percent or more. To best leverage the recovering market, three out of four respondents plan to add staff to their business in 2011, and 58 percent of firms plan to expand into new targets or geographies in 2011, demonstrating respondents’ overall optimism about the industry.
Respondents do see challenges ahead however, including:
Resilient recruiters, however, also see tremendous opportunity
in the current market, including:
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