UK Offers a Look Ahead and Behind
I’ve just returned from the UK, where Bullhorn has built quite a buzz over the past year. The staffing and recruiting market was hit hard in the UK, just like it was here in the US. And things are starting to pick up there as well. The remarkable thing about the UK market is the sheer density of staffing and recruiting firms in a 25mi radius of London. Agencies compete fiercely and their margins reflect it. Most firms operate on margins 25-50% lower than those enjoyed by firms in the US. One’s first thought would be, “How could firms make money in that environment?” While I don’t have the answer, I can tell you that the bottom lines of these businesses look similar to those of their US counterparts.
Staffing penetration in the UK is higher and the market is mature, so perhaps firms just “make it up on volume”. The UK staffing market is more mature than the US market, so perhaps this is a forecast for where the US market will head over time? While the UK recruitment industry is more mature than the US, the IT market is behind. Software as a Service (SaaS) is not yet industry standard like it is here in the US. In many ways, it’s 2004 in the UK – many of our sales calls involve lengthy discussions about the SaaS delivery model. Unlike 2004, most savvy IT professionals in the UK recognize that moving their applications to the cloud makes sense for so many reasons. It’s CEOs, MDs and CFOs that still need convincing that running hardware locally is actually riskier than outsourcing it to a partner who specializes in secure application management and delivery.
Of course, Bullhorn has come a long way since 2004. We didn’t have our SAS70 type II, or Safe Harbor in 2004. And the fact that we spend more on R&D, hosting and security than any of the largest staffing firms in the world (let alone our competition) makes for a compelling argument. We’ll be investing a lot more into the UK and further international expansion next year, as many of our enterprise customers are bringing us there already. 2010 promises to be an exciting time for Bullhorn and, let’s hope, for the entire staffing and recruiting industry.