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8 Apr

Revenue and Growth | Good Grade Guarantee!

Revenue Expectations:75% of respondents from APAC recruitment agencies met or exceeded their revenue goals in
While the 74% of contract agencies that met or exceeded their revenue goals falls in linewith this 75% average, this includes 44% that exceeded their goals, a mark that easily surpassesthe overall average of 35%. And though the 75% of permanent agencies that met or exceeded theirrevenue goals was similar to contract agencies’ results, permanent agencies proved to be muchless volatile in 2014, with only 29% actually exceeding their goals. Meanwhile, 86% of recruitmentagencies expect their revenue to increase in 2015, including 93% of agencies specialising in contractrecruitment. In fact, 62% of APAC recruitment agencies expect their revenue to increase by morethan 10% in 2015.5Revenue and Growth2014 Revenue Goals Results by Primary Recruitment TypeOverallExec Search – RetainedTemporaryPerm (non-exec search)ContractExec Search – Contingent0% 20% 40% 60% 80% 100%25% 40% 35%25% 46% 29%37% 31% 31%9% 27% 64%20% 50% 30%26% 30% 44%Fell ShortMetExceeded% of Agencies That Expect to Increase Revenuein 2015 by Primary Recruitment TypeOverallContractPerm (non-exec search)Exec Search – RetainedTemporaryExec Searh – Contingent0% 100%77%80%82%88%93%86%20% 40% 60% 80%6Revenue 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 generatedover $100,000 less per consultant/salesperson than agencies of any other size. Agencies ofthis size may be struggling to adjust to growth, as individual consultants may not receive themanagerial attention that consultants at smaller companies benefit from. Decreased managerialattention can lead to struggling performance, reduced billing, and ultimately, a noticeable impacton revenue per consultant/salesperson. Meanwhile, larger agencies likely have the advantage ofmid-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 togrow headcount in 2015, including 90% of agencies with 11 or more recruitment consultantsand salespeople.Overall, 30% of APAC recruitment agencies plan to expand into new branches in 2015. Thispercentage 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 recruitmentconsultants and salespeople plan to open new offices in 2015.1-1011-2526-7475+$0 $100,000 $200,000 $300,000 $400,000$365,000$356,000$241,000$365,000Revenue per Recruitment Consultant/Salesperson by Agency Size% of Agencies Planning Branch Expansion by Agency Size1-1011-2526-7475+0% 20% 40% 60% 70%64%17%44%24%10% 30% 50%7Revenue from Repeat Client Business:The 75% of respondents who generated over 50% of their revenue from repeat client business isa fairly modest percentage compared to U.S. and UK recruitment agencies, as APAC recruitmentagencies seem to have their eyes open for new clients. That said, the amount of revenue that APACrecruitment agencies generate from repeat clients is still substantial, and a good sign of baselineconsistency.Agency Health25%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 BusinessUse of Vendor Management Systems:Over the next year, APAC recruitment agencies plan to significantly increase their use of vendormanagement 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 suchlimited VMS use in 2015. Additionally, 13% of respondents drove 50% or more of jobs through VMS in2014, 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 VMS201420158Average Fill Rate in 2014:The average fill rate of all APAC respondents was 47%. Sorted by agency size, smaller agenciesexperienced more success in terms of fill rate than larger agencies. This is likely due to a lesserquantity of job orders received by small agencies, but the efficiency necessary to fill over half ofall job orders is still impressive. For this report, we defined fill rate as the number of job orders filleddivided by the number of job orders received, multiplied by 100.Performance BenchmarksFill Rate by Agency SizeOverall1-1011-2526-7475+0% 20% 40% 60%37%38%45%51%47%Despite the struggling state of the Australian construction1 and manufacturing2 industries, fill ratesfor 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 theseindustries during this period of contraction, making the efficient filling of job orders an easier task.Average Fill Rate by Industry0% 10% 20%39%OverallConstructionManufacturingIndustrialBusiness ServicesTechnologyFinance/InsuranceHealthcareTelecommunicationsRetailGovernment30% 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. 2015.9Average Hit Rate in 2014:The overall average hit rate for APAC recruitment agencies in 2014 was 40%. Hit rate was definedfor respondents as the number of successful placements (starts) divided by total number of clientsubmissions (sendouts), multiplied by 100. Agencies serving the technology industry performednotably worse in hit rate than they did in fill rate, perhaps because technology jobs require a greaternumber of submitted candidates than jobs in most other industries. IT/technical jobs, in fact, had thelowest hit rate of all roles recruited for by APAC recruitment agencies.Average Hit Rate by Industry0% 10% 30%35%OverallHealthcareManufacturingBusiness ServicesIndustrialTelecommunicationsFinance/InsuranceConstructionTechnologyRetailGovernment20% 40%33%37%37%39%40%42%44%44%47%40%50%Average Hit Rate by Role Recruited0% 10%SalesOffice/Clerical/AdminMarketing/CreativeEngineering/DesignProfessional/Specialty/ManagerialAll/GeneralistFinance & AccountingIT/Technical20% 50%34%35%36%37%39%40%42%46%30% 40%10Average 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 reportedfigures from the United States and United Kingdom. However, APAC contract recruitment agenciesdid have a longer average time-to-fill than both American and UK contract agencies by asignificant margin, needing an average of 16 days to fill each job.TemporaryContractPerm (non-exec search)Exec Search – ContingentExec Search – Retained0 10 20 30282820166Average Time-to-Fill by Primary Recruitment TypeAverage Number of Submissions per Hire:Overall, APAC recruitment agencies needed to submit fewer candidates per hire than either U.S. orUK agencies. Broken down by primary recruitment type, however, contract agencies’ 6.2 submissionsper hire stands out – in other parts of the world, contract agencies were on the lower end of thescale, with 4.7 submissions in the US and 4.1 submissions in the UK in 2014.Average Number of Submissions per Hire byPrimary Recruitment Type0.0OverallContractExec Search – RetainedExec Search – ContingentPerm (non-exec search)Temporary7. 2.0 3.0 4.0 5.0 6.011Percentage of Agencies’ Placements Made from Candidatesin Recruitment CRM:APAC recruitment agencies also had a higher rate of placements made from candidates in anagency’s recruitment CRM than both U.S. and UK agencies, with a substantial 53%. Temporary andcontract 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 agenciesrequire a platform that can provide them with a sizeable quantity of readily available candidates, sotheir relative need for a recruitment CRM system makes sense.Average % of Placements Made from Existing Candidatesby Primary Recruitment TypeOverallTemporaryContractPerm (non-exec search)Exec Search – ContingentExec Search – Retained0% 70%46%50%50%62%63%53%10% 20% 30% 40% 50% 60%Agencies placing candidates into the construction industry (the fill rate leader in this year’s reportdespite industry contraction) used candidates from their recruitment CRMs to make a successfulplacement 57% of the time, the third highest percentage among all industries.Average % of Placements Made from Existing Candidates by Industry0% 10% 30%46%GovernmentTelecommunicationsConstructionFinance/InsuranceTechnologyHealthcareRetailBusiness ServicesManufacturingIndustrial20% 60%45%47%48%51%53%54%57%59%61%40% 50% 70%12Remuneration Performance:Actual remuneration performance for employees of APAC recruitment agencies in 2014 wasfairly conservative, with 57% of respondents receiving a pay rise and 13% receiving a reduction inpay. However, expectations for 2015 are high, with 81% of respondents anticipating a pay increasein the next year.Remuneration30%57%13%18%2% 81%2014 – Actual 2015 – ExpectedIncreaseDecreaseSameReal Remuneration in 2014:CEOs earned the most money among recruitment roles ($146,000), while recruitment consultantsearned the least ($93,000). Interestingly, however, salespeople reported a higher averageremuneration than recruitment managers. Additionally, APAC recruitment agency owners andCEOs earn far less than their executive counterparts in the U.S. and UK, with those CEOs averagingmore than $210,000 AUD in remuneration.Average Remuneration by RoleCEO/Owner/Partner/Managing DirectorSalesperson/Sales Manager/Account ManagerRecruitment Manager/Head of RecruitmentRecruitment Consultant/Sourcer$0 $40,000 $80,000 $120,000 $160,000$93,000$116,000$121,000$146,000

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