Insight

Setting the Stage for 2019: The Top Priorities for Australia and New Zealand Recruitment Agencies

A new year, a new set of perspectives and priorities.

In 2019, recruitment professionals are feeling bullish and are eyeing increases in temporary placements, operating budgets, investments in technology and efforts to worker skills through education and training. Only the percentage of business done through VMS was expected to remain the same.

Australia and New Zealand recruitment professionals are feeling optimistic about 2019, with 81 percent of respondents expecting revenue to increase from 2018. Twenty-three percent expect revenue to rise more than 25 percent, and only two percent expect revenue to decrease. Overall, Australia and New Zealand agencies seem to be the most optimistic about the industry for 2019 over North American and European firms.

In terms of placements for the year, 76 percent of recruitment professionals are expecting increases in temporary placements this year. Twelve percent of agencies expect temporary placements to remain the same, while 4 percent of agencies expect temporary placements to decrease.

Australia and New Zealand recruitment agencies also anticipate increases in their operating budgets (57 percent of them do) as well as increases in investments in technology (58 percent). Interestingly, there is a strong positive correlation between agencies that understand artificial intelligence and are expecting increases in technology investment.

Region % Increase (All)
% Increase
(AI Understanding)
Australia and New Zealand 61% 64%
Europe 65% 68%
North America 58% 64%

Also related to technology, how do agencies feel about VMS, specifically conducting their businesses via VMS this year? The jury’s out on this one as 26 percent of Australia and New Zealand recruitment professionals expect their percentage of VMS business to increase, while 36 percent expect it to remain the same as last year.

Fifty-five percent of respondents will focus on workforce reskilling efforts, or updating workers’ skills through education and training. Australia and New Zealand was actually the most polarised region on the topic, with the highest projected increase and the highest projected decrease.

Region Increase Decrease Stay the Same
Australia and New Zealand 57% 5% 40%
Europe 51% 3% 47%
North America 54% 3% 44%
Total 54% 2% 44%

Workforce reskilling is also a highly relevant solution for candidates whose current skills sets could be automated by artificial intelligence in the near future. And therefore, it was especially interesting that a projected increase in workforce reskilling was highly correlated with an understanding of artificial intelligence.

AI Understanding Increase in Reskilling Decrease in Reskilling
Reskilling Stays the Same
No / Little Understanding 48% 2% 50%
Some Understanding 53% 3% 45%
Strong Understanding 62% 3% 36%

What Will Agencies Prioritise in 2019?

In short: candidates will be a top priority this year. Fifty-four percent of agencies listed candidate acquisition and sourcing, and 41 percent of agencies ranked engaging candidates and improving the candidate experience as their two biggest priorities. This makes sense considering that strategically identifying and sourcing candidates and providing incredible candidate experiences are two of the most effect ways to combat the talent shortage.

The days are over when you could post a job and wait for a response. You have to be disciplined about casting a wide enough net to capture the right talent.

Beyond candidates, here are some other notable priorities that agencies will focus on in 2019. We’ll explore these priorities in more detail below.

    Despite the promise of creating a renewable talent tool, reskilling ranked toward the bottom of the list as only 3 percent of Australia and New Zealand agencies selected reskilling workers due to the changing nature of jobs as a top priority.

    Embracing Digital Transformation to Improve Operations

    Automation and artificial intelligence continue to be one of the hottest trends and topics in the industry conversation. Last year, dialogues swirled about the potential impact of automation and artificial intelligence on recruitment— will the robots overtake human recruiters or will they aid their work?

    While we’re nowhere near a robot apocalypse that’s depicted in science fiction, bots are here to help improve agency operational efficiencies. How so? By automating lower-level initiatives such as scheduling, screening, following up, and data entry so human recruiters can focus on more strategic initiatives such as developing and deepening relationships — doing what humans do best.

    Regionally, Australia and New Zealand agencies saw digital transformation as less of a priority than firms in North America and Europe. However, agencies this year will focus on incorporating digital transformation into their recruitment strategies to help them become even better and more efficient at their jobs. Once automation and artificial intelligence are fully harnessed into the recruitment workflow, they’ll have profound implications on the industry at large.

    This [automation] is a disruptive force. We’re going to have disruptive capital. And the organisations that aren’t able to adopt automation will perish. They won’t be able to keep pace with their competition. 

    Employment Brand Development and Marketing

    Most recruitment agencies lack proper marketing leadership, which explains why 32 percent of respondents identified employment brand development and marketing as a top priority for 2019. According to a Bullhorn survey of more than 100 recruitment leaders of medium to large-sized agencies, 61 percent indicated that they have neither a vice president of marketing nor a chief marketing officer.

    Executives (defined in this research as C-Level executives, agency owners, and primary owners of lines of businesses) and senior managers (defined as managers, directors, and vice presidents) at recruitment agencies were more focused on employment brand development and marketing than staff (defined as frontline recruiters and salespeople). Geographically, Australia and New Zealand agencies were less concerned with this priority than North American and European firms.

    Why aren’t there more senior marketing leaders, especially in an industry where nurturing candidate relationships is paramount? While it can be expensive to invest in seasoned marketing leaders, the result is beneficial: a cohesive marketing strategy and vision that has business impact.

    Improving Management of Client Relationships

    In an industry driven by relationships, improving management of client relationships is currency. After all, deeper relationships can yield more opportunities and businesses can only further grow when their client relationships flourish.

    Interestingly, executives and senior managers were more concerned with improving the management of client relationships than staff, potentially indicating that frontline professionals already believe that their current relationships are strong.

    The primary reason we exist and why we consult is to create a level of advocacy and connectivity, and put great people together and everything tends to flow from there.

    How can agencies ensure that they have the strongest possible client relationships? Technology. To stay in front of the competition, agencies must embrace recruitment software to gain deeper insights into their client relationships and uncover real-time information to drive new growth opportunities.

    Social Recruiting

    Recruiters in today’s digital age have numerous ways to reach candidates, especially via social media. Tech-savvy recruiters are increasingly turning to social media to gain intelligence about candidates and source their very own super-skilled job seekers.

    Social media is an effective channel for connecting and building relationships with candidates. Recruiters can analyse candidates’ career and education experiences via LinkedIn, view their topics of interest via Twitter, dig deeper into their personas via Facebook, and understand their cultural and lifestyle interests via Instagram.

    What do agencies think about social recruiting as a top priority for 2019? Again, Australia and New Zealand agencies were less likely to engage in social recruiting this year than their colleagues in North America and Europe. And enterprise agencies were about 50 percent less likely to list social recruiting as a top priority.

    Succeeding in social recruiting is all about having a strong web presence, which not only helps attract new candidates, but also helps secure new clients.

    Expanding into New Markets

    As agencies grow their businesses, they’ll undoubtedly establish operations in new markets and develop brand recognition in strategic geographies. In order to expand into new regions, should recruitment agencies grow organically or inorganically? In other words, should they build their own operations or buy current businesses to enhance their portfolios?

    At Engage Boston 2017, we asked our attendees that question, and 69 percent of recruitment professionals said they preferred to build their organisations organically, while 31 percent said they favored growing their businesses through mergers and acquisitions (M&A). Fast forward to 2019, where this sentiment was reflected in respondents in Australia and New Zealand. Eighty percent of agencies are looking to build organically compared to only seven percent favouring growth in their business via M&A.

    Why are agencies focused on new market growth, and why are some of them expanding via M&A? Strategic M&A deals by larger agencies and the proliferation of recruitment investment from private equity firms will continue at steady pace for two reasons: private equity sees the financial appeal of capitalising on an industry with low barriers to entry and comparatively low capital expenditures, and debt is cheap.

    According to Staffing Industry Analysts, 2017 saw a 28 percent year-over-year increase from M&A activity in 2016 and the second highest annual deal volume over the past decade. These findings signal that M&A activity will continue to heat up within recruitment.

    There’s a real business benefit to putting two organisations together, you can create a combined organisation that’s ready to disrupt the industry. That’s why you’re seeing all this M&A activity in recruitment.

    It’ll be interesting to see how agencies tackle their priorities for 2019 and how they’ll use each of these strategies to grow their businesses. Will any of these priorities change as the year unfolds, or will any new ones rise to the top? Only time will tell.

    insight
    What did Australia and New Zealand recruitment agencies cite as their top challenges for 2019?

    Bob McHugh

    Senior Content Marketing Manager

    Bullhorn

    Bob McHugh is the Senior Content Marketing Manager at Bullhorn. Before joining Bullhorn, Bob spent five years at the digital marketing agency, Brafton, as a Social Media and Engagement Manager. He earned his bachelor's degree from Siena College and his MFA in writing from Emerson College.