A Numbers Game: A Corporate Recruiter's Take on the State of Staffing

Bullhorn done did it again. Today, the staffing software giant released its fourth annual Recruiting Trends Report.

In December 2013, Bullhorn polled 1,337 agency professionals to get a sense not only of 2013 but also what to expect in the future.

As a corporate recruiter, I’m not as up close and personal with the agency side, but I have many friends who are and the findings were not terribly surprising, confirming some of the larger trends and themes that have long existed in third party recruiting.

Growth

Is the recession finally over? Does the growth in recruiting agencies finally signal that the job market is turning around? Or are we just moving the same players from one company to the next?

With 77% of respondents reporting they’ve met their revenue goals, this should be good news. After all, it tops the percentage reported for the last three years. But could it be a sign that we’re setting our goals lower? Even with revenue goals being met or even exceeded, only 23% of firms are planning on opening new offices.

Makes you wonder just how aggressive these revenue projections really are. While the most successful (per recruiter numbers) were reported by larger staffing firms, these same firms reported most of their revenue coming in from large, repeat customers. The Walmart model of recruiting? Maybe so…

While the repeat business is definitely a positive, nearly half of respondents at firms with between 26 and 74 recruiters and sales people reported getting at least 70% of their revenue from a single client. As an agency recruiter this would freak me out, not to mention the potential for razor thin margins. Are the recruiters actually making any money for making placements?

Metrics

Let’s face it – the placement is king. None of this revenue stuff happens without placing candidates. So what does that look like?

It’s not surprising that retained executive search has the highest fill rate, while contingent the lowest.

Executive searches can go on for months, whereas contingent are often competing with other agencies or even internal recruiting efforts. If a contingent role isn’t filled quickly, it may not be filled at all.

On average, respondents are filling only 46% of the open positions they report. LESS THAN HALF.

Does this number bother anyone else? Maybe I’ve been inside too long, but I remember how tough the business development piece is. All that work to actually fill and bill less than half?

Maybe this is what success looks like, but I would have expected closer to 60-70%. This leads me back to the main question I would have as a contributor – how does this affect MY bottom line?

Candidates

All these placements being made, at all these clients? Yeah – doesn’t happen without candidates. With social media being the “next big thing” in recruiting, surely the latest shiny objects have contributed the most candidate flow, right?

Apparently not. Nearly half (49%) of placements were made with candidates straight out of the recruiters’ own databases.

Social media still had an impact, as did job boards with most large firms reporting boards to be the number one source of qualified candidates. Unfortunately, “social media” was never actually defined.

Does this include LinkedIn? Twitter? Facebook? Until there’s some sort of consensus on what social media really means, these numbers are sort of meaningless.

There were a few other areas broken down, including recruiter compensation (which seemed a little low to me, and was flat relative to years’ passed).

Also, in terms of greatest opportunity and biggest threat – social media for the opportunity win (seriously?) and lack of qualified candidates keeps us up at night.

Overall, the report was not surprising. The numbers reflect a lot of what I see and hear from my agency friends. There were definitely some unanswered questions – as I mentioned above meeting revenue goals is one thing, but knowing what the goals are based on (and improvement over previous years) could tell a completely different story.

I wasn’t as disappointed with the information as I’d expected. To be frank the lack of bullshit to blast made this post more difficult to write than I expected. That said, the information was more fluff and less substance.

I didn’t get a whole of lot insight I didn’t already have and not much in the way of trends moving forward. I guess we have to find some futurist “thought leaders” to weigh in on that. In this industry, that shouldn’t be too tough.

For a full copy of Bullhorn’s recently released 2014 Recruiting Trends Report, click here.

Comment by Tim Spagnola on February 18, 2014 at 12:38pm: Amy - I could hug you. Love your posts. I did not review all the data from Bullhorn, but did they by chance segment this out by industry?

Comment by Pete Radloff on February 18, 2014 at 12:46pm: I wonder how much some of these metrics are hurt by stupid agency doctrines of "minimum # of submittals a week", etc. I always saw that as dumb. I can give you 20 and we might hire 2, but what if I gave you 7 and 4 got hired? Still in search of quality over quantity, but then again I've been removed from the agency world for a few years. Nice post Amy!

Comment by Vinda Rao on February 18, 2014 at 12:53pm: Tim - yes, we did segment it by industry. Not all of the industry analyses made it into the final report, but I'm happy to talk offline and answer any questions you may have.

Comment by Tim Spagnola on February 18, 2014 at 12:57pm: Thanks Vinda for the quick reply. I'll dive into that a bit deeper this afternoon.

Comment by Amy Ala Miller on February 18, 2014 at 1:08pm: Thanks guys - I tried to review it as an objective third party - not TPR - yet still intimately familiar with recruiting and over 10 years in agency staffing. The pros AND cons to it is Bullhorn can only report on what respondents are telling them. No doubt the numbers are accurate, but I was still left wondering what it all really MEANS... and to your point Pete - how much does quality take a hit because of the quantity focus? The large staffing agency reliance on one client made me shudder.

Comment by Keith D. Halperin on February 18, 2014 at 4:36pm: @ Pete,@ Ala Re: Quantity vs. quality-

When I was still working for agencies, I don't recall getting criticized by the boss for a poor-quality hire if it didn't fall off during the guarantee period.. My guess is that things haven't changed too much in the intervening centuries, I mean years.....

Comment by Pete Radloff on February 18, 2014 at 4:43pm: Probably not, but it does contribute to the stigma of agencies, and more accurately recruiters in general.

Comment by Amy Ala Miller on February 18, 2014 at 5:02pm: Let's face it, agencies are well known for crazy rules. I remember being a top biller for a mid-sized firm - literally #1 or #2 every month nationally, but it was all perm dollars. I got dinged for not having enough temp gross margin dollars. I couldn't get temp clients on board to save my life but I was placing mid levels folks at 20-30% placements fees every week. My boss bubble wrapped me as best she could, but at some point you have to look at these so called "rules" and toss the ones that don't make sense.

Comment by Keith D. Halperin on February 18, 2014 at 6:39pm: @ Pete: Thank you. Speaking of a "lack of stigma" or "honor": I think it's time for this again:

http://www.youtube.com/watch?v=1mIok8ThT5c

-kh

Comment by Ken Forrester on February 19, 2014 at 8:59am: Great insights into those numbers Amy, I really like your perspective.

One question that I would have like to see was how recruiters are affected by the skill-gap problem.

In 24 years of recruiting I have never presented anyone without a college degree, until last year. I was fortunate to place two individuals only because the hiring manager trusted my judgment.

There is a bevy of exceptional talent out there hidden by out-dated recruiting knock-out terms like unemployed, job hopper, no degree, ethnic and a few more. Using robotic technology as the first line of defense to eliminate this group from consideration is an opportunity lost in hiring the best talent.

One group in particular that is overlooked and are greatly affected is the millennial. All we read about are their attitudes and unrealistic expectations, but that group of talent has suffered a crushing blow in launching their careers by the financial melt-down. Many will never get the opportunity to show what they can do and what they have done to survive one of the worst economic disaster of all times, and how that experience will translate into on the job performance. Unfortunately, that experience is perceived as job hopping.