To Fly

INDUSTRY INSIGHT – Simon Greening, APAC regional director, Bullhorn on setting up an Australian recruitment agency.

If you’re looking to set up a recruitment agency, you’ve picked the right time to do it. The Australian government’s last major report on the industry (August 2016) found that it consisted of around 7,000 businesses – which at the time employed 93,000 people and generated $11.2 billion in revenue. What’s more, over 90 per cent of these organisations employer fewer than 75 people.

These smaller specialist agencies clearly have a place in the Australian market – but they may have to go above and beyond to stand out. A complex and multifaceted workforce means that companies are happy to work with commercial recruiters, but commercial recruiters cannot take their custom for granted. Several challenges stand in the way of success, including pressure bill rates and margins; Australia’s economic growth rate; attitudes towards skilled labour from overseas; and the overall hiring intentions of the country’s employers.

There’s clearly some anxiety in this space. But what’s driving it, and what can be done to alleviate it? If you’re looking to set up a recruitment firm in Australia, you’ll require a comprehensive understanding of current trends in the market. Here are some to keep in mind.

Workforce trends

When it comes to workforce trends, it’s important to understand that Australia is both very big and very little. While geographically vast, its population sits at around 24 million – significantly less than countries like the UK, which has a substantially smaller surface area. Coupled with a decidedly less-than-relaxed immigration policy, it can be hard to find good, qualified full-time talent: particularly since the end of the 457 visa scheme, which has caused issues in industries reliant on STEM talent.

However, it’s important to note that despite shortages in specific areas, unemployment remains low: fewer people are looking for jobs, which means fewer candidates for you to draw from. But research indicates that this may be a problem of philosophy and approach rather than logistics. A survey from global job search engine Indeed revealed that the vast majority of employers are fixated on securing permanent candidates – and yet 75 per cent of workers surveyed claimed that they had ‘job hopped’ in the past.

This essentially misunderstands the nature of the modern Australian workforce, as the same survey reveals: 25 per cent of the national labour force is comprised of people working in contract, part-time, or casual roles. Fulfilling client and candidate requirements will naturally be difficult if you’re insistent on securing a permanent employee with an unbroken history of long-term, full-time roles, because these employees are an increasingly rare commodity.

This is also partially why there’s been a larger cultural push towards diversity – which could mean hiring people with diverse personal backgrounds, or diverse employment backgrounds. Though it’s often associated with ‘inclusion’ – and rightly so – the fact that diversity is simply good business sense isn’t always appreciated. However, the up-side to restrictions on overseas hiring is a belated recognition that underrepresented groups can be valuable sources of talent.

However you choose to approach the issue, it’s worth understanding that recruitment isn’t just about matching candidates who seem about right to roles that seem about right. It’s far more complicated now, and is just as much a matter of accommodating the eventual hire as it is meeting the client’s particular needs.

Legal trends

Data protection has always been important, within the recruitment industry and outside it. But in 2019, Australian recruiters should redouble their efforts to comply with local and federal privacy laws, as well as foreign legislation such as the European General Data Protection Regulation (GDPR) – which applies to anyone resident in the European Union (EU), and any recruitment companies that work with EU citizens.

Its stipulations are wide-ranging, and usually more stringent than Australian privacy law: the ‘right to be forgotten’ is not covered by national law, and the notion of ‘explicit consent’ is rather less relaxed. The intent of the regulation may be similar – to improve accountability, transparency, and protections – but the letter is radically different.

Australian law, of course, should be your first priority, and paying attention to recently introduced measures like Single Touch Payroll (which mandates that payments are reported to employees either monthly or quarterly) and complying with them is vital. Work closely with any tech partners, execute regular internal audits, and train your team to make sure you’re abiding by any regulations that apply.

Technology trends

Australian recruitment has had a somewhat underwhelming attitude towards technology adoption: anecdotal evidence suggests that most agencies will be increasing their spend in this area over the course of the year – but also that a sizable minority won’t, and that many aren’t automating key tasks. Many recruiters seem to believe that individual consultants should be exclusively responsible for candidate experience.

If you’re not making automation a priority, you may be making life more difficult than you strictly have to. Automation can simplify and streamline many of the more frustrating and time-consuming processes that might otherwise occupy a recruiter’s day-to-day activity. In terms of your core tasks – sourcing and placing candidates – CRM and ATS systems are amongst your most effective tools.

For Australian recruiters, it’s less about any individual tool than an overall attitude: being willing to adopt, adjust, and embrace the future. Focusing on technology will have tangible benefits, but some of the intangible benefits are perhaps even more important. If a fledgling firm embraces the unconventional – if it puts innovation at the core of everything it does – it will find success more easily than firms that don’t. In 2019, the most competitive firms will be ones who stay aware of trends and integrate them into their daily activities.