Recruitment services sector update

Published Credits: Alison Newman Categories: Tags:

There are over 7,500 labour hire companies across Australia who have seen business success over the last five years closely aligned with economic confidence and a fall in unemployment. Find out more about the trends and future for the sector.

Hand Shake in recruitment

With $15.9bn revenue expected this year and a predicted 1.1% growth, the recruitment services sector is doing well. 

The sector has benefitted from growing trends in outsourcing and part time and casual flexible working. WIth relatively few barriers to entry, competition has been intensifying as more companies have entered the market. There has also been an increase in online sites and technology helping both placement but also enabling client firms to recruit directly across a wider audience. This increased competition has led to lower profit margins and a downward pressure on fees. To help offset this businesses, particularly those with longer term preferred supplier agreements, are diversifying into other added value HR services and benefits.

This is a people business and unsurprisingly success factors are closely interrelated

  • Good marketing contacts
  • Quality staff and management
  • Effective promotion and communication
  • Provision of the latest and most efficient technology

Business costs are heavily skewed towards labour with above average staff salaries. It is predicted in contrast to every dollar spent on labour, that only $0.04 will be invested in equipment, vehicles and computers.

Opportunities to outsmart competitors suggest that investing in software and application development could be a winning formula.

Overall industry growth, in the longer term to 2025, is predicted to continue and in some years accelerate showing an increase in the number of companies, employment and revenue. This is great news for all involved in recruitment and labour hire.

Source:  IBISworld Employment Placement and Recruitment Services

How can Classic Funding Group help

Where recruitment companies are involved in outsourcing, winning a new client or project can put a significant cash strain on the business. Footing a much higher wages bill before payment arrives may leave a company with few options, particularly if overdraft limits are relatively low. 

For more ambitious businesses who are looking for funding to buy another business or expand their services, we can help to get the finance in place. 

Classic Funding Group offers Invoice Discounting solutions designed to flex with the business cash flow needs. We work with several labour hire companies in a confidential way to help enable growth for their businesses.

Enquire today to find out more