As documented in this website the National average turnover for recruitment companies in Australia varies between 35 – 40%.
That means in essence most recruitment companies are rehiring a whole new employment force every 2.5 – 3 years.
- Would you pay money to get coaching from a tennis player that had a poor win to loss ratio?
- Would you buy a car from a dealer that had a reputation for selling vehicles that break down?
I am guessing the answer to both is no!
In the same respect it is mightily worrying that an industry whose main function is to provide advice on how businesses should structure their teams and what staff they should hire, and likewise provide candidates with options as to where they will be best suited in their careers, seems reasonably incapable of maintaining a secure, settled workforce themselves. But that is sadly a problem facing the recruitment industry.
You often hear both clients and candidates make the comment that there is too much churn within recruitment businesses. That they are dealing with a particular consultant one minute and the next they are gone. This is unsustainable – and unless something can be done to rectify this turnover rate our industry will continue to be looked on with skepticism, as a necessary evil and a business focused on the transactional rather than relationship building.
So were we to look internally into the recruitment sector…what could we do to fix this?
- Respect your consultants
Without devaluing the power of a Recruitment Company’s brand….Clients and Candidates want to deal fundamentally with particular consultants. This can be seen throughout our industry where good consultants move on from a recruitment business and their main clients go with them. The consultant is the person who understands the make-up of an organization – its structure, culture and hiring policy. They have built relationships with HR and with line managers. The consultant will therefore maintain that loyalty. Not the recruitment business they have just left. Realising this is a first step.
- There is no such thing as a warm desk
As a lead on from point 1 there is a complacency that exists in our industry that when a successful consultant leaves a company it leaves a “warm desk” for his or her predecessor. This is a fallacy. No matter how close the relationship has been between the recruitment company and a business previously the new consultant will be starting from scratch. And make no bones about it – that client will be disappointed they have to go through the process of re-educating the new consultant about their business.
- Pay our people more
With the above in mind do we really pay our consultants enough? Given the relationship lies with the consultant surely we should be paying at least 50% – 60% of all revenue that is generated by these relationships to the consultant? Yes recruitment companies provide the support structure and the tools required for people to do their jobs BUT without our consultants and their relationships then there is no recruitment business. Indeed most recruitment businesses structure their commission schemes to accommodate the less successful performers so there is an overall balance in terms of what they will pay overall in bonuses. In short better consultants are disadvantaged.
For more information on how devote pay their staff please click here.
If the above can be addressed – and those that are the core of recruitment (our consultants) are better rewarded and what they bring given greater respect then this may just reduce the level of turnover that currently exists. And that would result in a happier, more successful recruitment industry where clients and candidates receive the consistent service they seek.