The pandemic has wiped out a decade worth of recruitment industry growth, and sent employment and revenue in our industry back to 2010 levels.

Figures from IBISWorld Australia suggest staffing industry revenue in Australia has dropped $4.4 Billion in the past financial year. (Four ‘point’ four billion dollars!)

Profit margins have collapsed from 4.2% of revenue in 2019 to 2.2% in FY 2021. (although I can assure you many recruitment companies would be delighted to have the word ‘profit’ even associated with their current trading results.)

As I reported in The Savage Truth a few months ago, employment in recruitment has been decimated. IBISWorld says that employment in the recruitment industry has dropped by 20%, representing 36,000 recruiter jobs. ( I do not believe this number includes corporate or internal recruiters, who have been heavily impacted as well.)

Most frightening perhaps, is the fact that 1,200 recruitment companies have ceased trading in Australia, year on year. (According to ABS data, in Australia there are 7,581 recruitment companies, and of those, 7,069 companies are SMEs with revenue of $10m or less.)

So that is all pretty shitty by any measure.

But there is good news!

According to IBISWorld, recruitment industry revenue is expected to grow at an annualised 3.8% over the next five years, outperforming the overall economy, which is likely to rebound at a rate of 2.7%.

And it might be happening already.

The freshest data I have is provided by my old mate Nigel Harse from Staffing Industry Metrics, who collects data from one hundred Australian recruitment companies and collates it into fascinating statistical trends. (Contact Nigel to join his benchmarking service)

With his permission, I have reproduced this chart of Perm Sales and Temp Sales across the statistical cohort from January 2019 to July 2020.

As we know, Perm was hammered once the horror of the economic impact of the pandemic sank in. Perm sales in April fell 58% on the prior month. (Seriously, ouch!)

Interestingly, Temp/Contract sales held firm, and even had slight growth in April 2020, once again proving the critical importance of an annuity revenue stream for recruitment company sustainability.

Perm sales for the seven months of 2020 are down by 47% on 2019, while Temp/Contract sales are down 12% on 2019

But the ‘trend is your friend‘ as my slick friends in the stockbroking world used to say until the algorithms got them.

The low point for perms was May 2020, and results have improved each month since. (Although the impact of the Melbourne lockdown is not fully felt in this data yet.)

Perm sales in July 2020 are 49% higher than in May 2020, so things are improving.

However, let us also be realistic about the situation. Perm sales in July 2020 are down 60% compared to July 2019

However, temp & contracting has grown 6% from April to July and July is down just 5% on July of 2019

So, as we all knew, our industry has been well and truly hammered. But the experts say we will recover, and we will grow faster than the economy (Which has happened after all previous recessions, I might add). What’s more, Temp has been resilient despite WFH, lockdowns and all the rest. Perm was smashed – but is recovering.

So my recruiting friends, it’s been a nightmare for many. Plenty of our colleagues have lost their jobs, and many companies have not survived. That scenario has yet to fully play out I fear.

But the sun will shine on recruitment again, and maybe sooner than we think!

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