Tuesday 01 September 2015 11:20am

There’s no “magic bullet” to reduce recruitment company costs, but employing a range of small measures can have a big impact on revenue and profits, says a management consultant.

Candidate training, for example, is an untapped source of revenue for many recruiters, Gatti Consulting director Rob Gatti told a Rec Tech Solutions webinar last week.

One approach recruiters can take is to partner with training organisations and recommend upskilling for candidates who are not immediately suitable for current roles, he said.

Gatti identified a number of other ways recruiters can improve their company’s performance, including:

Partner with other recruiters

“For example if I’m a temporary light industrial specialist and a client asked me to recruit an accountant, most people would respond by saying, ‘I’m not a specialist in that area’. But I would look to establish an agreement with a specialist recruitment firm to help fill the role and negotiate a portion of the fee,” said Gatti.

Split placements have become more common since the GFC and recruiters can approach them either through informal relationships or official networks, such as the NPA.

Capitalise on government subsidies

As of July 1, employers of young, Indigenous and long-term unemployed jobseekers are eligible for wage subsidies through the Federal Government’s Jobactive program.

“Forming relationships with Jobactive organisations can help you lower your costs of candidate acquisition, as well as deliver revenue you otherwise wouldn’t have had,” Gatti said.

Invest in traineeships

“Treating your temporary workforce like employees makes for a major shift in mindset for some recruitment firms.

“Investing in your employees through traineeships can deliver a new level of loyalty and should produce a safer, more efficient outcome for your employees and your clients,” said Gatti.

Reduce ongoing overhead costs

Recruiters can save on superannuation expenses by giving employees the chance to discuss insurance options with financial advisors, which might also lead to referrals, Gatti said.

Recruitment companies can also reduce their payroll tax bill by employing or on-hiring trainees and apprentices, who are eligible for payroll tax exemptions in some states, including Queensland, NSW and WA, he said.

“Some organisations choose to pass this exemption on to the client or keep the majority of it for themselves because there are some administrative requirements around handling trainees,” said Gatti.

Get all staff producing revenue

Recruitment companies’ biggest cost is often their own staff, so recruiters should review all internal roles on a regular basis to ensure as many people as possible are producing revenue, Gatti said.

“Your accounts person should be asking their contacts the ‘what else, where else’ questions, if there’s opportunity to gather information, and pass that back into your sales team,” he said by way of example.

Partner with businesses outside of recruitment

Another way to boost revenue is to foster candidate loyalty by offering discounted services such as accounting and finance broking through third-party providers, said Gatti.

“The way of candidate care goes in waves, but it is… about having the right viewpoint on the key things where recruitment companies have value. It is in their database, it is giving people options and opportunities to really look at for their candidates,” he said.

“How can I make people more loyal to me? Well if you can help them pick up a great home loan or deal through your contacts, through something you might be able to do in your business, then that will encourage loyalty and there may be some revenue in the business for you.”

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