2017 north american staffing & recruiting trends...

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2017 North American Staffing & RecruitingTrends Report:Above and Beyond

Business as Usual

© Bullhorn 2017. All Rights Reserved. 2

An in-depth look into the complex world

of staffing and recruiting firms, this report

analyzes the state of the industry in 2017 and

covers a wide range of topics—from the recent

election to KPIs to revenue projection and

best practices.

It’s based upon a global survey of more than

1,400 staffing and recruiting professionals at firms

of all sizes operating in all sectors. We tapped the

industry’s movers and shakers to find out how

they’re planning to tackle challenges, overcome

uncertainty, and build sustainable profitability.

The most innovative and aggressive firms

stride towards success through greater

operational efficiency, client retention, candidate

engagement, and pure hard work and grit. In

other words, they’re going above and beyond

business as usual, and the findings of this report

highlight exactly how they’re doing it.


Table of Contents

Executive Summary

The Staffing Landscape

Top Priorities

Top Challenges

Talent Shortages

Economic & Political Outlook

2017 Performance Outlook

Revenue Expectations

Hiring Outlook

Revenue Sources

Areas of Investment

Key Performance Metrics

Ramp-up Time

Corporate Structure

Recruiting Metrics

Sales Metrics

Employee Perceptions

Staffing Industry Best Practices

Operational Efficiency through Technology

Best Talent Sources

Evaluating Client and Candidate Engagement

Measuring Client Engagement

Boosting the Candidate Experience

Key Takeaways: Opportunities to Excel

About Bullhorn

Appendix: Survey Demographics

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ExecutiveSummary

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Bullhorn is pleased to share the opinions,

outlooks, and concerns of more than 800 North

American staffing professionals in its 2017 North

American Staffing & Recruiting Trends Report:

Above and Beyond Business as Usual.

Opportunities abound for most staffing

firms in 2017, but achieving success requires

going above and beyond a business as usual

mindset. Sustaining profitable growth—a top

priority among respondents—takes a clear

focus on operational efficiency, as well as an

understanding of the increasingly complex

challenges presented by a shifting economic

and political environment. Moving beyond the

status quo also takes a multifaceted approach,

anchored by strong performance metrics and a

commitment to client and candidate engagement.

The 2017 Staffing & Recruiting Opportunity: Sustaining Growth

TOP PRIORITIES

56% Increasing profitability

47% Driving revenue growth

35% Candidate acquisition

TOP CHALLENGES

61% Talent shortages

53% Pricing pressure/margin compression

37% Global economic uncertainty

ECONOMIC CONCERNS

35% Cost of healthcare

23% Economic growth

21% Trump administration

POLITICAL SENTIMENT

38% More confident about future

21% Less confident about future

NEW VS. EXISTING BUSINESS

78% Expect to generate a majority of revenues (51%+) from existing clients

10% Expect to generate a majority of revenues (51%+) from new business

Here’s an at-a-glance look at how staffing & recruitment pros feel about the year ahead.

REVENUE OUTLOOK

37% Expect revenue to increase by up to 10%

26% Expect revenue to increase by 11-25%

17% Expect revenue to increase by 25%+

BUSINESS INVESTMENT

43% Predict an increase in operating budget

40% Predict an increase in tech investment

38% Predict an increase in branch network

HIRING OUTLOOK

69% Expect hiring needs to increase

67% Expect billable hours to increase

48% Expect temp placements to increase

SERVING CLIENTS AND ENGAGING CANDIDATES

92% Rate their firm’s client service good or excellent

86% Rate their firm’s candidate service good or excellent

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Because we surveyed firms across a range of

sizes and industry sectors, the results shouldn’t

be interpreted as one-size-fits-all. Rather, we

encourage you to take a closer look to determine

what findings might be appropriate for your

unique environment. The report uncovers some

powerful strategies to capitalize on industry best

practices, as well as some interesting insights

from survey respondents.

A Strong Outlook for 2017

2017 looks like a banner year for the staffing

industry in comparison to last year. Surveyed at

the very end of 2016, more than 75 percent of

respondents predicted they’d meet or exceed

their revenue goals: 42 percent expected to

exceed them, 36 percent hoped to meet them,

and 22 percent prepared for a shortfall.

of staffing firms expect some

revenue growth in 2017

By comparison, staffing firms are widely—and

some might say wildly—optimistic in 2017. Eighty

percent expect some revenue growth and 17

percent expect revenue growth of more than 25

percent. Hiring needs, billable hours, and reliance

on contingent labor are expected to increase

(according to 69 percent, 67 percent, and 48

percent of respondents respectively).

Close to 80 percent of firms expect to generate

a majority of revenue from existing clients,

leveraging internal contacts to penetrate across

functions and departments. Revenue from

Vendor Management System (VMS) business is

expected to remain largely consistent in 2017, with

anticipated decreases occurring primarily in firms

that only have a small percentage of job orders

driven through a VMS.


The Search for Sustainable Profitability

Increasing profitability and driving revenue top

the list of staffing priorities for 2017, ranked by 56

percent and 47 percent respectively as a primary

goal. The lowest priority across the board is

moving to VMS, with 36 percent ranking it in the

bottom three. Achieving financial stability takes

precedence over expansion plans, as firms also

ranked acquisitions and offshore partnerships

among lower priorities.

Overcoming Obstacles

Keeping one eye on the bottom line, respondents

must necessarily scan the horizon for potential

disruptions—and there are plenty. It’s no surprise

that a shortage of qualified talent represents

the biggest expected challenge of the year (and

likely far into the future). More than 60 percent of

all respondents rank it as a top three challenge,

followed by pricing pressures (53 percent) and

economic uncertainty (37 percent).

Despite strong domestic and international

challenges, a resilient spirit emerges intact. Even

with the political upheaval of 2016 and volatility

surrounding healthcare and labor policies, 38

percent believe their firm will be better off in 2017

under President Trump’s administration. More

than half of respondents aren’t actively concerned

about the new administration.


Metrics Matter

Staffing firms recognize the importance

of tracking key metrics, even if they don’t

consistently do it. Almost two-fifths (37 percent)

of respondents use gross margin as the prime

indicator of sales effectiveness, followed by total

placements. For recruiting delivery, customer

satisfaction ratings take precedence (63 percent

rank as the top metric), followed by fill rate and

submittal-to-hire.

To ensure the fastest ramp-up time for new

employees (the usual timeframe is 1-3 months),

transparency of results through metrics remains

critical. With a majority of staffing employees

finding it harder to deliver consistent results,

retention requires a commitment to performance

feedback, constant training, and support.

The Value of Technology Investments

Investments in technology play an important role

in driving operational efficiency and improving

margins. Technology adoption is high: 64 percent

of North American staffing firms use an Applicant

Tracking System (ATS) to track candidate activity

and 60 percent use a Customer Relationship

Management (CRM) system for business

development.

However, firms aren’t taking full advantage of

one of the best sources of qualified talent—their

existing candidate database. More than a third of

North American firms (34 percent) make fewer

than 25 percent of their total placements from

candidates already in their ATS or CRM.

respondents who use gross

margin as the prime indicator

of sales effectiveness

37%


Engaging Clients and (Especially) Candidates

Advancing the client and candidate experience

to add value and build loyalty offers one of the

clearest ways to stand out from the crowd. But

when it comes to engagement and satisfaction,

it’s a case of “do as I say, not as I do.”

Large portions of staffing firms rank themselves

highly on delivery; 92 percent say they provide

good or excellent service to clients and 86

percent say the same about the service they

provide to candidates. However, many admit to

not tracking client and candidate satisfaction at

all, while others do so inconsistently. In light of

persistent talent shortages, firms would be

well-served to implement a comprehensive

approach to engaging clients and candidates

across multiple channels.

Further Trend Analysis

At the end of this report, we’ve provided

additional insights into key opportunities

uncovered by the survey responses. We’ve

outlined some takeaways and practical paths you

can take advantage of in 2017 to tackle tough

challenges and create a thriving, profitable, and

sustainable business model.


The Staffing Landscape


To kick off this year’s report, we’re taking a

30,000 foot perspective on the state of the

industry. Broadly speaking, what opportunities

and challenges lie ahead, and how are firms

responding? Which factors—both positive and

negative—impact the outlook for 2017?

Top 3 Priorities

Increasing profitability (56%)

Driving top-line revenue growth (47%)

Candidate acquisition and sourcing (35%)

Lowest 3 Priorities

Moving to VMS (36%)

Expanding through acquisition (29%)

Leveraging secondary sourcingpartners and offshore recruitment

resources (28%)

Top Priorities: Show Me the Money

No doubt about it, staffing firms have a lot on

their plates. With the ongoing talent shortage,

social engagement, offshore competition, process

automation, and other pressures, going about

business the same old way just won’t cut it. With

all these competing priorities, where are staffing

firms planning to spend their time and energy

in 2017? Take a look at the list of top and lowest

priorities, which are ranked by percentage of all

respondents who included each among their top

or bottom three.

Every dollar invested to boost profitability and

productivity requires a tradeoff. A low priority

on acquisitions and third-party partnerships

suggests that firms plan to focus on organic

growth, a strategy which will be well-served

by other high-ranking priorities such as new

market expansion, improved client and candidate

relationships, and improvements in automation.


of respondents rank

increasing profitability as

a top priority for 2017

56%

“Oftentimes, it’s difficult to

find an expert in a very specific

realm who has the licensures

and degrees the client is requiring.

For example, finding a nurse

who has experience auditing a

specific type of Medicare Code

with clinical coding credentials

AND managed care experience.

It’s easy to find a nurse and

easy to find a coder, but

when it comes to licensure

plus experience narrow down

the candidate pool so

significantly that a

recruiter is very limited.”

– Survey respondent


We see remarkable consistency in the top and lowest priorities across

job role and firm revenue, although a few notable trends emerge:

As you might expect, top executives were more

insistent on the importance of profitability and revenue

than production personnel. For example, 54 percent

of the C-suite ranked revenue growth as a top

priority, compared to 44 percent of non-executive

staff members.

Increasing profitability is the top-ranked priority for staffing firms of

every size, although those in the $10-25 million revenue range rank

profitability and top-line revenue as nearly equal in importance (52

vs. 51 percent respectively).

Firms in the $25-50 million revenue range give the

highest priority ranking for profitability, with 74 percent

placing it in their top three list. The very largest firms

(over $250 million in revenue) were less likely to place

revenue growth in their top priorities than smaller firms.

The very largest firms (over $250 million in revenue) were less likely to

place revenue growth in their top three priorities. Instead, employment

brand development and marketing rose as a top ranking, along with

profitability and candidate acquisition.

SPOTLIGHT:

Demographic Differences


Top Challenges:

What Keeps You Up at Night?

There’s no shortage of pressure on staffing

industry leaders, although there’s definitely a

shortage of qualified candidates. So, it’s not

surprising that the number one challenge facing

the industry is a talent shortage, far and away.

Sixty-one percent of respondents include it in

their top three challenges and 38 percent list it as

their single biggest challenge. Pricing pressure/

margin compression emerges as a close second,

indicating that commoditization will continue as a

force to be reckoned with in 2017.

Top Industry ChallengesPercentage Ranking Item as a Top Three Challenge

“There are myriad skill

shortages in technology,

but the greatest is a

combination of great

communications skills

plus technology skills.”


61%

53%

37%

26%

23%

19%

17%

16%

11%

Talent Shortage

Pricing pressure/margin compression

Uncertainty over economicand future growth

Leveraging technology to improvebusiness operations

Expanding VMS model

Regulatory concerns, includingovertime law impact

Outcome of the U.S. election andchanges in regulations/policies

Growth of freelance economy

Increasing demand for Statement of Work (SOW) and outcome-based models


Talent Shortages Threaten Growth

When it comes to the talent shortage, employers

and staffing firms share the same pain. In fact,

the extreme difficulty in sourcing skilled labor is

one of the primary reasons clients turn to staffing

firms in the first place. Persistent shortages

provide yet another impetus to engage passive

candidates and cultivate a strong internal

database, not only for hard-to-find IT and

engineering roles, but also for professional and

industrial positions.

IT skills dominate the list of skill shortages most

reported by recruiters. Engineers and developers,

particularly Java, top the list of hardest-to-find

skills.

Spotlight on Skill ShortagesBased on Hardest-to-find Skills

“DEFINITELY – the

hardest part now is to

find talent; talent willing

to work hard; intelligence

to handle the job;

management level

candidates that can

manage people.”



Economic & Political Outlook

Let’s dive into some of the specific

macroeconomic and global issues that could

disrupt the industry in 2017. The biggest area of

concern is healthcare policies and regulations;

more than a third of respondents (35 percent)

say they’re very concerned about these. Clearly,

North American staffing leaders have their eyes

on the Affordable Care Act (ACA).

The industry has invested an enormous amount of

time and money into developing responses to the

ACA that would have to be completely revamped

with a repeal or replacement. The uncertain

environment has the potential to cost hundreds

of millions of dollars and to dampen industry

growth.

As one respondent points out:

“If the Affordable Care Act is abolished,

business is going to change and jobs are

going to change. I’m not certain if it will

be better or worse on the staffing side,

but I’d imagine that there will be a lot

of movement from all aspects of the

government regulation of

healthcare options.”

Top 5 Macroeconomicaland Political ConcernsBased on Percent of Respondents

who are Very Concerned

35%

1. Healthcare policies and regulations

23%

2. Rate of economic growth

21%

3. The Trump administration

14%

4. Inflation

13%

5. Consumer spending


The rate of economic growth emerges as a

distant second on the list of concerns. And

despite reporting more confidence post-

election, many respondents still view the Trump

administration as a wild card. Nearly half (48

percent) are very or somewhat concerned about

the new executive branch, while similar numbers

are indifferent or not concerned (51 percent).

Despite the contentious nature of the 2016 U.S. Presidential election and

concerns about the new administration’s policies, significantly more North

American staffing leaders (38 percent) are more confident about the future

outlook for the staffing industry after the election of Donald Trump than those

who are less confident (21 percent).

SPOTLIGHT: The U.S. Election

71% of staffing firms are very

or somewhat concerned about

the potential disruption to their

business caused by healthcare

policies and regulations, and 35%

are very concerned.

U.S. Election InfluenceImpact of the Presidential

Election on Industry Outlook

29%

Unchanged

38%

More

Confident

12%

Not Sure

21%

Less

Confident


Strong Domestic Focus

Domestic issues outweigh global concerns.

Overall, the lowest ranked areas of concern

link to international issues, including: currency

fluctuation, international trade, refugee

displacement, and Brexit. For example, three

quarters say they’re indifferent or not concerned

about Brexit or refugee displacement (75 percent

and 72 percent respectively), and more than

half (55 percent) express low concern over

international trade.

We also explored the business implications of

increased restrictions on the movement of labor,

a policy under considerable discussion in the U.S.

and other regions.

More than a quarter (27 percent) anticipate

negative impact if world leaders increase

restrictions on the movement of labor in some of

the biggest economies in the world, and another

third were unsure (32 percent). The availability

and ability of talent to migrate globally has long

been an advocacy issue for staffing firms, so it’s

interesting that 21 percent say that further labor

restrictions would carry a positive impact.

Business Implications ofLabor Movement Restrictions

27%

Negative

21%

Positive32%

Unsure

19%

None


2017 Performance Outlook


In this section, we explore the outlook for

revenue, hiring, and key operational investments.

All indications point to another year of strong

growth, bolstered by demand from existing

client relationships.

Revenue Expectations:

Full Steam Ahead in 2017

Surveyed at the very tail end of 2016, more than

three quarters of respondents predicted they’d

exceed revenue goals for 2016: 42 percent

expected to exceed them and 36 percent

expected to meet them. Still, more than one

in five (22 percent) anticipated a revenue

shortfall for 2016.


A Rosy Outlook on RevenuesHow do you expect revenue to

change in 2017 compared to 2016?

Despite some laggards, the future looks

positively rosy for 2017. There’s no shortage

of confidence in the industry: a full 80 percent

foresee an increase in revenues in 2017, and

almost one in five (17 percent) expect revenue

growth of more than 25 percent. What accounts

for this optimism? Stellar growth from temporary

placements, driven by repeat clients facing talent

shortages in key sectors.

of staffing firms expect

revenue growth in 2017

of staffing firms

expect revenue growth

of more than 25%

80%

17%

17%

Increase more than 25%

26%

Increase between 11% and 25%

37%

Increase up to 10%

8%

Stay the same

2%

Decrease up to 10%

1%

Decrease between 11% and 25%

1%

Decrease more than 25%

8%

Don’t know/unsure


Hiring Outlook:

Signs Point to Growth

To get a closer look at growth trends for 2017,

we explored several leading indicators in more

detail. Positive signals abound. More than

two-thirds of companies anticipate hiring

needs will increase (69 percent), as well as

billable hours (67 percent). Close to half (48

percent) say their temporary placements

will rise.

More and more workers identify themselves as

contingent; according to a U.S. Government

Accountability Office report, between 30 and

40 percent of the workforce can be classified

that way. The upticks in our data mirror

workforce trends and indicate significant

positive change, both in terms of orders filled

and resulting revenue.

69% expect hiringneeds to increase

67% expect billablehours to increase

48% expecttemporary

placements toincrease

PositiveIndicators:

http://www.gao.gov/assets/670/669899.pdf

http://www.gao.gov/assets/670/669899.pdf


To take a closer look at where 2017 growth may be strongest, we broke

down the responses for three indicators—hiring needs, billable hours,

and temporary placements—by revenue, area of job specialization, and

industry served. The good news? Overall, firms are extremely bullish; the

vast majority expect either an increase or no change in these parameters.

Firm Revenue

• Generally speaking, the larger the firm’s revenue, the more they expect

hiring needs to increase in 2017. The smallest firms (less than $1 million

in revenue) are decidedly less optimistic. Only 41 percent expect hiring

needs to increase, compared to 75 percent of larger firms (more than

$10 million in revenue).

• More than 80 percent of firms in the $25-50 million and $100-250

million revenue range expect an increase in billable hours this year.

• The $50-100 million category contains the highest proportion of

respondents expecting a decrease in hiring and billable hours, although

that figure is only seven percent in both cases.

• Between 43 and 58 percent of firms of all sizes expect an increase in

temporary placements in 2017, with small firms once again serving as

an outlier. Only 33 percent of firms making less than $1 million in

revenue expect temp hiring growth.

SPOTLIGHT:

Demographic Difference


Job Specialization

• Sorted by placement specialty, we find optimism across all functions

and disciplines. Firms placing sales professionals are the least bullish,

but more than half (57 percent) still expect an increase in hiring needs.

• Light industrial/mechanical specialists have the highest proportion of

expected hiring increases at 75 percent. Those firms also have high

expectations for billable hours (71 percent), although office/clerical/

admin represents the strongest sector for an expected rise in hours

(76 percent).

• Temporary placement penetration again dips in the sales arena (only

27 percent expect an increase). At the top of the demand cycle, more

than half of finance and accounting, IT/technical, and office/clerical/

admin firms expect increased temporary placements (55, 54, and 53

percent respectively).

Industry Served

• At least two-thirds (67 percent) of respondents in every industry sector

expect an increase in billable hours.

• Hiring needs are expected to be highest in the industrial sector (78

percent expect an increase) and lowest in the pharma/biotech/medical

equipment industry (55 percent). The business services segment tops

the list for expected increase in billable hours (73 percent), followed

closely by manufacturing and industrial sectors.

• Despite expected strength in hours and hiring needs, temporary

placement penetration is expected to be less strong in industrial and

manufacturing business sectors. Only 42 percent of respondents in

those areas expect an increase in temporary placements.


Spotlight on Hiring Needs

The most optimistic firms:

• Revenue Size: those earning more than $500 million in revenue

• Industry: those operating in the pharma/biotech/medical equipment sector

• Job Specialization: those placing light industrial and mechanical workers

The least optimistic firms:

• Revenue Size: those earning less than $1 million in revenue

• Industry: those operating in the industrial sector

• Job Specialization: those placing sales professionals


Revenue Sources:

Growth Driven By Existing Accounts

So where’s all this booming business going to

come from? The short answer, from existing

clients. Close to 80 percent of firms say more

than half their revenue will come from current

accounts. For the majority of North American

staffing firms (57 percent), anticipated revenue

from new clients will only account for less than

a quarter of total revenues.

The old saying “a bird in the hand is worth two

in the bush” applies here. Driving more revenue

from existing clients delivers a strong profitability

boost, as business development and sourcing

expenses drop.

Of course, building a healthy pipeline of new

business protects firms from becoming too reliant

on too few accounts. Diversifying the business

portfolio may take firms outside of their comfort

zone, but it serves to reduce risks. Interestingly,

the bigger the company, the less likely new

business is to fuel top line growth.

New vs. Existing BusinessPercentage of Revenue by Type of Business

3%4%

15%

42%

31%

5%12%

46%

1%2%

7%

32%Existing

AccountsNew

Business


VMS Contributions

Staffing firms expect only moderate changes in

the percentage of total job orders driven through

VMS in 2017 compared to 2016, ranging from an

expected year-over-year decline of about three

percent to an increase of about four percent.

Generally speaking, smaller firms are less likely to

drive a large portion of their revenue through a

VMS. About 50 percent of larger firms (over $100

million in revenue) get jobs from a VMS to drive

at least 25 percent of their revenue. In contrast,

only 23 percent of small firms with less than $5

million in revenue drive a quarter or more of their

revenue through a VMS.

Decreases in VMS job order ratios are expected

by staffing firms of all sizes at either end of the

utilization scale—those filling up to 10 percent of

jobs through VMS and those filling more than 91

To extract the greatest value out of low-margin

VMS engagement, and to increase the number of

orders filled, firms should closely examine

technology-driven operational improvements.

percent of jobs that way. In both those categories,

businesses of all size expect VMS penetration

to decline or, at best, stay flat. The story in the

middle is muddier; pockets of expected growth

pop up at different penetration rates and among

firms of different revenue sizes.

To extract the greatest value out of low-margin

VMS engagements, as well as to increase the

number of orders filled, staffing firms should

closely examine technology-driven operational

improvements. These could include automating

the processes of routing job requirements from

the VMS to the ATS, entering job order details

into the ATS, submitting candidates to the VMS,

and tracking VMS-related metrics. Effective use of

an ATS and/or CRM can also pay off by allowing

firms to connect with potential candidates faster

and improve submittal times.


Organizational Investments

Despite the robust hiring outlook in 2017,

many firms hedge their bets when it comes to

cash outlays. Most firms say their operating

budget, technology investments, and branch

infrastructure will either increase or stay at

similar levels to 2016 (88 percent, 85 percent,

and 84 percent respectively). Only a very small

percentage expect decreases in these areas.

Expected Change in Investment for 2017

43%Operating

Budget

Tech

Investments

Branch

Expansion

45%

7%

40%

45%

7%

38%

46%

5%

Increase Same Decrease


A few notable data points stand out when we examine investment areas by

firm revenue, area of job specialty, and industry served.

Firm Revenue

• Firms that earn between $50-100 million are the most bullish in terms of

expected increases in tech investments.

• The largest proportions of individuals expecting an operating budget

increase are at mid-size firms (revenue between $25 and 100 million),

at close to 60 percent.

• The biggest firms (over $250 million in revenue) expect to get bigger:

88 percent expect more branch expansion, whereas the vast majority of

firms making $50 million or less expect no change.

SPOTLIGHT:

Demographic Difference


Job Specialization

• For all firms in the largest specialty areas we surveyed, the percentage

of individuals expecting an increase in operating budget ranges from 34

to 48 percent. Finance and accounting comes in at the top of that scale

and light industrial at the bottom.

• Firms specializing in finance and accounting placements expect the

highest increases in tech investments (45 percent). Engineering and

light industrial bring up the rear at only 28 percent.

• Which firms expect to physically expand in 2017? Likely not those

placing professional and specialty candidates; only 31 percent expect

branch expansion, compared to 46 percent of light industrial firms.

Industry Served

• Nearly half of respondents expect increases in their operating budgets,

and those serving business services sectors are the most positive.

Pharma/biotech/medical equipment staffing firms fall at the end of

the list, with 37 percent expecting an increase.

• A similar dynamic exists for tech investments, with technology and

business services staffing firms putting the most into their business, and

pharma/biotech/medical equipment at the lower end of the spectrum.

• Industrial firms have the highest expectation of branch expansion

(43 percent) and, once again, pharma/biotech/medical equipment

the lowest.


Compensation Holding Steady

Staff compensation typically accounts for the

largest line item expense. Two-thirds (68 percent)

of staffing employees say they expect their total

compensation (salary and bonus) to increase from

2016 to 2017. That anticipated figure represents

a modest improvement over the 63 percent who

reported an actual increase from 2015 to 2016.

Only 6 percent expect their compensation to fall

in 2017.

The most progressive firms will consider the

anticipated “revenue rich” environment as an

optimal time to bump up investments in key areas

in order to build infrastructure and processes

necessary to outpace the competition and

prepare for when the next inevitable business

downturn occurs.

Spotlight Operating Budget

The firms with the highest expectation of an increase by:

• Revenue Size: those earning between $25-50 million in revenue

• Industry: those operating in the business services sector

• Job Specialization: those placing finance and accounting professionals

The firms with the lowest expectation of an increase by:

• Revenue Size: those earning less than $1 million in revenue

• Industry: those operating in the pharma/biotech/medical equipment sector

• Job Specialization: those placing light industrial and mechanical workers


Key Performance Metrics


In this section, we explore how staffing

companies measure up in terms of productivity

and performance. Why is this important? The

industry has historically tracked metrics in order

to engineer results through a mix of targets for

calls, visits, interviews, submittals, and wins. In

an increasingly commoditized environment with

low-touch client accounts, clear metrics uncover

strategies to outperform the competition.

Ramp-up Time

When new staffing hires come on board, they’re

expected to get up to speed quickly. Most

firms (37 percent) say it takes one to three

months before a new salesperson or recruiter

is productive, followed by another 24 percent

reporting a four to six month ramp-up period.

Some firms (24 percent) measure ramp-up time in

weeks rather than months.

Ramp-up TimeAverage Time to Become Productive

7%

16%

37%

24%

6%

3%

7%

Less than 2 weeks

2 weeks – 4 weeks

1 month – 3 months

4 months – 6 months

7 months – 9 months

More than 9 months

Not sure


Corporate Structure:

Split-Desk vs. Full-Desk

To explore the impact of corporate structuring,

we asked about split- vs. full-desk business

models. More than 60 percent of all firms run a

split-desk model, where recruiting and sales roles

are separated, compared to 36 percent that run

a full-desk, where individuals are responsible for

both functions.

When you go from 1-25 total recruiters and

salespeople to 26-50 production staff, you see a

significant jump in the percentage of firms that

run a split-desk, from 57 percent to 74 percent.

A similar pattern exists for firms when they cross

the $1 million revenue threshold. Anecdotally,

those that have transitioned from a full-desk

to a split-desk cite a desire for specialization and

better client and candidate engagement. On the

other hand, those that have moved from a split-

to full-desk in recent years feel it streamlines

operations and drives new business.

To increase alignment between recruiters and

salespeople in a split-desk model, companies use

compensation structure, daily check-in meetings,

and accountability metrics. Interestingly, some

firms have opted to forego salespeople by relying

solely on marketing to generate leads, while

others have added interim personnel to serve

as a liaison between sales and recruiting.


Recruiting Structure by Type of Business

76%Contract

22%

Split-desk Full-desk

43%Perm Placement

(Non-Executive 55%

29%Executive Search

(Contingent) 71%

24%Executive Search

(Retained) 71%

57%

1-25

Split-desk Full-desk

26-50 50-100 101-150 151-200 201-250 250+

Number of Recruiters and Salespeople

41%

74%

26%

72%

21%

75%

25%

67%

33%

60%

40%

81%

19%


Recruiting Metrics

When a recruiting team fires on all cylinders,

performance metrics should show it. But many

staffing companies only use informal feedback or

a few key metrics to back up their assumptions.

To measure how well recruitment delivery

processes are working, three indicators stand out.

Those most frequently cited as the three most

important metrics are:

All the remaining metrics—including time-to-fill,

interview-to-hire and hit rate—come in lower as

measures of recruitment delivery. Additionally,

candidate satisfaction falls near the bottom of

the list—a potentially troubling result that we’ll

explore further in the section on engagement

best practices.

Key Delivery Metrics Top Rankings for Recruitment

Delivery Metrics

Three most important metrics:

Customer satisfaction

Fill rate

Submittal-to-hire ratio

63%

56%

46%

38%35%

32%

17%

CustomerSatisfaction

FillRate

Submittal-to-Hire

Interview-to-Hire

Time-to-Fill

Candidate Satisfaction

Hit Rate


More About Submittal to Hire

The submittal-to-hire ratio combines elements

of both quantity and quality, so it’s particularly

useful to explore productivity. If your firm has

a high ratio, more qualification may be needed

prior to client submittal. A low ratio? That’s not

necessarily a bad thing, but it may point to a weak

pipeline.

Among North American staffing firms, the sweet

spot appears to be submitting three to four

candidates for every hire made. Forty percent

fall into that bucket, compared to 24 percent that

submit four to five candidates and the highly-

effective firms (14 percent) that only submit one

to two candidates per hire.

of firms average three to four

candidates submitted for every hire

40%

Submittal-to-Hire RatioNumber of Candidates Submitted per Hire

Contract firms were significantly more likely to

submit only one to two candidates than their

counterparts in the permanent world (18 percent

vs. 8 percent respectively). On the other end of

the spectrum, retained executive search firms

were most likely to submit six or more candidates.

40%

3-4 candidates

submitted for

every hire

6%

Not sure

24%

4-5 candidates submitted

for every hire

15%

6 or more candidates

submitted for every hire

14%

1-2 candidates

submitted for

every hire


Sales Metrics

When we talk about the most important metrics

for business development, the bottom line is that

it’s, well, the bottom line. Almost two-fifths (37

percent) of respondents use gross margin as the

prime indicator of sales effectiveness, followed

by total number of placements (29 percent)

and placements per salesperson/recruiter

(15 percent).

Key Sales MetricsTop Rankings for Revenue-

Driving Results

37%

Gross Margin

29%

Total Number of Placements

15%

Placements per Salesperson/Recruiter

12%

Average Placement Fee/Average Bill Rate

6%

Total Number of Job Orders

Gross margin (37%)

and total placements

(29%) dominate the list

of sales performance

metrics


Employee Perceptions:

Working Smarter or Just Harder?

Although respondents anticipate strong industry

growth, when you dive down into personal

experiences, they appear to be working harder for

the same level of achievement. We asked, “Over

the past few years, have you found your job to be

getting easier or harder?”

A large majority (64 percent) find it harder to

deliver results day-in and day-out (17 percent

much harder plus 47 percent somewhat harder).

Only 16 percent say their job has been getting

easier. A few themes illustrating the challenges

emerged from survey respondents’ comments:

Competitive pressure:

“Increased competition in the market

resulting in needing to present

candidates faster on positions

with no exclusivity or solid client

relationship.”

Client expectations:

“Client expectations of staff

augmentation have become ‘try

before you buy’ vs. ‘specific

project need.’”

Candidate engagement:

“Keeping up with rapid social

media and technology changes…

difficulty in finding and engaging top

candidates who clients feel are

also a good cultural fit.”

Always on call:

“Expected to respond 24/7; there

is no disconnect time—even while

on vacation you need to check

emails.”

Vendor Management System (VMS) and Managed

Staffing Provider (MSP) impact:

“More competition, VMS services underperform, and

more MSPs making the industry more commoditized.”


StaffingIndustry Best Practices


To gauge best practices with the highest

potential impact on financial performance and

operational efficiency, survey respondents

ranked a list that includes both technology-

driven and relationship-driven processes.

Standout best practices represent a cross-

functional variety of initiatives, from ATS

adoption to better candidate and client

engagement.

Expanding into existing accounts is important

to your firm.1

2

3

4

5

By far the best practice that resonates most

strongly is account penetration. More people

agreed with the statement “Expanding into

existing accounts is important to your firm” than

any other presented. To hone in on actionable

best practices, we’ll take a deeper dive into a

couple areas:

• Technology Best Practices:

Documenting and analyzing activities to

drive operational efficiency

• Engagement Best Practices:

Improving the client and candidate

experience

Most Highly Ranked Best Practice Statements

On average, your firm does a good job at

creating a great candidate experience.

The majority of recruiters cannot do their job

effectively without an ATS.

Improving management of client/candidate

relationships is a top priority for 2017.

You anticipate the percentage of revenue from

repeat client business to increase in 2017.


Operational Efficiency through

Technology

While 10 percent of staffing firms still use a home-

grown system to track candidate activity, the

majority (64 percent) have transitioned to ATS

technology, either standalone or in combination

with other tools. With few exceptions, the size of

the firm doesn’t affect rates of ATS adoption.

On the sales side, 60 percent of surveyed

firms use a CRM system to manage their sales

processes (lead, opportunity, and pipeline

management). Generally speaking, the larger

the firm, the more likely they are to use a CRM

system, with a utilization rate of 88 percent for

the biggest companies (more than $500 million)

compared to 50 percent for the smallest (under

$1 million). The majority access core technology

via the cloud (82 percent for ATS and 78 percent

for CRM).

Companies that don’t use an ATS or CRM rely on

some combination of other systems, including

email (41 percent) and spreadsheets (30 percent).

Cobbling together systems to manage client

and candidate activity may work for some firms,

but ATS and CRM systems are must-haves for

firms who want to improve visibility into their

performance across the full sales and recruiting

lifecycles.

of North American

staffing firms use

an ATS to track

candidate activity

67%

use a CRM for

business development

60%

Existing candidates from your recruitmentATS and/or CRM

Most Effective Sources to Identify the Most Qualified Candidates Social media (LinkedIn, Twitter, Facebook,

Google+, Instagram)

Referrals from successful placements

Job boards (Monster, CareerBuilder, Dice)

Aggregator sites (SimplyHired, Indeed)


Best Talent Sources

What do staffing companies consider to be the

best source of talent? Existing internal candidates

in your database prove to be the favored source,

followed by a wide range of other options.

Variation in responses indicates no one method

should be considered exclusively “best practice,”

although the lowest rankings point to the need for

further optimization of advertising budgets and

partner networks.

Candidate cold calling

Job advertising

Secondary sourcing/staffing partners

Existing internal

candidates are ranked as

the best source of quality

candidates, but account for

less than half of placements

for 59% of staffing companies


Use It or Lose It

Developing proprietary lists of potential qualified

candidates has long been considered a best

practice for successful candidate conversion.

Ironically, staffing companies fail to capitalize on

internal databases, even as they recognize their

value as a highly effective source.

Candidates Hidden in Plain SightPercentage of Total Placements Made from Candidates in Database or ATS/CRM.

More than a third of North American firms (34

percent) make fewer than 25 percent of their

total placements from candidates already in

their ATS or CRM. Further, a quarter make

between 26 and 50 percent of placements

from existing candidates. We either have a case

of outdated and inappropriate resumes, or an

untapped goldmine of candidates—or perhaps a

combination of both.

23%

11-25%

11%

Less than 10%

25%

26-50%

1%

Don’t use an ATS/CRM

or other database

9%

Not Sure

5%

91-100%

17%

51-75%

9%

76-90%


Evaluating Client and Candidate

Engagement

Staffing firms send mixed messages about

candidate and client engagement. Note the

differences in the corresponding graphic. Even

though firms think they’re delivering a great

experience and staying in contact, let’s just say

there’s always room for improvement (especially

with candidates). Some interesting observations:

• Clients fare better overall than candidates; that

makes perfect sense, since they’re the ones

paying the bills.

• Firms that actually do measure client and

candidate satisfaction rate themselves higher

in service delivery and anticipating needs than

those that don’t. The difference is particularly

prominent in ratings for anticipating candidate

needs; 42 percent that do track satisfaction say

they’re doing an excellent job, compared to

20 percent of those without formal metrics

in place.

• Salespeople (not surprisingly) and CFOs give

their firms the highest ratings on customer

service delivery, while CTOs and sourcers give

the lowest ratings.

• For candidate service delivery, CFOs and IT

managers think their firms are doing a

particularly good job, but CTOs and CMOs

come in on the lower end of the scale.

Client ServiceDelivery

CandidateService Delivery

75%

50%

25%

0%

100%

Self-Rating % who actually measure

Client Service and Candidate Service DeliveryGap between self-rating and

measurement

High Self-ratings on EngagementPercentage of Firms Rating

Themselves Excellent or Good

92%Service Delivery

80%Anticipating Needs

86%Service Delivery

77%Anticipating Needs

For Clients For Candidates

Staffing Firms’ Self-ratings


Measuring Client Engagement

Only 54 percent of companies acknowledge

measuring client satisfaction on a regular basis,

primarily through regular meetings (such as

Quarterly Business Reviews) and online surveys.

That over a third (35 percent) don’t measure

client satisfaction at all seems particularly

surprising, given the lip service about the

importance of the client experience to future

success.

Companies that don’t ask for client input—or

only do so selectively—risk getting surprised

by negative feedback and lost business. As one

respondent put it, “You can’t improve what you

don’t measure.” Another highlights the value

of measuring client satisfaction, “We use this

information to make a plan and execute new

policies, and we use technology to be more

efficient and to stay on top of client priorities

on a regular basis.”


Boosting the Candidate

Experience: A Competitive Edge

Less than half (48 percent) consistently record

candidate satisfaction, and those that do rely

heavily on phone interviews and social media

monitoring, which may be anecdotal rather

than quantitative in nature. Firms that do solicit

candidate feedback do so for a number of

reasons, including (in their own words):

“It allows us to know if they [candidates] feel

valued and appreciated during the process.”

“To improve recruiting processes and

communication with candidates.”

“To better prepare future candidates for

client interviews.”

Talent acquisition news source ERE Media

ranks lack of feedback and non-returned calls

among “The 4 Biggest Complaints Candidates

Have About Recruiters,”1 leading to frustration

and dissatisfaction. Increased frequency and

consistency of communication with an existing

candidate pipeline can dramatically improve

engagement, and it’s simple with an ATS

and/or CRM.

Staffing firms that actively solicit candidate

feedback—the good, the bad, and the ugly—are

better positioned to generate positive word-

of-mouth referrals and to build loyalty among

talented professionals.

“Our biggest challenge

[when it comes to creating

a positive candidate

experience] is not having

enough jobs available for

all the amazing candidates

we work with, so some get

frustrated that we’re not able

to find them a challenging

project within their

timeframe.”


1 Source: Wheatman, Debra. “The 4 Biggest Complaints Candidates Have About

Recruiters.” ERE Media. 2015.


Key Takeaways: Opportunities to Excel


By all indications, 2017 looks to be a banner

year for the staffing industry. The vast majority

eagerly anticipate more client demand and

more placements, despite talent shortages and

economic uncertainty.

While the industry is strong and the outlook is

good, now’s not the time to settle into the status

quo if sustainable profitability is a top priority. It’s

a time to think creatively, set aggressive goals,

and face your challenges head on.

We’ve compiled seven key trends that peers

in your industry will be addressing in 2017 and

beyond. These observations and opportunities are

intended to generate tactical strategies to sustain

your firm’s productivity and profitability.


Find Balance between

Existing and New Clients

Money talks: profitability and revenues top the list

of staffing priorities for 2017. To make progress,

most staffing firms are putting their energy into

retaining and expanding existing client accounts;

close to 80 percent of firms expect to generate a

majority of revenue from current clients.

Leveraging existing relationships opens

avenues into different functional areas of

your clients without the expense of new

business development.

Consider how your success in one area can

demonstrate competency in another. Effective

use of a CRM and lead nurturing go a long way in

networking.

While the majority of firms recognize the

importance of engaging existing clients, many

do so at the expense of developing new client

relationships. Case in point, new client revenue

will account for less than a quarter of total

revenues for 57 percent of North American

staffing firms. Don’t become complacent with

business development. In a year when the

projected performance outlook is so strong,

this may be the time to invest in expanding

your footprint.

1


Talent Shortages

Loom Large

Without a doubt, talent shortages represent the

biggest perceived challenge to staffing firms; 38

percent list it as their single biggest challenge.

That’s a double-edged sword; the same difficulty

in sourcing quality talent is what’s driving clients

to greater staffing utilization.

North American staffing leaders tend to focus

more on domestic concerns and less on global

issues such labor market restrictions and

international trade negotiations.

Even if those don’t impact your business on a

daily basis, global market shifts can (and will)

affect your clients’ hiring plans as well as the

market supply of talent.

Global commerce will continue and forward-

looking businesses who seek to expand their

relationships with talent, whether directly or

through suppliers, will benefit in the long term.

2


Politics and

Profitability

North American staffing leaders are divided on

the impact of the Trump administration. About

half express increased confidence about the

future of their business following the election,

while nearly another half list his administration

as a major area of business concern.

Political conflicts exacerbate the volatility

surrounding healthcare regulations, which have a

direct impact on staffing firms’ bottom line. The

potential repeal and/or replacement of the ACA

represents a clear source of anxiety for many

staffing firms that ranked healthcare policies at

the top of their list of economic concerns.

3


VMS is Not a

Priority

Staffing firms don’t expect to move into VMS at a

rapid rate, perhaps indicating those that want to

play in that space have already made a bid to do

so. A third of companies with under $5 million in

revenues don’t get jobs from VMS at all.

For those already operating in the VMS

environment, automated processes are critical

to squeezing out operational efficiencies and

profits.

Although not investing heavily in VMS, staffing

firms are on board with the value provided by

ATS and CRM systems. While firms are rapidly

adopting ATS and/or CRM systems, keep in

mind that technology improvements don’t

always require investment in complex and costly

approaches. Often, simple and straightforward

options get overlooked in the pursuit of the

next big thing. Excellence in execution can be

a tremendous lever in creating positive impact

to operating profits. We encourage you to look

at all the tools available at your disposal and to

maximize how they’re incorporated into your

strategic plan.

4


Internal Candidates

are Underutilized.

WAY Underutilized.

Most firms spend countless hours and hundreds

of thousands of dollars collecting candidate

resumes into their database, only to have them sit

there unused.

Your internal database represents a huge

opportunity, as well as a sunk cost, when it

comes to filling orders.

Once you’ve got them in your system, look to

your candidate pipeline as your primary resource

for filling orders.

Social media comes in as the second source of

best candidates, so make sure you’re keeping

up your connections and engagement. If you’re

focusing your online presence only on prospective

clients, you’re missing an opportunity to attract

passive candidates. Rankings of other candidate

acquisition sources also call into question the

value of job advertising (outside of job boards)

and third-party partners.

5


Performance

Measurement Matters

Increased competition, candidate shortages

and pricing pressures play havoc on your

results, but you need to know how your team is

rising to the challenge. Sales and recruiting say

they’re working harder, but can you tell? Over a

third of firms don’t measure client satisfaction

at all, and less than half measure candidate

satisfaction. Since onboarding time is usually

measured in months, you need to make sure your

hiring investments pay off—both literally and

figuratively—with satisfied stakeholders.

The use of an ATS is particularly valuable in

measuring the performance of recruiters.

By providing visibility into your pipeline of

candidates; performance metrics (hit rate, fill rate,

margin and revenue); candidate engagement,

retention, and other key indicators; leadership

receives more accurate information on the state

of the recruiting team.

6


Don’t Overlook the

Candidate Experience

Staffing firms do a much better job keeping their

clients happy than their candidates. Maybe it’s the

nature of the beast—there are simply not enough

jobs for every candidate—but improvements here

can boost your reputation and your apply rates.

Since talent shortages ranks as the number one

industry challenge staffing firms face, you owe it

to yourself to explore how your firm stacks up on

engaging candidates.

Remember, communication goes a long way.

Candidates want to know where they stand in

the process, where their next job is coming from,

and that you’re there for them. Don’t lose sight of

the fact that they’ve come to you to find a job—

they’ve placed their livelihoods in your hands.

7


About Bullhorn

Bullhorn is the global leader in CRM and

operations software for the staffing industry.

More than 7,000 staffing companies rely on

Bullhorn’s cloud-based platform to drive sales,

build relationships, and power their recruitment

processes from end to end. Headquartered in

Boston, with offices around the world, Bullhorn

employs more than 600 people globally.

The company is founder-led and backed by

Vista Equity Partners. To learn more, visit

www.bullhorn.com or follow @Bullhorn

on Twitter.

Twitter.com/Bullhorn Linkedin.com/company/Bullhorn Facebook.com/BullhornBullhorn.com

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http://www.bullhorn.com/


Appendix: Survey Demographics

Bullhorn’s 2017 North American Staffing &

Recruiting Trends Report: Above and Beyond

Business as Usual utilizes data from an online

survey of staffing firm employees. A total of

1,440 responses were received globally, and this

report is based on 806 responses from individuals

working for companies with U.S. or Canadian

headquarters. The survey was fielded from

December 16, 2016 to January 25, 2017.

Most of our respondents skew towards the

contract and consulting marketplace (57

percent), followed by permanent placement (27

percent), executive search (12 percent) and less

than one percent each for Recruitment Process

Outsourcing, Professional Employer Organizations

and other formats.

The majority of North American companies run

a split-desk model rather than a full-desk model

(62 percent to 36 percent respectively). Most

employ fewer than 25 recruiters and salespeople

(74 percent). About a quarter (23 percent) of

participating firms generate more than $25 million

in revenue.

Participants reflect a wide variety of placement

disciplines and industries served, from packaging

to pharma and everything in between.

Top 5 Types of Positions Placed

• Technology (45%)

• Professional (24%)

• Finance/accounting (22%)

• Engineering/design (18%)

• Office/clerical/admin (18%)

Top 5 Industries Served

• Technology (37%)

• Healthcare (28%)

• Finance/insurance (27%)

• Manufacturing (21%)

• Business Services (20%)

Please note, some of the figures mentioned in

the report may not add up to 100 percent due

to rounding or question design, e.g. the ability

to provide multiple answers. Some participant

quotes were edited for clarity and length.

2017 north american staffing & recruiting trends...

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