4 challenges Recruitment Companies will face going forward!

The recruitment business is a tough business whether it is Contingency hiring (permanent placement or OTP One time placement) or Staffing business (on contract basis on payroll). Some of the successful companies in both these segments have taken a long time to get where they are.

For Recruitment firms, there is always a moving target from both ends …at one end the Customer is doing non-exclusive business and offering mandates to multiple vendors and at the other end, the Candidates are toying with multiple offers in hand and ready to do a no-show unpredictably. So to make these two targets meet has always been one of the biggest challenges for recruitment firms…

Some others that we see going forward include: 

1. Reduction of Consultancy Fees: With the job market is tightening and the customer’s focus increases on cost control, there will be heavy negotiation for Consultancy fees. Recruitment firms will have to think innovatively either to differentiate significantly or offer value-added services that protect the revenues at the same level.

1. Low Productivity of Recruiters: With the increase in social media chatter (FB, WhatsApp, etc), Recruiters are getting distracted much more than before. This is resulting in lower productivity in the workplace. So lower margins from customer coupled with lower productivity are driving the revenues further down. A variable pay model has to be to seriously looked at.

1. Increasing prices of Job Boards: The job boards are increasing their prices because they have to bear bigger costs to deliver the same level of resources. This is further hurting because the Recruiters aren’t looking at innovative ways to source and are habituated to job boards for their sourcing. Hence the cost per sourced CV is increasing drastically.

1. Lack of automation: Many Recruitment companies are yet to embrace automation (especially process automation for repetitive tasks), this is significantly hampering their speed of delivery and hence losing competitive edge with firms that are more forward-looking, taking risks and investing in automation.

 Take the concrete steps to resolve the challenges and probably win the battle too. Let us help you tackle these challenges. Call us now!