Nigel Harse reports only 1 in 5 agencies capitalised on strong market conditions
When it comes to sales, Australian recruitment agencies had an outstanding year in FY19. The first two quarters delivered record breaking sales across both the temp/contract and permanent revenue streams. This growth continued throughout the year despite some major challenges, including the federal election.
Considering sales were sky high, you'd expect profits to also peak. However, when we analysed the results of 104 Australian recruitment agencies, this wasn't the case. Despite market conditions being the best in recorded history, only 1 in 5 recruitment agencies increased their profit in FY19. That means around 80% recorded a decrease in profit.
The reason for the surprising results can be attributed to two main factors a decrease in productivity and an increase in operational costs.
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