Q1 bms business services sales index report

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Q1 bms business services sales index report

  1. 1. Quarterly Business ServicesSales Index
  2. 2. About IndexThe report is compiled from a variety of sources including vacancy data, candidatesalaries, client survey information and specific sector reports.  As a business we interview over 500 sales candidates per week, speak to 2000decision makers and have a national presence with 7 offices throughout the UK. Thisgives us access to a wealth of regional and national data, information on candidatesalaries and job expectations and insight into the challenges facing decision makers. The index is produced quarterly and provides organisations with a good barometer oftrends in the UK sales recruitment market.About UsWe specialise in recruiting high calibre people across the UK, Ireland and Australia.Our network of offices gives us strong local presence and allows us to support a longlist of blue-chip clients who view us as partners they can trust.We have grown to become a leading force in our field placing more people than everbefore. But we haven’t let our standards slip. We take the time to get to know you,your business and the type of people you need. We tailor our services to ensure theright recruitment solution for your business. In short, we make things run smoothlyand produce results.2| BMS Quarterly Business Services Sales Index - Published May 2013BMS Quarterly Business Services Sales Index
  3. 3. With the economy flat lining, the fear of risk is beginning tochange the behaviours of both recruiters and candidates,according to the BMS Quarterly Sales Index.Whether or not the latest GDP figures are an ‘encouraging sign’ as Chancellor, George Osbornecommented, or ‘just back to where it was six months ago’, as Ed Balls, his opposite number thinks, thefact is that the UK economy has flat lined.With just 0.3% growth in GDP in the first quarter of theyear, it was hardly surprising that this quarter’s salesindex confirms a continued downward trend in vacancynumbers, with jobs growth ending the first quarter of2013 2.4% down on the same period last year. But aswe will see, the mood is changing and avoiding triple dipcould mean this heightens in quarter two.“Avoiding a triple dip recessionmay well have a psychologicalbenefit but finding good peoplethat want to move in a flateconomy remains a challenge”Chart one: Sales jobs growth 2011 – 2013-3-2-101234What is perhaps more relevant for both recruitmentprofessionals and candidates is the heightened state of riskin which both are now operating.For candidates the risk is in the move. Higher salaries,better benefits and improved career opportunities must beoffset against current job security and an ability to pay billsto day.Risk is changing behaviour“Companies are more upbeatthan last quarter with 66% ofrespondents feeling ‘confident’about economic prospects overthe next 6 months”3| BMS Quarterly Business Services Sales Index - Published May 2013
  4. 4. Sales roles, by their nature, are heavily results orientated.Moving to pastures new where clients, and sometimesmarkets, are unknown has always held an element of risk.Today though, with purchasing budgets under intensescrutiny, sales cycles are increasing, and it’s becomingharder to close the deal.That’s not to say that candidates aren’t willing to risk amove. They are. But those who do will inevitably want to becompensated for it. As we can see from chart two this hasresulted in a gradual increase in salary expectations from candidates.“There’s a negotiationhappening in the marketbetween candidates andclients and the risks they areprepared to take when movingjobs or recruiting”Chart two: Company salaries vs. candidate expectations Oct 2012 – Mar 2013295003000030500310003150032000325003300033500Oct Nov Dec Jan Feb MarCandidate Salaries Vacancy SalariesWhile the chart indicates advertised vacancy salariesare also on the up, they have yet to meet candidateexpectation. This pattern has been consistently repeatedover the preceding 12 months, and indicates employerstoo are looking to balance risk and reward.Their first priority is, of course, to retain top performers,and firms are working hard to do so.According to the BMS Index data, sales training andincreasing OTE bonuses top the charts for strategies to reduce attrition. This is a great example ofrisk-free investments. Bonuses, of course, encourage revenue generation, while training should, intheory, improve opportunities to close – particularly in the FMCG and business services sectors. Hereproducts offer few points of difference so the sale becomesabout the ability of individuals to influence and accelerate thebuying decision.Even for the more technical areas, such as IT, sales trainingand development is crucial. Today’s purchasing behavior isincreasingly driven by solutions selling, and the ability to createa ‘vision’. Large scale IT purchasing is no longer based solely“Candidates expect to becompensated for the risk ofmoving with higher salariesbut only 7% of companiessaid they will do so in thenext 6 months”“Companies are reducingtheir own risk profile bylinking attraction andretention strategies directlyto sales performance”4| BMS Quarterly Business Services Sales Index - Published May 2013BMS Quarterly Business Services Sales Index
  5. 5. on speeds and feeds. So while having an encyclopedic knowledge of the technology is a bonus,today’s technical salespeople require an increasingly commercial skill set.On the performance-based point, focusing on OTE offers an element of risk too. In last month’sIndex we looked at the issues of high OTE levels being seen as increasingly unachievable in today’seconomic climate. Candidates, therefore, have a healthy distrust of high OTE offers, preferring higherbase salaries to reduce their risk. However, increasing the commission-based elements of existingemployee packages makes sense if targets are achievable – and salespeople in the job will knowwhether or not that is the case.Chart three: What are you doing to lower attrition rates of top performers?9% 9%12%2%16%19%29%5%7%9%14%3%22%14%26%7%0%5%10%15%20%25%30%35%IncreasedSalariesFlexibleWorkingImprovedBenefitsExtraHolidaysMoreLucrativeBonusSchemesTeamBuildingEventsSalesTrainingNone of theAboveQ4Q1Back on the candidate side, and the BMS Sales Indexhighlighted increased training levels as something of atrend across the sector last quarter. As chart four shows,firms looking to stay competitive in the recruitmentmarket are looking outside established markets andtaking on raw (graduate) talent, as chart four highlights.Long term investments or short term leaders?“Looking for talent outsideimmediate markets, taking onraw talent and offering salestraining are all strategies beingemployed to attract people in atough economy.”5| BMS Quarterly Business Services Sales Index - Published May 2013
  6. 6. Chart four: What steps will you be taking to remain competitive in the search for good sales peopleover the next 6 months?17%6%8%25%14%6%8%12%3%18%7%12%17%15%7%8%10%5%0%5%10%15%20%25%30%Look fortalent outsidemarketIncreasesalariesShortenrecruitmentprocessProvide salestrainingTake on rawtalent andtrainOtherattractionmethodsStrengthenrecruitmentpartnershipsImproveemployerbrandingNone of theaboveQ4Q1Training here is therefore critical in upskilling these new team members. But as one constructionexecutive commented, when responding to the BMS survey: ‘within our Industry it takes several yearsto be good enough to really make a difference’.Sales teams that 18 months ago recruited raw talent are now beginning to see significant returnson their investments. Those that did not are having to play catch-up. Building for the future certainlymakes sense but a balance must be struck between nurturing teams and getting in talent that can hitthe ground running today.Losing the salary gameBy focusing on training and development as attractionmethods, rather than salary, firms are effectively limiting theiroptions to building for the future. And they are significantlyreducing their opportunities to influence and attract provenperformers who can add value today, as we see from chartfive.Earlier in the report we saw that salary expectations are rising in relation to advertised vacancy levels.Here we see the impact of failing to meet them. Salary is the main reason why firms are missingout on good candidates. With few exceptions, this is a trend the BMS Index has been identifying forover 12 months. It is also a major frustration for employers. But as the data indicates, firms are eitherunwilling or unable to do anything about it.“Companies are reducingtheir own risk profile bylinking attraction andretention strategies directlyto sales performance”6| BMS Quarterly Business Services Sales Index - Published May 2013BMS Quarterly Business Services Sales Index
  7. 7. Chart five: If you have missed out on a good candidate in the past, what was the main reason?Internal frustrationAs we’ve seen, firms offering higher base salaries are themselves increasing their risk in the faceof pressure to drive cost from the recruitment process. But we are seeing other strategies. Internalrestructures in HR departments and attempts to bring recruitment in house may be reducing cost, butthey’re causing concern too.Responses to the BMS Index survey indicated both sales and recruitment managers are frustratedby some of these cost saving measures – from‘a decline in investment by the corporation’ and‘insistence by corporate HQ to use internal, US-based recruitment teams’ to ‘a lack of flexibility inoffer T&Cs’.At least for these firms, more internal recruitmentactivity and less flexibility when it comes todiscussing the package is having a negative impacton their ability to find and secure the best people.Its interesting to note, therefore, that despite efforts to cut recruitment costs, nearly a third ofmanufacturing firms, and almost a quarter of business services companies are looking to strengthenpartnerships with recruitment consultancies to remain competitive over the coming months.“Internal pressures to reducerecruitment costs could be harmingmany short term strategies toattract those star performers intothe business that can affect yourbottom line now”7| BMS Quarterly Business Services Sales Index - Published May 20130%5%10%15%20%25%30%Counter offer Long recruitmentprocessOffer fromanother employerOther Unable to meetcareer aspirationsUnable to meetsalaryQ4Q1
  8. 8. Candidate quality and CV accuracy upThe Quarterly Sales Index highlights another disconnect – this time with candidate quality. Asked, asan open question, to name their firm’s biggest challenge, a range of connected concerns appeared:‘calibre of candidates at the moment is really poor’, ‘there are very few closers out there!’ and the ‘CVnever matches the candidate’.These are perennial problems. But it’s interesting that when we look at an average across all sectors,the BMS Index shows that candidate quality, and CV accuracy, is actually increasing.In Q4 2012, recruiters rated 74% of ‘candidates recently interviewed’ as being average to excellent.In Q1 2013, that number had increased to 85%. Similarly, 66% of recruiters felt ‘CV to candidatematches’ were average to excellent in Q4 2012. That number rose to 76% in the first quarter of 2013.So while challenges persist, perception may not always map to reality. And indeed, these increasesmay go some way to explain why recruiters are more confident of increased recruitment activity as wemove into Q2.An upturn in confidenceSet against this challenging background of prevailingeconomic gloom and candidate acquisition challenges,the BMS Index shows sales recruiters are in a moreupbeat mood than they were just three months ago. 66% of respondents to this quarter’s BMS Indexfelt confident about the UK’s economic prospects in 2013 – a rise of 1% on the previous quarter.When asked back in January whether recruitment activity would increase or decrease in the secondhalf of the year, a third of respondents expected it to decrease [see chart six]. By April this figure hadfallen to a quarter, while those predicting an increase had risen to 18%.So while the overriding feeling is one of ‘wait and see’there seems to be some evidence that recruiters arefeeling the worst may be over, and are looking towardsthe second half of the year with renewed confidence.The BMS Quarterly Sales Index paints an interestingpicture. Recruitment levels are mapping to the widereconomy, and volumes are down on the same period lastyear. Conversely, candidate quality is felt to be improvingand confidence is on the rise.“85% of people that hadrecently interviewed felt thatcandidates were average toexcellent, up on last quarter”“18% of companies expectto see their recruitmentactivity increase over thenext 6 months, up from13% on last quarter”8| BMS Quarterly Business Services Sales Index - Published May 2013BMS Quarterly Business Services Sales IndexWhatever the feelings on the internal/external debate there’s little doubt that sales leaders feelprocesses could improve – and in so doing may reduce the number of good candidates being lostto counter offers by existing employers, competitive offers by new ones, and by long, drawn outprocesses.
  9. 9. Chart six: Will your recruitment activity for the second half of 2013 increase or decrease compared tothe first half of 2013?54%33%13%56%25%18%Stay the Same Decrease Increase0%10%20%30%40%50%60%Q4Q1In conclusionWhether the recent positive GDP growth figures, and news that the UK has avoided a triple-diprecession will further increase this generally positive feeling remains to be seen – and, of course, we’llreport back next quarter.But there’s no getting away from the fact that the dynamics inthe recruitment world are changing. Businesses are finding itincreasingly difficult to secure good sales talent. And while therecession has increased the size of the candidate pool, thereis plenty of evidence to suggest quality hasn’t increased.The majority of good people appear to be staying put to rideout the storm. Those confident enough to make a move arelooking for potential employers to share their risk by way oflarger base salaries. As we can see, failing to meet thoseexpectations means losing the best people.We’ll see how this develops, but there’s little doubt thata more flexible approach from recruiters is needed if theeconomy continues to flat line – and there’s no sign of thatchanging soon.“The recession mayhave increased the sizeof the talent pool but notnecessarily the quality.Evidence suggests many arestaying put”“Companies that want toattract the best sales talentin a flat economy have tobe flexible and competitivein their recruitmentstrategies”9| BMS Quarterly Business Services Sales Index - Published May 2013
  10. 10. A confusing picture in business services recruitmentQ1 2013 sales recruitment data paints something of aninconsistent picture for the Business Services sector,according to the latest BMS Quarterly Sales Index. The onlyreport to specifically analyse sales recruitment trends, theIndex shows a dramatic fall in vacancy numbers during thisfirst quarter – 3.3% down on volumes for the same periodlast year.Despite this downward trend, when analysed in the context of a 3.3% growth rate for the same periodlast year, we see recruitment activity flat lining, rather than dramatically declining.“The business servicessector was a tough placeto recruit sales people lastquarter but confidence isgrowing”Chart seven: Business Services Sales Vacancy Growth Rate Year on Year-4-3-2-1012345Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb MarGrowthRate(%)Market Average Business ServicesFigures published in April 2013 by Markit and the Chartered Institute of Purchasing and Supplysupport this more positive analysis. It’s PMI for March of 52.4 reflects the sector’s strongestperformance for seven months in response to improved client confidence and a greater willingness toenter into new contract arrangements.Commenting on the figures, CIPS CEO David Noble said: “These positive figures culminated in adecent first quarter for this critical sector, but growth at the present rate remains tepid and below thelong-run average. However, there are signs that underlying trends are improving, even defying andlimiting the effect of the bad weather on firms.”BMS Quarterly Business Services Sales Index10| BMS Quarterly Business Services Sales Index - Published May 2013
  11. 11. Salary disconnect causing confusionDespite this more positive outlook, and a greater willingnessacross the services sector to take on staff to fulfil increasingorders, sales recruitment remained stagnant, and ultimatelychallenging. In common with other sectors, the biggest factorfor losing good people at interview remained an inability to meetsalary expectations, as chart eight highlights.“The biggest factor forlosing good people atinterview remained aninability to meet salaryexpectations”Chart eight: If you have missed out on a good candidate in the past, what was the main reason?Interestingly however, and in direct contrast to the majority of other sectors, the BMS data indicatesthat average vacancy salaries have consistently remained higher than those expected by candidates.While this is characteristic of a sector that has historically outperformed the industry average in termsof growth and employment opportunity, this doesn’t explain why recruiters continue to lose candidatesthrough their failure to match salary expectations.11| BMS Quarterly Business Services Sales Index - Published May 201311%22%14%8%19%27%11%18%21%18%0%32%0%5%10%15%20%25%30%35%Counter offer LongrecruitmentprocessOffer fromanotheremployerOther Unable tomeet careeraspirationsUnable tomeet salaryQ4Q1
  12. 12. High performers command high salariesWhile it’s possible to speculate on a number of causes, the most likely is due to the hard fact that thevery best candidates can still command above average salaries. This takes us back to the conceptof risk. For proven performers to risk a move, they will demand a higher salary. If this isnt on offer,chances are they will stay put.There’s no doubt that business services employersare responding to these challenges; looking to staycompetitive by looking outside their market for toptalent, recruiting graduates and offering training, as wesee from chart nine.But, as with firms across the sector spectrum, whetherbusiness services recruiters are willing to sharecandidate risk by offering higher base salaries to thevery best people remains an open question.“Business services firms areremaining competitive by lookingfor talent outside their market,recruiting raw talent and offeringsales training”Chart nine: What steps will you be taking to remain competitive in the search for good people overthe next 6 months?BMS Quarterly Business Services Sales Index12| BMS Quarterly Business Services Sales Index - Published May 201317%14%12%12%11%11%11%6%6%Look for talent outside marketProvide sales trainingTake on raw talent and trainImprove employer brandingIncrease salariesShorten the recruitment and offer processStrengthen recruitment partnershipsEngage other attraction methodsNone of the above

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