The document discusses disrupting the recruitment industry by connecting available worker capacity with emerging enterprises and small businesses. It notes high unemployment and under employment rates alongside frustrations from workers, business owners, and small to medium enterprises. Statistics show the recruitment industry is large but facing declining profits, while available workers from recent graduates, retirees, and stay-at-home parents are not being utilized. A new approach is needed to match available workers with growing small businesses using a model of shared equity rather than traditional employment.
2. Who
• Fraser – Opening Mindset
• Adam – Expert Analysis,
Stats and the disturbing
facts
• Ian – Solutions, time is
right.
3. A General Mathematical Theory of Political
Economy (1862)
William Stanley Jevons
• Trade for Currency ($)
• Double Coincidence of
Wants (Barter)
“there is more than one way of
trading our capacity to work”
4. “Inefficient way to achieve financial
growth plans”
• Work for income
• Pay Tax
• Purchase needs
• Purchase wants
• Invest savings for dividend and growth
– Equity in Assets
5. Sweat Equity Concept
• Capacity to work
• Endgame of owning
assets
• Equity to share
• Endgame of achieving
their business dreams.
12. Revenue from recruitment industry to reach
an estimated $11.4 Billion in 2015 and grow
by 1.5% PA
Employs 121,400 people in 6,822 Businesses
Equates to $93,400 revenue per employee
and just under $1000 for EACH of the 23
Million Australians
Placement fees vary from 10-30%
27% of recruitment agencies are running at a
loss and for the other 80% profits are
declining
Australian Recruitment Facts
13. Owner outgrown the Business Business outgrown the Owner
EE’s and SME’s Frustrations
14. Source : Bersin by Deloitte -Ten Disruptions in HR Technology for 2015: Ignore At Your Peril
22. The industry needs change it’s
mindset
The stats all add up.
Now is the time to disturb the
industry.
Editor's Notes
1. Introduction
Why the Recruitment Industry is totally ready for disruption, more
importantly why the Niche market with in, of Emerging Enterprises is crying
out for support.
Adam – All research collected.
This leads us into
There is a gap in that can be filled
I am going to start with showing you some of the frictions on both the worker side, many of whom would be interested in offering their services and be paid a smaller amount and receive equity instead, as well as on the side of Emerging Enterprises & SME’s who are in need of these people but cant afford to pay them market rates.
Uni students suffer from a 30 % unemployment rate and getting their first role is crucial.
Graduate Survey Employment for people with university degrees has decreased since 2008 every year down to 70%.
Means that 30% of higher education workers are unemployed.
% of Uni students Professionals Employed /unemployed Corporate Employed / Unemployed
Consultants Restructure victims Grey Army Time rich with flexibility - Parents
The unemployment rate of 6.3 % is only one side of the coin. The Underemployment rate, which includes both the unemployed plus those who would like to work more is 15.0 % (= 1.356 million people) .
It is common knowledge, that people who are in jobs generally find it easier to find a new position over those who are not engaged
% of Uni students Professionals Employed /unemployed Corporate Employed / Unemployed
Consultants Restructure victims Grey Army Time rich with flexibility - Parents
There are so many Consultants out there who are highly competent but fail to fill their diaries.
Whilst no hard facts or even statistics were available, mum focussed websites suggest an increase in mothers wanting to be part of the workforce and of a business.
How many retirees do you know who would like to get out of the house and share their wisdom and experience?
Or people like myself, whilst not retired – I am still far off from 50, Karl!... My career has been varied and it would be difficult for me to find employment as I don’t fit the typical corporate mould anymore, despite having significant experience. I know the pain of working with the recruiters and I am sure each one of you has a story of their own. I am longing for a way to find suitable startups who need a partner.
The industry is suffering. Picking just a few points on this slide, we can see that, according to IBISWorld , with 11.4B turnover the industry is still huge, but companies having to pay placement fees of between 10-30% it may be of no surprise that 27 % of recruitment agencies are losing money and for most others it is going downhill. Several listen agencies have already closed. This clearly means there is opportunity out there for disruption as matchmaking will continue to happen.
Industry stats info: Source: IBISworld / ABS
Info re recruitment industry Source: Sales Manager Chandler McLeoud Recruitment & Owner de Jager & Associates
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Placement fees vary from 10-30%. Lower end (10-20%) for non-executive non-excl contingent search and higher end (18-30%) for retained executive search. Guarantee is generally given for 3-6 months
Real cost per recruitment employee ca. $200,000 p.a.
27 % of recruitment companies are operating at a loss and Profits in 80 % are declining. Consultant productivity is declining because individual recruiters are billing less as a %age of their salary and on-costs than ever before. 3 x GP to salary 2003-07 down to 2.2 x in 2013-14
Listed recruiters HJB and Bluestone have closed.
Now let’s look at the challenges on the Startup and Small business side. The lack of funds is a major issue as these businesses struggle to pay the $ to secure the people they need where the owner has outgrown the business, the business has outgrown the owner or an entrepreneur wants to get a new business off the ground. This is exacerbated by the rise in domestic labour cost of 37% over the last 10 years and puts our country at the top of the global pack as stated by the OECD.
Here you can see how recruiting has changed from Active to Network recruiting. According to a report by Deloitte, the way people are recruited today has changed from sourcing candidates through recruiters to personal and company networks like Linked-in. Traditionally print media and job boards were key, whereas today most happens through referrals, talent communities and networking sites.
Disruption has started in a number of industries and traditional companies are struggling to adapt. Look at Über who are disrupting the taxi industry,
Linked-in has already dramatically changed the recruitment industry – people have become much more findable and companies are searching for people themselves. Linked-in’s global talent solutions revenue has risen to $860M in 2013, up 64 % on 2012. linked-in only offers a job search platform and is not a model to engage the emerging enterprise sector who typically dont have the cash-flow to pay the salaries of the people they require but could offer equity in place.
Google, Linked-in and online job portals have strongly hurt traditional print media with News Ltd and Fairfax revenue declining 9 % and 18 % respectively.
But can Linked-in take up all the slack and does it respond to the emerging enterprise sector? No, because linked-in only offers a job search platform and is not a model to engage the emerging enterprise sector who typically dont have the cash-flow to pay the salaries of the people they require but could offer equity in place.
Why is it that businesses seize operating? We can see a surprising and also sad picture that over 50 % do so because of lack of finding finance or low profitability and that less than 5 % had planned their exit or managed to sell it. We can see from this again, there is opportunity to bring the parties together.
Global Entrepreneurship Monitor 2013
Fraser told you industry needs to change its mindset and adam showed you the stats add up. Now is the time we disturb the recruitment industry. Would you like to join us
It is the right time.
A math's equation
What is the most popular flavour of ice cream
The only way to change this law is to change the game. Make up your own rules
Facebook changed meeting up and communication
“One-third of the Australian economy faces imminent and substantial disruption by digital technologies and business models – what we call a ‘short fuse, big bang’ scenario. This presents significant threats, as well as opportunities, for both business and government” Delliote
Analogy – Its like we are watching the tide come in and we are not
Out of the top 100 websites advertising jobs who do you think is top – Gumtree
The public do not like the recruitment industry.
Recruitment industry itself is oblivious.
77% of people surveyed indicated that they would use a sweat model. The majority being employees
Angellist connects entrepreneurs, skilled people and Angel funders
Lucky they didn’t get it right as little equity and also don’t cater from other emerging enterprise
Angel.co is has a job platform for startups which offers a mix of salary and an equity share between typically 0.5-4 %.
Currently they show around 50 job openings in Australia compared to around 3,900 for the US. They do not cater for the SME sector.
Linked-In
Underutilised Workers, skilled retires, directors, University Graduates, Cosultants, Mum preneurs, Corporate
Emerging Business like my own, I have minimum available funds to grow the business
Cost of labour going up will stifle the emerging industry industry
Our mindset is that we need to pay tax get old and hope we have enough. Lets shift that.
Work to pay tax to buy and asset. Cut out middle man and end up with an asset.
Australias cost of labour has increased more than any other OECD country in last 10 years
Cost to business is high and we have untapped talent available
Little to no competition