Recruitment industry seeing fewer jobs and more applications

Recruitment software company JobAdder has released its Global Recruitment Industry Report Q3 + Q4 2022. According to the report, job growth has eased in Australia and New Zealand, while job applications are rising.

Martin Herbst, chief executive of JobAdder, commented: “Candidate shortages were previously an ongoing issue for recruiters as high job growth fuelled demand, and employees and candidates exercised unprecedented power in the employment market.”

He continued: “As a result of slower growth, immigration, and sector-wide layoffs, this extraordinary imbalance between job demand and candidate undersupply will shift this year.”

JobAdder said in a statement that these findings contrast with what we saw in early 2022, as there were fewer job applications per role due to a more competitive talent market.

Mr Herbst said: “This means recruiters will have more time to dedicate time for forward-planning instead of racing to fill never-ending positions. Having time to think and strategise allows recruiters to emphasise finding diverse candidates, bringing them back to thinking outside the box.

“Agencies should take advantage of this breathing space to train and upskill their staff and ensure their tech stack is fit for purpose and adopted to its fullest. Whether using technology to weed out unconscious bias or finding non-traditional candidates, the time to start getting back into strategy mode, as opposed to sink-or-swim mode, is now.”

According to the Global Recruitment Industry Report Q3 + Q4 2022, Australian agency applications per job were 15.3 in Q3 2022. This rose to 16.9 in Q4. Furthermore, recruitment agencies posted 66.3 jobs on average in Q3; this dropped to 58.9 in Q4.

JobAdder adviser and recruitment thought leader Greg Savage discussed: “The impact on recruiters of more applications per job is very nuanced. Job volumes are dropping, but they are still healthy, and hiring continues. We are not in a recession (yet).

“The fact that candidate flow is increasing may also be a mixed blessing. The volume of candidates does not always mean more qualified candidates. Indeed, an impending downturn reduces candidate confidence and inclines many well-qualified people to stay put.”

According to JobAdder, it took an average of 5.8 days for hiring managers to find Australian temp and contract workers through JobAdder’s talent pool in Q4 2022. When using external methods, such as job boards, it took an average of 25.3 days. This figure jumped to 31.7 days when looking for full-time positions.

Mr Savage continued: “As hiring demand drops, agencies should not return to the lack of candidate service ethos that has characterised our industry for so long. Even as they increase business development with clients, agencies need to ensure they don’t take the focus off activating their candidate pipeline because it’s how they treat those candidates when they don’t need them that will dictate how many they have when the hiring market improves.”

Agency fees are also rising across Australia, with JobAdder reporting that they climbed 0.6 per cent in Q3 2022 and 0.7 per cent in Q4.

“Agencies need to be visible to their existing clients, nourish relationships with them and flex their business development muscle. Now is also the time to reignite dormant client relationships. Get in touch. Go and see them. Engage whenever possible. In their communications with clients, agencies should also focus on value,” Mr Savage said.

He added: “Explain that it’s harder to recruit great candidates in a depressed job market, not easier. The volume of applications increases, and the best candidates are reluctant to move. As a result, a recruiter works harder for the outcome, screening much more effectively to find the right candidates in what might become a crowded but not highly qualified candidate marketplace.”

Jack Campbell

Jack is the editor at HR Leader.