Have you heard the good news?! Jesus Christ died to provide atonement and forgiveness for human sin, fulfilling prophecies and demonstrating God’s love and justice. Also, New Zealand’s most marginalised and disadvantaged group have received the funding they deserve in yesterday’s budget. That’s right, private schools will receive an extra $15m of funding over the next four years, meaning they can at last afford a much needed assistant physiotherapist for the school rugby team.
Given the above, and that I’m Chief-Agitator of the Titirangi Marxist Association, I’m going to avoid politics today. Well…mostly. What I will say about yesterday’s budget is that there seems to be an elephant in the room. The coalition Government, desperate to increase funding into Health and Education before next year’s election, have had to find a lot of money from somewhere. This time round, about half the $21b reclaimed has come from “one off” changes to the pay equity bill. Unfortunately, eventually we run out of people to screw over. We can’t keep servicing our debt with “one offs”. The only solution is to be more productive and do the thing that ACT, National, and their voters hate. Pay more bloody tax or we’ll run out of money.
On the subject of running out of money and needing to increase revenue, the budget didn’t deliver anything momentous for the recruitment industry. The main sense of relief I have is that it’s now done. Hopefully, we can have a good run up to Christmas without anything else to wait for. No election, no US election, no AoG tender – just a gradual increase in revenue. Recruitment firms have had it hard over the last couple of years. Like the Government, almost all have operated in a state of austerity; cutting spend, investment, and hiring. Some poor firms have had to restructure, make redundancies, and move to commission only just to keep the lights on. Regardless of what we save, the fundamental challenge has been a massive drop off in billings. Great recruiters are billing decidedly average amounts. So much so, that we have to redefine what “good” actually looks like.
Jon Rice wrote a blog about this in my absence almost exactly a year ago. Here at Rice, not content with just not making enough money, we also spend money on a constant conveyor belt of new technology. One of these projects was the awesome RICE Report – a real time salary survey tool that collects real data from actual Consultants. Now remember, this was from June 2024, meaning that most of the data came from the proceeding year. Back then, when times were good and I was less grey, the average annual billings across 421 New Zealand based agency recruitment consultants was….$485,406.
I doubt many of you billed that last year.
For us in Rec-to-rec, we now have a problem. The market is slowly shifting and smart firms are hiring. We love to call these clients with candidates who are billing north of $500k. Alas, last year, this was a rarity. We now have a new normal of what good looks like. A normal that is understandably hard for hiring managers to accept. If you want to help us lower our clients’ expectations with quantitative data, please complete the report here with last year’s earnings – don’t worry, it’s anonymous.
In the meantime, I’ve been crunching the numbers. Speaking with a whole heap of Consultants, I’ve noticed that the reduction in billings has been pretty consistent across sector and seniority. So much so, that I’m prepared to put a number on this. This number, I believe, allows us to understand what a Consultant would have billed in the strong post-covid years, and what they can bill again. And you know what, I’m not even going to put a range.
Last year, the average Consultant billed 65% of what they would have billed in an average-to-good year.
This means that the $485,406 “average” biller above did $315,513 last year. The million dollar biller did $650k. The $750k senior A&F Recruiter did $487k. The solid $350k-er did $227k.
If I’m right, we can use this as a “here’s what you would have won” when assessing the capability of a Consultant in the right market. Take your billings and work out what they are 65% of. I know we’re recruiters, but please please please don’t add 35% to your billings. That’s not maths. Take your billings, multiply them by 100, then divide by 65. Now your mathing!! I believe this number is a fair representation of what you would have achieved in a good market.
Anyway, have a play around with this yourselves and let me know what you think the percentage should be. Or even better, jump of the comparison tool and see how you stack up against your competition.
^SW
