Netflix, Amazon and most of the unicorns out there became global powerhouses of modern business through recurring customer revenue.
You could talk about market opportunity, investment, innovation and more, but it’s a consistent, better experience and service that divides market share.
Recruitment might be a different landscape, but in the contract market – which makes up 91% of its total turnover – the opportunity for revenue is recurring.
Yet, our own data confirms that up to 70% of contractors that approach the end of their assignment fail to be redeployed by the agency that placed them. Further findings suggest that nearly half of those that go unplaced have no record of ever being contacted about another role at all.
That means there’s absolutely zero chance of securing further revenue from their existing contractors. It undermines the hard work and cost that goes into acquiring, screening and building those relationships.
The costs of acquisition, obtaining hiring references, placing them on payroll and ensuring compliance has already been completed.
Businesses are also forgoing the opportunity to:
- Extend these contracts
- Place them into a new contract
- Potentially backfill the placements
- Source new contractor referrals
- Hear of new hot projects and potential clients
We’ve spoken to some of the most successful agencies in the world and they’ve shared that their redeployment rates can sometimes knock about at the 5 to 10% mark.
Some of the more sizeable agencies will have tens of thousands of contractors out on active placements. That’s an enormous amount of margin that will be picked up by your competition.
That’s an eye-watering amount of missed revenue.
Contractors don’t disappear from the workforce once their assignment ends without renewal. They tend to source a new contract.
A window of opportunity opens up for recruiters as contractors transition from passive to active job seekers upon nearing the end of their assignment.
Businesses are missing a serious trick if they’re pooling the lion’s share of their efforts into sourcing new candidates when they could be redeploying their existing talent. A fact that is compounded in talent-short markets and competitive markets.
A systemic problem at the heart of recruitment
Recruitment businesses are often unaware of what their contractor redeployment percentage is and how to actively move the needle on it.
From conversations with thousands of recruitment owners, we’ve found that most of the larger organisations will have a contractor care team that kicks recruiters to chase on redeployment.
The process breaks down through accountability, timing and not having the data actively presented at the time of need. It’s a matter of combining data integrity and Actionable Insights.
That and a compounded lack of incentives that surround redeployment rates and offer a diminishing return on commission.
It’s limiting the potential revenue opportunity for recruitment businesses.
The after-effects of redeployment
It’s a win-win situation where new contractors are more likely to invest in an agency that has a track record of customer care, loyalty and future work opportunities.
A revolving base of contractors leaves a sign above the door inviting new contractors to enter.
It’s also worth considering the costs that are saved on subsequent acquisition through job boards, screening and attrition.
Whether you’re operating a business that has 10, 100 or 10,000 contractors – imagine if each consultant was actively notified of when each of their contractors had entered a window for redeployment.
If you’re interested in seeing Actionable Insights, leave your details and we’ll make it happen.