KPMG Australia was commissioned by the Department in early 2016 to develop a profile of the Australian recruitment industry. The final report was delivered to the Department on 31 August 2016.
The aim of the project was to develop a profile of the Australian recruitment industry, with a particular focus on the commercial sector and a comparison with public employment services. The report considers the structure and development of the industry, the market focus of the different sectors and their performance. Differences are highlighted between the sectors, notably in client base, business cycles and processes.
Some key observations in the KPMG report are:
- The market focus of the two sectors is very different. Employers are the main clients of the commercial sector, with fees for service set in the open market and little revenue gained from job seekers themselves.
- Market specialisation is common in the commercial sector, with recruitment firms or their staff focussing on particular industries or occupations. The regulatory framework is relatively light, with low barriers to entry and exit, which enables quick adaptation to market conditions.
- The sectors tend to operate on complementary business cycles, with the commercial sector stronger during an economic boom whereas public employment services experience strong demand at times of economic slack and high unemployment.
- Technological platforms such as LinkedIn, Seek and other online forums are increasingly being used by the commercial sector to develop databases of high-quality job candidates to match with positions. These candidates are more likely to be already employed, in contrast with the client group for public employment services.
The report provides a number of case studies which show collaboration between the commercial sector and public employment services in delivering pre-employment assistance, post placement services and employer initiated support programs for particular job seeker groups.
KPMG were unable to compare service delivery and performance between the sectors for common cohorts due to a lack of suitable benchmark data. This is an issue for possible further exploration by the Department with the commercial sector. While the analysis of international experience in the report is also limited by data availability, further analysis could be undertaken to learn how the sectors interact in other national environments.