This client spent $2 Billion with 11 recruitment agencies. (No BS)

It turns out the good old Aussie Federal Government has been supporting the local recruitment industry all along.

To the tune of $2Billion in contractor fees in the past 6 years.

No typo.

That’s Two Billion Dollars!

Yes, the much loved, often lucrative (but always ludicrous ) game of using agencies to hire temps and contractors to dodge caps on permanent staff numbers, is well and truly alive.

As reported in the Australian Financial Review on 5 June 2020, and using data from AusTender, it seems that just 11 recruiting firms won 80% of the recruitment contracts entered into by the Federal Government in the financial years 2013 – 2018.

Just four firms grabbed 80% of the dosh.

And, unsurprisingly in many ways, Hays Specialist Recruitment was the big winner, with contracts worth almost $500 million (That’s half a billion dollars if you want to roll that around your brain for a while. If that is not Recruitment Porn, what is?). That equates to 40% of the total contacts.

Yes, this is a photo of a newspaper image, taken with my iPhone! The Savage Truth budget, and expertise, is low!

Personally I have no gripe with any of this. (Except perhaps the inevitable government waste caused by capping perm hires and then hiring temps to compensate). Hays won the biz, Hays delivered on the biz.

Good for them, and the rest of the firms on this list.

One small doubt lingers in my mind, and it’s simply a commercial question. (To which I do not have the answer, but have my suspicions)

These are revenue figures.

But what was the margin?

These deals went to tender no doubt, and procurement geeks were crawling all over the detail I am sure. And those dudes know how to trim a price and trim it good.

Did the ‘winners’ here sacrifice profitability for revenue?

 Did they allocate high paid consultants to transact low margin work?

Did they miss the boat with opportunity cost?

 Maybe. Maybe not.

One thing we do know is this. The Hays financial results are freely published, and they are consistently one of the most profitable recruitment businesses going around. So they have nailed it at least.

So when you need some ‘Big-Biller Stimulation‘ and your mind turns to recruitment fee fantasising, just lovingly saying that phrase again.

‘$2 Billion in temp sales’

Yeah, baby!

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