By Mark Atterby, Senior Staff Writer

Despite the ever-increasing use of smart technology, the development of innovative business management and leadership, and the increased focus on recruitment, training and staff development, meeting and exceeding customer service targets is a never-ending challenge for contact centres.

The essential problems stems from the fact that what customers need and expect today can change dramatically over time. If you’re a service provider, customer expectations can pose a major challenge. They grow, they shrink, they change shape, and they change direction. They shift constantly, and they shift easily. And how satisfied (or dissatisfied) your customers are is determined by these expectations and your performance in meeting them.

Shane O’Donnell Senior Consultant Contact Centres, Curran and Associates, who has some 30 years experience in contact centre management, comments, “The main reason that meeting customer expectations is so challenging is that the needs and wants of customers evolve as quickly as their lives and businesses change”.

Though what customers expect may change rapidly the internal processes and structures of an organisation may not be able to evolve quick enough to meet the new challenges. “Unfortunately while market change is rapid, organisational internal decision-making processes are often too slow to be effective so only those with quicker, more empowered authority to initiate change, tend to prosper in a competitive environment”, says O’Donnell.

One of the key benefits of outsourcing is that organisations can immediately tap in to “best practice” skills, expertise and processes, offering a significant time-to market capability. For example, in launching an IVR solution, an outsourcer is equipped with the consultative skills and programming ‘know how’ to help corporations rapidly ramp up a new application .In running a short-term marketing promotion, or in anticipation of overflow calls, perhaps due to seasonal fluctuations, an outsourcing firm can quickly assemble the staff and systems needed.

Dislocation between the contact centre and other parts of the organisation can also have a dramatic impact on customer expectations. O’Donnell advises, “This dislocation is most often caused by timing and poor communication. If a sales and marketing campaign takes months to plan and the contact centre is still waiting on a script to be approved 4 hours after go live (a very frequent occurrence), there is a serious disconnection and it is usually symptomatic of other problems”.

Last minute information leaves no time to ask questions, test processes or properly train staff, leading to customer dissatisfaction, employee dissatisfaction, misunderstandings causing errors and the blame game. The contact centre (regardless if it’s in-house or outsourced) and the rest of the organisation, need to work together, early in the process, to understand the differing perspectives and prevent problems, to get it right, first time.

A supplier of any product or service relies on the quality of its offering and the speed to delivery to provide basic customer service. “However”, advises O’Donnell, “it is the relationships its employees can create and maintain over time that overrides concerns of cost and other objections and sets the customer perception of the service received. The “like” factor should not be underestimated. Don’t let the metrics overshadow it”.

Multi-skilling has many benefits to customers, the organisation and frontline troops. It allows; more efficient use of technology to help customers have their needs met in a single call, minimisation of costs by reducing waste and it provides Agents with variety in their tasks, opportunities for career development and potential to increase their income.

Source: Dialogic.com

A précis of an article that appeared in the Straits Times in Singapore.

The year 2020 may have once sounded more like the stuff of science fiction novels. But it is only eight and bit years away now. In a new report “Imagining Asia 2020” a team of researchers and analysts from DBS Bank look into their crystal balls to see what 2020 might hold for Asia

1. GDP growth: Asia will surpass the US in economic size.

Asia has long been the fastest growing region in the world. And last year it overtook the United States as the main driver of global growth.

Mr. David Carbon, managing director of economic and currency research at DBS said “This is the biggest structural change going on in the global economy today. Asia has been getting a little bigger and bigger, and is now at the point where it is big enough where it matters. 5 years ago, 10 years ago, 15 years ago, it was not big enough to matter, not big enough to drive its own recovery, but today it is.”

By 2016, Asia will catch up in size with the US. By 2020, it will be 17% larger than the US economy.

The speed of growth has been simply breathtaking. In 2000, Asia was only 40% of the size of the US. By 2010 it was 80%.

China will contribute 64% of this growth over the next eight years, and India 17%, making them the two most important drivers of growth by far.

2. People power: Asia will add another US to its population.

We have just had the 7 billionth person born and by 2020 Asia will have added another 220 million people, almost the entire population of the US. “That is 10 times more than the US population is going to grow by. For every single new person we have in the US by 2020 we are going to have 10 new people in Asia,” said Carbon

Mr. Bhaskaran Manu the chief executive of Centennial Asia advisors and vice president of economic Society of Singapore, said: “if the population growth occurs in countries with endemic political and economic problems, these problems could perhaps get even worse. But if the growth is in rapidly growing economies, which can provide good jobs for the additions to the workforce, then the impact is likely to be positive.”

3. Urbanized nation: China will have over 100 cities with more than 1 million people each.

China will have seven megacities by 2020. There will be more than ½ a dozen mega cities with a population of over 8 million each. However China will also have a whopping 130 other cities with populations of more than 1 million people each.

It’s not just all about China and India, in Southeast Asia, over 20 secondary cities across Indonesia, the Philippines, Thailand, Vietnam and Malaysia also behind the growth of people by 2020, said the DBS report

The demand for infrastructure development and urban makeovers is therefore immense. “Urban centers offer economies of scale and make it more efficient to provide services such as education, healthcare, clean water and safe sanitation,” said the DBS report

“A skilled labor force attracts investments that generate more employment and prosperity, setting off a virtuous circle of economic gain.”

4. Hey big spenders: Asia will be the next big consumer.

Americans are not the only big spenders. Asia is expected to at least double its current level of consumption and will consume 80% as much food as the US.

It will more than triple the growth rate of private consumption of the US over the next 10 years said the DBS report.

Food will be a large part of that spending. One out of every four dollars spent by each household will be on food.

5. Wealth creation: Asian incomes have lots of room to rise

Between the mid-1960s and today, income levels in most Asian nations have grown by 5 to 8 times. But most of Asia is still far behind developed Western nations such as the US and Europe in terms of household income levels.

So while income levels have grown rapidly in Asia, there is still a lot of catching up to be done and it means “fast growth in Asia should be able to continue for a long time”, noted the DBS reports.

The latest report findings from NelsonHall, a leading BPO analyst and advisory firm, measured the transfer of operational responsibility for all payroll services, from the client to a services provider, for contracts of 12 months or more.

The report estimates the competitive Asia Pacific payroll outsourcing market to be valued at $431 million. Specifically, emerging markets such as China and India will experience strong growth whilst consistent growth in Australia will continue.

Mary Sue Rogers, Global Managing Director of Talent 2 HR Managed Services said:

“We know from market research that outsourcing is now being considered as a strategic solution for many oganisations, rather than just a cost-cutting tactic in response to the GFC. We are seeing steady growth in the Payroll outsourcing market despite the sluggish economy, with an increasing number of organisations looking for multi-country and consolidated domestic payroll.

The leading players are reflected in the table below:

By S Ronendra Singh (Email: ronendrasingh@mydigitalfc.com)

Outlook for global business process outsourcing (BPO) and offshoring industry will remain cautiously optimistic in medium-to-long term despite decline in transactions, independent advisory and research firm Everest Group said on Thursday.

“While there are some signs to show that global outsourcing and offshoring market is beginning to slow down, it is still early to comment on how the overall global market scenario will shape up,” VP, global sourcing, Everest Group, Amneet Singh said. He said the company has to see few more quarters to determine if this is a momentary blip or beginning of downturn trend.

According to its third quarter report on global outsourcing and offshoring industry, Market Vista, market witnessed 472 outsourcing deals compared with 508 and 516 transactions in the Q1 and Q2 of this year, respectively. However, while there was a dip in transaction deals by nine percent on a quarter-on-quarter (Q-on-Q basis), Q3 global transaction volumes reached around $2.7 billion in annual contract value (ACV), up six per cent over previous quarter, primarily due to signing of a few large-size contracts.

Compared to Q2 2011, market saw a decrease in BPO transactions by 12 percent and information technology outsourcing (ITO) transactions by seven percent.

“This has been the first significant decline in the number of transactions for first time in four quarters,” Singh said. He said banking financial services and insurance (BFSI) sector continued to lead transaction activity, while manufacturing, distribution and retail (MDR) segment also saw meaningful activity.

North America and Europe witnessed marginal reduction in transactions, while the UK and rest of world saw significant decline of 22 per cent and 15 per cent, respectively, he said. On captive’s part, Singh said there was increase of 20 new centres in Q3. Captives are also offshore wherein a company retains work and close operational tie-ups within parent company.

Nearly 1000 major outsourcing contracts have expired across the globe during 2010 and 2011. A flurry of activity in the BPO and outsourcing marketplace has seen a host of mergers and acquisitions. Despite this, the market locally and across the globe remains crowded (with numerous players of varying size) and competitive. As contracts have been renewed, clients have been making a greater use of multisourcing.

According to research from TPI momentum, the new contracts that clients are signing are shorter in length and include a greater variety of suppliers. More than half of clients who spend more than $50 million annually on outsourcing are employing to or more service providers.

The principle behind multisourcing is fairly simple: breakdown a particular business process, function or service into its constituent parts and allocate those different parts to the ‘best of breed’ provider or internal resource who is best able to manage it. To engage in or manage a multisourcing environment, however, is extremely difficult and complex. Graham Beck, senior outsourcing advisor at PA Consulting Group stated recently “multi-sourcing can only be a viable strategy, if an organisation has the appropriate capabilities and managerial disciplines to discharge its responsibilities”.

It is highly recommended that organisation who have limited or no experience of outsourcing to be extremely careful if they are looking at multisourcing. According to Beck, a client organisations needs to have the technical skills and service management experience to create a framework that can integrate the multiple outsourcing relationships and different elements of the service or function involved.

In essence the client organisation will be adopting a new role as it becomes an integrator of various services and service provider relationships. Many companies and businesses may struggle with this and the investment necessary to be successful may come as an unpleasant surprise. For those organisations that recognise the need to invest and have sound plans in place, multisourcing can deliver real qualitative and quantitative benefits. Organisations that evaluate their outsourcing arrangements effectively from the outset are better placed to realise the benefits.

Mark Kobayashi-Hillary, in his article The Pitfalls of Multisourcing, highlights one major benefit as being the best of breed effect: choosing suppliers based on their specialised expertise and execution capabilities, rather than an ability to service every possible function, regardless of quality.

Multisourcing can also reduce outsourcing risk. Businesses can hedge their bets by utilising a basket of expert suppliers, rather than a single massive provider. It’s a lot easier to replace a supplier failing in a single service than to negotiate with a large supplier failing in key areas but satisfactory in others.

Multi-sourcing allows for vendor comparison, whereby a vendor can be tried out on a smaller or less critical function before being given a larger process or service in the future.

One way to address multisourcing is to utilise an experienced third party to integrate the different service elements and associated relationships. The third party provides the managerial and technical framework for integrating different service providers, as well the project management, consulting and change management skills to ensure the successful transitioning of outsourcing projects.

As companies modernize their business practices, driven by the need to remain competitive and retain critical survival capabilities, such as, agility and flexibility in a fast changing marketplace, it is opportunities galore for players in the Medical Device Outsourcing market. Outsourcing offers several advantages to OEMs, which include access to dedicated product design teams/expertise, manufacturing-cost reductions, minimizing the number of process steps involved, cost-effective customized products, and improved time to market, among others.

Interestingly, in comparison with other manufacturing industries like automotive and industrial equipments, the medical devices industry has been relatively late to latch on to the outsourcing trend, deterred primarily by thorny legislative issues.

Regulatory issues have been a major barrier, given the fact that medical devices are strictly governed by medical legislations. However, in recent years, the economic advantages of outsourcing have far outweighed the bottlenecks confronted and as a result outsourcing is currently a growing trend with major medical device OEMs. With the future characterized by volatility in commodity prices, and currency fluctuations, manufacturing processes, including that for medical devices, will come under direct pressure requiring OEMs to remain cost effective and flexible and to rapidly adjust to changing external market stimulants.

Outsourcing against this backdrop will emerge even higher to be the sharpest competitive edge for medical device OEMs.

The healthcare industry is resilient but not immune from the developments in macro-economic environment.

Under such a scenario, growth in the medical-device outsourcing market decelerated to single digits in the year 2009 discouraged by reductions in contract manufacturing orders from OEMs burdened with softening demand, liquidity shortages and longer sales cycle of products However, the recession interestingly has pushed the concept of outsourcing medical device development and manufacturing out of its orbit. Several medical device OEMs have and are continuing to re-evaluate supply chain dynamics in a bid to leverage cost efficiency under a scenario where increasing profitability is solely dependent upon reducing production/manufacturing costs.

The year 2010 has already witnessed a “rubber band effect” with contract manufacturing orders/deals springing back into force with recovery in the economy. The vigorous snapping back of growth is largely the result of OEMs recalibrating strategies to reduce costs, lead times, increase execution speeds, and flexibility. Steady growth is forecasted for the upcoming years, as revenue starved companies’ prowl for outsourcing solutions that are cost-effective, and convert their costs from fixed to variable.

Most medical device outsourcing service providers are focusing on expanding their capability and expertise with end-to-end full service portfolio offerings. Full-length services typically range from product design, development and production including, value added services such as R&D, engineering services, packaging, and supply chain management. In the upcoming years, companies with dual prototyping and production abilities are poised to score the maximum gains as OEM preferences skew steeply towards service offerings that promise radical reductions in time to market.

Like other industries, shift of manufacturing bases to low-cost destinations has been gaining pace in the medical device industry. In the upcoming years, Asia is expected to lead the way as the most preferred offshore destination because of the quality and scale of labor it has to offer. Sensing opportunities, several European companies have relocated significant portion of their operations to Asian economies to reap the benefits of lower operational costs.

As stated by the new market research report, the US accounts for a major share of the global Medical Device Outsourcing Services market. By device category, outsourcing services offered for Class II Devices is the largest segment. OEMs leveraging the most of specialized outsourcing services are expected to be those operating in a business environment where cost-containment and product differentiation represents perennial needs.

In the post-recession period, organizations will continue to retain their appetite for cost effective solutions, but will however demand more value-creating productivity. Growing recognition of the economic and operational efficiencies and benefits of a device outsourcing model promises strong future growth. World Medical Device Outsourcing Services in the field of Radiology is expected to surge at a projected CAGR of 9.4% over the analysis period.

Major players in the global marketplace include Accellent Inc, Advanced Scientifics Inc, ATEK Medical, Flextronics International, Benchmark Electronics, Inc, Code Refinery LLC, Creganna Tactx Medical, EtQ Management Consultants Inc, Greatbatch Inc, HCL’s Life Science, Intertech Engineering Associates Inc., Lake Region Medical, Medical Device Consultants Inc (MDCI) Inc, Memry Corporation, Minnetronix, Inc, Nortech Systems Inc, Plexus Corporation, RTEmd, Sandvik Materials Technology GmbH, Symmetry Medical Inc., Vention Medical, among others.

The research report titled “Medical Device Outsourcing: A Global Strategic Business Report” announced by Global Industry Analysts, Inc., provides a comprehensive review of market trends, issues, drivers, company profiles, mergers, acquisitions and other strategic industry activities. The report provides market estimates and projections for Medical Device Outsourcing Services in (US$ Million) for major geographic markets including United States, Canada, Japan, Europe (Germany, Italy, UK, Spain and Rest of Europe), Asia-Pacific and Rest of World.

For more details about this comprehensive market research report, please visit – http://www.strategyr.com/Medical_Device_Outsourcing_Market_Report.asp

By Asher Moses

Telsyte says 44% of Aussie smartphone users have free messaging apps

Australians are increasingly using free apps to send text, picture and video messages and make calls – with savings over $100 in value a month for heavy texters – raising the question of whether telcos are becoming merely a “conduit” for smartphone makers and app designers.

Apple will hurry this shift along this week with the release of a new free messaging service for iPhone owners. But carriers, for their part, say SMS is still going strong.

iPhone users who install iOS5 this week will be able to send free rich text messages using iMessage.
Email and other electronic communication on smartphones is now virtually free, making it more difficult to justify charges of 25c per SMS and more for picture messages. Telstra charges 75c to send texts overseas.

Many are choosing to avoid these charges by using apps such as What’s App, Facebook messenger, Skype, Windows Live messenger, Viber and Bump. These are largely used for sending text, picture and video messages but Skype, for instance, can be used for making calls.

Bundle plans make it difficult to determine how much an average user could save from switching to free apps.

But Rolf Hansen, CEO of low cost carrier Amasim, said heavy texters sent about 500 texts a month or more and at an average rate of 25c a text, that worked out to $125. He said switching to free apps could save 95 per cent of this cost.

“You can’t stop technology and if consumers see benefits they will embrace them, full stop … as we can’t stop it we’re just trying to come up with smart data products that people will use to bypass some of the legacy products [like SMS],” he said.

High margin SMS ‘progressively eroding’

The free apps are richer than standard SMS messages and users can see which of their friends are online and whether they have read their message.

“Over time what we’re seeing is that these kind of very high margin telco services are progressively disappearing, progressively eroding,” Nick Ingelbrecht. research director for Gartner, said in a phone interview.

Jordan Zacharowitz, 18, from Sydney, uses tools such as What’s App, Twitter and Facebook to send a large chunk of his messages and would send more if more of his friends had smartphones.

“I’d say maybe 40 per cent would go through What’s App and other messaging services,” he said.

With Apple’s update to its iOS platform this week, iPhone users will be able to quickly and easily contact each other for free using iMessage.

More Australians own iPhones than any other smartphone and the feature is similar to BlackBerry Messenger, which has long been one of BlackBerry’s key drawcards. Microsoft, Samsung and Google are reportedly working on integrating similar apps.

With these apps, instead of using the carrier’s mobile network it instead uses the data network, which consumers still pay for but at a much lower average rate per message – just a few cents.

Telcos becoming ‘dumb pipes’?

Elise Davidson, spokeswoman for the Australian Communications Consumer Action Network (ACCAN) said Australians had a well-known voracious appetite for new gadgets and many savvy customers were using apps to text for free.

“Now this may seem like pie in the sky stuff for some, but there’s a definite trend towards data away from voice and text,” she said.

“The telcos will no doubt be looking at their bottom lines to make sure they don’t just end up a conduit through which smartphone manufacturers and app designers make money.”
Telco reps have previously complained that companies like Google were transforming them into “dump pipes”.

Not just for the geeks

Ben Zocco, 19, from Melbourne, said he was a “massive Twitter nut” and also used What’s App and Facebook to send messages.

“I’ve got unlimited texts and I still prefer using the more data-based contact methods,” said Zocco.

“If I load up What’s App for instance 40 or 50 of the contacts on my phone use the app – it’s not just the tech savvy people who do it, it’s normal plebs who use the apps due to text messaging restrictions and you can see whether someone’s online, whether they’ve received your message and whether they’re replying to you.”

A recent Ovum report found mobile messaging was fast approaching an “inflection point” as consumers moved from SMS to internet-based messaging services.

“We see a larger proportion of messaging moving away from SMS and MMS towards internet-based services such as instant messaging (IM), email, messaging apps, and mobile social networks,” wrote Ovum analyst Neha Dharia found.

“[A] larger share of messaging revenues which initially went to the operator [are] now falling into the hands of third-party services or adjacent players such as Google and Facebook.”

Analyst firm Gartner said in a recent report: “[Telcos] need to factor into their revenue forecasts the increase in smartphones among younger people. Growing use of social media on mobile devices by this demographic will increasingly eat into traditional messaging revenue.”

Growing number of Aussies using free apps

Telsyte telecommunications analyst Foad Fadaghi said a recent survey Telsyte conducted of 1143 Australian smartphone users found 44 per cent had a free instant messaging application.

But he said the availability of large text and voice caps as well as unlimited plans had so far mitigated the ability of free apps to eat away at carrier SMS revenues.

“53 per cent of mobile IM users in our survey indicated they have not changed the amount of SMS messages they send and receive due to mobile IM,” he said.

“Despite this, IM messaging is very popular especially for people communicating with friends overseas, where text messages are charged separately and often at much higher rates.”

Fadaghi said that using services like Skype to replace phone calls had been limited due to 3G network reliability issues, but many were using it to save costs on overseas calls.

‘There’s a huge amount at stake here’

In the US, more than two trillion text messages are sent each year generating more than $US20 billion in revenue for the industry. SMS revenues account for about a third of Verizon’s operating income.

“There’s a huge amount at stake here,” Craig Moffet, a telco analyst at Sanford C. Bernstein, told The New York Times.

“They are undermining the core business model for an industry that makes most of its money from services that are high priced and low bandwidth, like texting.”

Telcos not worried

An Optus spokeswoman said SMS remained a very popular product with its customers and noted that Optus offers unlimited SMS on many of its most popular mobile plans.

Vodafone said it hadn’t seen a major take up of free messaging apps or IM services and in fact Vodafone text messaging use was “continuing to grow strongly”.

“Vodafone Infinite plans are based on a flat rate (from $45) and give customers infinite texts to personal mobiles here and to overseas mobiles as well as standard national calls, social networking on a range of sites and data so customers can download and use whatever apps they like – messaging or otherwise,” a Vodafone spokesman said.

“There’s also a new prepaid offer – the $30 prepaid cap – which includes infinite texts each recharge.”
Telstra said its SMS messages were also growing and had hit 9.9 billion messages last year, up 5.4 per cent on the previous year.

But Gartner’s Ingelbrecht said these increases could be partly explained by organic growth such as the acquisition of new customers. He said the growth in SMS text messages had slowed as people increasingly used free apps.

“There’s inevitably going to be a ceiling and what we’re going to see is … attrition of the text messaging market to other communications protocols whether it’s instant messaging or a cheap voice call,” he said.

IDC figures seem to back this up. Analyst Yee-Kuan Lau said free messaging services were having a “noticeable impact” on local mobile service providers’ SMS business.

“SMS traffic growth fell from 15% YoY in 2009 to just 5% YoY in 2010. IDC believes SMS related revenue will drop from 19% YoY in 2010, to just 5% YoY at the end of 2011 as a result,” Lau said.

IBISWorld

Recruitment was one of the first business processes outsourced by industry and it is tied to the cyclical nature of the business cycle. As an extension we will see growth in employee benefits administration. Australia bypassed the worst of the global financial crisis, which meant its effect on the Australian employment placement services industry was mild compared with its international counterparts.

Australia’s rise in unemployment was small and quickly began to reverse, with demand for employment placement services continuing to grow in 2010-2011 and expected to continue in 2011-2012.

IBISWorld estimates that industry revenue has increased at an average annualised rate of 0.6% during the past five years.

In 2011 the industry is expected to generate $2 billion in revenue, up 4.5% on the year prior. Profit will climb by 4.0% to $59 million.

Following the economic downturn revenue grew 2.2% for 2010-2011.

Despite uncertainty among international global clients and reduced business confidence the employment placement services industry will grow as it anticipates increased demand in permanent recruitment services and an increase in client-paid net fees.

As the Australian economy hits full health industry revenue growth will accelerate to average 2.9% per year over the next five years and is forecast to total $2.3 billion by 2016-17.

That will be driven by increased economic activity, a strengthening labour market and the potential for providing services online.

Industry Outlook

With the Australian economy having held up well amid the global financial crisis and unemployment remaining relatively low growth in the employment placement services industry will continue to strengthen in 2012-13, with revenue forecast to rise by 2.7%.

Although declines in unemployment tend to lag behind growth when an economy is emerging from a downturn the composition of unemployment tends to move more toward people who are switching jobs, while the proportion of people that have been laid off or are long-term unemployed declines.

Continued solid growth is anticipated during the five years through 2016-17 as unemployment gradually decreases. By 2016-17 IBISWorld estimates that industry revenue will reach $2.3 billion.

Job vacancies and new hirings will increase as the economy begins to achieve relatively strong results. Businesses will again turn to employment placement service providers as their recruitment needs expand and the right applicant becomes more difficult to find as competition for workers heats up.

During the five years through 2016-17 industry revenue is forecast to increase at an average annual rate of 2.9%.

Aside from the level of unemployment and general economic conditions other factors driving growth, once the recovery begins it will include the expansion of major operators into new services such as employee process outsourcing and administering WorkCover, superannuation and other compulsory and statutory payments to employees on behalf of clients.

Outsourcing recruitment by business and government will continue. IBISWorld expects profit margins to remain low due to ongoing high levels of industry competition.

After-tax profit is forecast to grow at an average rate of 2.9% per annum to $79.4 million over the five years through 2016-17. Profit will be more volatile than revenue as it comes off a lower base following the downturn.

A strong recovery in profit is expected as margins recover although overall that remains a relatively low margin industry due to its highly competitive nature.

International risks and opportunities

The Australian economy has dodged the worst of the global economic downturn so far but risks of further global financial shocks remain.

When many nations’ governments bailed out financial institutions and increased spending to stimulate their economies the effect was a shift of some private sector debt burden onto government balance sheets.
Many governments were already heavily indebted prior to the crisis and the additional burden, coupled with investors’ reluctance to continue to provide cheap credit, have strained the finances of some nations, particularly Greece, Spain, Italy, Ireland and Portugal.

Any problems in global credit markets will potentially affect Australia’s banks, which are heavily reliant on offshore funding. That may flow through to Australia’s economy and the employment placement services industry.

The industry has a small but growing number of large companies with international links and many small operators, some providing niche services in specialist industries or markets.

Some providers are now critically dependent on government contracts under the Job Services Australia program.

A shake-up of those contracts occurred as part of the transition to Job Services in mid-2009, with some providers losing contracts and others gaining them. That led to office closures and staff lay-offs among those who lost contracts.

It is expected that major domestic operators will expand internationally due to limited revenue growth opportunities in the domestic market.

Further growth opportunities still lie with providing online services to employers and job applicants, and with expanding into providing a totally outsourced human resources service to clients, covering aspects from staff selection to payrolls and claims for Workcover.

Recruitment broker firms that sign up a number of recruitment agencies then offer their databases to client firms are a growing sub-segment in the United States and Australia.

Key Success Factors

IBISWorld identifies 250 Key Success Factors for a business. The most important for this industry are:
Having contacts within key markets: Developing contacts in a wide variety of companies and industries is essential for identifying suitable job candidates.

Ability to communicate and negotiate effectively: Good communication and interpersonal skills combined with industry knowledge are important to retain clients and for interviewing job applicants.
Production of premium services: Maintaining quality staff, service and high client satisfaction levels are important in retaining and attracting clients.

Capacity to objectively assess new investments: Medium and large companies need funds to acquire other companies in the industry.

Effective product promotion: The capacity to present a professional image and to market to appropriate clients is important in attracting and retaining clients.

Access to the latest available and most efficient technology and techniques: It is important for companies to be completely computerised and to have databases containing information on people and clients. The ability for e-mail lodgement of resumes and for clients to access them online is very useful for placing employees.

Production of goods currently favoured by the market: Companies must understand the work environment and culture of clients’ workplaces. Ultimate success will come from continually identifying and selecting the most suitable people for vacant positions.

Source: Smart Company