14 Agency Recruitment Metrics to run your business

I have highlighted the ‘Sacred Agency Recruitment Metrics’ before.

But right now, they are more critical than ever.

You need these ratios and benchmarks to help you drive excellence and to make sure you don’t drive your business into the ground.

But now, here they are updated!

With brilliant data from my friend Nigel Harse at Staffing Industry Metrics, I can provide you with updated metrics with bits of extra market information!

•  2020 ‘Average’ Across Australian Recruitment Companies
• ‘Best Practice’ for Australian recruitment Companies
• The ‘Danger’ level for each metrics

If you are not in Australia, don’t despair. The metrics themselves are still relevant to you, and many of the ratios are valid for a healthy recruitment business in any market.

So, here is the full list, plus the up-to-date data for the first four metrics

The rest will come over the next four weeks until you have the whole set.

1. Gross Profit / Staff Member (month): A simple but telling number. Add up all your GP. (GP = Gross Profit, which equals permanent placement fees plus net temporary /contractor margin). Divide that number by the number of people you employ (FTEs). That number is a no BS exact productivity metric. You want it trending upwards. Monthly is good. Quarterly is ok but maybe a bit late to detect an ugly trend. In Australia in 2020, that number was $23,000 monthly.

2. Gross Profit / Income Producer (month): Same calculation as above but now divide only by Income Producers. Those involved in generating sales. Consultants, resourcers, etc. In 2020 that number was $29,000 in Australia, but high performing recruitment firms were over $40,000. ( I have several clients who were hitting that 40k plus number, mostly in IT or healthcare)

3. Gross Profit Multiple / All Staff Remuneration (Quarter): Divide total GP by total staff salary. A good measure as it helps assess whether those non-billing people you are adding are assisting recruiters in generating sales. And they must. Or why are they there?

4. Gross Profit Multiple / Income Producer Remuneration (Quarter): Divide total GP by total Income Producer salary. A key and long-standing industry productivity measure. In 2020 it was actually relatively high. However, that, of course, was influenced by how any recruiters were let go last year, so billings per recruiter were quite high, even if total billings were not.

(Please note one important caveat when reviewing these numbers. Some data may include Jobkeeper payments from the government.)

So these are the first four ‘Sacred Metrics’.

Thanks to Staffing Industry Metrics.

The next three metrics unveiled next week! And all of them over ensuing weeks.

Subscribe to The Savage Truth to ensure you get them all, and track this data yourself for your business.

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