My previous two blogs (Part 1 and Part 2) on this topic revealed seven of the critical metrics needed to run your recruitment agency efficiently and productively.

Today, metrics eight through ten for your reading pleasure.

All supported by the excellent data from my friend Nigel Harse at Staffing Industry Metrics, so 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 metric

(Note, most of the percentages and ratios are universal, so any recruiter worldwide can glean value here.)

Here is the complete list, plus the up-to-date data for the first ten metrics, with explanatory notes for the latest three.

The final four metrics will come over the next coming weeks, and then you will have the whole set.

Marketing Cost / Gross Profit. I get this a lot! “How much of my GP should I be spending on marketing?” Many owners are fixated on this number. The truth is it does not matter what the percentage is, or the number of dollars that you spend, if the money is spent on the wrong activities or the marketing itself is garbage. Which frankly is often. Marketing is not a ‘nice to have’ in recruitment. It’s essential. And it has to be tip-top quality. I have always considered 5% a minimum, and the figures here support that.

EBIT / Gross Profit. This is a crucial productivity measure. Tread carefully though. If you are perm only or have a ‘perm-heavy’ business, your percentage EBIT return will be much higher. You might think you are in fine form as a result, but you will be much more vulnerable. It’s harder to maintain the profit return as you grow, but you must undoubtedly fight that fight with all your resources. Getting bigger and making less money means more stress, risk and work… for what?

Debtor days. Oh, stay calm, Greg! So many owners and managers are acting as a bank for their clients by providing free credit. And often waiting so long as never to collect their debts. So many recruitment companies are growing revenue and running out of cash! You should sleep with this number ringing in your brain. Get it under 30 days and hold it there

So there it is. You have ten of the fourteen metrics unpacked— four more to come.

Subscribe to The Savage Truth to get those.

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