My previous three blogs (Part 1 and Part 2 and Part 3) on this topic revealed ten of the critical metrics needed to run your recruitment agency efficiently and productively.

Today, the final four!

All supported by the excellent data from 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, with explanatory notes for the final four.

Total Expenditure per Staff Member (Per QUARTER. Not per month as it says in the table. That’s an error). Pretty simple. Very telling. As we grow, we should be getting leverage. Expenses per staff member should be going down, or at worst staying stable. Usually, it grows, decimating profit, even though your GP is rising. You measure this monthly and have a trending graph to show you what the direction is.

Back of House (Support and Corporate cost) / Gross Profit. Everyone not involved in sales or delivery. Accounts, IT, marketing etc. Divide their salary costs by the total GP. Very revealing.

Temp Margin % Monthly trending. I am amazed how few owners track this. Many do not even know their average Temp or Contract margin. This is crazy because over a sizeable temp count it can mean thousands (even hundreds of thousands) of dollars a year.

Profit per staff member trending (month). This cuts through everything. Is our profit per staff member trending up? Or down? Total profit divided by total FTEs. Monthly.

So there it is. An incredibly valuable tool for managers of recruitment agencies, even if I say so myself.

You can’t manage what you don’t measure. So install these metrics, watch them, and act!

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