Six ways recruitment agencies can increase profit
Recruitment is a highly competitive industry. If your agency doesn’t spend time on their growth and profit strategy, they will be left behind. As the competition intensifies, increasing the your agency’s profit should be a top priority.
We’ve pulled together a list of advice and accompanying articles to help you strategise.
Profit tip #1: Increase your margin
Rather than focusing your time and effort on topline growth alone, a key way to improve your profitability is through a number of strategies have one shared focal point: margin.
There are a number of ways to do this:
- Evaluate your pricing structure
- Focus your best efforts, talent, and attention on selling in your most profitable channels
- Look for ways to increase value to clients and customers
- Review your client list to determine several things:
- Who is making you the most money right now?
- Who has the most growth potential?
- Who isn’t making your money? Cut them loose.
And here’s how to lower your customer acquisition costs and cut any unnecessary costs:
- Redesign workflows and systems for greater efficiency (back office, tech, suppliers)
- Take a closer interest in your advertising spend and candidate source (how many were already on your CRM)
- Eliminate tasks and activities that don’t add value to the company or customer. (eliminate non-strategic expenses that just don’t add value to the company or to the customer)
- Reduce your IT costs (move to cloud)
This article shares some ideas on how to open new doors and do more deals.
Profit tip #2: Expand into new sectors
Most recruitment agencies have a few sectors that they specialise in and recruit for. As your reputation grows within these industries, and you become the go-to recruitment business for businesses to work with, the scope of opportunity grinds to a halt.
To overcome this, and continue to grow your business and your profit, you should consider branching out into new sectors.
Keep an eye on business in the UK for sectors that are increasing in popularity. Reach out to businesses that are growing in new, emerging markets.
We frequently share QuickViews on the top businesses in a variety of industries, as well as emerging industries you should know about, on our website. You can download your copies for free here.
Looking to increase placement volume?
Check out five sectors that are growing rapidly!
Profit tip #3: Go global
You may find that you’re close to reaching your limit in the UK, with regards to the scope of work you have available.
International recruitment can seem like a big, high-risk step to take, however, get it right and you’ll see your profile grow, as well as your profit.
Here are four tips for how to recruit on a global level.
Profit tip #4: Analyse your advertising ROI
Your candidates are one of your key sources of cash flow into your business. Without them, you can’t close deals. And you don’t get any profit.
The way we work is changing. With more people choosing to leave the 9-5 and joining the evolving freelance industry, more workers are assessing where to go with their career. Take advantage of all of these people considering change, and introduce yourself as the recruitment business who can facilitate it.
Profit tip #5: Take inspiration from the your competitors
There is absolutely nothing wrong with assessing how your competitors are operating and adapting what seems to be working to grow your own business. They’ll most likely be doing the same thing.
Create a competitor analysis for your main competitors, and find out the following information:
- How are they selling themselves on their website?
- How do they present themselves in their marketing, on LinkedIn, etc?
- What sectors do they work with, which you don’t?
- What kind of clients are they working with?
- Who are their top billers?
- What are their Glassdoor reviews like?
- What’s their approach to new candidates and clients?
Build up a good picture of your competitors and share it with your team. They might have more information to contribute to it. And they may be inspired by it to try something new at work.
Here are some of the ways in which three top UK recruitment businesses are growing.
Profit tip #6: Take time to reflect
The first place to start is the previous year. Ask yourself, and your team, the following questions:
- Did the business as a whole hit their targets?
- Did individuals hit their targets?
- Which quarter was the most successful?
- Which month was the most successful?
- Which industries did you work with most?
- Were there any points where you felt your time wasn’t being well spent?
- Did you notice any trends with the recruitment process, or what your clients were looking for?
- Are there any similarities between your top candidates?
- What approach did the year’s top biller take?
- What was the best approach to reaching out to new clients?
- What marketing tools were the most successful?
- What marketing tools were the least successful?
- Did you attend any events that brought in results?
- Where did you feel the budget was well spent?
- Where did you feel that the budget was wasted?
- What online platforms were the best for finding new candidates?
There are an abundance of questions you can ask yourself to reflect on how the previous year went. What’s important is that you build up a good picture of what worked and what didn’t. That you highlight any trends that cropped up in the recruitment process, both with your candidates and your clients. And that everyone in the business has an input, because they all played their role in the achievements of the business.
Whatever information you pull out of the exercise, whether positive or negative, can be used to help create your growth and profit targets, and hopefully achieve them!
Now is the perfect time to reflect, learn and change your business strategy. Put the above in action and you’ll see positive changes to your growth and, more importantly, your profit.