New year, new budget sheet – but how do you make sure that your agency spends resources wisely over the next 12 months?
Most recruitment business owners mistakenly think that improving profits means a complete overhaul of the way you operate. In actual fact, a little fine tuning in key areas can make a huge difference to your bottom line.
If you’re keen to grow your recruitment agency but aren’t sure how to cut unnecessary costs, take a look at our nine easy ways to make your company more profitable in 2019…
1. Set a target
While setting a target in itself won’t make your agency more profitable, it will help you to be much more goal focused in the year ahead. It’s a great opportunity to get your key personnel together and collectively decide what you want to achieve, so everyone is on the same page.
In addition, having a year-end target enables you to plot milestones for each quarter. This way, you can keep check on your progress – and change your approach if necessary.
2. Audit your current marketing strategy
Do you know which channels and campaigns are driving the most business for your recruitment agency? If the answer is no, you could be wasting marketing resources on activities that aren’t generating opportunities.
To increase your profitability, it’s important to track and measure the leads you are achieving from any marketing outreach, to see where you should be investing more time and resources. Don’t be afraid to cut back on certain channels, even if your competitors are investing in them; it’s about understanding and refining what works for your business.
3. Nurture existing client relationships
It’s much more expensive to convert a new business lead than to increase incremental spend among your current client base, so look after your existing relationships.
Identifying proactive opportunities to help clients attract new talent, rather than waiting for them to brief you on specific job openings. For the right person, companies will often create a role – and you will reap the rewards from introducing them.
4. Brainstorm new market opportunities
While it’s essential to take care of current client relationships, there could be new business opportunities out there that your agency is yet to tap into.
A good way to start looking is to list all the current sectors in which you operate, the types of roles you recruit for, and the sizes of the businesses you tend to deal with. From there, sit down with your team and brainstorm related companies and industries that could benefit from your expertise, but which you are not yet dealing with. For a couple of hours’ work you could stumble across your biggest emerging revenue stream for 2019.
5. Evaluate your pricing model
The market is tough at the moment, but that doesn’t mean to say clients aren’t willing to pay the right price for your services – so long as they are receiving strong results in return.
Do some research into what other recruitment agencies are charging, and how their payment model works. You might improve profits by adjusting your strategy in line with your findings; for example, evolving from a set rate to a retainer set-up could work well, as it establishes precedent for a longer term relationship with your clients.
6. Hire the right people
Productivity is critical to profitability, so make sure your agency works as a strong team. Every person counts, particularly within smaller businesses, so don’t be afraid to go that extra mile in terms of salary or employment package to attract the right talent.
Equally, once you have skilled staff on board, make sure you look after them. Constructive feedback, offering development and training opportunities, and celebrating successes as a team are all straightforward ways to make employees feel valued and want to stay loyal to your business.
7. Keep closer track on time management
As you become more profitable, hopefully your business will grow – and this may mean recruiting new team members. With more people on board, it’s more important than ever to ensure that staff are focused on value-add activities.
Keeping track of time management is a useful way to provide you with a breakdown of exactly what employee workload consists of during the week. You may find that low value tasks like collating contractor timesheets, processing invoices and chasing payments are eating into their capacity – and the burden of these tasks can easily be reduced with the right recruitment agency technology.
8. Spend less effort on admin
As we’ve already mentioned, tedious tasks like managing contractor and client paperwork can take up a surprising amount of your team’s time. By its nature, the recruitment business involves a lot of data processing, and doing this manually is a burden.
Bringing operational software for recruitment agencies on board not only reduces the amount of time that staff spend managing documentation in the first place; automated approval processes can detect and correct mistakes that result in paperwork being sent back from clients. This will result in a faster turnaround, with minimal involvement from your staff.
9. Let technology take care of the back office
The simplest way to increase profits in 2019 is to let technology worry about repetitive admin, so your team can focus on building and growing client relationships.
While recruitment back office technology may involve some up-front investment, market-leading solutions can be cheaper than you think – and the expenditure is more than paid back in terms of time and resources saved.
Letting technology take care of everyday operations also has the benefit of speeding up paperwork and invoice processing, meaning your business gets paid quicker for the work you carry out.
Increase your agency profits in 2019 by bringing ETZ’s recruitment back office software on board. Our platform will automate essential administration, freeing you to concentrate on clients and prospects. Book your free ETZ demo here.