Is recruitment a numbers game? To say so would be an oversimplification, but there’s no denying that data-driven insights can lead to improved performance and profits.
Recruitment is a numerically predictable business. If you want to maximize your billings, it’s important to measure both your activity (quantity of effort) and ratios (quality of effort).
We also recommend setting yourself KPIs (Key Performance Indicators) to stay on track and increase the likelihood of achieving your billings goal.
If you’re not already tracking your metrics, or if you do not know what numbers and ratios to measure, I am sure you will find value in this episode. By analyzing metrics such as “job order to placement ratio” and “average placement value,” recruiters can identify areas for improvement. The exciting part about knowing your numbers is that small improvements can lead to a big increase in billings with the same or less effort.
Episode Outline and Highlights
- [00:32] Why some recruitment business owners are reluctant to measure their metrics.
- [03:30] Why are KPIs critical for you to achieve your goals?
- [04:40] What is the Recruitment Business Health Check? Discussion on reasons why you need to do it.
- [10:30] What are the specific numbers and ratios that you should be tracking?
- [16:13] Tangible steps to track your metrics and KPIs.
- [21:06] The benefit of getting an accountability partner.
Perform a Recruitment Business Health Check
When clients join our Recruitment Coach community, one of the first things we do is a Recruitment Business Health Check. Business owners analyze their desks by looking at their billings, average invoice value, how many interviews to make a placement, how many candidates it takes to get an interview, and other significant metrics. The purpose of this is to give you a benchmark of your current performance and allow you to pinpoint the obvious area for improvement. Whatever your goal is, you can reverse engineer and work backward. Whether your goal is an annual revenue of 500k or 1m, you can figure it out by working on your weekly, monthly, or quarterly milestones. Hence, aside from leading you to your goals, the value of tracking your metrics is to give you the maximum chance of hitting your business goals.
What Should You be Tracking?
You may be wondering, what specific numbers and ratios you should be tracking. Before I lay out a few critical data points, I want to draw an important distinction. There is a difference between the numbers you are tracking and KPIs. People often use those two terms synonymously, but they are not the same thing. I want you to track, absolutely everything. The more data you have, the clearer it will be. However, a KPI – key performance indicator, is something you are going to target yourself on or target your team on. We don’t recommend giving yourself or your people too many different targets. Having three KPIs at most that you are constantly focused on is enough. At the same time, having access to all the other data means that you can refer to it as needed and make informed business decisions. Here are some important data points that you should be constantly looking into:
- Billings
- Number of placements
- Average placement value (Billings/Number of Placements)
- Number of first interviews
- Number of candidates presented/submitted
- CV to Interview Ratio
- Number of new job orders
- Number of sales conversations with clients
- Numbers of recruiting conversations with candidates.
The list is definitely not exhaustive, but I would encourage you to be on top of the above data points and be able to work out your ratios accordingly.
Tangible Steps to Track Your Metrics
Speaking about the benefit of tracking your KPIs and metrics, where do you start? There are low-tech and high-tech solutions. You can use an old-school whiteboard if you want to create a visual of the data you are tracking. Most people nowadays use CRM systems, which have the capability of producing reports which will make it easy for you to see your KPIs. Don’t be discouraged if you do not have a CRM yet, you can use a spreadsheet or even a paper-based system if you want. The important thing is to start tracking and monitoring your numbers asap!
