Generating Consistent Per-head Billings
A major challenge faced by recruitment agencies looking to scale is how to ensure that revenue generation builds evenly across the business.
Most companies begin with one or more high-billing founders, then add headcount as they reinvest the cash surplus they build in the early months.
Sometimes founder energies can generate enough jobs and clients to keep the initial team billing strongly, but as the business grows the scale of the challenge increases.
Once an agency is in full growth mode – hiring new recruiters who are expected to be self-sustaining and generate per-head profit independently – multiple factors need to align to mitigate cashflow risk and ensure the agency’s top and bottom lines continue to grow stably.
What steps can a growing recruitment business take to reduce billing inconsistencies across an expanding recruiter base?
Map Markets
A risk for ambitious, cash-rich agencies is to add headcount without first evaluating the scope of opportunity for each planned desk. Often general business momentum will create the confidence that there is ‘lots of business out there’, without critical data to shore it up.
The outcome of this approach can lead to (potentially talented) recruiters getting off to a slow start as they feel their way around in a new market – perhaps eventually to learn that there wasn’t as much potential on offer as first thought.
Market mapping for new hires doesn’t need to be exhaustive, but some basic validation that each new hire will have enough opportunity to comfortably hit their assigned sales goal is advisable.
Indicators can include:
- Target customer lists (total number of companies, headcount size, revenue, number of locations etc.)
- Volume and frequency of job postings (across core platforms, based on keyword queries)
- Total target candidate numbers (derived from LinkedIn searches, plus job board CV libraries)
- Competitor activity (size, distribution, focus and job postings of competitor agencies)
Especially if new hires are being directed towards new markets or tangential sectors, it can also be useful for an experienced team member to ‘pilot’ their desk, winning a handful of clients and job orders, and even delivering a few successful placements before proceeding with the decision to add personnel.
Monitor Qualified Pipeline
Plenty of agencies come unstuck when trying to build reliable billing cycles because they don’t have enough insight into recruiter pipelines.
By the time a recruiter looks as though they might miss their goal, it’s already too late to take action to fix the situation.
Key to this is tracking what each recruiter has in the pipeline at all times, using realistic qualifying measures to ensure things don’t just ‘look good’, but actually have a strong chance of converting to revenue. This also gives managers enough time to adjust recruiter activity early enough to avoid billing dry spells, by concentrating on sales, sourcing or specific job openings as needed,
Developing a weighted pipeline system is an effective approach, grading each opportunity a recruiter is working on by vital signs such as how advanced it is in the process, the level of client hiring urgency, number of competing candidates etc.
Monitor Activity Data
Where dizzying frameworks of KPIs once dominated the recruitment sector, there’s a tendency for newer agencies to be less forceful in imposing daunting amounts of goals on their teams. Fewer recruiters are targeted on base activity such as outbound calls dialed, and many are managed with a lighter set of guiding metrics.
But having access to data and using it to set targets are two different things, and it’s vital for an agency trying to stabilise revenues to know exactly how recruiters are spending their time.
This doesn’t mean stifling staff with overwhelming mini-goals, but does mean having the ability to:
- diagnose where recruiters may have a problem, if they are struggling to consistently reach target
- benchmark against top performers, to see activity patterns that are working
If your agency only tracks a handful of basic KPIs (e.g. CVs sent, interviews booked) but has no way to dive deeper into how recruiters are spending their days (phone usage, email, LinkedIn messaging etc.), then it can be very hard to provide the help and support needed to correct their work and help them get back on track.
Ensure Training Is Thorough And Ongoing
There’s a huge range of quality in the world of recruitment training, with much of it just focusing on making sure recruiters have the basic skills to execute the core steps in the recruitment cycle.
Training programs can miss key areas that are fundamental to recruiter success, such as effective correspondence, relationship-building skills, developing true market knowledge, or the nuances of negotiation.
A further issue is caused by ‘onboarding-only’ training structures, where recruiters are loaded with information in their first few days of joining an agency, then never offered more. Six months later when they’re struggling to hit target, there can be a lot of important information in that early training entirely forgotten.
When evaluating your training, keep in mind:
- does it teach all the skills needed to excel in the job, or just the basics?
- is it ongoing, or just a data-dump during onboarding?
- does it offer clear best practices for recruiters to follow at all steps of the process?
- do recruiters have access to ‘refresher’ materials to help them master key topics?
Foster Accountability
Most importantly, the desire to overcome stop-start revenue generation has to come from recruiters themselves.
A culture in which team members regularly blame bad luck, market conditions, difficult clients or other factors for missing goal can quickly turn into an environment where under-performance is expected.
Instead, internal narrative should focus on the individual responsibility to overcome those obstacles.
Every recruiter will have bad luck, candidates drop out and clients change their minds.
In a strong corporate culture where personal accountability has been prioritised and developed, recruiters will learn to anticipate obstacles, expect setbacks and deliver regardless.
Delivering Technology ROI
The right technology stack is essential to scaling any agency, with effective communication, collaboration and processes forming the backbone of the business.
But technology is only as good as how it’s deployed, and simply purchasing licenses doesn’t guarantee that your business will get maximum return on the cost and effort of implementing a new tool.
Paths to greater technology ROI include:
Integration
Most software programs are designed to be used in collaboration with other applications, and especially in the case of niche industries like staffing and recruiting a lot of work is done by developers to ensure systems can fit together.
CRM systems should fully integrate with email and marketing technology, for example, as well as providing activity reporting (whether inbuilt or via a third-party plug-in). Most can also be adapted to connect directly with job boards, allowing recruiters to search all their candidate platforms from a single interface.
Technology can be used across your agency to automate manual processes and eliminate human error, whether it be calculating employee commission direct from placement data or providing automatic notification to management of key data points and activity triggers across the recruiter team.
Branding
One of the struggles in driving IT adoption across businesses is the unfamiliar look and feel of software interfaces.
There are usually plenty of options to customise the visual appearance of tech platforms, whether it’s uploading your agency logo, creating custom URLs and domains, or adjusting interface colours to fit your brand palette.
It may seem like a small detail, but a sense that your tools are branded and proprietary can lead to significant upticks in user engagement.
Training
Often signing up with a new technology provider involves some degree of onboarding training to get you off the ground, but this can quickly fade from memory. A few months into using a new tool, and many of the more complex features might be forgotten.
This is even more of a concern as new hires start to join your agency, and ensuring that your team truly knows how to get the best out of the tools you’re paying for becomes a key challenge.
Quality, ongoing training on technology for you and your team is non-negotiable if you want to derive maximum ROI.
To stay on top of it, consider:
- appointing an internal champion – even if you don’t have a dedicated IT manager, playing to the natural interest of a tech-savvy team member and tasking them with staying up to date on the capabilities of your tool set (and communicating them to the team) can produce great results.
- ensuring tech is covered in training – many training programs focus on recruitment skills at the expense of the tools recruiters use day to day. Your tech providers will usually have tutorials, walk-throughs and self-help resources – make sure these are included as you train new people in your business.
- challenge your suppliers – even if in-depth training is itemised as a billable add-on service, your technology suppliers will still want you to be getting the best out of their product. Arrange for your account manager to give you regular demonstrations of new capabilities and uses for your tools, and review your current usage to make suggested improvements.
Customisation
Every tool in your tech stack will have potential to be shaped and adjusted to better suit your agency’s workflow, and you can guarantee that the ‘out of the box’ settings won’t be the optimal configuration for your needs.
Many agencies are so keen to get on with using a new tool that they never fully explore what it can be made to do, and realise later on down the line that key value-adds and efficiencies have gone unused.
Customisation doesn’t mean hacking into the code, it means investigating the range of capabilities your software applications have, and taking advantage of the ones that fit more naturally with your structures and processes.
Using Knowledge-sharing To Boost Growth
What Is Knowledge-sharing?
Your agency will contain expertise in every corner of the business – from tips and tricks known used daily by your top-billing recruiter to interesting market information your intern learned during a research project.
Knowledge-sharing is the process of making all the information and expertise within your company accessible to everyone, and ensuring that if someone learns something valuable, everyone else learns it too.
Why Promote Knowledge-sharing?
Creating an organisational focus on sharing information and learning across teams has numerous benefits for your agency.
It helps significantly in training, as recruiters ‘self teach’ from hands-on experience, learning live from each others’ successes and failures.
If a recruiter has 10% response rates to cold emails while someone across the office has 40%, it’s likely not an issue of ability, but of knowledge-sharing.
Actively working together to share best practices also encourages collaboration, bringing teams closer as they exchange ideas on how to improve.
Knowledge-sharing also drives performance, by placing a spotlight on excellence, and creating a desire to become a leader in the team, with positive contributions to make and examples of personal successes.
How To Foster A Knowledge-sharing Culture
Despite its many benefits, a culture of sharing knowledge is unlikely to develop spontaneously in a defined sense.
Some team members may feel uncomfortable about ‘self promoting’ by sharing their successes or being perceived to be telling others how to do their work. Newer or junior team members may feel it’s not their place to be offering advice to more established colleagues.
Some recruiters may also tend to keep their cards close to their chests, striving to keep their tips and tricks secret to enhance their personal performance and place in the sales rankings.
Creating the right dynamic requires pro-active steps from your agency’s leadership team, built around:
- Structured sessions – workshops, brainstorming sessions and other training activities expressly focused on sharing ideas and experiences help confirm your agency’s intention to make knowledge-sharing a priority. Purpose-built platforms to support the exchange of ideas give recruiters opportunities to see how a more collaborative way of working can benefit them, and helps foster a spirit of common purpose among groups.
- Collaboration platforms – the use of intranets, chat and collaboration tools and internal email groups can all provide channels for team members to circulate their contributions. It’s important that senior leadership be active on these, proposing ideas and responding to input – recruiters are busy people and without the sponsorship of top management making a concerted effort to demonstrate the benefits of collaboration, your channels may soon be gathering dust.
- Aligned incentives – effective use of team incentives can help encourage all team members to open up to the idea of sharing their personal best practices with their colleagues, creating a collaborative environment pursuing group success. Ultimately, your agency only succeeds if your per-head billings reach and maintain a consistent level – having a handful of superstars and a growing roster of under-performers will inhibit growth. Reflecting the need for information and best practices to flow through the business in the form of incentives helps bring your goals and those of your team into better alignment.
Training & Onboarding Essentials
Training
There’s no one size-fits-all approach to recruitment training, with different solutions offering different benefits.
- On-site trainers can offer high levels of interaction and engagement, but lack ongoing support.
- Home-grown training resources can be highly customised to your agency, but difficult to upkeep and maintain.
- Off-the-shelf training courses can be a cheap and easy option, but miss key areas.
Whichever model works best for your agency, there are some best practices common to all effective training programs which are important to keep as focus areas:
- Mix theory with practice
Training programs which just teach practical abilities have limited impact compared with those which build long-term skills. The age-old “teach a man to fish” analogy is appropriate here – recruiters who understand not just how to do something, but why to do it in a certain way, will develop a more powerful skill set. In the short term, they’ll solve problems faster and generate better results. In the long-term, they’ll be able to share their knowledge with others and continue their own learning curve.
- Build industry interest
Recruiters often struggle to convince clients that they are ‘true’ experts in their market sectors, with skepticism from clients that they have merely been assigned a niche by their agency. Very often this is backed up by agency training, which goes deep on recruitment skills but shallow meaningful market information. Recruiters who become genuine experts in the sectors they support will typically enjoy their work more, have higher-quality client and candidate conversations, and ultimately generate more revenue.
- Strengthen business basics
In the course of their work, recruiters are exposed to a whole range of factors outside the scope of ‘recruitment’ in itself – employment laws, taxation, stocks and shares, technologies, regulations… In dealing with both clients and candidates, top recruiters display a very well-rounded awareness of many business issues, and excellent commercial acumen. Making sure this basic background of business knowledge is included in your training can help emerging recruiters to gain much-needed confidence and be more commercially astute in their work.
Onboarding
The experience new hires have in their first few days with your agency sets the tone for the months ahead.
A good onboarding program can leave new employees feeling excited, energised and inspired, while a poor one can leave them second-guessing their decision to join you.
The core of successful onboarding is preparation. Designing the ideal experience, and working to make sure everything is in place to run smoothly for your new team members.
Designing KPIs That Work
Key Performance Indicators (KPIs) set vital productivity expectations across your agency, and calibrating them correctly is essential for scalable success.
It’s also a delicate task:
- too many, and employees feel suffocated and confined to a ‘call centre’ environment
- too few, and recruiters lose focus and may struggle to deliver against revenue goals
- the wrong ones, and team energies are focused in the wrong direction
When it comes to building a KPI framework for your growing recruitment agency, a set of best practices can help keep you aligned and ensure you design a goal structure that creates optimal results.
1
Set KPIs based on data
For KPIs to be effective, they have to be anchored in reality – credible activity targets that are designed to enable achievement of a series of end goals (such as high placement volumes, revenue generation, client and candidate network growth).
Picking numbers based on gut instinct can be risky, and wherever possible it’s advisable to set KPIs based on data evidence of what is necessary as input to achieve the desired outcome.
CRM activity reports and benchmarking against top performers are the simplest ways to leverage existing information, but where this data isn’t freely available it’s often best to start with activity ratios and build targets from there.
Ensuring that KPIs are built from tangible evidence increases recruiter confidence in the viability of the goals they’re being set, and helps contribute towards buy-in and commitment to reach targets.
2
Explain rationale clearly
KPI adoption will have a higher chance of success if your team grasps why they need to be reaching their goals. Instead of “instructions” from a manager,
KPIs should be interpreted as guide rails for the employee’s own benefit, helping them to succeed in their role and develop both their income and career trajectory.
Managers who invest the time to discuss KPIs with their team – and have the confidence in their metrics to engage in an open dialogue – are often able to enhance employee performance in comparison with those who present targets as a top-down mandate to be hit and not discussed.
3
Set as few as possible
Try to avoid setting a goal for every available data point – it can lead to information overload, and recruiters losing sight of what’s truly important.
Furthermore, it runs the risk of stifling autonomy and discouraging team members from thinking creatively to solve problems and accept ownership for their most critical goals.
Using fewer KPIs (and concentrating on the ones that really matter – typically revenue, interview volume and pipeline) shows trust in employees to use their own skills and initiative to deliver these core requirements – something most recruiters respond well to.
If they struggle, you can work with them to add additional goals in where needed to boost key activity areas.
4
Adapt KPIs to roles
Naturally a new starter tasked with kicking down the door of a new market sector shouldn’t work to the same KPIs as an agency veteran with an established client book.
Both recruiters are in different situations, and while their end goal of generating revenue may be the same, they need to spend their time differently and focus on different tasks to arrive there.
While maintaining as much common ground as possible to keep your team united and collaborative, it’s important to personalise some metrics where certain team members have different desk dynamics from your ‘cookie cutter’ KPI set.
5
Get employee buy-in
Working with your team to mutually agree to KPIs can be a key step to improving attainment rates.
Employees not only appreciate the involvement in determining goals, but will often work harder to achieve these goals if they have personally confirmed that they are both necessary for success and realistic in scope.
Starting discussions around KPIs can feel like heading down a slippery slope where the whole nature of targets and activity goals gets called into question by team members, but if the conversation is managed with a careful dynamic the the opportunity to evaluate goals can actually energise your team to achieve more then if simply instructed without engagement.
6
Make them achievable
A potential pitfall for eager agency managers is to set KPIs which are deliberately out of reach, privately prepared to settle for recruiters to reach less than 100%.
While there is a place for stretch goals in your agency, core KPIs is unlikely to be the best place for them. Making base KPIs ambitious but achievable is vital to success.
Driving a team towards unreachable standards week after week soon becomes unsustainable, affecting morale and causing all goals (including revenue) to be viewed with skepticism.
7
Monitor them consistently
If everyone in your agency hit their KPIs in full, you’d have very few headaches left as a business owner.
That means that once you’ve set them, take them seriously and monitor them closely!
Agencies who have a stop-start approach to upholding KPIs quickly find that they are rarely reached – if managers aren’t paying attention or worrying about reaching goals, why should recruiters?
Building your KPI framework around real-time digital analytics is usually the most direct route to achieving this, with information pulled directly from your CRM system.
Whiteboards, spreadsheets and other workarounds can have their place, but are inevitably open to becoming out-of-date and lack the added benefit of pushing recruiters to use their databases effectively.
8
Encourage transparency
It’s very difficult to build a culture of accountability in any company without transparency.
This means enabling team members to see at least part of each other’s activity levels and KPI attainment (whether digitally or physically), and avoiding tracking performance purely at a management level via private reports.
Many agency owners are keen to protect team morale from unflattering data (hence the tendency to reserve report access for their eyes only), and whilst there is a lot to be said for being sensitive to the impact that unreached KPIs could have on individuals or teams, a long-term approach to building a culture of accountability means being comfortable putting names to goals in front of colleagues.
9
Lead from the front
It’s rarely possible for an agency owner to lead their business in activity metrics, but it’s critically important that managers don’t set higher standards for their team members than they would be able to achieve themselves.
As leadership roles evolve to include increasing time spent on non-recruitment matters such as strategy, training and management, it can help to use historic data (where available) to show your team you’re not asking them to do anything you haven’t been able to achieve personally.
If all else fails, roll up your sleeves and help show that the standard isn’t unattainable.
10
Keep consistent, but be open to change
Too much change is usually damaging when it comes to KPIs, creating the impression that leadership lacks direction and goals are being plucked from thin air.
While trying to resist the temptation to tinker with targets on a regular basis, it’s also important to be comfortable admitting that KPIs may need to be adjusted.
Sticking stubbornly to goals for their own sake can be highly counter-productive, so when evidence mounts that KPIs aren’t working, be ready to talk to the team and make some fixes.
Getting Incentives Right
Together with KPIs, incentives represent the other key dial with which you can shape employee behaviour most directly.
And, just like KPIs, designing and inventive program involves careful fine-tuning to generate maximum results from your team.
An incentive package should be more than a blanket commission structure policy that blindly pushes everyone to generate personal sales, but should never become an over-complex labyrinth that loses recruiter engagement.
As you build your agency’s rewards structure, focus on:
Defining desired behaviours first
If you aren’t clear on exactly what you want your team to do, you can’t effectively incentivise their activity.
Naturally you’ll want them to hit sales goals, but is this enough on its own to drive your agency’s strategic development in a scalable way?
- Is new client acquisition a focus, or account expansion and penetration?
- Is your team consolidating their work and building foundations for future growth (by building a detailed, annotated CRM and candidate database), or just scraping by on month-to-month billings?
- Do you need to focus on doing more deal volume, or improving average deal value?
Creating incentive tiers
Incentives operate like a series of levers that your leadership can pull, the ‘carrot’ to the KPI ‘stick’. A range of different incentive tiers can help you clearly see where and when you can have the desired impact on your team’s performance:
- Basic – which behaviours need to be encouraged on an ongoing basis, to keep the wheels turning? (e.g. monthly sales goals).
- Strategic – what can you layer in to steer the agency in a certain direction, such as incentivising winning new customers, penetrating new markets, winning retained business or more contract work?
- Short-term – what instant-impact incentives can you use to generate activity spikes when needed, either pro or re-actively? For example capitalising on seasonal opportunities, building pipeline during a sub-par quarter, or accelerating out of a New Year slump?
Leveraging a full range of incentives
As an employer, you have access to a wide range of tools which can be used to encourage recruiter output.
As your incentive plan matures, it’s important to take advantage of the full set of options in order to shape culture, develop employees and maintain healthy cashflow.
A high-level overview of different incentive types might include:
Financial
- Commissions
- Bonuses
- Shares and share options
Perks
- Holidays
- Remote working
- Company cars
- Expenses accounts
Promotion
- Job title
- Salary
- Responsibility
- Leadership
- Autonomy
Travel
- Client meetings
- Company offices
Training
- Courses
- Conference attendance
- Materials
Collective
- Group & team goals
- Office goals
- Company goals
Make sure incentives are understood
After the effort and expense of planning incentive programs, take the time to ensure that your team knows exactly what’s available to them and how to achieve it!
Making incentive plans publicly visible on collaboration platforms or intranets can help visibility, as well as ensuring that onboarding processes cover incentives in depth.
Lastly, be sure to celebrate and communicate highlights from your team when incentives are attained – seeing that rewards are being achieved and enjoyed by colleagues can be more powerful than any amount of reminders that they are on offer.
Building A High-performance Culture
What Are ‘High-performance’ Cultures?
Your corporate culture dictates how people internally and externally perceive your agency, and how it performs.
It is the essence of the business – the collective result of your values, people, activity and goals.
A ‘high-performance’ culture is one in which there is a shared focus on performing tasks to the highest possible standard – on reaching and surpassing set goals and on continually improving, both on an individual and organisational level.
It is an environment in which teams work actively to eliminate mediocrity, and support each other collaboratively in an ongoing effort to raise performance standards.
VC-backed startups are often excellent examples of high-performance cultures – motivated teams who are committed to delivering their best work in order to achieve ambitious, high-pressure goals.
Why Are They Necessary?
Without a focus on fostering and celebrating high performance standards, teams tend naturally to settle on a path of least resistance. This usually involves doing good work, but delivering at or around the minimum level required by leadership.
Cultures without a high-performance focus cause significant problems for ambitious agency owners, in that:
- they require continual motivation – employees are not engaged or energized by their work itself, and need management to provide ongoing stimulus
- they do not self-develop – with no cultural focus on improvement, team members do little to no self-training and lack curiosity to learn
- they require continual monitoring and direction – teams may lose focus, momentum or fail to reach goals unless repeatedly prompted
- they accept mediocrity – failing to reach or exceed goals is commonplace
- they lack accountability – team members have no cultural commitment to each other to deliver their assigned goals
In high-performance cultures, these tendencies are reversed.
Team members are more likely to self teach, take ownership for their goals, work with minimal supervision and exceed targets.
For founders seeking to scale their recruitment agencies, creating and enabling a culture in which individuals embrace the company’s broader goals and work effectively without time-consuming management input is essential to unlocking rapid growth.
How Are High-performance Cultures Built?
As with any cultural transformation, developing a high-performance environment involves bringing together multiple strands of business activity in a single, coherent thread.
Some of the core building blocks of high-performance cultures include:
Leveraging value statements – deliberate emphasis on excellence and ongoing improvement should be fixed in a company’s basic principles, discussed with all new hires as a part of their onboarding program, and regularly reviewed and discussed to ensure they are being upheld.
Celebrating over-achievement – recruitment agencies can have a tendency to focus purely on sales results in their rewards and celebrations, sometimes overlooking great working being done in other areas. This may be recruiters who exceeded activity KPIs, new hires who scored highly in training assignments, or non-recruitment personnel (marketing, finance, HR) who delivered above expectations.
Highlighting and discussing examples of standout performance across all areas of the business is key to building a culture where weak points are addressed and all team members work to improve their overall skill sets.
Valuing training and development – if committing to a culture centred on learning and improvement, company leadership must substantiate this vision by making time and resources available for training, workshops, training tools and opportunities to learn new skills.
Leading from the front is also important, with senior company figures actively building their own skill sets and demonstrating willingness to work on weak areas.
Including employees in goal-setting – during performance reviews or business planning, it’s important to generate employee buy-in on key targets.
Involving team members in defining goals, as opposed to prescribing them from the top down, can drive engagement and commitment to deliver.
Letting high achievers share their stories – as well as providing recognition from a leadership perspective, there can be high potential impact in allowing top-performing recruiters to present their own successes to colleagues.
Peer learning and identification helps learners to connect in a different way, and success stories can have added authenticity when not delivered by company ownership.
Focusing on skills and ability, not just results – as well as celebrating sales goals, KPI attainment and other metric-based outcomes, it is also important to highlight how team members have achieved results, specifying the skills used, knowledge applied.
This can be critical in demonstrating that employee ability is valued in itself, not only end results.
Building a shared vision of culture – no aspect of business culture can be imposed, and the more employees are included in discussions around shaping culture, the higher the chances of success in implementing that culture.
Although perhaps happy to settle for mediocrity when not challenged to deliver better, most employees do not actively seek to work in a company defined by average people and performance. Inviting team members to participate in setting their own high standards can be pivotal in bringing that vision to life.
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