Staffing agencies have a lot of moving parts to keep up with. You have to consider your sourcing, candidate communications, client relationships, and everything in between. Not to mention, you want to be able to turn a profit while helping your business partners as well. Here is how your staffing firm can increase profit and improve its bottom line.
Three Money Saving and Profit Increasing Tips for Staffing Firms
Customer Acquisition
Is your firm spending a lot of money finding new customers? Instead of spending a ton on acquiring new customers, build and maintain good relationships with your current clientele to increase repeat business and referrals. To do this, be sure you maintain regular contact and know what their preferred method of communication is. You should also make an effort to keep their profile with your firm up to date. For candidates, know whether or not they are actively searching for work. For employers, have information about the type of candidate they typically look for and whether or not they are actively searching for candidates.
The cost of getting a new customer is high. So, being able to utilize your current customer base for repeat business and referrals is key to success. Not only will it save you money, but it will make you a trusted resource for staffing in that industry, which will help you earn more business.
Know Your Margins
Include your profit margins and other financial data in your applicant tracking system. Your margins give you an idea of exactly how much money your staffing firm is on track to make. Once you have this figure, you can figure out how much money you make from each contract or placement.
All of this will allow you to better understand what entails success for your staffing agency and let you prioritize your strategies to decrease your overall cost. When you can pinpoint what actions your agency takes to turn a profit, you will be able to better replicate those actions and repeat the process. This will lead to an increase in profits and will save you time trying out different approaches.
Profit and Loss
You should always have an updated profit and loss statement for your agency. This statement gives you a look at the overall financial health of your staffing firm. It will give you an idea as to whether or not you have enough profit to make new business moves. If you aren’t turning a profit or have areas where you are struggling, it makes more sense to address those things before trying to grow.
A profit and loss statement will also let you know if you should focus on a certain segment of your firm or not. For instance, if you are getting the most profit from placing administrative candidates, you may want to put more focus on those services and talent. Similarly, if you are putting a lot of time and effort into another segment of your business that isn’t paying off, the profit and loss document will identify that as well.
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