Recruitment agency profit per person – is your agency punching its weight?
Learn the real profit metrics you need to measure, and how your agency performed in FY18.
There’s no doubt that annual profit is an important metric in business success. However, to measure the real profitability of your recruitment agency, you need to look beyond the bottom line. To see how your business compared to other recruitment agencies in FY18, divide your total profit by the number of full-time employees (or full-time equivalents). The correlation between these metrics will help you understand how your team stacks up against top performers – and how to bridge the gap.
The difference between average and outstanding
Figures just released from Staffing Industry Metrics show a staggering difference between recruitment agencies when it comes to average profit per person. Figures from over 100 Australian recruitment agencies indicate that the top 10% of agencies outperformed others by more than double in FY18.
Recruitment agencies with 10 or less employees
FY18 was a tough year for small teams, with high staff turnover impacting results. The average profit per person was $48,233 – 7% less than the prior year, despite buoyant market conditions. However, the top 10% of small agencies bucked this downward trend by increasing annual profits by 5%, averaging $119,791 profit per person. Over a 3-year period, the average profit per person for small agencies is $49,371. If your agency averaged $110,000 or more, you’re tracking extremely well.
Recruitment agencies with 11 to 20 employees
As teams grow, it becomes more challenging to match the profit per person metrics of smaller agencies. For those with between 11 and 20 employees, profit per person has been increasing over recent years, reaching an average high of $38,703 in FY18. Again, the top 10% of agencies stood head and shoulders above the rest, averaging $75,203 per person – a 16% increase from FY17. The 3-year average for these agencies is $35,869. If your average sits above $70,000, you deserve a pat on the back!
The number one way to increase your agency’s profitability
If your recruitment agency isn’t performing as well as you’d like, consider sharing these stats with your team. In most recruitment agencies (and businesses in general), there’s a reluctance to share the key metrics. However, when people learn how your business works, they also learn how to help. Being transparent about your numbers can help increase engagement, efficiency and motivation. Share these figures with your staff and encourage everyone to strive for that top 10%!
How does your recruitment agency measure up?
Discover the latest recruitment metrics that really matter to successful recruitment agencies. Download our free eBook here.