Sales growth for recruitment agencies: 3 key success factors - APositive
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Sales growth for recruitment agencies: 3 key success factors

Mid-sized recruitment agencies face unique challenges when it comes to sales growth. Learn the 3 key factors that influence growth and how to measure them.

A few months ago, we published a post about sales growth rates for recruitment agencies across Australia and New Zealand. While data from Staffing Industry Metrics showed record growth across the board, it did reveal some challenges for mid-sized agencies with 21 to 40 staff.


In contrast to smaller and larger competitors, recruitment agencies with 21 to 40 staff reported a comparatively low growth rate of between 3% and 7%. We refer to this segment as the “valley of death”, as these agencies face unique obstacles. They’re too large to be nimble (like agencies with 1 to 20 staff), yet too small to achieve economies of scale (like agencies with 40+ staff).

While the “valley of death” is a precarious place to be, it need not limit your agency’s potential to achieve healthy sales growth. After conducting an Insights Poll, we’ve identified the top 3 factors that influence growth. Get these right and you’ll grow more profitably, no matter what size agency you’re running.

1. Team engagement and input

It’s no surprise that team engagement correlates directly to success. Engaged staff are more productive, more passionate and more likely to stick around. Given the high turnover rate of many recruitment agencies, this is critical.

If your sales or profit per person are below industry averages, there’s a good chance you need to improve engagement. Either that, or the ceiling for performance needs to be lifted. So, how exactly do you do that? Get your team to buy in to the vision. Share key metrics around sales and performance and use industry benchmarks to show how your recruitment agency stacks up.

You can’t be what you can’t see – so be authentic, be transparent and set clear goals for your team. You’ll be amazed at what people can achieve when they know what they’re aiming for and why. Remember, no team has ever set out to be average. Understanding where performance can be improved and presenting this information in the right way should be a powerful motivator.

2. Staff selection and retention 

Considering we’re in the recruitment business, it’s alarming how many recruitment agencies fail to select and retain great staff. If you’re struggling with high staff turnover, this will stunt your sales growth. It will also impact team engagement, as you’ll be unable to deliver on promises and plans.

Determine the average length of tenure for your team, as well as your staff turnover rate, and compare these to industry standards. If your tenure number is going backwards – or if your staff turnover rate is above the industry average – it’s time to review your selection process. Are you applying the same rigorous criteria that you apply for your clients? Are you providing adequate training? Are you creating a positive culture where people feel valued and influential? Get this right while your agency is small, or it will be a nightmare as you grow.

3. Financial management and cost controls

As your recruitment agency grows, it can be easy for costs to blow out. This not only means your profit is minimised, it also means you’ll have less money to do the things you said you’d do – not a great way to build trust with staff.

To ensure your agency enjoys balanced growth, financial management is key. Keep an eye on important metrics, like cost % of gross profit benchmarks, as well as productivity benchmarks. Conduct peer comparison research and share the findings with your team. While you may feel apprehensive about revealing your numbers, the more you share the more you’ll grow. Think of your staff as investors in your business. They deserve to know what’s happening – and they want to know how to make a difference.

Top 3 essentials to make it through the valley of death

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