With the end of the financial year just around the corner, now is the perfect time for people in the recruitment and labour hire industries to reflect on the past financial year and prepare for the next one.
Two key actions to prioritise during this period are conducting a thorough business review of the 2024 financial year, and planning for business optimisation for the ‘25 financial year.
Business Review
Financial Success
Analysing the financial success of your business involves a comprehensive review of key financial metrics and performance indicators. A great place to start when analysing the financial performance of the business is to compare your budgeted costs to the actual costs for the year. If you didn’t prepare a forecast last year, now is the time to do it so you’ve got something to compare for next financial year’s end, otherwise, compare your metrics with industry benchmarks for a general idea of how you’re performing commercially.
It's important to evaluate the cost structures to identify areas where efficiencies can be improved. Cash flow analysis, client acquisition costs, and the return on investment (ROI) for various recruitment channels also play a key role. A dynamic reporting system or good business accountant will be able to guide you through the financial analysis.
Consultant Performance
Reviewing consultant performance is essential because these recruiters are generally the driving force behind client satisfaction and successful placements. Regular performance assessments help identify top performers, areas for skill development, and potential gaps in productivity. By analysing metrics such as placement rates, client feedback, and time-to-fill positions, businesses can ensure consultants are meeting targets and maintaining high standards. This helps to enhance overall efficiency and service quality while promoting a culture of continuous improvement and professional growth, ultimately contributing to the business's long-term success.
If you don’t have any formal key performance indicators (KPIs) for your consultants, the end of financial year is a great time to think about defining and implementing KPIs ready to hit the ground running for the ‘24-’25 financial year.
Marketing Results
Reflecting on marketing performance is crucial to understand how effectively a business has reached and engaged its target audience over the past financial year. This analysis should include evaluating metrics such as lead generation, conversion rates, and return on marketing investment (ROI). By examining the performance of various campaigns, channels, and strategies, you can identify what resonated with potential clients, candidates or contractors and what did not. Insights gained from this review enable informed decisions about future marketing initiatives, optimising budget allocation, and enhancing overall brand visibility and impact in the competitive recruitment and labour hire market.
Process Efficiency
Ensuring process efficiency is essential for optimising operations in the recruitment and labour hire industries. This involves reviewing the workflows and procedures related to daily activities, from candidate sourcing and screening to client engagement and placement. Key performance indicators such as time-to-hire, cost-per-hire, and the efficiency of communication channels can be reviewed to identify bottlenecks and redundancies in your existing processes. By pinpointing areas where processes can be streamlined or automated, businesses can reduce operational costs, improve response times, and enhance overall service quality, leading to greater client satisfaction and a stronger competitive edge.
Business Optimisation
Compliance
With the new financial year comes updates to taxation and salaries, so it’s important to be aware of the changes on the horizon regarding income tax rates, modern award updates, and workcover rates to ensure your business remains compliant.
Ensuring compliance involves reviewing and updating payroll systems, employment contracts, and financial records to reflect the latest regulatory changes. Staying ahead of upcoming changes helps to protect your business from potential fines while ensuring your consultants and contractors receive appropriate remuneration and have their rights upheld.
Proactive compliance management also allows businesses to forecast and budget more accurately, ensuring financial stability and operational efficiency in a constantly evolving commercial landscape.
Reducing Costs
Reducing costs is a strategic tactic that can significantly impact the bottom line. Reviewing your tech stack can be a great way to reduce costs while also enhancing efficiency. When reviewing your tech stack, ensure tools and software are being utilised effectively, eliminating any subscriptions or services that are underused or redundant.
Conducting a thorough finance review may also help reduce costs, particularly given the recent interest rate environment. Assessing loans (product types and terms), credit terms, and investment strategies can uncover opportunities for savings and better financial management. By focusing on these areas, businesses can optimise their expenditures, improve operational efficiency, and strengthen financial resilience.
Increasing Revenue
There are many different ways labour hire and recruitment businesses can increase revenue. A couple of areas to focus on might be developing a marketing plan and go-to-market strategy based on the analysis of the marketing performance for the financial year just gone. By reviewing the performance of campaigns and channels, you should be able to identify patterns and successful ways to attract new clients and expand market reach.
Another tactic to help combat inflation and increase revenue is to review and adjust client charge rates. When conducting your financial review, pay attention to your profit margins. With the rising costs of doing business, these margins may be quietly eroding. Once you’ve taken the time to assess the previous profit margin and define where you’d like it to be for the next financial year, it needs to be communicated to your clients. Transparent and timely communication of these rate changes helps manage expectations and maintain strong relationships. By combining these efforts, businesses can enhance their competitive position and drive growth.
Outsourcing
After conducting a business performance review, you could be feeling overwhelmed by the endless opportunities you’ve uncovered to optimise your business. If so, it might be worth considering outsourcing some of these jobs.
Outsourcing can significantly enhance business efficiency by delegating essential but time-consuming tasks such as marketing, payroll, HR, timesheet management, and other back-office functions to specialised service providers. This allows you and your business to focus on core competencies, improve service delivery, and reduce operational costs. By leveraging external expertise, your business can benefit from the latest technology and industry best practices, ensuring high-quality outcomes and freeing up internal resources to drive growth and innovation.
As the financial year draws to a close, it's a great time for those in the recruitment and labour hire industries to reflect on the year that was, and move forward with a plan for the year coming. By embracing a business review and optimisation, you can position your business for growth, resilience, and success in the ever-changing world of recruitment. And remember, it’s important to engage the right professionals while conducting your review and preparing for optimisation — focus on what you’re good at, and delegate the rest to relevant experts.
