Is your agency punching its weight?

Learn the real recruitment agency profit metrics you need to measure, and how your agency performed in FY18.

APositive - Recruitment agency profit per person

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 the 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 fewer 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!

APositive - Recruitment agency profit per person

The #1 way to increase your agency’s profitability

If your recruitment agency profit 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 agency profit metrics that really matter to successful recruitment agencies. Download our free eBook here.

Recommended Articles

Why Cash Flow Funding for SMEs

Many businesses, such as those in labour hire, have a natural trade cycle where suppliers (in this case, payroll) need to be paid before the customers pay. This negative cash flow cycle requires some type of funding to facilitate normal operations and the funding needs increase with growth.

Read More

Take control of your cashflow with APay

According to a new study, job ads across Australia have risen to the highest levels in two years. In this recent article, Seek’s job ads recorded a 10.2% month-on-month increase in jobs posted last month. This suggests that Australia’s economic resurgence is well underway, likely also supported by economic stimulus measures rolled out in recent weeks across VIC and NSW as tight restrictions ease.

Read More