Subscribe for regular insights from the recruitment industry.
Quickly fill out this form to be amongst the first to receive industry insights from Firefish Software.
Understanding & Measuring the North Star Metrics of Your Recruitment Agency
Strategies based on intuition alone don't work. But only 7% of agencies have sufficient data analytics skills in their teams to truly understand how their agency is operating. By basing your agency's strategic decisions on data, your agency will become more agile, adapt more quickly to market changes, and increase profits faster.
In this article, we explore how your agency can understand and measure the North Star Metrics for your agency. These are the insights that directly relate to your agency’s growth prospects and they measure the factors that will actually have an impact on your success. These higher-level goals reflect the overall growth aspirations of your agency.
Being able to clearly understand and measure your agency’s North Star Metrics allows you to have a clear indicator of your progress and situation at all times; and make relevant strategic shifts when needed.
Read on to learn:
How to understand and measure agency data
Which metrics are vital to agency growth
How to put data at the heart of your agency
The first core measure of your agency's success is the revenue generated. But tracking this loosely isn't enough.
Knowing exactly what revenue your agency is generating, where that revenue comes from, and what actions impact this will allow you to strategise for success and make a data-driven growth plan for your agency.
To measure and track sales performance and the metrics that impact it, consider these three areas:
Measuring Agency Sales Performance
Job-to-Fill Ratio
Client Contribution
Placements Made
53% of high-growth companies rate their sales analytics as essential to their growth
The key to understanding and achieving your agency's North Star Metrics is measurement. By putting data at the heart of your agency and tracking key performance metrics, you will gain a far deeper understanding of performance and how to improve it.
These five key areas should be tracked in real-time within your recruitment CRM to enable you to grow efficiently, effectively and profitably.
What it really means to put 'data at the heart of your recruitment agency'
1. Measure sales performance
2. Understand Sales Forecasts
3. Benchmark Agency Performance
5. Track Candidate Sourcing
4. Identify Recruiter Value
Understanding Sales Forecasting
Putting data at the heart of your
recruitment agency.
Explore More Agency Leadership Insights
One of the hardest aspects of agency management is understanding your performance in comparison to your competitors. Market fluctuations can impact agency sales and this is particularly challenging if you only become aware of a market shift after it has happened. Without monthly insights into agency performance across your sector, you're missing key data that can guide strategic planning.
Competitive benchmarking unlocks relevant data on factors that impacts your agency's performance. Make use of competitive benchmarking to measure the following areas and gain a deeper understanding of performance.
Benchmarking Your Recruitment Agency's Performance
Sector Placement Performance
Revenue per Recruiter
Application Sources
Many recruitment agencies are guilty of tracking vanity metrics like the number of calls and emails sent, without taking the time to identify the actual value in recruiter activities. Identifying which actions create results and drive revenue allows your agency to increase efficiency and productivity to scale sustainably.
Consider the following key metrics to identify the value of activity from each member of your team:
- Job-to-fill ratio: This measurement gives you a strong insight into recruiter productivity. A higher job-to-fill ratio means that they are working efficiently. If this success ratio is low then you should interrogate the type of jobs, quality of opportunities and candidate sources.
- Interview-to-placement ratio: This metric will indicate whether the candidates being put forward by recruiters are up to standard. If companies are rejecting your candidates, you're either dealing with the wrong clients who aren't willing to move forward or candidates who aren't the best quality.
- Prospect breakdown: This metric measures the quality of candidate data that recruiters acquire and add to the CRM, allowing you to work on improving candidate acquisition.
Identifying Recruiter Value and Returns
We've grown from 3 to 19 users, and Firefish has been adapting to our changing needs.
The day-to-day functionality has really helped us grow and increase the efficiency and productivity of our team.
Sam Wild
Operations & Training Director,
Axion Recruitment
Understanding and Tracking Candidate Sourcing
Having warm talent ready to be placed is not 'nice to have', it's a necessity.
Tracking where your applications are coming from will allow you to determine which parts of your marketing strategy work and which don't. These metrics will help you to identify gaps in your sourcing strategy and tailor it to your agency's goals and the market situation.
Agencies should not only track the source of applications, however. It is also important to interrogate the win-rate per channel. By analysing not only the source of applicants but also the success rate of placing those applicants, agencies can win faster by maximising efficiency.
Application Source
85% of placements are made with existing candidates.
In order to achieve your agency's growth goals it is vital that you truy understand the output of your agency and the key factors that influence that.
The only way to really understand this is by putting data at the heart of your agency and tracking every factor that impacts sales performance. By measuring and understanding sales performance, forecasting, sector benchmarking, recruiter value, and candidate sourcing, you will be able to make strategic decisions based on data, not intuition.
Every sector will experience fluctuations based on seasonality and external factors. While this is an inevitability this doesn't mean you should sit back and allow the fluctuations to happen without reacting.
Monthly placement volume benchmarking gives you a clear insight into how the sector is improving, allowing you to allocate resources to capitalise on the best performing areas and shifting focus away from areas that are underperforming.
While the hunt is always on to generate new business and create new streams of revenue for your agency, not all clients contribute in the same way to agency revenue.
Tracking revenue per client and gauging this against the time spent catering to that client will give you a clear understanding of client contributions.
Just as revenue is the most fundamental metric for your agency, it is also the topline metric to track for recruiters. But understanding recruiter performance only within the context of your agency only gives you part of the picture.
By comparing your average recruiter revenue against the average revenue for recruiters in your sector each month, you will gain a far greater understanding of the success you're actually seeing in the broader economic environment.
The top-level metric that feeds into agency revenue is the number of placements made.
In order to understand exactly what niche, client type, and job type brings you the most revenue, it's essential that you track placements by sector, contract type, and client. This will allow you to focus on the role types that generate the best return.
Recruitment Marketing and Candidate Acquisition can be a hugely costly area of operation for agencies. While you can use internal data to refine and control candidate acquisition spend, it can also be hugely valuable to look outwith your agency.
Competitive benchmarking allows you to track application sources in your agency's sector, uncovering any untapped avenues that you may not be leveraging to their full potential.
Scalable growth is dependent on efficiency, and in recruitment there is nothing more inefficient than working a job that you are not able to fill.
By tracking job to fill rates across job types, sectors and salary bandings you will gain a far greater understanding of which roles are profitable for your agency and which roles are best avoided.