Entrepreneurs like to keep score. OK, that is a generalization but seriously, how do successful people become successful? They hold themselves accountable and they set targets. So my question is, as an independent recruiter or recruitment firm owner do you have someone that you compare your success with on a regular basis? Benchmarking is the term many use.
It is tempting to compare only with your past results because it is easy to find the data and if the direction is up, all seems good. What you may fail to realize with such a simplistic approach is the best in class benchmarks that could propel you to a completely new level of success.
One organization that makes data available for these purposes is Staffing Industry Analysts. Maybe you read their publication, Staffing Industry Review. SIA has a monthly report called the Pulse and a semi-annual Staffing Industry Benchmark Consortium (SIBC) Report. I just completed a Pulse Report and it took about 5 minutes to complete. It may take longer if you have a complex mix or have a hard time finding your metrics year over year, etc. This is the price you pay: to get a copy of the results…you must contribute. There are also more in-depth reports available for a fee.
Here are some metrics that SIBC suggests you should benchmark:
- Segment-specific, year-over-year revenue growth each month
- Marketing and technology expense as a percentage of revenue
- Temps and Accounts per staff employee
- EBITDA per location
- Days sales outstanding (DSO)
I also know of membership organizations that are good at creating networking opportunities to connect with like-minded peers. It is always good to find someone that you can benchmark and then becomes a coach/consultant to help you improve results. It is great to find someone of similar size that has been through the issues you are dealing with currently. NAPS (National Association of Personnel Services) is one such group at naps360.org. Our members in NPAworldwide do this regularly too, and I’m sure there are many other great organizations that offer open and honest partnership and networking opportunities.
Seek a benchmark opportunity out and measure yourself or your business. It is a great way to learn what is possible.