Image commercially licensed from Unsplash
In today’s volatile job market, having the correct data to guide your staffing agency is crucial. Giridhar Akkineni, the CEO of AkkenCloud, brings light to this fact with his deep insight into the world of human resources and technology. Akkineni believes that the key to running a successful staffing agency is monitoring the correct key performance indicators (KPIs).
According to Akkineni, “The value of a staffing agency can be truly understood by assessing its ability to fulfill job orders in a timely and efficient manner, which is directly related to the KPIs they track.”
With this in mind, here are the ten KPIs that Akkineni strongly suggests every staffing agency needs to monitor:
1. Time to Fill (TTF)
Time to Fill is the number of days from when a job order is received until the position is filled. According to Staffing Industry Analysts, the average TTF across all industries is 36 days as of 2022. Lowering this number should be a key focus.
2. Time to Hire (TTH)
This is the time from when a candidate is sourced until they start their job. A LinkedIn report indicates that 30% of companies globally have seen longer time-to-hire cycles due to interview scheduling difficulties and decision-making delays.
3. Submission to Hire Ratio
This is the number of candidates submitted to the client to the number of candidates that get hired. Akkineni explains, “A high submission-to-hire ratio might indicate a problem with the quality of candidates being submitted. Ideally, an agency should aim for a low ratio, showing they understand their client’s needs and submit appropriate candidates.”
4. Submission to Interview Ratio
Similar to the submission-to-hire ratio, this ratio shows how many candidates submitted end up getting an interview. This can be indicative of the overall quality of candidates submitted.
5. Fill Rate
Fill Rate refers to the percentage of job orders that the staffing agency fills successfully. Akkineni elaborates, “A high fill rate is indicative of a highly successful staffing agency. If the rate is low, it could suggest a lack of suitable candidates or inefficiencies in the recruitment process.”
6. Candidate Satisfaction Rate
Measuring candidate satisfaction can give an indication of how successful an agency is at placing candidates in roles they’re happy with. According to Gallup’s State of the Global Workplace Report, only 15% of employees worldwide are engaged in their jobs – this is an opportunity for staffing agencies to make a difference.
7. Client Satisfaction Rate
This is the measure of how satisfied clients are with the service provided by the staffing agency. Client satisfaction is a leading indicator of client retention and referral rates, which are key to an agency’s success.
8. Cost per Hire
This is the total expense incurred to hire a candidate. The Society for Human Resource Management reports that the average cost-per-hire is $4,129. If the cost per hire is high, agencies may need to reevaluate their sourcing and recruitment strategies.
9. Revenue per Employee
This is the total revenue divided by the number of employees in the staffing agency. As Akkineni underscores, “This KPI is a measure of productivity. If revenue per employee is low, it might indicate inefficiencies in the agency’s processes or underutilization of staff.”
10. Gross Margin Percentage
This KPI is the total revenue minus the cost of direct labor, divided by the total revenue. It shows the financial health of the agency. “A staffing agency must always be financially viable, and a healthy gross margin percentage is a strong indicator of that viability,” says Akkineni.
These ten KPIs provide a solid foundation for any staffing agency to assess its performance, identify areas for improvement, and build a successful, client-focused business. As Giridhar Akkineni puts it, “Knowledge is power, but it’s crucial to know which data to focus on. By monitoring the right KPIs, staffing agencies can make data-driven decisions that lead to enhanced productivity, improved client satisfaction, and increased profitability.”
To stay ahead of the curve, it’s crucial to leverage technology and data effectively. By tracking these KPIs with reliable software and analytics tools, staffing agencies can ensure they stay competitive in today’s ever-evolving job market. As Akkineni concludes, “In the digital age, data is our greatest asset. Used correctly, it can be the difference between success and failure for staffing agencies.”
