Five tips for setting targets in recruitment businesses
If you are a regular reader you will know that my three step mantra for a successful recruitment business is:
1) Set targets and objectives
3) Ensure accountability
I am tempted to add a fourth: 4) Set targets. Targets are so fundamental to a recruitment business’ success that the need to set them merits repeating. Without targets planning is impossible.
How to set targets in recruitment
Too many businesses don’t have targets that will enable them to achieve their potential. Here are five things to bear in mind when setting targets:
- Targets must be realistic but challenging. If targets are too easy complacency will lead to underperformance, if they are unachievable then they lose credibility.
- Start from your end game and work back to the present. Write down where you want to be in 3 or 5 years time. In particular the number of staff and target profit figures, then break them down, working back to the present year by year.
- The ratio between profit and staff needs to be realistic. It will typically take between three and six months before new consultants cover their costs. Similarly even experienced consultants will go through peaks and troughs in their performance and it is important to be realistic about what individuals at different levels can bill each month.
- Growth needs to be realistic. Attracting the staff needed to grow businesses requires cash flow and also the ability to find quality talent. Good people tend to be scarce and attracting them can take time.
- Communicate your targets. Targets only work if management and the team are committed to them. Make sure that you communicate your targets internally and ensure the team understands how they will benefit if you hit them.
If you would like help with setting realistic targets that will help maximise your growth and profitability together with developing the plans on how to achieve that growth then consider my MyNonExec service and get the experience and insight that comes from having advised more than 100 recruitment businesses on their growth and profitability strategies.