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FAQs online signature
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What percent of revenue should go to employees?
While there is no universally defined percentage for a "good" Payroll to Revenue Ratio, a commonly cited guideline is that labor costs should ideally account for 15-30% of total revenue. This range provides a general framework for assessing the proportion of revenue allocated to payroll expenses.
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What is the average revenue for a staffing agency?
How much revenue does a staffing agency make? Using the data from more than 1,200 franchised staffing agencies, a staffing agency earns $4.0 million in gross revenue per year on average. This number is the average gross revenue per agency from 1,200 agencies of the largest 6 staffing franchises in the U.S.
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What is a good profit margin for a staffing agency?
Yes, staffing agencies can be highly profitable businesses. Top staffing firms like Adecco, Randstad, and ManpowerGroup bring in billions in revenue per year. The US staffing industry has an estimated profit margin between 15–20%. Many small to midsize agencies see ROIs of 30% or more.
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What is the ideal staff cost ratio?
Each industry has different labour-to-cost ratios, and each industry has different ideas about what a “good” labour-to-cost ratio vs. a poor one. The typical range for any industry is 15% to 30%.
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What is staffing revenue?
In 2023, the revenue of the staffing industry worldwide totaled roughly 593 billion U.S. dollars. Following years of continuous growth, the global staffing industry revenue amounted to 442 billion U.S. dollars in 2020 due to the coronavirus (COVID-19) outbreak.
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What is a good labor to revenue ratio?
An acceptable average cost percentage is 25-35% of gross sales. This can vary greatly depending on the business, industry, and location. For example, a retail store in a small town may have labor percentages less than 25%, while the manufacturing sector may have labor percentages higher than 35%.
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What percentage of revenue should your staffing be?
Determining the Ideal Payroll Percentage However, payroll as a percentage of revenue should range between 15% and 30%. Anything above 30% typically means your labor costs are starting to eat into your earnings, and you are not effectively controlling labor costs.
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What percentage of revenue should be spent on staffing?
If you find that the company is achieving between 25-35%, it is effectively managing its staffing costs and is operating efficiently. If it is consistently higher than this, the businesses workforce is not as efficient as it should be.
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hello and welcome everyone to the e-skill webinar staffing agencies how to leverage assessments to drive more Revenue we're excited that you're here we've got oh gosh so many people on the webinar today we are thrilled to get started um today's webinar is presented by client success manager Jeff schnicker Jeff let's get started so on today's webinar we are going to be talking about how you can leverage assessments to drive more Revenue today we're going to share how stock top staffing agencies use assessments to dramatically improve the quality of The Hires that you're trying to place the process for your recruiters your available database of skilled candidates how you sell candidates to clients and how most of all do you increase your placement rates and drive more Revenue foreign we are proud to have Jeff schnittker with us today he is the director of client success management for the e-skill corporation Jeff helps Staffing clients maximize their assessment programs to deliver top candidates and drive Revenue he has worked with some of the largest Staffing organizations in the world and he has more than 20 years of experience in assessments and employee evaluation so with that I'll turn it over to you Jeff we're excited about your information today all right I appreciate that hello everyone I am I am putting some time today what we want to talk about is how we can use assessments within the Staffing world to to bring value to the organization and there's really two ways uh or two main streams that we can look at when we try to add value via an assessment program and a staffing agency number one is is going to be how do we increase how do we look and focus on the quality of hire and there's a lot of ways that we can do that and how we can drive a better quality of hire using a solid assessment practice the second stream of of Revenue and how to drive revenue is really around the process efficiency and the technology that will bring you a large pool of candidates that has already been vetted so you have a process in place that's going to drive a lot of efficiency a lot of organization and a lot of top quality candidates at your fingertips through your Assessment program so the first thing that we want to talk about is quality of hire this is something that has come up uh time and time again in my discussion uh with staffing agencies as well as of regular hiring HR departments is they want to focus on on that quality of hire and kind of some of the the big buckets that you hear about in quality of hire something that we can impact directly when using an assessment program so e-skill as as a provider we have thousands of of tests available and they're designed uh validated and and implemented really to drive that quality of hire and and so when we think about quality of hire there are a lot of different metrics that our clients can use that we can use to determine that quality of hire and so when it comes to using assessment what we really want to do is focus on what does quality of higher mean to that client to that organization how are they defining it what are the metrics they're looking at and we'll get more specific as we get into some uh specific segments within Staffing but overall you're going to hear things like reduce turnover increase productivity reduce training time increased engagement increased in profitability and what do those things mean well for example reduce turnover using an assessment is is a very easy way to reduce turnover if you're looking at a resume and someone says they are an expert in in Microsoft Excel you place them in a job they aren't an expert at Microsoft Excel the chance of turnover is is great uh and in addition to that you've got people around them who are going to deal with someone who might not be skilled enough uh as as their resume states with a skills assessment you can verify those skills so you can place them ingly what happens then a person's going to be more satisfied with the job they're going to be more prepared for the job the client isn't going to have to train them the co-workers aren't going to have to train them or do rework things of that nature so this is really one of the the big drivers and uh there's so many ways that we can look at how skills assessments can tie directly to these long-term performance of employee performance metrics that said there is a another way we'll get into more specifics when it comes to uh driving metrics and performance data on quality of hire the the first is is really the efficiency when it comes to using an assessment program and as the slide says your time is valuable and that's really when an assessment program is is designed to do is one we want to spend time with qualified candidates so before you even spend time on the phone you can ensure that that candidate has the skill set or the job you can also know that candidate skill set so if they're coming to you they say they're a forklift operator you can verify that skill set you can present that verified skill set to an employer so what does it mean when you're when you're putting all these candidates through an assessment program you've got a data set of qualified candidates it's searchable by skills so if you're looking for someone who can type 40 words per minute or someone who's an expert in OSHA whatever the case may be you can find that quickly uh within an assessment program and there's a lot of different ways that this drives efficiency for organizations a lot of times people might be coming from a different type of process I know I've had a client that used to use paper pencil based interviews replace that with an online assessment and it essentially that company say six figures worth of shipping alone on those paper based interviews so depending on on the process there's a lot of different ways that our system an assessment system can really Drive efficiencies for your organization so typically that's going to be looking at high qualified candidates uh not spending time with with people who are unqualified you're also able to focus that candidate's time as well um so in addition to making a process more efficient for you you can make the process more efficient uh for a candidate so rather than spending out or or figuring out what their skill sets are you can have them take a test verify what the skills are if the test uh results are a little lower you can also point to have some targeted training uh based on those results so really the ability to drive time-based efficiencies using an assessment program especially up front it's going to be a big drive or a value too let's take a look at really how skills impact business results and and this is a wide topic um but the the overall message here is really understanding how clients how they track their performance of of individuals and I broke this down into some some very uh familiar uh verticals within the staffing agencies so call center admin clerical and skilled trades I've I've seen hundreds of ways the the people really qualify what makes a quality of higher and if we look at things like call center agents so the quality higher is going to have things like reduced errors uh improved call handling time higher customer satisfaction rates uh higher sales rates all these numbers that can lead to an increased revenue and essentially what we want to do with a a proper skills Assessment program is be able to to replicate that that top quartile of performance in their existing employees we can replicate that imagine how that's going to change their overall numbers an example of this probably the easiest one is going to be in in sales so if you have your top quartile it is averaging a million dollars in sales per year we want to make sure that the quality of hire we bring is matching that that top quarter file so imagine that just the financial differential between hiring 10 top quartile sales reps versus hiring for up sales reps in six mediocre so you know it's millions of dollars worth of Revenue that a quality assessment can predict uh based on back on client outcomes so it's really important to understand that it helps dollarize the value of these candidates uh for clients as well we can also look at things like admin and clerical and so um we look at things like increased productivity uh decreased errors decreased training times this is a very common uh you know with the Microsoft Office Suite and typing we want to make sure that that people in these positions have the correct typing skills that work is done faster work is done more accurately and there's no need to train them on this so basically we're building in both productivity as well as efficiency right into the process as well so a lot of different ways we can look at admin and clerical additionally skilled trades uh very popular vertical within the staffing agency when we look at higher quality of work what does that mean so that might mean uh in a lack of Insurance liability claims we could look at safety violations uh training needs um as as well as well as manufacturing errors which which can cause a a loss of of a lot of revenue for clients so we want to look at the positive aspects uh of that work and how can we align with that so for example in in skilled trades we do have tests uh that look at basic Mechanical Aptitude uh test of look at tic-pack skills forklift skills OSHA knowledge things of that nature so we can really focus on what skills really drive the most business results what are going to drive the best quality of hire for candidates essentially using an assessment program once we understand that we're going to have verified skills on an assessment result that drive verified Revenue results for clients and this is really kind of the magic the secret sauce if you will of an assessment program is being able to to link to the long-term business results of the client and this is really what helps sell candidates and help sell staffing agencies to clients is that quality of hire how can we create that linkage between uh the skills that they are testing for the skills that they're delivering via these employees and then via the actions and results that these various employees have for their clients so all that said when we're talking about skills testing what we're really talking about is what people can do and basically what people can do is some things that can be trained um so we can definitely train people on on Microsoft Office we can train people on forklift skills at the same time we can find out where we don't need that training now how we could really maximize uh the assessment experience and really maximize the quality of hire is in addition to looking at what people can do with a skills test let's combine that with what people will do with a behavioral test these offers both uh behavioral tests as well as skills tests so if you understand people's skills what they can do it's also really important to understand what will they do and that's what a behavioral test does is it's going to look at different components ours is is configurable so you can look at the different behavioral personality components that are most important for a client and combine that with with the proper skill sets so a really basic example that I have here today is Imagine really any placement that you're making so if you have a client looking for someone with Microsoft Office skills typing 40 words per minute what if we combine that with the work ethic sense of integrity and grit to get the job done so you know that they're going to take those skills and apply them daily to the organization and this this is really where we see kind of an X Factor a a multiplication of the benefits of assessment this is where we also look at a lot of different other ways to drive revenue or efficiencies or add-ons for for the client because when you have someone who's properly skilled oh and they also have a work ethic work ethic and integrity that fits the organization that fits the mission of the organization their productivity is going to go up co-workers productivity is going to go up the overall engagement of the organization is going to go up I've worked with with clients or for for many years and a lot do look at employees survey engagement results and and that is another thing that we we would like to link into in addition to kind of these long-term performance metrics how can we drive engagement who understand those drivers of Engagement we can link the assessment results to that as well so I want to be in tune with what drives Revenue uh for our clients that makes it easiest to sell based on those assessment results so that is overall the the ways to drive Revenue with with skills and behavioral assessments for for clients what kind of questions do people have wow great thank you so much for joining the webinar please put your questions into the chat at the console to the right of your screen and our first question Jeff thank you for that presentation is really uh how would we better understand how an individual's assessment results compare to another candidate so that we can make a better recommendation for a candidate that's that's a great question one that I've received quite a bit from staffing agencies so they've got a result we've got a lot we've been in business for more than 20 years we've got a lot of data on our standard tests we actually have what's called a percentile ranking so you can actually see essentially how discount is stored on this particular set of properties or skills questions compared to everyone else you can present that but this person is of skills uh to the client as well additionally very common for our our clients to Simply compare the candidates to each other as as they're a couple different ways we can look at globally or we can ensure that they've got a top quartile percentile of skills where we can also compare them uh to other candidates for the same job in the same pool thank you Jeff can you talk a little bit about what it's like to work with e-skill uh how they would work with their client success manager as compared to many assessment firms out there who simply sort of put you in a queue yeah yeah so at Esco we've developed we're starting um essentially our own Staffing division within you know with the intent that we're going to focus on what serves staffing agencies best and and so what we've done is we've we've got number one an onboarding program uh so with e-skill you've got the ability uh to hit the ground run so we've put together test libraries for the most common verticals within uh Staffing so call center admin clerical skilled trades will have test libraries available ready to use for for you to uh to go from day one so we understand that speed is important for Staffing we have that ready we've kind of done the research on what's most popular what's most applicable to these so from kind of an onboarding standpoint where we're ready to serve we've also got committed caring when it comes to our client success managers so as you have questions if you're looking at an integration things of that nature we are here to help and and uh it's not an automated chatbot uh we're here for you uh we we have uh best practices that we've gleaned uh from other clients as as well so we can share when when appropriate um so overall you know Staffing is something that's that's very important uh to e-skill we've got our own model uh for as well we're part of Asa and uh we're we're here to make the Staffing World better so can you talk about uh just an example of when a staffing agency uh sort of the kinds of placements they were getting before using e-skills skills tests and assessments and then the experience after yeah yeah well I I can think of is specifically in in accounting um and and so what people could do is they can look at you know or they might have had a paper pencil based test that in basic accounting for example what you can do with e-skill we do have questions on Facebook and basic accounting but we've also got uh assessments for things like QuickBooks and the software that they'll be using so essentially if we can when we have more skills that are all kinds of things of the job that quality of higher that way up that that placement rate they're able to place 30 percent more uh in into those type of positions as they started using a more all-encompassing well-rounded uh skills testing package compared to kind of their their your legacy uh test that a client may have had or just kind of you know basic math that's one thing that that we see quite a bit in just outside that accounting example kind of the the legacy of testing is people will will look at things like basic math skills uh as as a as a measure of General mental ability people will look at typing speed as as a measure of of overall computer skills and while that that can work with skills we can get really impressive so we can we can definitely look at your uh aptitude and capability we can look at you I don't have people that we have some reasoning tests but we can also get really really specific and and so when you can get specific when you get those verified skills that quality of hire uh almost always goes up and the process is almost always better both the recruiter and the candidates as well so the the test uh experience is a lot different than having to go into an office and take a paper pencil based test that needs to be scheduled that's the recruiter's times as well now you can send out a test uh that's validated that's secure they can take on their own time and their recruiters get the results back right away additionally our our tests are a lot more engaging a lot more uh candidate friendly uh so to speak than your your typical uh paper pencil-based test as well and Jeff how quickly can a staffing agency get up and running with e-skills skills tests and assessments sure typically it's going to be the same day um as soon as an agreement uh is signed we can typically have them up and running on on the same day if not within 24 hours and how long does the training take yeah good question so the the the training is is maybe 20 minutes uh initially to to get you kind of through the system there's a lot of configurations well within e-skills some of those are optional some of those you may want to work in in down the road but I think a lot of the training is is showing people hey here's some some optimized workflows that that might work for you we can for example automate where uh results reports are are sent and maybe people don't want that automation but we certainly can can do that we can set up a multiple assessment hurdle uh uh program as well so if you want to have people take multiple assessments at a time very easy to do uh within the system and then uh the system is is intuitive enough uh that that really that the training is is more around best practices um and tips and tricks because the spending an assessment looking at results is fairly straightforward but we're always happy to help with that as well and what are some examples of the common types of configurations that staffing agencies make with the e-scale platform sure yeah a couple different ones that that I've seen pop up over the years we've got the ability to change a little bit over Kobe but I know a lot of staffing agencies do tests on site yet people come on on board uh we've got the ability if you have testing computers for example we can actually set up links so someone can just walk right into your testing lab or or or testing computer enter their name and start testing right away uh so that's that's a fairly common workflow changed a little bit during covet but we can definitely uh have that up uh and going for you we can also look at where um assessment results are sent uh you do have the ability also to essentially configure our assessment Library put together a test that's appropriate so a common workflow for that might be but you actually have a client who had very specific uh needs very specific questions they wanted to ask you could actually put that to assessment together with them name that assessment for a particular client it really gives a face validity based value uh for that as on to the testing process knowing that it's associated with the clients so those are some of those thank you Jeff and what are some of the most common ATS platforms that e-skill integrates with so we do have standard Integrations great and if anyone on the webinar is interested in learning more and connecting with you how would they do that Ken um uh contact eskill directly you can also email me uh Jeff jff schnicker sch-n-i-t-k-e-r at eskill.com uh always happy to to help and chat with anyone about Staffing great well thank you everyone for your time today on this quick webinar it really is a powerful tool that you can use to increase revenue for your staffing agency have a great day
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