Recruitment Insights

9 key strategies for recruitment agencies to drive a profit

April 24, 2023
Nine key strategies for recruitment agencies to drive profit

Running a profitable recruitment agency is not easy. From finding ways to differentiate from competitors, managing client and candidate expectations, and maintaining cash flow, it can often feel like a constant uphill battle.

While the challenges of running a recruitment agency will not cease, there are some strategies you can leverage to make life easier, build business resilience, and ensure that you drive a profit.

In this blog, we’ll cover nine strategies to help your recruitment agency drive a profit. Whether you’re a seasoned veteran or getting started, these tips and tricks will help you maintain resilience in the face of challenges, attract top talent, and grow your bottom line.

1. Reduce your reactiveness to market trends

Recruitment agencies need to stop the all-or-nothing mentality if they are to drive profits. For example, many businesses respond to market downturns by firing a significant portion of their workforce and then hiring again when needed. Instead, you need a more constructive approach to market changes. Yes, you might have to let some people go when things change, but you should retain staff where possible to ensure a more resilient business in the long term.

2. Focus on supporting your recruiters

Recruitment agencies must invest in their recruiters to drive profitability, as they are the backbone of your business. Where possible, improve recruiters’ systems and processes, such as learning management, to ensure they have the latest techniques and tools. You should also encourage professional growth to ensure your recruiters have the skills to deliver the best results for the company and drive profits.

3. Leverage automation to drive process improvements

Automation can improve the candidate experience, reduce manual workload, and free up time for more personal interactions with candidates and clients. Automation tools like AI-powered chatbots can provide 24/7 support to candidates, answering frequently asked questions and guiding them through the application process. Moreover, automation can take away manual tasks such as resume screening and interview scheduling, leaving recruiters more time to focus on building relationships through human interactions.

4. Rethink your definition of a good client

A good client treats recruitment as a differentiator and not just a service, recognising the value a top-notch hiring process can bring to their organisation. Such clients understand that a high-quality hiring process can result in better candidate fit, increased productivity, and, ultimately, better business outcomes. They will pay your fees without debate, recognising the time and effort to deliver quality candidates. Working with clients who value your work can increase profitability and success.

5. Become a consultative recruiter

Becoming a consultative recruiter enables you to build credible client relationships and position your business as a trusted advisor rather than a mere vendor. You can maintain long-term client relationships, leading to repeat business and increased profits. Additionally, consultative recruiters can offer valuable insights into market trends, best practices, and emerging technologies, helping clients stay ahead of the curve in their industry. By positioning your business as an expert in the field, you can differentiate your business from the competition and create a competitive advantage.

6. Calculate the cost of seat

Recruitment agencies must know their cost of seat to maintain profits, meaning you must know the cost of having a recruiter working for the agency, including their salary, benefits, and other associated costs. By understanding this cost, you can better evaluate the return on investment for each recruiter. You can calculate seat cost by considering the recruiter’s salary, benefits, overhead costs, and revenue generated by the recruiter’s placements. This approach can help you optimise profitability, reduce costs, and improve financial performance.

7. Focus on maintaining your margins

You must focus on maintaining margins to ensure long-term financial health. You should coach recruiters on how to push back on pricing negotiations to stabilise profits. Managing debt is also vital to maintaining margins. Focus on eliminating large debts and overdrafts to preserve financial stability. While some debt can be necessary for growth, you should avoid overextending the business and ensure that any debt is manageable and recoverable quickly.

8. Revisit your approach to commissions and benefits

You must revisit commissions and benefits to improve business profits. You should gather the base percentage of total billings to ensure your business earns enough to cover costs and generate a profit. Additionally, if you have a rewards scheme, ensure that rewarded behaviour aligns with the business strategy to drive desired behaviour among recruiters. Such a scheme should reward high performance, incentivising recruiters to excel. It is also best to pay recruiters based on collected fees instead of invoiced fees to prevent your business from relying on owed cash.

9. Build a client nurturing program

A client nurturing program supports your business in staying top-of-mind with clients. Part of your client nurturing program might cover automated processes, like sending out a newsletter, event invitations and other digital marketing initiatives. But it should also include in-person engagements where your recruiters catch up with clients and discuss their needs. A well-designed client nurturing program can help recruitment agencies increase retention rates and generate repeat business, contributing to long-term profitability.


Recruitment agencies must take a holistic approach to business operations to drive profitability and long-term success. You must invest in your recruiters, leverage automation, focus on your clients, and manage your cash flow. By adopting these practices, recruitment agencies can optimise their financial performance and position themselves for long-term growth and success.

APositive specialises in helping recruitment agencies drive a profit

APositive’s specialist payroll team, payroll funding or invoice finance can be the boost that helps you scale your business to focus on its growth. APositive has the experience to help you take on this challenge. We aim to provide recruitment businesses with the tools to grow and thrive.

Our Payroll Funding solution provides access to the money stuck in unpaid invoices. We also deliver a tech-integrated back-office solution with outsourced payroll options to remove the administrative burdens of managing it yourself.

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