The Right Way to Establish Activity Metrics for Producers

I am frequently asked about how to establish activity metrics for recruiters and sales reps.
The easy answer is to respond with the “typical industry averages” for the top five KPIs. For recruiters, that’s Candidates Sourced, Interviewed, Submitted, Client Interviews, Placements. For sales reps, that’s Prospect Touches, Meetings, Job Orders, Client Interviews, and Placements.
But using industry averages is not the best way to establish activity metrics for your producers. In part that’s because they’re based on someone else’s business, not yours.
The best way to determine what’s required of your team is to reverse-engineer the weekly activity needed to meet the required weekly gross profit goal. And individual goals should align with your firm’s overall gross profit goal.
For the purposes of illustration, if your goal is to do $5 million in annual sales and your gross profit is 25% of sales, that’s $1,250,000 in gross profit your producers need to generate.
Take that $1,250,000 and divide it by the current number of producers on your team. That number is what each individual must produce for the goal to be achieved. The individual number may be too high (unrealistic) or too low (you may be overstaffed) which in and of itself is enlightening and helps you plan your internal headcount accordingly.

Now you’ll need to make some assumptions based on historical data, which you can (hopefully) extract from your ATS and CRM.
For recruiting, those are ratios such as the percentage of number of candidates interviewed to achieve the ideal submittal number, which is based on the average number of submittals required to result in a client interview, offer, and placement.
On the sales side you’ll want to review how many meetings it takes your reps to secure a job order…and then determine how many prospects your rep must reach out to every week to achieve the required number of meetings. And so on.
There are many factors that influence a producer’s activity and performance – seasonality being one. It will be easier to get job orders from your clients during their busiest season, potentially easier to fill them, and your gross profit will increase accordingly.

Your goal in establishing weekly activity metrics should simply be to give your producers some benchmarks and then to begin tracking them. You may tweak certain KPIs as you look at your run rate each month and determine whether you are on track to make your annual gross profit goal.
Is the reverse-engineer methodology an exact science? No. But it’s better than using someone else’s numbers, which is equivalent of guessing.

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Bingham Consulting Professionals LLC

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