How Recruitment Leaders Can Improve Sales Forecasting Accuracy
When Directors of a recruitment company are planning for growth they need to know two things.
- What is the company is going to invoice in the next 90 days.
- What cash are we due to collect in the next 30, 60 and 90 days.
Yes, this is obvious. But many recruitment companies struggle to accurately forecast placements, invoicing and cash flow.
Accurate forecasting is important because it drives so many decisions. It dictates the tone with which you run your business; Are we growing headcount? Are you shouting or smiling about performance?
From a Billing Manager’s perspective, forecasting is just as important. Understanding what placements you will make this month and next is key to managing team performance and the executive team’s expectations.
Why Do Recruitment Leaders Find Forecasting Difficult?
One of the problems is in a fast moving recruitment company is that managers and directors don’t have any visibility into leads and vacancies that are active.
Opportunities are often hidden in spreadsheets or even in your CRM. Getting information on the jobs you’re working, the stage they are at and the likelihood of them closing is really hard.
Nurtureit helps prevent these problems by helping recruiters display their leads, vacancies and placements on three simple tabs. The ease of data entry and updating of progress means recruiters actually use Nurtureit and in turn managers get ready access to value of the pipeline at each stage.
Any manager can instantly see the pipeline for any member of their team.
The uncertainty of Conversion:
There is uncertainty about what will and won’t convert it to a fee. I regularly hear directors saying :
“My managers are not challenging recruiters enough in terms of ‘how likely’ any particular deal is to convert into a fee.”
Human brains are wired for ‘positive bias’ which means we are always looking for the reasons that things are going to turn out right. Recruiters are no different. Managers need to be able to challenge recruiters to determine how likely is something going to be able to come off.
Nurtureit helps both recruiters and managers have higher quality conversations about which deals are likely to close in the coming weeks and months. Our prioritisation system encourages recruiters to assess and score how much client commitment they have – and how hard a role will be to fill. This provides both recruiters and managers more certainty in their forecast.
Are you sure you’re going to place it this month?
Different Time Horizons:
Recruiters minds work on a different time horizon to managers.
A recruiter’s time horizon is likely to be the next 30 days. This means they’re focusing on the jobs they’re working now and will convert this month.
A director’s is thinking 60, 90 or 120 days ahead. So they’re not just interested in what jobs we’ve got today – they’re interested in the jobs we’re going to get next month and the month after. This means the ability to manage leads is absolutely key. But most CRMs are dreadful at helping consultants manage leads.
Recruiters using Nurtureit are able to see the value and size of their whole pipeline using our dashboard features. This also helps managers have more productive conversations focused on performance 60 to 90 days ahead by talking actively about volume and quality of leads in a recruiters pipeline.
See the shape of your whole team’s pipeline
Poor Prioritisation of Effort:
Consultants are typically poor at qualifying jobs. For most recruiters; Working a ‘Z Grade’ job is preferable to business development activity.
When recruiters don’t qualify or prioritize their vacancies then too little of their effort converts into fees (low fill ratios). Managers need to be able to be able to challenge recruiters to ensure they’re putting the right effort into the right vacancies.
Nurtureit makes it easy for recruiters to prioritise effort using our ‘effort prioritisation” methodology. Recruiters can grade opportunities on
- How much client commitment do I have and
- How much sourcing effort is involved.
This means the recruiter and manager can prioritise which vacancies receive the most priority.
Should you really be wasting time on this C-Grade ‘opportunity’ ?
Effective 1-2-1 Meetings:
When managers conduct 1-2-1 meetings without accurate pipeline information, it is difficult to make conversations focused. The lack of detail means it Manager can find it difficult to hold the recruiter accountable or provide the level of coaching they need to convert leads to vacancies and vacancies to placements.
Nurtureit lets managers view the pipeline of any recruiter in their team with just 2 clicks.
Importantly they can do this on desktop, tablet or mobile. Whether meetings are held at your desk, in a meeting room or a coffee shop, the manager always has the recruiter’s pipeline to hand.
In summary, accurate forecasting is difficult for every business to achieve, because it requires a blend of accurate data, accessible data and a managers willingness to regularly discuss with the recruiter what opportunities will convert into placements this month and next.
There are no easy answers. Getting systems, consultants and managers to work in sync is always a challenge.
Too many leaders surrender to the challenge and just accept that they have little clarity on what will be happening 60/90 days ahead. Don’t surrender! Take up the challenge to continually improve the accuracy of your forecasting. I hope that some of the areas outlined above will help you focus on areas where your business can improve.
So, What is your plan?
We would love you and your team to start using Nurtureit. It takes no time to get your team up to speed and start improving your forecasting. We’d be delighted to show you how it works and get you started.