#1 Staffing Analytics. 5 Hidden Sales Forecast Killers

Transcription

1 #1 Staffing Analytics 5 Hidden Sales Forecast Killers

2 Contents Introduction Sales Forecasting 101: Getting Started Beware of These 5 Forecast Killers Job Order Age Job Order Value Momentum Stage Client The Next Level of Forecasting and Analysis Hidden Sales Forecast Killers / 2

3 Introduction Staffing and recruiting executives know that the lifeblood of their business lies in their firm s ability to source and place candidates as efficiently as possible. When it comes to hitting their goals and impacting the bottom-line, staffing executives must be able to project a consistent and accurate forecast of how much business they will close during a given selling period. Though the most competitive staffing and recruiting firms use Applicant Tracking Systems (ATS) to collect data and manage their daily sales processes, less than five percent of all businesses are taking advantage of data to make better decisions 1. Most staffing and recruiting firms are missing the mark on a critical competitive advantage when it comes to using data to plan for the future. Staffing firms that want to grow and deliver predictable revenue need to move beyond a model that simply tallies previously closed business, and must instead use their historical and current ATS data to create a more accurate sales forecast that estimates how much business they will close each selling period. This Guidebook covers where to get started with sales forecasting for staffing and recruiting and some common forecast killers to beware of when implementing a datadriven sales forecast. 1 Competing on Analytics: The New Science of Winning, 2007, Thomas H. Davenport, Jeanne G. Harris, Harvard Business School Press 5 Hidden Sales Forecast Killers / 3

4 Chapter 1 Sales Forecasting 101: Getting Started

5 Sales Forecasting 101: Getting Started When it comes to forecasting, the best firms do not rely on their sales reps to tell them how they feel about their open job orders. Traditional forecasting methods like this rely too heavily on the subjectivity of the rep doing the analysis. Instead, staffing executives and sales coaches should rely on data to tell the story. There are some basic variables to consider when building out a forecast that relies on data already stored in your ATS. The first elements to consider and calculate when getting started are: How much new business do we anticipate we will generate this selling period (generally this week, month, or quarter)? What do we currently have in our pipeline that is expected to close? What have we already booked this sales period? Begin your initial data-driven forecast by developing simple benchmarks around win rates and opportunity age, and start to apply a formula to your open job orders on a weekly or monthly basis. Compare this forecast to your sales reps predictions about what business they will close, and you should begin to see that this basic data-driven forecast delivers a more consistent and accurate prediction than your sales reps can estimate based on their gut. If you re interested in learning more about the steps to creating a data-driven sales forecast, read this guide. 5 Hidden Sales Forecast Killers / 5

6 Chapter 2 Beware of These 5 Forecast Killers

7 Beware of These 5 Forecast Killers Once you are forecasting regularly (and meeting with sales reps each week to stress-test their personal forecasts) you can take your forecasting accuracy to the next level by considering some key elements that affect almost every open job order: Age Value Momentum Stage Client 5 Hidden Sales Forecast Killers / 7

8 Forecast Killer #1 Job Order Age Unless your staffing and recruiting firm focuses on longer-term executive searches, chances are that, like most sales cycles, the longer a job order stays open in your system, the less likely it is to close. When analyzing whether a job order will close this sales period, consider how long the job order has been open and compare it to the average age of job orders that you win. In the 2013 Fill Ratios and Time-to-Fill Benchmarking Report co-produced by Staffing Industry Analysts and InsightSquared, the average time-to-fill for contract placements was 46 days and 75 days for permanent placements. For a contract hire firm, for example, a job order that is currently 110 days old (almost 3x the average) and is forecasted to close during this selling period should be closely examined by the sales rep and their manager to tell if it is really a winnable opportunity. When the data suggests otherwise, an open, unwinnable job order like this puts your sales forecast (and your business) at risk for the month or quarter. Action Plan: Set business-specific benchmarks around average job order age (bonus: understand if specific industries you service have shorter or longer time-to-fill cycles) and pressure-test reps on outlying job orders that are forecasted to close in a given selling period. 5 Hidden Sales Forecast Killers / 8

9 Forecast Killer #2 Job Order Value When forecasting properly, consider a job order s value when assessing how likely it is to close. Though there may be many reasons you excel in a filling job orders of a certain value range your team is great at filling reqs for particular positions or industries, for example every staffing firm has a core competency, and some job orders of similar composition and value will have higher likelihoods of closing. Use your ATS data to determine what your optimal strike zone is for job order value. Group your job orders by value to understand where your sweet spot is. This way, when sales reps report positively about a high value job order they re hoping to fill this month, you will know how likely you are based on historical data, to fill a job order like this. Action Plan Compare win rates by value for average value, larger and smaller value job orders to start to understand how likely you are to close each value range based on historical data. Then, adjust your forecast based on your past win rates by value to improve your accuracy. 5 Hidden Sales Forecast Killers / 9

10 Forecast Killer #3 Momentum One of the best indicators of how well a job order is progressing is the activity your team is logging against it: how many internal submissions, sendouts, and interviews has it received? How active are both recruiters and sales reps at logging activities against it? In an industry where 57% of candidates who are actively placed are submitted within the first 24 hours of an open job order 2, having a stagnant job order is a huge red flag. When reviewing job orders that are forecasted to close check to see when the last time an employee logged an activity on this job order. If a job has stalled but you are still including it in your monthly bookings forecast, you are likely putting your firm at risk for missing its numbers and should consider removing it from your forecast. Action Plan: Determine what a stalled job order looks like by knowing your average time-to-fill by stage. Have reps quickly reach out to resuscitate these job orders or purge them from your pipeline to remove these liabilities from your forecast. 2 The Ultimate Revenue Roadmap, Bullhorn, Inc., Hidden Sales Forecast Killers / 10

11 Forecast Killer #4 Stage Another major variable that you need to consider is the stage of the job order in your pipeline. Accurate forecasts differentiate early-stage job orders (internal submission) from later-stage job orders (interview) when predicting what business will close in a given selling period. Are you assigning the same likelihood to close to both? Look at historical data in your ATS to see what percentage of open job orders you fill by stage, and make sure you weigh these stages accordingly when considering them in your forecasts. An open job in an early stage is far less likely to close compared to a job order that has sent out candidates to the client and received requests for interviews. Action Plan: Determine your win rate by stage and assign win rate values to each stage in your forecast. This way, you can rely on historical performance to weight your likelihood to close every open job order. 5 Hidden Sales Forecast Killers / 11

12 Forecast Killer #5 Client The final forecast killer you should consider might be less obvious: your clients. Though you may know who your top one or two clients are from a bookings perspective, do you know which of your clients are the most efficient at accepting candidates? In order to know whether a job order you are forecasting to close will do so during a given selling period you should know how efficient the client you are working with is. How many sendouts does this client usually request before they will take an interview? How long do their searches generally take? Are they in an industry, like Healthcare & Life Sciences, that can take between 40 to 100% longer to fill than average? 3 Action Plan: Analyze your time-to-fill by individual client. If you are forecasting to close a job order in 30 days but a particular client generally takes 90 days, update your forecast to reflect this or ask your rep for a quantitative reason that this job order will be different than past data suggests. 3 Staffing Recruitment Metrics Data Analysis: Fill Ratios and Time-to-Fill Statistics, Staffing Industry Analysts, Hidden Sales Forecast Killers / 12

13 The Next Level of Forecasting and Analysis Now that you have a better understanding of which elements can impact a consistent and reliable sales forecast, start small by choosing one to two of the biggest variables in your sales cycle and including them in your weighted forecast. All of the data you need to start making educated and accurate forecasts is already at your fingertips in your ATS. Get started either by downloading and building metrics-based models in spreadsheets or by considering an ATS analytics tool to pivot in and analyze data more easily. After implementing and customizing your forecasts based on your own historical data, your firm will begin to see the benefits of a data-driven forecast: fewer surprises, more consistent and predictable results, and ultimately increased revenue from insightful forecast analysis. 5 Hidden Sales Forecast Killers / 13

14 #1 for Staffing Analytics About InsightSquared InsightSquared is the #1 Analytics product for Staffing & Recruiting firms. Unlike legacy Business Intelligence platforms, InsightSquared can be deployed affordably in less than a day and comes preloaded with reports that staffing and recruiting firms need. Hundreds of companies and thousands of users around the world use InsightSquared s award-winning analytics to maximize sales performance, increase team productivity and close more business. 10 Must-Ask Performance Questions for Staffing and Recruiting