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Dan Mori, Managing Partner for Staffing Mastery, Reveals 5 Simple Dashboards That Can Set Your Agency Up for Success
157 Plays2 years ago
Business analytics is essential for modern agencies to make better informed, data-driven decisions. But many staffing leaders are using overly complex dashboards that don’t deliver clear direction, nor do they have time to review all the data available to them. In this episode of Avionté Digital Edge, Christopher Ryan, Chief Marketing & Strategy Officer at Avionté, sits down with Dan Mori, Managing Partner at Staffing Mastery, to talk about 5 of his favorite dashboards that can cut through the complexity to help your recruiting agency focus on what matters most.
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Transcript
The Role of Data in Staffing Agencies
00:00:00
Speaker
If you run a staffing agency, you live in a sea of data. You use analytics to manage every part of your business, your sales activity, your recruiting, your talent reliability and retention. You can look at payroll, receivables, cash flow, gross margins. You can spend a fortune on analysis. But most agency executives don't have time to review all the data available to them today.
00:00:27
Speaker
Is there a way to attack this complexity? Let's find out.
Introduction to Dan Morey and Key Topics
00:00:31
Speaker
In today's podcast, My Five Favorite Dashboards, we talk with staffing expert Dan Morey on how to keep your staffing and recruiting agency focused on the activities that matter most.
00:00:47
Speaker
Welcome to the Aviante Digital Edge, a podcast series that explores the digital transformation of staffing and temporary employment. My name is Chris Ryan, and I'm the chief strategy and marketing officer for Aviante. The title of our session today is My Five Favorite Dashboards, and that pretty much tells the story. We have a very special guest with us, Dan Morey, to talk about one of my favorite topics, staffing analytics and reporting.
00:01:14
Speaker
and how to maximize the impact in the way we use and manage data. Dan brings us a very interesting perspective to staffing.
Dan Morey's Success Story with Data-Driven Leadership
00:01:24
Speaker
He spent 16 years of his career building and operating his own recruiting agency. And his journey began with a single office startup. But he ultimately grew his company to have a national footprint in the recruiting space. Now Dan attributes much of his success to a very specific approach to the way he leads and manages people.
00:01:46
Speaker
aided through the smart use of technology, data analytics, and dashboards. Dan was so successful he launched, essentially, a second career as the founder of Staffing Mastery, where he provides executive coaching to staffing leaders with a focus on strategic planning,
00:02:04
Speaker
and strategic execution. Dan is one of the most sought-after leaders in the staffing industry, and we are delighted to have him with us today. So welcome, Dan, and let's get into it a little bit. In talking to you, I realize that you're a little bit of a contradiction. When we've talked in the past, sometimes you'll say, I'm a numbers geek. I love staffing analytics.
00:02:26
Speaker
And then you'll turn around and you'll profess, but I'm just a simple guy. So which is it? Are you a numbers nerd or a simple guy? And is it possible to be both? Oh man, we're going there right out of the gate, huh Chris? For the record, I struggle with maintaining that numbers geek status and being a simple guy every single day. So I think you almost need to be both if you really want to be successful leading an organization in today's day and age.
00:02:52
Speaker
So you're saying it's both that you can live with the contradiction and everyone has to live with it too, huh? I have managed that contradiction personally internally for over a decade now since I've had to actually adopt understanding my numbers and driving business using a dashboard and data versus just driving by feel.
00:03:11
Speaker
If you're out on the racetrack, driving by field is a whole lot of fun, but when you're running a business and there's actually high stakes and livelihoods on the line, you can't leave it to field. So I sort of had to become a numbers geek, but I try to break it down and keep it simple. So speaking of keeping it simple, and I heard you say an old philosophy from the military, clear instruction, clear results, I'm thinking there are literally hundreds of ways to analyze a staffing business.
00:03:37
Speaker
I could go to any website and they'll give me 50 great reports or a hundred great reports. But you favor simplicity.
Importance of Simplicity in Data for Decision-Making
00:03:44
Speaker
Why is simplicity so important?
00:03:46
Speaker
So simplicity is so important for exactly what you just said, clear instruction, clear results. When you are looking at all of the data that exists in the world of staffing, you could come up with countless numbers of reports and you could spend the data, dice it, slice it, any which way you want to tell whatever story that you essentially need to. But at the end of the day, that creates a level of complexity that producers just don't have time for.
00:04:12
Speaker
And you can actually sound super sophisticated and complicated and have all these comprehensive reports. But at the end of the day, if the message isn't simple and actionable, nobody's going to do anything with it. I've been on the producer role where I'm literally confused by what I'm looking at. So I need simplicity. And I truly believe that managers and producers want simplicity in their life because they don't have.
00:04:35
Speaker
the time for anything else. They just need simple clear instructions so they can deliver clear results that are on point with the goal, right?
00:04:43
Speaker
That reminds me of an experience I had once with a client while I was consulting where they were looking at and studying a report. It was complex. It was full of sound and fury. And after a couple of days of looking at it, I think people finally concluded that it really didn't mean anything. If you want to send an executive down a rabbit hole, give them a report, tell them it's important, but perhaps it's not actionable or what can you actually do with the information?
00:05:09
Speaker
That's why I like simplicity because simplicity is often more actionable. Chris, pretend that you are a regional operations manager and it is your responsibility to maintain the performance of a certain region of an organization.
00:05:24
Speaker
And I go to you and I say, Hey, Chris, I analyzed all of this data.
Translating Data into Actionable Steps
00:05:27
Speaker
And I can tell you that for the past two years or year over year, job orders are up 50%. So you actually have twice as many job orders now than you did this time two years ago. And your candidate availability is keeping pace, but your job fill percentage is actually reduced by 25% year over year. And you're really just filling the same quantity of jobs. So your revenue and growth is fairly stagnant. If I tell you all that, that's a lot of data or.
00:05:52
Speaker
I could just say, hey, Chris, you need to hire another recruiter. That's actionable. That's simple. And that's why I like simple because it's actionable. You can move on it. And then you can use all those analytics to measure if it was the right decision or not.
00:06:05
Speaker
So one of the measures of a good dashboard is, what can you do right now, today, to make your business better or more effective? I know a number of staffing agencies that have invested very large amounts of money. Seven figures is possible. Invest a lot of money in software consulting and even have engineers on staff. One of the questions I have is, are we really getting an ROI from this? I mean, how much of this complexity is really needed
00:06:32
Speaker
Or is this more a reflection of simply having a disjointed tech stack? Most people that I've talked to that have built these really comprehensive tech stacks that are like multi software integrations. I feel like the reason that they keep adding something is because of a deficiency with something else.
00:06:50
Speaker
And if it's looking at analytics and data, they'll have this one piece of software that they use for something and they want data and visibility to get insights and be able to take action, but it doesn't deliver that. So then they need this other piece and then those two things talk to each other and then they're like, but it doesn't quite paint the picture. So they add this other thing or this other dashboard and it's all these outside pieces. And honestly, Chris, the thing that makes me the most afraid that the ROI would have to be so outsized just to overcome this fear because I see it happen in software all the time.
00:07:20
Speaker
is that one of your core elements that's part of your stack, they decide to have a fundamental shift in their business, and they change the way that things operate in their piece of software, and it messes up all of your integrations. I look at it like a hose. When a hose is laid out flat, water flows beautifully. But as soon as you kink that hose, it builds up, water stops flowing properly, and if it gets kinked up too long, it could burst.
00:07:43
Speaker
If that happens with our business and the way that business flows through the daily grind, that could be catastrophic. I don't know if building out that type of tech stack ever becomes worth it. And I would have to see a massive ROI just to get past that risk. You have to really measure what is each component getting you like how much value are you really getting out of all of that deep analytics? Yeah, and I haven't admitted bias and it's a commercial bias for end to end staffing platforms and software. But
00:08:10
Speaker
Many staff and companies do have a separate CRM.
00:08:13
Speaker
a separate ATS, separate timekeeping, separate payroll, separate receivables, but whether you can bring it all together, you do need that additional investment to combine the data. Do you ever see where it's more important to buy a new system first rather than investing in the analytics? It depends on what you're going for, right? I would say take a step back and really ask yourself, what is it that I really need from my analytics? It's going to make the world of difference and is the best path
00:08:41
Speaker
getting a system that's maybe more simplistic or end-to-end, like you mentioned, that can deliver that, or is the best path building some sort of comprehensive stack? And I think that's gonna be different for every agency. Me personally, the more complicated you make things, the more maintenance it's gonna take, the more technical savvy it's gonna take. I just think that you're layering on layers of complexity and risk to the organization that are probably unnecessary, because I don't think most people need all of the dashboards that exist out there.
00:09:08
Speaker
So with that said, let's get into
The Purpose of Dashboards in Staffing
00:09:11
Speaker
it then. Let's talk about your five favorite dashboards. And to be clear, I'm sure you've got more than five, but I think five is a good number. Five is probably what you can handle on an actionable basis in a given week. What are the dashboards you're looking at? What's number one?
00:09:27
Speaker
So before I jump into number one, I think it's important to put a disclaimer and maybe this is me being a bit of a contrarian or a walking contradiction, but most people will look at all of the available data they have and then they'll try to figure out what's the best way to visualize that. And then once they visualize it, they'll try to figure out what is this telling me? When I look at a dashboard, really all a dashboard is, is it's just, it's
00:09:50
Speaker
data that's telling a story. But if I take a step back, why do I even need it? And that's the question that I always ask. And when it comes down to it, Chris, management of a staffing business at any level, even if you're just a producer on a desk, you have to make decisions every single day. And to make those decisions, you need information. So when I'm setting up my dashboard, all I do
00:10:10
Speaker
is I just ask myself, what are the three to five most important decisions that I need to make in my role to support my strategic initiatives? And then from there, I say, what is the information or the data that I would analyze to best prepare me to make that decision?
00:10:27
Speaker
And then what is the data I would need to analyze to know if that decision was a good outcome? So that's really all a dashboard really is. It should trigger an activity and then give you the ability to measure the triggered action to see how well you're doing with it. So know your decisions first, then figure out the analytics needed to support the decision, not the reverse.
00:10:49
Speaker
Absolutely. Absolutely. Because that's all a dashboard really is. It should trigger an activity and allow you to measure the triggered activity to see if it was the right choice or not. So you can course correct. So I say all that because I've seen this too many times where I say, hey, these are my dashboards or these are my KPIs and people that don't really have a set dashboard or KPIs, they just try to copy and paste.
00:11:08
Speaker
And that's the wrong approach. So if you're out there and you're listening to this, just take a step back and say what decisions are most essential in my business on a daily basis for my role and which ones do I actually focus on more frequently. And that should set the stage for the five dashboards that are most important to you.
Client Growth Dashboard Analysis
00:11:24
Speaker
So one of my favorite dashboards, I actually use it as a four square, but it's essentially using average hours or utilization, average billable hours per week, cross-sected with gross margin per hour.
00:11:37
Speaker
And if I look at this and I quickly map out my clients this way, it will tell me which clients I need to focus on growing in a certain direction. And here's why. And this is the biggest one. And most people I don't think truly appreciate the gravity of this. Agencies don't have infinite resources.
00:11:55
Speaker
Most agencies, especially the ones that are in my orbit, they have finite resources. They have finite capital. They have finite number of recruiters or producers internally. They have a finite number of candidates that they can supply to their clients, right? All those things have limits. And if you want to run a healthy, profitable organization, you need to make sure that all of your resources are going to the best place.
00:12:17
Speaker
which are going to be your clients that have higher margins and higher levels of utilization. And if anyone segments their client base by this, just using the average hours and gross profit tools that you can find in insights or BI tools out there, you'll most likely be shocked that you're going to have some clients in there that you think are amazing clients that fall in the lower than average margin and the lower than average utilization quadrant. It's actually over consuming your resources and you're not getting the return on it.
00:12:43
Speaker
I'm curious about that. You find a client or an agency that has a squeaky client and that squeaky client is taking up all their energy, but then they do an analysis and they discover we're not making any money on this squeaky client. You either fire the client or you figure out how to transform them in some way.
00:13:02
Speaker
So that's the point right there. So if I see a client that falls in that category, I know one of two outcomes has to take place. I either have to raise their rate to get them up above the average gross margin per hour, or I have to increase their utilization to get them into an acceptable high utilization, low margin quadrant. Any one of those three are kind of acceptable, but consuming resources and basically consuming the time of your producers to serve clients that are paying you lower than average margin and lower than average utilization, it's cruel.
00:13:32
Speaker
That report could also reinforce your leverage in a negotiation or your willingness to negotiate hard.
00:13:38
Speaker
That's a wonderful first example of a way of managing to a business. And that's something that you would run on a fairly ongoing basis. I do. So we typically encourage running it on a quarterly basis. However, as a mandatory practice, run it annually to see where everything plots out. Because when you have this data, it sets up something that we call the client growth plan. So you can actually, again, make a decision. SDR, business development rep, whoever, account manager, here's a list of clients that we need to raise their rates and here's the rates we need to take them to.
00:14:08
Speaker
Or here's a list of clients that we need to get more business out of them. We need to expand into their business and increase our headcount there. It's clear, actionable insights that you can give your people. So that sets up one of our literally strategic annual plans when we do this annually. But we do check it quarterly to make sure we're making progress. Got it. So second dashboard.
Revenue and Activity Dashboard for Growth Planning
00:14:26
Speaker
Second dashboard, standard theme of revenues. I'm focused on growth, strategic growth, business development as a passion of mine. One of the things I look at, it's a tool I use called a sales activity tracker, but the dashboard that it supports is essentially your revenue and activity. So what I want to do, when I'm actually coaching clients or even planning out my own strategic plan, what I look at is how do I plot growth?
00:14:49
Speaker
How many clients do I need to add to hit my revenue targets? And if you're thinking about for a staffing agency that has staffing payroll, and you can do this on the placement side as well, it works the same way, but the placement and a billable hour is your, essentially that's your most granular unit of growth.
00:15:07
Speaker
And it's ultimately a worker or a headcount or talent is a collection of billable hours and a client is a collection of headcount or talent. So I look at how many clients do I need to add in order to hit my revenue goals. So through this, I'm looking at a dashboard. It will automatically tell me through tracking all of the sales behaviors week in and week out.
00:15:27
Speaker
how many touches it takes to get to a meeting, how many meetings it takes to get to a proposal, how many proposals it takes to get a signed contract, and how many signed contracts it takes to turn into a billing client. If we're tracking all that data, pulling it out of the system, it just pops up on a dashboard. It will tell me, this is how many resources go into getting a billable client. So if I need to acquire 100 billable clients, this is the time and resources that it's gonna take to get me there. So it helps me make the right decisions to plan.
00:15:55
Speaker
And what's really cool about that dashboard because it's dynamic and you're pulling the data in weekly, you can start to tell, am I on track with that goal? Or are my yields, my conversion rates dipping and putting me at risk of not hitting my financial targets so I can make the necessary adjustments throughout the year to stay on track? So revenue and activity is a really important dashboard for me if you want to plan and make sure you're hitting your financial targets.
00:16:19
Speaker
And I'm curious about this particular one. Presumably you could be out of balance where you have a revenue target, but you don't have enough recruiters to fulfill the revenue target. Talk to me a little about that. Have you had a client who has said, this is my plan. And then you say, great, you invested all this money in sales, but you're under clubbed with your recruiting engine.
00:16:41
Speaker
We do. So we actually look at that. I literally just went through this exercise with a client earlier today where we actually talked about historic fill percentages, access to job orders and all of that stuff. And the salespeople, they were killing it. They were bringing in a lot of orders and it was evident based on how much opportunity the agency actually had.
00:17:00
Speaker
But they noticed that their fill percentage was actually declining over the last two years. And when we did a deep dive analysis on this, we recognized that the issue wasn't a lack of candidates like they had thought. And they kept throwing money at recruiting more candidates and putting more people in the pipeline. But when you looked at the data, it had plenty of job opportunities. It had plenty of candidates.
00:17:21
Speaker
The constraint was the number of recruiters producing in the office. They just couldn't process people through enough to fill the orders. So what they recognized is there was so much available business on the board that it was actually costing them more money to not hire a new recruiter. Like we've been sitting here letting this opportunity cost just evaporate, growing more money at recruitment marketing, and they're not even capitalizing because they didn't identify the constraint.
00:17:45
Speaker
And again, data insights and dashboards will tell you that stuff before you get two years in and throw a lot of money out the window. One of the art of management is always to identify the most important constraint to attack next. So I see that as part of your philosophy and the way you're approaching your numbers. So let's talk about the third dashboard.
Staff Development and Training Opportunities
00:18:06
Speaker
I'm gonna stay on the sales trend for a second because with that sales activity tracker, we're pulling all of that same data. Another decision that has to get made, if you're gonna run a healthy organization that's gonna grow, the only way that you grow your organization is through the growth of your people. That's just plain and simple. That's just the way that it is. So when we're tracking all of those same exact conversion data points that I was mentioning to you, if you actually use your sales stats and per sales rep, you'll start to see if people are progressing with their conversion. So if you see that they're,
00:18:36
Speaker
cold calls are converting higher or their emails are converting higher or maybe they're actually getting more proposals after a sales meeting and that conversion from meetings to sales proposals is actually going up. That's how you want it to be going. However, it could go the other way. You might look at this quarter over quarter when you're doing your performance management with people and say, hey, I noticed that SDR John was converting 50% of his meetings into a proposal, but all of a sudden Q3, it dropped down to 30%. Something happened there.
00:19:05
Speaker
And as a manager, you want to know, is there a market condition going on? Has the pricing shifted and we need to adjust our pricing model? Is that the decision we have to make? Or does John need some reinforcement in the sales meeting training? Does he need to be coached up a little? So I actually really like to use that data for that to help make the decision. Is there an opportunity for training and development to improve my staff, to improve the results?
00:19:28
Speaker
And if we can improve the results, if we can focus on improving the little yield all the way through that process, it takes us less resources to get a client. The lower the resource consumption in a client means more money we can pay our people and the more competitive we can be on our pricing, which in turn allows us to get more business. So I actually pull a lot of information out of that dashboard right there.
00:19:49
Speaker
I'm curious about if you were to plot the tenure of a salesperson versus their conversion rate, presumably conversion rates should go up with tenure. The more experienced you are as a sales rep, the more likely you are to convert and close business. Do you ever find that you're looking at an experienced group of salespeople and their conversion rate is going down and when that happens, what is a potential cause of it?
00:20:12
Speaker
Yes, that is a great question. And believe it or not, it is not a natural progression up. There's actually a very interesting progression curve that you'll follow in new salespeople. They actually progress pretty quickly initially. They often hit a plateau, usually in the six to nine months, six to 12 months range. A lot of times they'll actually dip back down and then with proper training support, performance management, we can actually get those yields back up. A lot of the reason why is when brand new salespeople are first at this, they're more inquisitive.
00:20:42
Speaker
Right. They're more curious. So they ask more questions, which is the best way to sell. Once they get a few client contracts on their belt, once they think that they actually understand the game of staffing sales, what will happen is they'll start to prematurely present information, not fully understand the client, not fully listen. They'll start jumping to conclusions. And when that happens, the client can tell.
00:21:06
Speaker
And then you've got to coach them through that. So that's a very obvious first hurdle that you got to identify. But what's really cool is you don't want to start coaching that too early. You want to ride that curiosity curve as long as you possibly can. So having that dashboard, knowing where those yields are will tell you when's the right time to jump in. That being said, if you fast forward to the actual more experienced, more tenured people that really should have it, worst case, a flat stagnation with their development because they're maybe topped out, but a little bit upwards as they're always kind of honing their craft.
00:21:34
Speaker
You can see them go backwards because everybody, every human being gets complacent. Every human being gets used to just going through the motions. And when we do that, when we get complacent and we just go through the motions, the market is not complacent. The market is shifting. There's new marketing techniques coming out. There's new pricing stressors that are going on. So as a salesperson, you always have to be paying attention to that and never lose that initial curiosity and that desire to diagnose before you offer a prognosis with your sales efforts.
00:22:03
Speaker
It's almost fascinated me how early success in sales can ultimately make it difficult for you to succeed longer term. So let's talk about the fourth dashboard.
00:22:15
Speaker
Yeah, so knowing that I didn't want to stay completely on the sales side, even though that's my passion, I did want to talk about
Managing Talent Pipeline Efficiency
00:22:21
Speaker
a couple of ones. When I'm working a desk or I'm thinking about managing operations, I like to see talent progression. Really, I want to see a dashboard to see where is talent in the pipeline. And I use this for two primary ways. One, as I mentioned before, going back to growth, we have dashboards that will tell us if we're on track with our target headcount KPI.
00:22:40
Speaker
We'll say, Hey, this is where we're supposed to be at this given week of the year, based on our plan. Are we there or are we not? I was actually in a coaching session not long ago, doing a quarterly review and the company was off headcount by just a little bit. When we got to that point, the first thing you want to look at is, is it just a weird week? Is the pipeline just clogged somewhere and it's going to pop and you're going to be right back on track.
00:23:01
Speaker
And that was the case. We just looked at the talent progression dashboard. We're off pace by 15, but we actually have 18 people that are slated to start here in the next two weeks. And once this comes to fruition, we're going to be right back on track. And then you want to look a little bit further upstream and say, but do we have enough talent coming through the pipeline to actually backfill that? Cause there's going to be attrition in this business. And that's a great way to use that dashboard just to see before you panic, because sometimes executive will say,
00:23:26
Speaker
Oh my gosh, we're not where we're supposed to be. Let's just blow everything up and do something. But take a step back, look at your talent progression pipeline. And it could literally just hit next week. You could literally be like one week of everything being fine. That's one way that I use it. The other way is you don't want to let talent sit in the pipeline too long.
00:23:44
Speaker
You want to be one of the agencies that emerges a dominant agency in this industry. You need to get people through your entire talent pipeline as quick as possible. That's applications onboarding. All of that has to be streamlined. And if you're looking at this and you can actually measure the number of days that a candidate stays in each status of the pipeline, as well as the reason that they actually leak out, as I call it, or they don't convert to the next stage, then you can decide what actions to take next.
00:24:09
Speaker
Do I need to streamline something? Do I need to eliminate a part of my application process? Where am I losing candidates? And that's why I really like that dashboard to be able to tell me what's coming down the pike and my staying on track and then where can I optimize my process to continually grow.
00:24:24
Speaker
Yeah, it's interesting to me because it seems that talent pipeline efficiency is very closely correlated to transaction time. You can look at the total end-to-end time of talent going through the funnel and you can look at the conversion efficiency of talent. How many bodies did you bring in? How do you convert to actual revenue producing units? And presumably there's a strong correlation between the two. Yeah.
00:24:46
Speaker
Absolutely. Especially the most recent stat I heard was that shelf life of talent is 18 days right now. So that's huge. That's 18 days, clock start, clock end. And you don't want to consume too much of that 18 days if you're trying to get that talent in the door at one of your clients, right? Because your client's going to take time and that time is a whole lot harder to control than your pipeline process.
00:25:07
Speaker
And then on the flip side, the other interesting piece of data that I heard out of that same study was that applications need to be four minutes or less. You have to be able to get someone applied and in your system and every minute beyond four, you lose 50% of your pipeline. So if they aren't hitting the send button within the first four minutes, you may have lost them. That's right. They're hitting the eject button. Wow. So fifth dashboard.
Tracking Net New Headcount for Growth Targets
00:25:31
Speaker
This one is just super simple. So obviously we talk about growth and plotting that trajectory. And it's all about head count growth. This is, if you're in the staffing business, this could also be in the placement. I know that not everyone does just staffing. Some people do per placement. Same concept applies, but I use this for the staffing side of this. I actually use placement starts ends, right? Because I know when I plan my entire year out, I know what my net new head count needs to be.
00:25:59
Speaker
I got to give you a shout out here. You guys actually introduced something that literally does one extra step of math for me. I was actually just doing placement starts and ends to give me that net number so I can see if I'm on track or not. And you guys actually simplified it even more. You came out with the Delta. So it just does that little piece for me so I can see what is the Delta. And as long as the Delta is aligned with my target number of net new ads per week,
00:26:21
Speaker
I'm in good shape. And if it's not there, then I need to start asking questions or looking at the talent pipeline piece to say, hey, is it going to be catching up here? Is there some other issue that needs to be addressed? So that's just core. Am I on track or do I need to recalculate?
00:26:35
Speaker
Let's talk a little bit about how metrics might change when you're operating in a different vertical industry. There are a lot of different variations in the healthcare recruiting business, whether you're talking about per diem, Locum Tenens, how do metrics change? Sure. The big thing to really call out here goes back to my approach of asking yourself the decisions that you need to make first, because really that's what's going to change it. It's the decisions that you might need to make if you're doing Locum Tenens or
00:27:03
Speaker
if you're doing IT, direct placement, like it's the decisions that you need to make in your particular role that's going to determine which metrics that you should be identifying. That's the big thing. Now, if you're talking about specifically W2 versus per placement or direct recruiting, I would say the metrics that change in that regard is if you're working with a company that is primarily direct recruiting or maybe exclusively direct recruiting, they're not going to care about headcount as much.
00:27:29
Speaker
And they might not even care about billing clients as much as a meaningful metric. They might not even care about all the sales activity data that I mentioned. Those would not apply to that type of a business. But if I was actually looking at that, I'm going to understand that direct placement becomes very transactional. So how many orders am I getting per client per year? What's my average placement fee? What's my bill back, my refund, my replacement rates?
00:27:54
Speaker
Those are the metrics that are going to matter the most because those are the things that are going to tell me that I need to make a decision to change something or improve something to make sure that I optimize the revenue. So I think that's really the way that you look at it, but it's going to come back to what information do you need to support the decisions that you need to make to achieve your objectives?
00:28:10
Speaker
So Dan, one of the lessons I learned from experience is that dashboards can be pretty useless or problematic if a business doesn't adopt or integrate them into their daily management practice. From your standpoint, how do you actually use dashboards to create a culture of continuous improvement in your agency?
00:28:30
Speaker
So Chris, you're going to appreciate the simplicity of this. First and foremost, I completely agree with you that dashboards are useless if you don't integrate them into the daily management. And if at the root of it, what daily management is, is it's problem solving. If you're a manager, it's just identifying the constraint or the problem that's facing your business or your producers or your people now. And how do you solve that? So what decisions do you need to make?
00:28:54
Speaker
The first thing we would do if we want to align it with continuous improvement is we're going to actually define what improvement looks like and actually define the areas that we want to improve and be intentional about that. And then we're going to define what are the decisions that we're going to have to make along that journey to be improving, not only just in the daily operations, meaning, Hey, I have this job. If I'm a producer sitting on a desk and I'm trying to fill these orders, they might have to make decisions like.
00:29:18
Speaker
Should I repost ads? Should I post other ads? Should I do my AB rotation on job ads? Should I try a different job board based on candidate flow? Managers might have to think, do I need to hire somebody? You know, little things like that, or do I need to invest in a different recruiting resource? Do I need to change my onboarding strategy? Whatever it might be, they got to make all these little decisions and you just identify what the most essential decisions are. Align that to the dashboard and then you have to teach your people how to read the dashboard to know what decision to make.
00:29:46
Speaker
You have to build this in. And one of the techniques that I utilize when teaching this is you teach people the questions that you need to ask because a lot of times dashboard is clear and I'll tell you what decision to make, but sometimes you actually need to investigate a little bit further. So let's go with the headcount thing. We talked about that earlier with my Delta that I thought was a slick addition that you guys added with that right there. If I'm talking to a client, I'm like, Hey, our headcount's not where it needs to be.
00:30:10
Speaker
The first question that you have to ask and you train your managers this process. And if you need to map it out like a flow tree, you can do that. But the first question you ask is why, why is our head count not where it needs to be? And generally speaking, that answer is going to fall in one of three buckets.
00:30:26
Speaker
Do we have orders? Yes, we have orders or no, we don't. If we have enough orders, are they good orders, right? Do we actually have the good orders that are actually worth filling? Sometimes you have all the orders in the world, but they're just not good orders because maybe the market has shifted. Maybe the clients are putting in pay rates that are not reasonable. Maybe there's geographic constrictions that are limiting your talent force.
00:30:46
Speaker
Whatever it might be, there might be a litany of reasons that it's not a good order and the recruiter needs to actually educate the salespeople or if it's an account manager full desk, they got to do it themselves to go back and try to improve the order. On the flip side, it might simply be that we're not getting enough candidates. And I try to defy that third bucket into it's either a recruiting issue or recruiter issue. Recruiting is your resources, your techniques, the things that you're actually doing to drive talent through your pipeline.
00:31:12
Speaker
Are there even enough candidates coming through that talent progression pipeline to fill these orders to get our head count where they need to be or not? And then the third one is a recruiter issue. Does a recruiter need to be trained? Do they need to actually learn how to optimize job ads and learn the appropriate number of keywords that you should be putting into the job ad to optimize it for the search mechanism or the algorithm that like Indeed and Monster and all these job boards have or
00:31:35
Speaker
Do you just need to add another recruiter, right? So what we do is that's the technique. You basically understand the dashboard is only going to create a decision point. How do you make that decision? And then you just teach people that decision tree to figure out so you can get to it as quickly as possible, make the decision. And then the last piece on that one right there is how do we measure that decision to make sure it was the right one?
00:31:53
Speaker
So what I hear you saying with staffing is if you want to teach people how to use a dashboard, don't show them the numbers first. Show them the questions. What are the questions? What are the decisions? What is the flow? Then you go and look at the instrumentation you need, and then you figure out how to read it. So it sounds like change management and education have a very non-quantitative component.
00:32:19
Speaker
Absolutely. So Dan, let's talk a little bit about the future of metrics. I've talked a great deal about calculating the lifetime value of acquired talent. The talent that you are acquiring has only so much value to you. And there is a cost of acquisition and presumably however much gross margin is being generated by that talent, you shouldn't be spending more money to find that talent than the return you're getting from them.
00:32:45
Speaker
I often talk about an LTV to CAC or something like that. I'm curious, from your standpoint with the way you see digital talent platforms and placement platforms going forward, do you see this as a valuable measure? Are there other metrics that you think might come into play five or 10 years
Future Metrics for Staffing Agencies
00:33:04
Speaker
from now? Are we going to be using different metrics than we are today?
00:33:07
Speaker
I imagine we probably will be using slightly different metrics and I think there's two questions in there and not fundamentally because there's going to be different decisions, but we might have to decide on a path forward that might not exist right now or might not be prevalent. Just as an example, we know that the gig economy is disruptive. We know that the platform space is disruptive.
00:33:28
Speaker
the future of work is probably going to be impacted by that somewhat. So we might have to actually look at the way we deploy talent differently. Therefore, we might have to look at the way that we nurture our audience or nurture our database differently to make sure that we're staying in check with them so we can deploy people quicker. You'll have to make different decisions based on how do we get people into the platform? How do we deploy them across different clients, different shifts, different locations, whatever that might be. So there are different metrics that you're going to have to look at.
00:33:57
Speaker
And it's going to be rooted in the decisions we have to make based on where the future of staffing goes. But he brought a good point about the lifetime value of talent. And I don't want to sound callous or cold hearted, but if you think about staffing, the people are our inventory.
00:34:12
Speaker
Right. And if you look at the great practices of retail that actually are widely popular, they understand the value of inventory and they would never sit on cold stock. Yet in the staffing industry, we just let candidates just sit in our database all the time that we paid to get in there. And what happens is all of the cost of unutilized talent or non-deployed talent that sits in our database gets added to the cost to acquire the talent that gets placed.
00:34:39
Speaker
So I think if you actually understood the lifetime value to the cost of acquiring talent ratio, you might be more inclined to try to deploy more of your talent or redeploy more of your talent. And also from a spend management or resource management standpoint, this is so huge, especially if you can get granular and understand the cost of acquiring talent down to a source. If I know that my cost to acquire talent through employee referrals is half that of acquiring talent through major job boards.
00:35:09
Speaker
I should be putting more money into acquiring talent through employee referrals. Most agencies are probably not looking at that from a resource management standpoint. If you want to use the retail term, talent is scarce. We have to use it more efficiently and we have to manage the cost associated with acquiring it. Do you mind if I take literally 15 seconds to share one vital piece of advice?
Eliminating Ineffective Dashboards
00:35:30
Speaker
Understand this.
00:35:31
Speaker
If you're out there and you're having a bunch of dashboards, let me tell you how to manage them long-term. Take the essentialist approach to it. If you can look at your dashboards and you can't point to any meaningful decisions that you've made from your dashboards over the last few months, get them off your dashboard. Stop looking at them. It's a waste of time. Their dashboards are designed to give you quick insights, help you make better decisions and better manage your business. And if you're not using them for that, don't look at them.
00:35:57
Speaker
Thank you so much for talking with us. I've really enjoyed our conversation. We look forward to having you back on additional episodes. And for our listeners, I want to encourage you, if you're interested in learning more about Dan Morey and the Staffing Mastery, you can look them up on LinkedIn. Is that right, Dan? Yes, sir. That's the best spot to find me. So if you want to connect with me and learn more about dashboards or staffing or executive thought leadership, find me there and connect with me. Send me a message.
00:36:24
Speaker
So thank you again, Dan. And for all our listeners, don't forget to subscribe to our podcast, Aviante Digital Edge. And if you're interested in learning more about Aviante or our software, please visit us at aviante.com. Until next time, this is Chris Ryan, and thank you for joining Aviante Digital Edge.