How Do You Know that your Digital Transformation Strategy is Working?

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Digital transformation is a constant headline in the Staffing Industry right now, and for good reason.  The potential gains to be realized through deeper relationships with talent and automation of labor-intensive workflows are too big to ignore. The benefits do not, however, come without a cost.

One of the biggest challenges is the difficulty calculating the value of the investments made in digital capabilities such as new technologies, new skillsets, and new processes. For small and mid-size Staffing Agencies, these investments are significant, and they need to deliver measurable returns within defined timelines.

Most businesses use Key Performance Indicators, KPI’s, which are specific measurements indicating that business is moving in the right direction. A quick search will result in a long list of possible KPI’s. While it’s nice to have options, it can be difficult to find 5-7 KPI’s that are perfectly suited to a specific company’s objectives.


What to Avoid

In the world of KPI’s, altitude is everything.  Avoid metrics that are either too high level or too far into the weeds.  Profitability, as an example, is a common KPI but for smaller businesses can be difficult to calculate. When performance against that KPI falls short, it is hard to pinpoint underlying causes. On the other end of the spectrum, a very detailed KPI might be easy to measure but not provide any meaningful insight into the business.

It is also best to avoid complicated KPI’s, even if they happen to be popular within an industry. In the Staffing World, many agencies use a Cost-per-Hire metric. Although intriguing, this metric is often measured in slightly different ways.  If it is not well understood by the Agency it ultimately has little meaning.


Staffing Agency Options

The best KPI’s are intuitive, not too difficult to calculate given an Agency’s existing resources, and most important, are highly relevant to the business.  How can you determine what is most relevant? Imagine a KPI moving from a proverbial “green” state to “red”. Would that trigger an immediate action?  If so, it is probably a good KPI. If not, consider retiring that metric in favor of something more actionable.

Instead of profitability, most Agencies benefit from looking at KPI’s that drive revenue and reduce or control costs, both of which are components of profitability.  KPI’s that track revenue could be timesheet actuals, job orders filled, or shifts worked.

Significant resources are required to recruit and retain workers, particularly in today’s labor environment. It is therefore critical to track recruiting costs insofar as they are a major contributor to an Agency’s overall profitability. KPI’s that track recruiting costs could measure the effectiveness of the recruiting funnel by tracking the difference between the number of workers recruited each month compared to the number of workers working a first shift with the Agency.

Another KPI related to recruiting costs could be the time it takes to fill all jobs within a specific job order.


In the end, a short list of KPI’s that are relevant to critical objectives like revenue and cost, yet detailed enough to be measurable, are the best option for small to midsize Staffing Agencies seeking to increase growth through digital transformation.  Actionable metrics that are easy to understand can create the kind of focus across the business that drives results.

About Arrived

The Arrived staffing app helps agencies beat the increasing number of on-demand competitors at their own game by matching and deploying contingent workers to job opportunities with an intuitive, user-friendly, mobile experience. Our platform promotes increased sales, recruiter efficiency and supports client retention. Arrived is the staffing app with easy adoption in a variety of markets like industrial, medical, clerical and more.

We connect Staffing Agencies with Great People and Great People with Great Jobs.

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