For staffing firms looking to increase revenues in 2014 (and really, who isn’t?) there are several options. You can charge more for your services ­– and risk losing business. You can hire a few rainmakers to bring in new business – both risky and expensive, or you can squeeze a little extra margin out of your existing business.

Here are a few proven margin-increasing strategies.

• Say goodbye to low-margin clients.
  If you don’t currently have established metrics to determine what makes a profitable client, 2014 is the year to implement some. Pay attention to clients who require a lot of hand-holding with little return on your investment. Do you have clients who never seem to be happy with your level of service? Have you heavily discounted your rates to keep budget conscious clients happy? Make 2014 the year to consider letting them go.

• Rethink your VMS/MSP relationships.
  Working as a subvendor to a client using a vendor management system or under a master supplier agreement can dramatically impact your margins.  Though many systems offer competitive rates, others put tremendous pressure on recruiting margins while simultaneously requiring dramatically higher than industry standard insurance, extensive (and expensive) background checks, extended payment terms, and much higher overall legal risk.  These relationships can be profitable as long as you always keep in mind that (i) you are not the VMS’ employee even though in many ways they treat you like one, and (ii) your time may be better spent working outside of this space.  VMS is good supplemental business, but as a core revenue stream it is very difficult to build a business on.

• Upgrade your candidates.
  In staffing and recruiting your rates are determined by the hourly or yearly compensation of the people you place. It’s a no-brainer that aiming for job orders for more highly compensated positions is going to increase your receivables. Do you have the infrastructure  or knowledge base to support reaching for those opportunities? What avenues can you open to give it a shot.

  Take a look at verticals or departments where you have done well and find areas to expand. If you are currently focused on light industrial staffing, jumping to C-level placements doesn’t make sense, but expanding to the next supervisory level or to a related department such as procurement or operations may be within reach.

• Regroup and refocus.
  Have you focused on a niche that’s run dry? Conversely are you a generalist with strengths in a particular area? It may be wise to market yourself in that niche market, rather than as another “Me too” general agency. Or looking at our first point, if the complaints that you hear strike a common chord – like poor service or high prices – it may be time to reevaluate and make some changes.

For more help making this your most profitable year ever, partner with ECS. Employment Contractor Services helps recruiting firms to provide high quality contract staffing services to their clients throughout the USA. ECS does it all for you, so you can focus on what you do best — recruiting talent. Contact us today for more information!