Everyone wants to earn more money, but in today’s new normal economy raises are hard to come by. And where raises exist they amount to rather little. A highly incentivized comp plan presents the best opportunity for the company and its producers to be on the same winning ticket and amounts to potentially a lot more then a raise. For sales reps and recruiters, commission can be tied to margin cost with a sliding scale to motivate and retain people as they become more valuable to the company. Appropriate steps and risers are needed, with the levels and rates to be determined by the market, the competition and ones own P&L. Although we have designed dozens of plans over the years, no two are ever the same. The values are typical set on an annual production basis, but other time frames can work. A trail and error approach is best to arrive at a “win-win” program that works best and is reset as conditions warrant.

Optimal Management is the premier management consulting company to the staffing industry. We act as mentors to owners and managers to maximize their sales, profits and value of their company. We become an extension of our clients operations and are there for all of their staffing and business needs, from sales, marketing and compensation plans, to finance, M&A, general management and everything in between.

Everyone wants to earn more money, but in today’s new normal economy raises are hard to come by. And where raises exist they amount to rather little. A highly incentivized comp plan presents the best opportunity for the company and its producers to be on the same winning ticket and amounts to potentially a lot more then a raise. For sales reps and recruiters, commission can be tied to margin cost with a sliding scale to motivate and retain people as they become more valuable to the company. Appropriate steps and risers are needed, with the levels and rates to be determined by the market, the competition and ones own P&L. Although we have designed dozens of plans over the years, no two are ever the same. The values are typical set on an annual production basis, but other time frames can work. A trail and error approach is best to arrive at a “win-win” program that works best and is reset as conditions warrant.

Optimal Management is the premier management consulting company to the staffing industry. We act as mentors to owners and managers to maximize their sales, profits and value of their company. We become an extension of our clients operations and are there for all of their staffing and business needs, from sales, marketing and compensation plans, to finance, M&A, general management and everything in between.

“Metrics” isn’t a dirty word that some people use as a report card; it should be used as a tool to help people succeed. We can breakdown metrics into two topics, productivity and efficiency. Productivity is how hard one works, as measured by the number of telemarketing, tele-recruiting or email conversations one has over a period of time. Efficiency is how that is converted by a series of steps to a placement, i.e. job orders/telemarketing and e-mail conversation; candidates/tele-recruiting call and email conversations; placement/job order (fill ratio), send outs/resume submitted, hours/placement (assignment filled), margin cost/bill, cost (margin rate), etc. If these values are high one will make more placements and everyone wins, however, there are tradeoffs. For example, if one prices (margin rate) are too high their fill ratio will suffer and so will their margin cost and commissions. A profitability algorithm integrates the various term into how many margin costs are generated so one can evaluate these tradeoff to make the best decision.

How have you used metrics to help your team succeed?

Optimal Management is the premier management consulting company to the staffing industry. We act as mentors to owners and managers to maximize their sales, profits and value of their company. We become an extension of our clients operations and are there for all of their staffing and business needs, from sales, marketing and compensation plans, to finance, M&A, general management and everything in between.

“Metrics” isn’t a dirty word that some people use as a report card; it should be used as a tool to help people succeed. We can breakdown metrics into two topics, productivity and efficiency. Productivity is how hard one works, as measured by the number of telemarketing, tele-recruiting or email conversations one has over a period of time. Efficiency is how that is converted by a series of steps to a placement, i.e. job orders/telemarketing and e-mail conversation; candidates/tele-recruiting call and email conversations; placement/job order (fill ratio), send outs/resume submitted, hours/placement (assignment filled), margin cost/bill, cost (margin rate), etc. If these values are high one will make more placements and everyone wins, however, there are tradeoffs. For example, if one prices (margin rate) are too high their fill ratio will suffer and so will their margin cost and commissions. A profitability algorithm integrates the various term into how many margin costs are generated so one can evaluate these tradeoff to make the best decision.
How have you used metrics to help your team succeed?
Optimal Management is the premier management consulting company to the staffing industry. We act as mentors to owners and managers to maximize their sales, profits and value of their company. We become an extension of our clients operations and are there for all of their staffing and business needs, from sales, marketing and compensation plans, to finance, M&A, general management and everything in between.

Source: Optimal Blog  

There is always a balance to maximizing profits. One can’t usually adopt a single strategy, but a mix of things to reach their objectives. We have found that there is no free lunch and a tradeoff must be made to increase profits, such as lowing prices for higher volume, or lowering cost in order to lower prices. The key is to make sure you analyze your options before making a change, i.e. a 10% price decrease to get 12% higher volume could result in 5% lower margin cost if margin rates fell 15%.
What kind of tradeoffs do you make and how do you measure if your tradeoff was worth the effort?
Optimal Management is the premier management consulting company to the staffing industry. We act as mentors to owners and managers to maximize their sales, profits and value of their company. We become an extension of our clients operations and are there for all of their staffing and business needs, from sales, marketing and compensation plans, to finance, M&A, general management and everything in between.

Source: Optimal Blog  

Change is, of course, a constant and those that are attuned to changes and react to it quickly have a good chance to benefit from it versus getting left behind. Some of the ones we use in our consulting work include:

Identifying key events as opposed to many events which make it hard to isolate the ones that are really important. i.e. initial telemarketing and e-mail conversations instead of attempts, messages left and e-mail blasts
Measuring key indicators on a timeline so you can see if they are getting better or worse which is hard to do by looking at something as an event, i.e. are your return on sales rising and are they on par with your competitors vs. are they “acceptable”
What are your clients say about your services compared to your competitors? Are you using constructive criticism to your advantage and encouraging your staff to share the bad as well as the good news with you?

What strategies do you use to keep abreast of changes?
Optimal Management is the premier management consulting company to the staffing industry. We act as mentors to owners and managers to maximize their sales, profits and value of their company. We become an extension of our clients operations and are there for all of their staffing and business needs, from sales, marketing and compensation plans, to finance, M&A, general management and everything in between.

Source: Optimal Blog