How Can Staffing Agencies Improve Profit Margins?

Your clients can increase their profits in many simple ways that can significantly improve their bottom line. If you want to improve profit margins, you’ll likely need to charge more or do more (grow your business or increase your volume of placements). But there are countless ways to approach either method. Here are some top ways to improve your staffing industry gross margin.

What are They Charging?

It is helpful to study up on the industry competitors and numbers to improve profit margins. Although it may be difficult or tricky to find the right balance, they must charge what they deserve. Often, pricing pressure from competitors is a severe challenge for agencies. However, they must reevaluate their pricing structure from time to time and consider if the competition has driven the price too low. They must look at the margin and bill rate trends within the industry. Note that any price increases may result in lost customers, so they should balance the risk with significant bill rate increases.

Evaluate Current Clients

One-sided relationships with clients can be damaging to the profit margins. High revenue, low margin clients take up the bottom line and the crucial time to focus on clients. Your clients should take advantage of CRM (customer relationship management) software to obtain data on the most and least valuable clients. For instance, determining what clients have the worst gross margin/gross profit to identify which ones are doing more harm than good.

Service Boost

Your clients can also bring more to the table by investing in performance improvements or offering services in areas where their competition is lacking. Helping potential candidates advance outdated skills so that they are prepared for the new age by reskilling is a huge opportunity for your clients. This will create newly qualified candidates, which is invaluable as annual turnover costs the recruitment industry half a billion dollars. The impact of taking employees from lower-wage jobs and reskilling those individuals can be transformative.


Time wasted is money wasted, and your clients can save time with automation. Automation operating will allow firms to improve their revenue and margins. By getting rid of manual operations, recruiters have more time and energy to spend on clients and candidates. Automation can be used in so many different business areas, such as data-entry, onboarding, and background checks while saving an enormous amount in gross profit. Mishaps are inevitable, especially when implementing new methods, and staffing liability insurance can save your client’s business in a time of need.

About World Wide Specialty Programs

For the last 50 years, World Wide Specialty Programs has dedicated itself to providing the optimal products and solutions for the staffing industry. As the only insurance firm to be an ASA commercial liability partner, we are committed to that partnership and committed to using our knowledge of the industry to provide staffing firms with the best possible coverage. For more information about Staffing Professional Liability Insurance or any other coverage, we have available to protect your staffing business, give us a call at (877) 256-0468 to speak with one of our representatives.