If You’re Still Doing What You’ve Always Done, It’s Time For An Operational Audit
June 1, 2015
by Terry Petra
This old cliche refers to a circumstance where an individual is so close or involved in a situation that they are incapable of maintaining their perspective or view of the big picture. This cliche applies to many owners and managers within the staffing industry.
Our rebounding economy is creating an environment in which many staffing firms are enjoying increased growth in sales and profits. However, much of that growth is due to external factors versus internal competencies. Although this may appear to be acceptable with our expanding economy, it could spell disaster when the economy slows and demand for services decreases.
Now is the time for owners and managers to look beyond the trees (external demand) and see the forest (internal competencies). In many instances the best way to accomplish this is through a comprehensive operational audit. The objective of an operational audit is to provide owners and managers with an objective evaluation of their firm’s strengths and weaknesses; then, based on the audit’s results, implement a process of start, stop, continue, and change to insure the firm’s long-term success, regardless of external factors.
Begin with the Business Plan
A complete operational audit begins with a careful review of the firm’s strategic business plan (or lack thereof), market share, client share, organizational structure, physical plant and equipment, as well as technological capability. Internal policies, systems and procedures are evaluated in order to determine if they are designed and operating in the best interest of clients, candidates, contractors, and/or temporaries. However, one of the most important components of an operational audit is the objective evaluation of management and staff competencies, including performance standards and ratios.