pivot

Key performance indicators

Key performance indicators

Our long-term aim is to be the undisputed leader in global specialist recruitment. Along the way, we are focused on delivering well-diversified, profitable and cash-generative net fee growth.

We measure our progress in this respect, as well as against our areas of operational focus, using a series of KPIs.

Why we have chosen these KPIs
We have chosen a range of KPIs which are both financial and non-financial. They are focused on the overall Group financial performance, as well as changes we are making within the Group, such as the internationalisation of the business. As well as growth, we measure KPIs which illustrate the efficiency of our operations, such as the Conversion Rate and Cash Conversion.

As we work towards our aims, and the shape and size of our business, or our strategic priorities evolve, then our KPIs will evolve too.

Measured against our strategy
We clearly link each of our KPIs to our four strategic priorities, which is outlined in our strategy.

Strategic priority 1:
Materially increase and diversify group profits

Strategic priority 2:
Build critical mass and diversity across our global platform

Strategic priority 3:
Invest in people and technology, responding to change and build relationships

Strategic priority 4:
Generate and distribute meaningful cash returns

1. Like-for-like net fee growth (%)

Measure
How the Group’s business is developing and growing over time, measured as net fee growth on a constant currency basis.

Progress made in 2015–16
We delivered good net fee growth of 7%(1), primarily driven by our European businesses. The rate of growth slowed versus last year due mainly to slower growth in the UK.

Link to relevant strategic priority

12

(1) LFL (like-for-like) growth represents organic growth of continuing operations at constant currency.

2. Proportion of Group net fees generated by our international business (%)

Measure
The Group’s relative exposure to markets which are typically more immature and underpenetrated than the UK&I, calculated as the percentage of non-UK&I net fees.

Progress made in 2015–16
66% of Group net fees were generated outside of the UK&I this year, led by a material increase in net fee coming from our European businesses.

Link to relevant strategic priority

12

3. Headline international net fee base (£m)

Measure
The absolute scale of the non-UK&I businesses in net fee terms (Asia Pacific and Continental Europe & RoW).

Progress made in 2015–16
Like-for-like(1) net fees in the international business grew by 13% in the year. Australia continued to grow, and we saw strong, broad-based growth across many European markets and much of the Americas.

Link to relevant strategic priority

2

(1) LFL (like-for-like) growth represents organic growth of continuing operations at constant currency.

4. Basic continuing earnings per share growth (%)

Measure
The underlying profitability of the Group, measured by the Earnings per share of the Groups continuing operations.

Progress made in 2015–16
Basic earnings per share increased by 14% to 8.48 pence, reflecting the Group’s higher operating profit and lower effective tax rate. Growth slowed on last year primarily due to the lower rate of profit growth in the UK.

Link to relevant strategic priority

1

5. Employee engagement (%)

Measure
Based on the results of our internal employee engagement survey which tracks their sense of belonging, discretionary effort, personal motivation and job satisfaction.

Progress made in 2015–16
Over 80% of our employees again engaged in our annual TALKback survey this year, reflecting our continuous efforts to focus on employee training, retention and effectiveness.

Link to relevant strategic priority

3

6. Like-for-like net fees per consultant (£000s)

Measure
The productivity of the Group’s fee earners. Calculated as total Group net fees divided by average consultant numbers.

Progress made in 2015–16
Group like-for-like(1) net fees per consultants increased by 1% in the year. In the UK productivity rose by 2%, driving excellent operating leverage and profit growth.

Link to relevant strategic priority

13

(1) LFL (like-for-like) growth represents organic growth of continuing operations at constant currency.

7. Conversion rate (%)

Measure
Calculated as operating profit divided by net fees. Measures the Group’s effectiveness in managing our level of investment for future growth and controlling costs.

Progress made in 2015–16
Conversion rate improved to 22.3% as a result of this good net fee growth, the ongoing benefit of our largely automated back office platform and our continued strong control of operating costs.

Link to relevant strategic priority

1

8. Cash conversion (%)

Measure
The Group’s ability to convert profit into cash. Calculated as cash generated by operations as a percentage of operating profit from continuing operations.

Progress made in 2015–16
88% cash conversion was a result of good working capital management, especially considering the strong growth of our working-capital intensive German contracting business, and the reversal of an FY15 £20 million benefit due to the favourable day on which that year end fell.

Link to relevant strategic priority

4