Situation:
Our client had experienced inconsistent growth patterns, characterized by periods of expansion followed by lulls in new business. Historically, their approach to hiring was reactive, employing a Just-in-Time (JIT) mentality. They hired full-time employees only when new business was secured, and existing capacity was insufficient. This often led to delays of two to four weeks in project start dates to allow time for hiring new staff. These delays sometimes resulted in losing potential new projects when clients’ timelines could not accommodate the lag. In response, the company shifted to hiring early to ensure capacity was available, but this strategy negatively impacted profit margins and, in one instance, necessitated layoffs.
Solution:
Proxxy collaborated with the client to implement new business forecasting. The solution leveraged historical data from the previous two years, including the volume of new project proposals and the win ratio. This data formed the basis for weighted probabilities assigned to each stage of the sales process. The forecasting model provided a clearer and more reliable projection of expected business and related staffing needs.
This predictive approach allowed the company to:
- Start Projects Immediately: By having accurate forecasts, the company could prepare resources in advance, enabling immediate project initiation upon client approval. This improvement fostered stronger client relationships and enhanced revenue and cash flow.
- Anticipate and Address Lulls: The forecasting model highlighted potential gaps in project work, enabling the company to proactively sell into these lulls. Additionally, they utilized downtime for internal projects, maximizing productivity during slower periods.
- Pilot a Hybrid Staffing Model: To address gaps without creating long-term utilization issues, Proxxy introduced a pilot program using part-time contractors alongside full-time staff. This flexible model provided multiple benefits:
- It allowed the company to meet immediate resource needs without overcommitting to full-time hires.
- Contractors and the company could assess fit in a “try-before-you-buy” approach, ensuring mutual alignment before transitioning to permanent employment.
Outcome:
The implemented changes fundamentally transformed the company’s operations, leading to:
- Increased Revenue: The ability to start projects immediately and align staffing with forecasted needs enhanced cash flow and reduced revenue loss from missed opportunities.
- Improved Profit Margins: The hybrid staffing model reduced unnecessary overhead during slower periods while maintaining agility to scale up when required.
- Enhanced Client Satisfaction: The elimination of delays in project initiation fostered stronger client trust and loyalty.
- Boosted Employee Engagement: The “try-before-you-buy” utilized contractors to handle workload peaks and lulls, leading to a more consistent experience for full-time staff and worry of layoffs due to overstaffing.
By transitioning from reactive to proactive planning, the client achieved sustainable growth, financial resilience, and improved operational efficiency.
