The industry often simplifies revenue into permanent and temporary categories. While useful, that distinction overlooks the many forms of client engagement that provide visibility into future revenue.
The perm/temp distinction is useful but is incomplete in an industry that is more sophisticated and the way revenue behaves is more nuanced.
Forecastable revenue is revenue that can be reasonably expected to continue into the future, based on existing client arrangements. It may not be guaranteed. But it is visible and often sits beyond revenue that must be won again from scratch through to revenue that is already contracted and scheduled.
Most businesses operate across a spectrum of revenue types. There is no doubt that revenue that is not forecastable includes contingent permanent recruitment, one-off assignments, and opportunistic work.
Beyond that sits a wide range of arrangements that are under-recognised.
Forecastable revenue is not limited to temporary or contract placements. It can include:
retained search assignments
consulting services such as HR advisory
What these have in common is not the service itself, but the nature of the relationship. There is a defined scope, an ongoing requirement, and some level of forward commitment. That creates the visibility.
The mix of revenue within a business changes how that business behaves. A business reliant on work that must be sold continuously will tend to:
A business with a higher proportion of forecastable revenue will tend to:
Neither position is inherently right or wrong. But they are different.
As businesses grow, the nature of their revenue often changes.
In smaller businesses, revenue is frequently transactional, immediate, and closely tied to the founder or a small number of consultants. This is not a limitation, and it is most often how momentum is built. But as the business increases in size, the demands on revenue change.
Larger engagements and deeper client relationships require a stronger client relationship including continuity of service, broader capability, financial strength, and consistent delivery across teams.
This tends to lead to more structured arrangements. And those arrangements often carry a higher degree of forecastability. At the same time, they introduce greater operational complexity, higher expectations, and more formal commercial relationships.
So while forecastable revenue increases visibility, it also changes the nature of the business.
The largest companies in the staffing and recruitment industry highlight this. For example, Adecco has recently reported quarterly revenue of 5.66 billion Euro with Gross Profit of 1.06 billion Euro, an 18.8% margin. Those numbers are not achieved by being dominant in contingent permanent recruitment.
As another example, Korn Ferry’s latest quarterly results announcements show that Executive Search revenue, what the company is best known for, contributed just 32% of fee revenue and 37% of EBITDA. The remainder of the company’s revenue is from RPO, Digital, Consulting and Professional Search divisions.
The type of revenue in a business influences behaviour.
Where revenue is less predictable:
Where revenue is more predictable:
Again, these are tendencies, not rules. But over time, the revenue mix shapes how the business is run.
Forecastable revenue is closely linked to the themes discussed in previous articles.
A business with more visible future revenue is generally easier to manage, more stable in performance and less exposed to short-term fluctuations
From an external perspective, it is also easier to understand, easier to assess, and usually viewed as lower risk.
This influences how the business is valued. Not because one type of revenue is inherently better than another, but because certainty has value.
It is important to recognise that not every business needs to maximise forecastable revenue. Some founders prefer the pace and immediacy of transactional work and the independence of operating without long-term commitments. Others choose to build longer-term client relationships with structured service offerings and more predictable income streams
Both approaches can be successful, but they lead to different business characteristics.
Increasing forecastable revenue often involves trade-offs. It may require:
It can also reduce flexibility. Longer-term commitments bring expectations, structured services require consistency, and client dependency can increase if not managed carefully. These are not reasons to avoid forecastable revenue, but they are part of the decision.
Forecastable revenue is not a category, it is a characteristic. It reflects the nature of client relationships, the structure of service offerings, and the level of visibility within the business
It sits alongside:
Together, these shape the sustainability of the business.
HHMC Global operates within the staffing and recruitment industry on equity transactions, market valuations and business growth advisory. Contact us to discuss further.