You have maybe heard the saying “you cannot manage what you cannot measure”. It’s so true! I’m surprised, even somewhat concerned, by the number of NZ organisations that are not measuring their recruitment efforts. Measurement provides a barometer of what is working well; it uncovers problems and bottlenecks, lets you know whether you are getting good bang for your buck, and gives you an idea of where improvements need to be made. The organisations that are doing this well are making incremental, even dramatic, improvements.
Measurement should be a strategic priority for any HR function. Even if your organisation operates a decentralised recruitment model, measurement and reporting should be centralised. If quantitative and qualitative analysis hasn’t traditionally been part of HR’s repertoire or skill set I strongly recommend buying in this expertise or upskilling yourself on the topic. If you have outsourced your recruitment and your provider/partner is not measuring their performance on all or most of the metrics below then fire them and look for a more strategic partner.
Quality of Hire
When I say measurement I don’t mean how many live vacancies an internal recruiter is working on or how many hires are made – I don’t view this transactional mindset as a measure of success. I recommend starting with the end in mind, by gauging quality of hire.
One client had a very low cost per hire and the time to hire was exceptionally short; however, managers were disappointed with many of the people they hired – a lot were not performing and/or sticking around, which became an enormous cost to the business and a lost opportunity. To improve the situation, the organisation invested in improving the recruitment and selection process and ran some interview skills workshops with managers. Though time to hire and cost per hire actually increased, the outcomes were better overall.
Some organisations are getting quite scientific and conducting validation studies, and looking at the performance review and employee retention data to determine whether a quality hiring decision was made.
A focus on quality of hire enables the HR or recruitment team to explore the various practices across the recruitment and selection workflow and determine whether it is fair (in an EEO sense), working and adding value. For example, is your managers’ favourite job board, newspaper employment section or recruitment agency actually producing quality hires? A good e-recruitment system will enable an organisation to get a feel for the effectiveness of any employment branding initiatives and the ROI of different advertising media across regions, business groups and roles.
Other useful measures – time, cost, satisfaction
- ‘Speed of hire’ – the two most common metrics here are ‘time to hire’ (from when a candidate applies to when they accept a position) and ‘time to fill’ (from application to start date) - the public sector appointment appeals process tends to extend the time between these two. In some organisations quite a lot of candidates withdraw after they accept the position, which is concerning. If it takes too long for an organisation to arrive at a hiring decision or simply acknowledge an application then this is a major turn off for a candidate, especially in a tight talent market. I recommend calculating the average number of days it takes to reach each stage of the recruitment and selection process, and compare the results across regions, business groups, and individual managers.
- ‘Candidate care’ – this is so much more than having a friendly cup of coffee with a candidate a few months after they are hired. Track candidate care from the start of the recruitment process. Are candidates being communicated with or are they being lost in the twilight zone? Is communication timely and professional? What are their recruitment experiences like? You don’t need to be an accountant to gather this sort of information.
- ‘Recruiter effectiveness’ – this is about tracking the performance of both agency and internal recruiters, especially in terms of quality, speed of hire, manager satisfaction, etc. Often internal recruiters can get bogged down in the administrivia of recruitment but it is vital that recruiters actively follow up with, even chase, busy managers and put time into building that relationship. There should also be some KPIs for managers. Managers need to be responsive with reviewing a shortlist and not ‘sit’ on candidates. Again, a good e-recruitment platform helps by providing tools and reminders for recruiters and managers.
- ‘Cost per hire’ – How much did you spend on advertising and agency fees over the past year? It is not unusual for organisations to have no ideal at all of the real cost of recruitment. If reporting processes and systems are in place it shouldn’t be any more difficult to capture this information than a model where managers are left to their own devices. Make sure to include all fixed and variable costs. Don’t be shocked if the figure is ginormous.
The organisations that have a good grasp on recruitment metrics are starting to develop internal benchmarks and measure their performance against them. I strongly recommend tracking metrics on a regular basis rather than leaving it to an end-of-year exercise. Both point-in-time and tracking measures provide valuable insights to any cyclical influences. Also, keep the number of metrics to a manageable level. Every organisation and recruitment function is different, so measure those things that you believe to be the most applicable. If there isn’t a measurement regime in place then remember that a journey of a thousand miles starts with a single step.
Paul Jacobs
Engage