A Step-By-Step Guide to Improving Sourcing Performance

Today more than ever, professional recruiters must ensure they are maximizing results and increasing the efficiency of both sourcing (finding) and recruiting (hiring) qualified candidates. But to do this effectively, recruiters must address one of the most difficult issues in the industry: performance accountability. That is, how do we measure how well the recruiting function is doing to meet the company’s sourcing and recruiting goals? Historically, recruiting organizations have attempted to measure performance with a “cost per hire” formula. This figure is really a sum of two separate functions: sourcing and recruiting. Measuring two different functions (sourcing and recruiting) with one metric (cost per hire) makes it difficult, if not impossible, to improve performance, because the end ‘cost per hire’ does not give a clear picture of the separate sourcing and recruiting performance. For example: a great recruiting effort may yield twice as many hires as a poor recruiting effort from the same pool of qualified applicants. On the other hand, even a great recruiting effort can do fail with a poor candidate pool. The only way for recruiting organizations to improve their performance in today’s new environment is to forget the old “cost per hire” formula ? and look separately at sourcing costs and recruiting costs. But that’s only the first step. Once recruiting organizations differentiate between sourcing and recruiting activity, they must analyze the metrics for each thoroughly, and adjust each effort accordingly. This is where things get difficult, especially on the sourcing side. The recent proliferation of options for sourcing applicants makes it extremely difficult to measure sourcing performance. Therefore, in this forum I’m going to focus only on ways to measure sourcing. But you can follow the same basic steps to measure your recruiting performance as well. You probably already have a sense of what resources work best for different kinds of reqs. But without solid numbers, you can’t effectively change things to improve your performance. So without further ado, here six steps on how to measure your sourcing effectively, so you can improve your performance. 1. Clearly differentiate between sourcing and recruiting activities. It’s very important to clearly differentiate sourcing and recruiting in your mind and agree on the categories with your coworkers before you try to measure your sourcing performance. Sourcing covers everything you do from the time a req opens to the time you identify the applicants you will interview for the position. This includes composing a compelling job ad, posting that ad to job boards, placing a newspaper classified, searching resume databases, working with sourcing services (e.g. recruiting gateways, Internet sourcing services, and ATS vendors), sorting and screening resumes, and verifying applicant interest in the position. Recruiting covers everything related to turning those “interviewable applicants” into employees. Recruiting begins the moment you decide the applicant is interested and qualified, and ends with the actual hire. Recruiting activities include phone screening, setting up interviews, interviewing, discussing applicants with the hiring manager or other decision makers, negotiating, making the offer, closing the applicant, and securing the hire. 2. Carefully track the time and dollars you spend on sourcing. Do this for each open req, and for each resource you use, e.g. job posting sites, recruiting gateways, Internet sourcing services, ATS vendors, resume databases, newspaper classifieds, etc. Tracking dollars spent is relatively easy. Include any money you spend on your external resources, as well as the cost of your time (hours spent sourcing x your hourly pay rate) Tracking the time spent will be more difficult, but is just as important. Keep a log of the actual time you spend writing the job, posting the job, reviewing resumes, etc. for each resource and each req. You’ll also need to note the number of interviewable applicants you source by req and resource. Here’s an example. (Please note: This is purely hypothetical and intended only to demonstrate the process of measuring. Your actual results will vary.) Req: Staff Software Engineer

Sourcing Resources: Job Board A, Job Board B, Local Newspaper, Internet Sourcing

Company, Recruiting Gateway, Resume Database

Totals Total interviewable applicants identified: 5

Total time spent sourcing: 30 hours

Total dollars spent sourcing: $5000

Hires made: 1

Per Resource To keep things simple, I’ll just compare two of the resources used. Job Board A

Total interviewable applicants identified: 1

Total time spent sourcing: 4 hours

Total dollars spent sourcing: $300

Hires made: 1

Job Board B

Total interviewable applicants identified: 1

Total time spent sourcing: 6 hours

Total dollars spent sourcing: $500

Hires made: 0

3. Compile the results. Use the data you tracked in Step Two to figure out the following metrics:

  • Sourcing Time Spent per interviewable applicant (STS/A)
  • Sourcing Dollars Spent per interviewable applicant (SDS/A)

Your focus should be on these two metrics, since the purpose of your sourcing activities is to find interviewable applicants, not make a hire (that’s the goal of your recruiting activities). But because the bottom line ROI is a hire, you should also consider the following numbers:

  • Sourcing Time Spent per hire (STS/H)
  • Sourcing Dollars Spent per hire (SDS/H)

Work up these numbers for each req, and for each individual resource you used. This is where the “per hire” numbers become irrelevant ? if you only hired one person, only one resource will have “per hire” stats. Using the Staff SWE example above, our metrics would be: Total

STS per applicant: 10 hours

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SDS per applicant: $1000

STS per hire: 50 hours

SDS per hire: $5000

Job Board A

STS per applicant: 4 hours

SDS per applicant: $300

STS per hire: 4 hours

SDS per hire: $300

Job Board B

STS per applicant: 6 hours

SDS per applicant: $500

STS per hire: N/A

SDS per hire: N/A

4. Compare results. At the end of each quarter, look at the numbers you’ve compiled. Which resources had the lowest STS and SDS per interviewable applicant? Were resources more or less effective depending on the type of job you were sourcing? Clearly, the ideal resource will have a low STS/A and low SDS/A, but if a resource had a low SDS/A and a high STS/A, consider which is more important. Remember, your time does cost the company money, and any time you save in sourcing is time you can spend on recruiting. In the example above, Job Board A had a lower STS/A and SDS/A than Job Board B. So the next time you source a Staff Software Engineer, you can use only Job Board A. Doing so will save you the time you spent reviewing unqualified resumes from Job Board B ? and reduce your total sourcing cost per hire. Judging a resource on just one req is risky, but if you’re looking at results for several reqs over the quarter, it’s a pretty good indication of results. 5. Outline a plan of action. Based on your review of the metrics, decide which resources you want to continue with, and which you should discontinue. Also plan which resources to use for which type of req. Use the time per applicant (STS/A) and dollars per applicant (SDS/A) numbers to make these decisions. If those numbers aren’t enough, you can supplement your decision with the time per hire (STS/H) and dollars per hire (SDS/H) numbers. But don’t make your decisions based solely on the hire numbers. Remember, making a hire is the recruiter’s job, not the sourcing resource’s. 6. Continue measuring and reevaluating. Once you’ve put these methods and metrics in place, keep using them and expanding on them. In addition to looking at the type of req, for example, look at the job location you’re sourcing for. Maybe certain resources are stronger in certain regions. Or consider the time of year ? if a resource gives you lots of unqualified recent college grads in June, try them again in September when those grads have found their first job. Maybe that resource will then provide you with excellent experienced talent. Also consider variables within your organization, e.g. different hiring managers. Conclusion With these metrics in hand, you can make the necessary changes to reduce your total sourcing time spent (STS) and sourcing dollars spent (SDS) ? and meet hiring demand more effectively and efficiently. <*SPONSORMESSAGE*>

Dayle Bowen has been involved in the recruiting industry since 1994, when he started a business that put companies in touch with bilingual professionals. He is now the founder and CEO of Tapestry.Net, a cutting-edge e-cruitment services company that provides Pay-For-Results Sourcing for software developer, IT, and Asian-language bilingual positions through its Interested, Qualified Applicant (IQA) program. Tapestry.Net has worked with more than 1,000 companies, such as Microsoft, IBM, Hewlett-Packard, and Sun Microsystems.


1 Comment on “A Step-By-Step Guide to Improving Sourcing Performance

  1. This is an interesting perspective on measurements. However I know that I do not have the time to get this finite and I do not know of any of my peers that go this far. The bottom line that I look at and my management measures my results and budget on is how many hires did I get from the source used and what was the cost. I do agree that we have to make sure we are using current resources to the utmost. If we buy into a job board and the recruiters don’t utilize it, it does not matter what the cost is! From this perspective I concur that we should be looking at how effectively the sources are being used by the recruiting staff. This will be a measure of both the staff and the source that is used. I would like to hear more on this topic and am keeping an open mind.

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