Over the last few years, we have seen a tremendous increase in the functionality provided by applicant tracking systems (ATS). Candidates create and update their own profiles, apply to multiple positions, and then follow their progress through the workflow process. Hiring managers have online access to create requisitions, view candidates, and schedule interviews. The Internet has provided a mechanism to automate the candidate submittal process, and through websites and job boards the vehicle needed to gain visibility to candidates untouchable ten years ago. Recruiters have access to the latest and greatest search engines, auto-posting of requisitions, and faster, easier-to-use applications. All of this functionality is intended to reduce the cycle time required to hire a qualified, willing candidate. The question is, has it? Common sense will tell you that the increase in functionality has had a direct impact on productivity of the hiring cycle. But very few people can articulate by how much. The main problem is that, while Herculean functionality gains have been made on the application front, very little improvement has been made with metrics, measures, and reporting. The divide between increased functionality and reporting capabilities continues to grow, and there are no real out-of-the-box solutions available to close this gap. In order to address the fact that reporting is a continuing challenge for a majority of organizations, I have assembled a road map with the intention of bridging the reporting divide. Before we begin navigating the roadmap, there are two commonly used words, whose meanings are sometimes interchanged, that need to be defined:
- Metric: An identified, stated, or understood goal or standard.
- Measure: Dimensions, quantity, or capacity as ascertained by comparison with a standard.
This map or blueprint takes advantage of the standard report system (data marts or reporting systems) usually found in today’s ATS solutions. These systems provide the standard operational reporting needs such as number of open requisitions, number of hired, etc. and are standard out of the box in most cases. However, the final destination of this map will be a client-centric reporting system that goes beyond the standard to meet the specific reporting needs of the customer. Step 1: Define Metrics The first leg of our trip will be to define metrics that will be meaningful to the organization. This process requires careful consideration of all aspects of the recruiting function and how it aligns directly with stated business goals and objectives of your organization. It is also very important to standardize the definition across the entire enterprise. In order to thoroughly define your metrics it is important to complete the following three activities:
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- Identify metrics. Determining the metrics that align your recruiting function to the needs or goals of your business is a key success factor. Breaking down defined business strategy into usable, actionable, relevant metrics will align the employment function with the overall direction of the organization. Along with key business objectives, other areas of potential interest should include individual business unit objectives, strategic HR objectives, and recruiting management priorities ó to name a few. Other items to questions to answer include: How should you measure your recruiting and staffing organization’s performance? What practices and processes would benefit from close management? Should these standards be measured only internally or should they also be benchmarked externally (i.e. via peer group comparison)?
- Define rules for metrics. Once the set of metrics are identified, clear and concise rules need to be established on how they are determined. Use of best practices within your specific industry will allow you the ability to benchmark metrics with other organizations. Key to success will be standardization of the definition across the entire organization. An exception might be in the event your organization requires specific rules that are outside the normal best practice definitions. Consideration could then be given for maintaining multiple metric definitions: one for internal standards and one for external comparison.
- Assign goals. The final item of our first step is the assignment of a goal. Each metric should have a goal that will represent the organizational standard. For example, it might be stated that based on careful review of past trends, business unit expectations, recruiter input, and organizational objectives, the time it takes to fill an exempt requisition should be 20 days. This assignment of a goal to each individual metric will providing everyone within the organization a clear understanding of the intended corporate standard.
Step 2: Process Optimization The second leg of our trip will be to align each identified metric with the corresponding process. For some metrics ó like “Time to Fill,” “Time to Start,” or “Days Open” ó the review may be rather short. For others, however, it will be a very important exercise. Let’s use an example. We will say that one of our key employment goals is to effectively manage our external recruiting costs. We decided in Step 1 to create a metric, External Recruiting Costs, and we define it as being made up of fifteen separate items. Now, for Step 2, we must ensure that our current process will enable us to reliably capture this data. If one of the items is the travel expenses of the candidates interviewed, who will be responsible for capturing the data? The recruiter is often held accountable for this information, when they have nothing to do with the processing of travel expense vouchers. It is important to align the process so that the people who encounter the information in the course of their daily activities are responsible for capturing it. By conducting the process optimization exercise, you will have an opportunity to identify communication and training points for the implementation of these metrics and measures. You cannot simply inform your team of the new metric’s modified process, you must communicate and train in such a way that people understand on an individual level what their responsibility is in capturing the required data. Step 3: Multi-Source Integration The third leg of our journey can sometimes be the most intimidating step of all, integration. A review of the defined metrics may show a list of data elements that will require information from a system other than your ATS, usually your HRIS. Let’s look at an example. During the definition phase, let’s say it was determined that a key metric would be to understand the effectiveness of the new assessment tool that is now in place. To do this, we identify two metrics that we want to use to assist in determining the effectiveness of the assessment tool: “Performance of Hire by Assessment” and “Retention by Assessment.” Based on our definitions, we know that we will need performance appraisal information and specific employee counts. Both of these data items will need to be pulled from the HRIS and made available for measurement by the corresponding metric. Once the data elements are identified, the design of the integration will follow. In some instances, integration between your ATS and HRIS will already be in place, while others will need to look at initiating this process. While this may appear to be a complex task, particularly if IT resources are limited, integration of multiple systems is not as daunting as some might believe. Serious consideration should be given to the value proposition before dismissing a multi-source integration. The justification for these projects typically centers on the transfer of new hire data; however, in many cases the real value will be in your ability to collect meaningful performance metrics. Step 4: Develop the Measures The final step in our process will be to develop the measures. Development will take two forms: the technical development and how we implement the measures. On the technical side, this means creating the environment to produce the data. In some instances, like “Contracted Time to Start,” you might need to add an additional custom or user-defined field. Others, like “Interview to Offer Ratio,” might be a custom calculated field or bucket on the data mart, while still others, like “Source Effectiveness,” might simply mean generating a customized report. Whatever the actual development requirements look like, exact details should be provided to the technical team for the metric, measures, and report development specifications. Implementing the measures will focus on how the metrics will be applied. Of course many will be used on an individual recruiter basis, some at a business unit level, and some at an organizational level. Let’s look at an example of a measure of the metric “Time to Fill.” In this example, the measure is completed by recruiter type. It is measured over a specific period of time, and includes all recruiters who recruit for exempt positions. Here is what the metric and measure would look like:
- Identified metric: “Time to Fill”
- Metric definition: Calculated by counting the number of days between the date a requisition was opened and the date the requisition was filled, while the requisition is in the “Open” status.
- Goal assignment: 30 days
- Measure: 70 days, or 40 days over the goal assignment of the metric
This example would infer that, on average, it took exempt recruiters 70 days to fill a requisition, which compared to the goal assigned to the metric, is 40 days longer than the stated goal or standard. This sounds terrible, right? Maybe. But it could also mean that the term “exempt positions” is too broad. If you have a set of very difficult-to-fill jobs, like registered nurses, the time to fill may be skewed. You may need to set your goals based on type of jobs or by business unit. Destination Our journey to bridge the reporting divide is now complete. We have identified, designed, and assigned values to the metrics that define our business; we insured alignment of our process with the expected outcomes; we infused external data to deliver needed information; and we developed the measures and reports needed to catalog our ongoing efforts. So what does that get you? Well, if you have been successful, you will find that the employment strategy should now align better with the overall corporate strategy. Better information should lead to better decisions, which in turn should reduce overall costs and support streamlined processes. By implementing a client-centric reporting system, you will have access to meaningful data that can support key business decisions in anticipation of and in response to the ever changing environment. For the last two decades HR has been trying to become a strategic business partner. This is clearly an opportunity to get one step closer.