A fundamental shift in recruiting values is now taking place inside organizations around the world. At the center of this shift is a focus on more proactive recruiting tactics in order to help drive a higher return on investment from recruiting and develop talent pipelines ahead of demand.
In a reactionary, requisition-driven recruiting model, overhead metrics such as cost, efficiency, and speed are adequate measurements of a recruiting department’s value to the organization. Cost-per-hire, staffing efficiency, and time-to-fill are still the primary metrics used in most organizations when recruiting reports to the business.
How much money did we save this year? Did we decrease our time to fill? Is the requisition load per recruiter at an optimal level?
These traditional metrics, while still important measures of overall efficiency, are not effective measures for a proactive recruiting team. In fact, they could ultimately reduce the effectiveness of such a group by necessitating that team members are incented to act in reactionary ways, such as:
- Filling a need as fast as possible with the wrong person vs. waiting or working harder to find the right person for a mission-critical role
- Waiting for requisitions to be open to identify and build relationships with mission-critical talent, at which point it might be too late
- Screening and sorting quickly vs. networking to find the best person
Outbound Recruiting Metrics
Most proactive recruiting teams operate more like a sales force than a traditional recruiting force. That means that they measure outbound activity (establishing relationships and making presentations) just as much as inbound activity (taking sales orders or, in this case, making hires).
Realizing the importance of each task, as well as the different competencies required, many companies have split their sales organizations in half to have “hunters” focus on finding new business and “farmers” focus on strengthening and mining existing business relationships.
Similarly, some recruiting organizations have established central sourcing groups or recruiting strike teams that focus on specific, game-changing positions. One major software company I’ve worked with has assembled a recruiting strike team to woo senior software architects, the true visionaries and innovators in its business.
The sales cycle for these individuals can be five years or more. Therefore, they’re not measured on the number of jobs they fill as much as they are on the number of qualified individuals they identify and the relationships they create.
A recruiting team that is measured on outbound activity will build the equivalent of a sales funnel, or a series of stages in a relationship that may culminate in a person getting hired at your company. The time it takes to move people through these various stages will be measured and optimized over time, while reasons that candidates decline to move forward will inform recruitment marketing and branding efforts.
Some of the stages in a typical recruiting funnel include:
- Candidate identified
- Unknown level of interest/have not contacted
- Connection established
- Not interested
- Willing to listen to opportunities
- Willing to refer others
- Interested in opportunities
- Passed on to hiring team
- In the hiring cycle for a specific opportunity
- Rejected (would hire in future)
- Rejected (do not hire)
Some recruiting managers have taken to calling this progression “suspects, prospects, and applicants.” In other words, there is a difference between people who have been contacted and those who have not, and making that initial contact is really the beginning point in a long-term relationship. In a sales force, this is the equivalent of a lead versus an assigned contact, and a few proactive recruiting teams have begun to make this distinction part of their operational model.
Some organizations expect that end-to-end in-house recruiters can be proactive in the course of doing their job. I don’t believe this is a scalable model, as most in-house recruiters have a rising plate of requisitions and enough administrative responsibilities to keep them occupied.
In addition, the competencies required of proactive recruiters are much different than those of so-called “A to Z” recruiters, who very often either hate picking up the phone to make an outbound call or hate dealing with hiring managers and the hiring process. Proactive recruiting teams will excel in turning a passive candidate into a more active one.
Reporting to Your Business Leaders
Increasingly, sourcing or strategic recruiting groups are built up by business leaders with critical human capital needs. They often look for people outside of the recruiting industry to drive them, sometimes with disastrous consequences.
In these cases, selling the value to the rest of the organization can become somewhat easier because of the executive endorsement or even because the funds come directly from that business leader’s budget.
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The risk is that the sponsoring business leader leaves the company, so you’ll want to make sure that you hedge your bets and build political capital with other executives.
But what about when a recruiting team identifies and tries to push through a proactive recruiting initiative or team? In an industry that values quantity over quality, proactive recruiting is not always an easy sell to business leaders who usually know very little about what lurks behind the curtain in recruiting.
In this case, alignment to business goals, revenue generation, and mission-critical roles are the real key to making an initial business case and justifying your existence on an ongoing basis.
While every employee is important, let’s face facts: some employees are more important than others. One of the most common mistakes I see in proactive recruiting efforts is taking a “boil the ocean” approach (i.e., falling into the trap of becoming a reactionary candidate generation team for all of the openings in an organization).
If the economy or business needs take a turn for the worse, the ax will eventually fall on your team because you’ll become an unnecessary luxury. Creating a sustainable proactive recruiting model that allows you to move up the value chain requires discipline. Stick to the core reason why proactive recruiting teams succeed, and remember they focus on the positions that drive the highest value for an organization and are thus an inseparable part of business success.
If the business needs senior software architects to take it to the next level, then prepare your business leaders for a two- to five-year sales cycle to close a candidate, educate them on the funnel you need to build to support the business, and prepare for a potentially enormous return on investment.
If you’re looking for senior financial consultants, expect a somewhat shorter sales cycle and smaller return on investment per head, but what you do could make an even larger impact over time. If you’re in healthcare, hiring a heart surgeon can help accelerate the building of a new practice or the expansion of an existing one, which can drive an extraordinary amount of revenue.
In any of the examples above, your business leaders will need to understand your methodology; the metrics you are trying to optimize in your sales funnel and why; the number of hires at this level that your group will be responsible for over the next two or more years; and most important, the overall impact on the business your team is having.
When you focus on strategic positions, this impact becomes relatively easy to measure. Continuing with the examples above, a senior consultant will generate revenue; a software architect will bring products to market successfully; and a heart surgeon will generate revenue and save lives. Other measures of quality, while at times subjective, can also be very powerful if presented in the right context of business success.
The recruiting industry is in the middle of a profound transformation. The traditional measures of efficiency and quantity are giving way to new measures of effectiveness and quality. The move from a reactionary to proactive discipline is underway, and how you measure your effectiveness can drive business performance and ensure your survival for years to come.