Recruiting Metrics for Management

If you can’t measure it, you can’t manage it. No debate on this one. But just what should you be measuring? Now, there’s the rub! To begin the debate, let me suggest that the list below represents the things that should be measured, with some corresponding opinions on the best metrics to use. To further engage the audience, I’d like to offer an unusual opportunity: a series of online Internet discussions to develop a list of “best metrics.” But more on how to involve yourself at the end of this article. For now, let the debate begin. Here’s my list of what recruiters and recruiting departments must do to be considered effective and how best to measure performance. I’d also like to thank Dan Guaglianone, the VP Staffing at Unisys, for setting me straight on this. I was starting to weave a bit too much on the importance of metrics.

  • Deliver high quality candidates. This is probably the most important and the toughest to measure. If you hire great people quickly, cost is not too important. A top-third salesperson outbills a bottom-third by 300%. A top-third engineer out-designs a bottom-third by 300%. A top-third anybody outdoes a bottom-third anybody by 300%. To measure quality of hire, you need to conduct quantitative, performance-based interviews and then compare actual performance to predicted performance. This is a great metric when combined with some predictive testing, like what ePredix offers. Turnover is an indirect metric for quality.
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  • Minimize the time to hire to just-in-time. Sometimes this is more important than quality, and it’s easy to track. The goal is to have a person start on the day you need that person. Lost production is a huge cost that dwarfs cost per hire. How you accomplish just-in-time hiring is very challenging, involving workforce planning and pipelining, but it starts by tracking how long it takes to fill each requisition.
  • Use Internet sourcing tools to find the best active candidates. This includes everything from name generation, resume screening, and online application processing to posting on job boards. You’ll need to track the source of your best candidates and how much time is spent on each. This will help you improve your time and quality metrics.
  • Effective career website. Your website needs to attract, nurture, and process top candidates. Metrics need to track candidate yield loss at each step. This way, you can figure out where you need to improve the design or content of your website to minimize fall-outs.
  • Use networking and comparable techniques to find the best passive candidates. At any one time, 15% of the total candidate pool is comprised of active candidates and the other 85% is passive. It’s obvious that there are more top candidates in the passive pool, but most companies spend more money, effort and time on working the active pool. Figure out how much money you’re spending by channel to gain a sense of this. Most likely you’re spending 85% pursuing active candidates and 15% on passive candidates. This is a great way to drive down your cost per hire and time per hire, but quality will decline dramatically.
  • Effectiveness of recruitment advertising programs. You need to know if your advertising is attracting enough good candidates. The number of people who respond to an ad and the percent of good candidates compared to the cost of the ad are some good metrics to track. You need to know if you’re paying too much for bad advertising, and where to spend your money on what works best.
  • Recruiter quality. This includes everything from coaching hiring managers, influencing candidates, assessing competency, negotiating offers, and having the ability to use a full range of sourcing techniques, from ad writing and cold calling to working a job fair and networking. You need to track all of this to measure recruiter quality. Consider satisfaction surveys with hiring managers and with candidates hired and not hired to get some of these measures. Time to fill assignments, the number of assignments and types of positions handled, turnover, the source of candidates, and the quality of candidates should also be tracked by recruiters.
  • Tracking systems efficiency. A lot of money is being spent on front-end websites and candidate tracking systems. You need to know if they’re producing results and increasing recruiter efficiency. If your recruiters are spending more time on the phone networking with top candidates while reducing the time to hire with better candidates or are handling more assignments, your systems are probably working effectively. To make sure, you should be tracking where your recruiters spend most of their time and who it’s with. To my mind, most of it should be on the phone with top candidates ó screening, recruiting, influencing, and networking ó and coaching hiring managers.
  • Cost per hire. This is last only because I think it’s overemphasized in how companies manage their recruiting efforts. If you do everything else well, you’ll minimize cost per hire without sacrificing time or quality. It’s easy to drive down costs: just spend more money going after active candidates. It will go even lower as you reduce your hiring standards. I believe good cost per hire is a result of doing everything else right. If you go after costs as the primary driver, all you’ll do is eliminate outside search fees. If you can get the same quality inside, or if you’re paying high fees for low quality, then this is an appropriate cost reduction method. However, too often I see quality suffer for the sake of cost control. This is a bad trade-off that no hiring manager or executive should ever make. The top-third is 300% better than the bottom-third. This is obviously a very complex subject that can’t easily be covered in a short article. Each company situation is unique, and one size does not fit all. However, the importance of metrics can not be overstated in managing a recruiting department. Good metrics will tell you which assignments are faltering, which channels work best, which recruiters are falling behind and where to spend your limited budget. To further the cause and raise the importance of this topic, we’re forming a discussion group to discuss these metrics for recruitment management. If you’re in recruitment management and would like to be part of this discussion group, email me at lou@powerhiring.com for the schedules and required information. We’ll hold monthly Internet meetings to further explore this critical topic. Now let the debate really begin.

Lou Adler is the CEO and founder of The Adler Group – a training and search firm helping companies implement Performance-based Hiring℠. Adler is the author of the Amazon top-10 best-seller, Hire With Your Head (John Wiley & Sons, 3rd Edition, 2007). His most recent book has just been published, The Essential Guide for Hiring & Getting Hired (Workbench, 2013). He is also the author of the award-winning Nightingale-Conant audio program, Talent Rules! Using Performance-based Hiring to Build Great Teams (2007).

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