Rewire Your Brain to Present Talent-acquisition Metrics Differently

People, I am sure you have read enough posts about metrics that state “predictive analytics” is the pinnacle of the mountain we must aspire to as a profession.

Yes, forward-looking metrics that help you be more proactive vs. rear-view-mirror looking metrics that are more reactive are very important. In my experience, they are not as important as presenting your data, KPIs, and metrics, either to your own team or business leadership with the goal of showing how the metrics you are showing help save or make the company money.

In this article, I am going to give you some practical examples of what this looks like visually, and hopefully inspire you to rewire your own brain when thinking about recruiting-related metrics.

I have been reporting directly to the C-suite or talking directly with heads of business now for over a decade, and one truth is clear. If you want buy in on an investment, help with change in the middle layers of and organization, then you must present your ideas with a dollar lens associated with it.

I have been doing this so long now that when I speak with someone about anything to do with the attraction, assessment, or retention of talent, my brain automatically thinks in terms of how can I translate the situation back into dollars and cents.

Fixing the “Hiring Managers Want More Candidates Than They Need” Problem

Here is an example of historical challenge I faced where too many hiring managers in the company were in the mindset that they need to see more candidates on their open reqs than was actually necessary.

The top of the visual showed hiring managers in the company who partnered with recruiting only needing five candidates to be interviewed by the business (interview loop) on average to produce a hire (5:1). The bottom of the table shows the hiring-manager population that was at or above 20:1 in the number of candidates submitted by recruiting who they interviewed to produce that hire.

Take a moment to look at each aspect of the table (click to enlarge) to understand how I took a submittal-to-hire metric and then overlaid the associated time/dollars involved in producing different outcomes.

In this example, the company was handling hundreds of reqs a year, but I also wanted to show the impact in one visual of including thousands, and then explaining what the difference looks like if we applied a multiple-year lens to the problem.

I also wanted to raise awareness as to a recruiter’s time costs money as well, but I will get to that specific point in a second.

While most business leaders don’t get all hot and heavy about recruiters’ time, they certainly do when it comes where their business is spending time.

So back to recruiter time. When I showed this visual, I also spoke to the fact that the extra time we must spend on finding more candidates means a few things:

  • Recruiters req loads decrease (can’t handle more)
  • Time to fill increases (more candidates to be reviewed/screened)
  • Hiring manager satisfaction gets impacted (why’s it taking to long to fill my req?)
  • Quality of candidates can be impacted (Less time recruiters have to source/screen/assess)

What I found is when I presented the recruiter lens with the additional data points of sub-optimal outcomes, I could also overlay additional financials associated with the first table. Example:

What the cost of recruiting headcount looks like if we ran closer to 5:1 vs 20:1 on submittal-to hire metrics. As we all know, recruiting is a cost center, and recruiting headcount makes up the largest cost in a recruiting budget.

I am not suggesting that you always want to present the scenario about reducing heads. You can tell the same story but tie it back to the other bullet points above related to reducing time to fill, or improving quality of candidates submitted. I hope you get the point.

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Back to the business, as its general about WIIFM.

Time the hiring manager/business spends interviewing is time not spent on building or fixing something in the business. It’s time away from producing revenue.

Lost Opportunity Costs a S@#$load in a Business

Here is another example I have used multiple times in my career to show the lost opportunity cost of roles that remain open. While I used sales roles in this example, because of the direct correlation to revenue generation, I have also found you can use formulas like Revenue Per Employee as a way to show the financial impact as well.

Take a moment to absorb the table below (click to enlarge). It shows how I presented this scenario to leadership in the past to get them to understand the impact that roles open longer than they needed had on the business.

When leaders see recruiting data presented in financial terms, it’s like leading the witness. It did not take a room full of business executives long to reach for the calculator and quickly work out what even a five-day shift meant in dollars and cents.

Show Me the Money

Take a moment and discuss with your team or even your CFO about all the different ways you could present your metrics with a financial overlay. I have done these many times in the past with the metrics below and the financial impact they have directly on the business:

  • Optimal req loads for my recruiting team.
  • Impact of hiring managers taking too long to respond and give feedback on candidates (time in step/status).
  • Impact of candidate retention within the first 12 months of employment.
  • Financial impact of lack of a solid intake/kickoff call with recruiters and sourcers.
  • Poor or a lack of structured interviewing to assess candidates.
  • Correlation of sub-optimal offer acceptance percentages.
  • Recruiters who have underperforming-candidate’s submission-to-business acceptance percentages.
  • Req cancelation rates by the business.
  • Time/cost of recruiters spending time on backfill reqs vs. net/new growth reqs.

A final thought I will leave you with:

The more I presented recruiting challenges/opportunities with a financial overlay, the more effective I became of translating conversations on the fly into dollars and cents. This helped me so many times in my career as business leaders got used to me translating how what recruiting was doing impacted saving or making the company money.

I reached a point where business leaders trusted my off-the-cuff commentary on even back of the napkin math vs. always having to go away and spend hours in Excel and then translating into a PowerPoint deck.

Like most things in life, the more you practice something, the better you get. I strongly encourage you next time you look at your own scorecards and KPIs, pause, and think of the financial overlay you can apply to tell the business story of how it saves or makes the company money.

Rob McIntosh is a talent acquisition leader at Honeywell’s Connected Enterprise business. He is a senior talent executive with 20+ years of global recruiting experience spanning four continents where he has consistently delivered results through building high-performing teams for Fortune 100 companies in senior leadership roles for McKesson, Avanade, Deloitte, and Microsoft. 

As a public speaker his articles, presentations, and case studies have been shared and downloaded over 50,000 times. He is one of the early pioneers of corporate sourcing functions and the co-founder of SourceCon. He is the primary content, strategies, tools, and case studies provider for the Human Capital Institute Talent Acquisition Strategist Course & Certification and ERE Media’s Talent Advisor course.

His strategic advice is constantly sought after for use of advanced metrics/analytics to help tell the business story around the value of talent acquisition, and how to scale delivery while improving quality of hire through optimal talent org designs; shared services, CoE, offshore, outsourcing, and hybrid talent acquisition structures. 

 

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7 Comments on “Rewire Your Brain to Present Talent-acquisition Metrics Differently

  1. Thanks, Rob. In a logical, rational, facts-and-data-based decision-making environment, metrics can be the key to getting what you want and need. However in my experience, many organizations are run according to the GAFIS Principles- the Greed, Arrogance, Fear, Ignorance/Incompetence, and Stupidity of the people in charge, and a gigabyte of clear metrics loses out to (a) powerful jerks) six days to Sunday.
    Want an example? Climate change data/metrics and the federal government.
    In such organizations, fewer metrics and more Machiavelli might be the best course to getting what you want/need.

    1. Keith – no disagreement that we are both left and right brain. Also see lots of decisions made on emotion and feelings. Some rational, some not so much.

      Maybe we live in different worlds. I’ve met hundreds of CEO’s and business owners, but I’m yet to meet one that is not interested in making or saving money.

      Sure, when you get down at the hiring manager level they pivot more on speed and quality vs worrying about other people’s costs, but in my experience the examples I gave relate to both of those as well. I just don’t bang the dollar drum as hard at that level because that’s not their WIIFM.

      1. Thanks, Rob. I’m not speaking about “left-brain, right-brain” here: I’m speaking about doing objective, data-and-fact base studies show is right on the one hand, and doing what is clearly (or not so clearly wrong, because I”m/we’re the boss!”

        I think it comes down to control and power- which is something we rarely discuss here, at least in terms like that. I believe that there is a strong bias toward avoiding a certain loss of control vs. the unknown possibility of a financial gain. Let’s set up a fairly extreme version of this:
        The “Wonder Algorithm Company” could guarantee the founder /CEO:
        1) That s/he would make/have twice as much as they’re receiving now
        2) His/her company would do at least twice as well (Stock price, revenue, EBIT, whatever) forever. in return for-
        Cleaning out his/her desk right now, leaving the company, and have absolutely no contact have anything to do with the company in any capacity whatsoever (official or unofficial), nor discuss the company in public for the remainder of his/her life….They have 30 seconds to make a decision…

        How many of the hundreds of CEO’s and business owners you’ve met would say”yes”? Of those that would say “yes”, what about lowering the return, raising the contact/influence factor? How would that effect their decisions? How much control is someone prepared to give up for the certainty/probability of more money (or other benefits)? I think people are not just loss-averse in material area, but in power/control as well.

        I am very much in a different world than yours- I’m just an old recruiter from Portales, New Mexico, but my experience with folks in charge is that many of them would rather “reign in Hell than serve in Heaven,” though I doubt they’d admit that, even to themselves.

        Cheers

        1. Keith – Any extreme scenario could produce extreme results as you point out. My POV (be it right or wrong) is that the everyday CEO be it in the SMB or Enterprise cares about making and saving money. My article was designed to help recruiters/HR and TA leaders think about presenting the value with a dollar and cents lens.

          That is the language of the business. That is how CEO’s/CFO’s and heads of sales think and talk. Just makes sense to me that maybe more heads of recruiting think and talk in those terms as well.

  2. Thanks Rob,
    This is a good article. I enjoyed your top/bottom quartile CPH example. It is an important metric and I do believe there is a huge difference in the time and cost associated with the hiring and performance of great candidates vs non. I might suggest looking at it through the 80/20 lens as well (the common sales success ratio).

    The CPH numbers, while there are many variables to pull in for accurate results, are achievable. And I think this is one of the most valuable and under reported metrics in hiring. Many of us have had interview teams and hiring managers go on for long periods of time meeting candidate after candidate and never making a hiring decision. When this happens, we know the process is broken. But, without an ability to show the related operational costs associated with a non-optimal process, there is little incentive for stake holders to mandate or implement changes.

    Regarding Lost Opportunity Cost: This, I suppose, is the holy grail of data. Something nearly impossible with a siloed ATS and really needs a fully connected HCM platform and a couple of analytics wizards who can dive into all the related data (ATS and Talent Marketing, Talent and Performance Management, Payroll, Salesforce.com, etc.) With functions like Sales, it’s easier to make that direct connection to revenue. But, once you start looking at other functions like HR, Finance, Janitorial, it becomes much more difficult (and more subjective) to make the correlation.

    As someone who has moved from a recruiting role into one building solutions for recruiting teams, I’m trying to actively focus on these areas. I know the pain of needing quality data and the frustration of trying to compile it quickly, accurately and be able to present it in the right light… all while running a full cycle desk.

    Keep the good ideas coming!
    Jeremy

    1. Jeremy – thanks for the comments.

      To clarify, I was not thinking CPH. I get to that in a moment. The metric was more time and cost of interviewer time. Now CPH.

      You are on point. ATS’s were never designed to incorporate all the costs within TA….headcount, Hrtech, licenses, marketing, background, etc….let alone factoring in other things a) not in the TA budget (like at agency spend) b) Recruiting related expenses, like Sign on bonuses, candidate travel, etc c) Operational analisys of the soft costs, like interviewer time, etc.

      We all live in excel and it’s near impossible given these complexities, to calculate a true CPH at the req level where I think the more accurate opportunities lie.

      It’s a journey, be it a long one 🙂

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