At the SHRM conference in San Francisco this week over 19 individual sessions and workshops were related to employee selection, staffing, and retention. The thousands of attendees seemed very focused on recruiting issues, giving some indication that attracting and keeping talent remains of huge interest despite a slow economy. But throughout the session, I kept hearing statements that I think we need to examine a bit. I call them “recruiting myths” because they seem so plausible on the surface that it is hard to see that they may not be as accurate or as simple as they seem. The first myth is that cost per hire is important. It is the single most popular statistic that I hear mentioned. Why is hard to fathom. Cost per hire is a poor measure for three reasons. The first is simply that is doesn’t tell you anything useful. We all know that the CPH for a secretary is most likely less than for an executive, yet CPH does not show that difference. It lumps all categories of employees together and tries to create a single cost figure. Because the variations are so great and are completely different from industry to industry and region to region, it is not possible to make any meaningful comparisons between different companies or regions. When the CPH figures are broken out by type of employee, there are too many figures to make sense of. Secondly, the variables that firms choose to include in their CPH figures vary greatly from organization to organization. And despite the best intentions of groups such as the Saratoga Institute, there is no universal standard or generally accepted definition. When companies report their figures, many are using variations on the definition, making the figures suspect. The third reason is that it makes no sense to report a number to management about how much you COST them. It would make a lot more sense to get a measure of quality or of contribution to profit or of utilization. Maybe this is why many recruiting departments have had their budgets slashed over the past few months? After all, many of you remind management all the time that you are a cost center and not a center for acquiring the great people who make your company thrive. A better metric is the staffing cost ratio devised by Staffing.org. This metric divides the total staffing costs by the total compensation recruited. Total staffing costs include all direct costs, overhead and such things as signing bonuses and relocation. Total compensation recruited includes the first year salaries of everyone hired. This gives you a figure than can be compared across regions and industries and makes sense. I still wouldn’t volunteer to report it to management, though, as it focuses them on how much you cost. Use measures of quality, time to fill, and customer satisfaction instead. The second myth is that having an Applicant Tracking System is the key to success. Sure, it is important to acknowledge that you have received a resume and to know where it is in the screening and selection process. And, yes, it is convenient, if you still believe in collecting resumes, to have a means to store and retrieve them. However, most of the systems available today will be obsolete within two years, cost thousands of dollars to install and thousands more to customize and integrate with HRIS systems, and offer little improvement in the quality or speed with which you hire people. I bet you it is costing you more to recruit people after you purchase the system than before, with no visible difference to management on your performance. Not a good scenario in any economy. You would get a higher return for your money and more management visibility if the same dollars were invested in a better marketing and branding campaign and a vastly improved website. Administrative efficiency in lieu of candidate relationship and customer (manager) satisfaction is not a success formula. Get the cheapest system that will do 80% of the job and don’t worry about all the bells and whistles. Spend your money on attracting and screening good candidates via your website and on collecting and reporting a small number of strategic metrics as mentioned above. One of the greatest myths of all is that interviewing is the best way to assess people. Numerous vendors provide interview training and promise that if you conduct interviews well you will select people who will perform better and stay longer. Even if this is true, which I doubt, interviews are done well only very rarely and most of them are little more than chitchats. As I have written many times, only a combination of assessment techniques will really work — and then not perfectly. Testing for skills and competencies, assessing cultural fit and determining motivation can be done with web-based tools cheaply and much faster than by interviewing. They are also more defensible and objective than interviewing, which even when well done is a highly subjective process. And the last of my myths is the belief that the candidate is your customer. While there is no doubt that it is very important to market your organization and the job to the candidate and to maintain impeccable relations with her, she is not your most important customer. The hiring manager has always been and remains the key to your success. By aligning yourself with the hiring managers and making sure they get the types of candidates they are looking for in timeframes they accept, you will ensure your own ability to continue doing good recruiting. Managers are looking for quality people, delivered to them when they want and need them. Recruiters who can do this become vital members of their team. Make sure your metrics, your sourcing strategies and your selection tools are all acceptable to your hiring managers. Involve them and keep them informed at every level and you will get the budget and staff to recruit the best people. Examining assumptions and questioning traditional beliefs are exercises that help you be a more creative and useful recruiter. <*SPONSORMESSAGE*>
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