Why Care About Metrics? Part 1

Why care about metrics? Metrics help us make better business decisions. The numbers themselves are not as critical as how we interpret and use those numbers. Now that “human capital” and the value it adds to an organization’s bottom line has made it to the top of the list in company boardrooms, measuring that value has become increasingly important. The result. Recruiters are scrambling to collect data. They are collecting data on everything they can think of: number of requisitions, requisitions per recruiter, cost per hire, hires per recruiter, responses from the Internet, responses from the company career site, responses from each individual job board, hires from each job board, cost of an employee referral program, print response rates, # of hires from job fairs, turnover rates, time to hire, relocation costs, and on and on…This data collection is great but don’t become metric myopic. Being able to recite internal recruiting statistics only demonstrates that you have a memory for numbers and interesting bits of recruiting trivia. The real value in those numbers is knowing how to use them to your advantage. How are you going to dissect them to understand your “real” issues? Are the actual numbers critically important or are the trends they represent most important? What decisions can you now make by using the analysis of these metrics? A hot issue among recruiting departments nowadays is measuring the effectiveness of its recruiting programs. Before a company can do that, it needs to determine its organization’s definition of “effectiveness.” Typically effectiveness is measured on two key criteria: time and money. The ideal is for a company to be able to hire the best talent, in the shortest period of time, for the least amount of money. (The person that can come up with this magic formula and market it will be a very wealthy individual.) Realistically, a company needs to determine which of these two criteria is most important for the current business need and how much weight they want to place on each. This weighting could change from year to year or from initiative to initiative. The decision is really dependent on the impact to the bottom line. Once a company determines its most important “effectiveness” criteria, the recruiters can begin to collect and evaluate the appropriate metrics. As an example, a company in a high growth, highly competitive market, with aggressive deliverable commitments to investors may care more about time than money. The bottom line will suffer more from leaving mission critical positions open then it will from the cost to get the right people in place fast. In this scenario, the company may choose to spend a sizable amount of money to source qualified candidates, utilizing every resource available. Their key issue is that they need to get the right hires in place, fast, or the investors will begin to get nervous. Assuming that the money is being spent strategically (always an assumption), and that the candidate flow is strong, the recruiters in this company are most concerned with managing that flow. The type of metrics they would want to collect would be related to internal process and the length of time it takes to move a candidate through the system. These metrics include:

  • Length of time it takes to pre-screen resumes to determine viable candidates
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  • Length of time it takes for the hiring manager to review the resumes of the viable candidates and make a next step decision
  • Length of time it takes for a candidate to be contacted once they are determined to be viable
  • Length of time it takes to get a screened candidate in for an interview
  • Length of time it takes for the managers to make a decision after an interview

Once the metrics are collected, it is important to understand why they are what they are. Numbers don’t mean anything unless you know what is behind them. For instance, it may be that the recruiter doesn’t have enough time to sort through all the resumes that come in from all the great recruiting sources (remember this company has spent their money strategically so there should be lots of great resumes). This could be a time management issue and if the recruiter reorganizes his/her day, the problem may be solved. However, assuming that the recruiting has strong time management skills and is not spending time on unproductive tasks, the company may want to consider outsourcing the pre-screening piece of the process. The recruiter now only has to deal with the qualified candidates, thus shortening the cycle time. In another instance, it may be that the recruiter turns the resumes around within 24 hours but the hiring managers hold on to them for weeks (remember they are short staffed so they are juggling an extremely heavy workload). The solution here may be to set up weekly or even semi-weekly candidate review sessions to set real deadlines for the managers. This will help everyone manage their time more efficiently: Recruiters won’t need to spend hours tracking down managers and managers will organize their schedules to make sure that they review the resumes in a timely manner. It may also mean educating the managers on the effect a delay in hiring has to the bottom line and what that means to the company future. Tying compensation to meeting these deliverables seems to be a good motivator. What ever the situation, having solid metrics in place will help you make better decisions and will provide the appropriate back up information to support your decisions. The degree to which you can quantify the bottom line impact of your recommendation will make the financial managers that much happier. In the above example, if you can place a bottom line dollar value on each day a position is left unfilled, you will be able to make a much stronger argument for implementing new policies or outsourcing pieces of the process. Collecting metrics is good. Interpreting the metrics and using them to make sound business decisions is an even better. Next month we will review measuring the effectiveness of recruitment dollars, the metrics that will help you get there and how to interpret them to make future spending decisions.

Karen Osofsky (karen.o@tiburongroup.com) is a co-founder of TiburonGroup.com, an e-recruiting consulting firm that provides outsourced recruiting solutions to rapidly growing companies and new ventures. The firm provides a broad range of recruiting consulting, sourcing, screening, and strategy development services to help companies manage the front-end recruiting process. Tiburon Group is a Certified AIRS Solutions Partner.


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