So What Have You Done For Me Lately? HR and the Metrics of Recruitment

Tas 2010 Richmond 1 180x180Jim Lefever is the Managing Director of HR2BE

Speaking as a HR practitioner, when I engage a recruitment agency, I have only one outcome in mind and that is to successfully fulfil the R5 equation for my internal clients:

R5 = Right Person + Right Skills + Right Place + Right Time + Right Cost.

All the Recruiter has to do is meet that need. But here’s the thing. I would suggest that the average recruitment agency will tend to get somewhere around R3 and R4, rather than R5.  And the missing piece for me is whether the individual hired is the Right Person over time.

Most businesses still measure the success of their recruitment activities by concentrating on the process of recruitment.  Common process metrics include source-of-hire, placement numbers, employee satisfaction, recruitment marketing channel effectiveness, application rate, time to fill and cost per hire. Whilst these are perfectly acceptable metrics, the problem with these types of measures is that they don’t measure the quality and business impact of the final product – the individual hired; the Right Person of the R5 equation. Simply put, they are failing to measure the value that new hires contribute to the organization over time.

I do believe that there are benefits to be gained from measuring process metrics but I also believe that there is a powerful set of metrics that Recruitment agencies should be working with businesses to implement in addition as they have a much higher benefit in demonstrating the fulfilment of the R5 equation. As we finally leave the Industrial Age behind and willingly enter the Social Era, recruitment companies will find more and more challenges to their current paradigm, whether through increased social network referrals, greater use of on-line candidate identification tools and other collaborative, conversation driven mechanisms.

How then can recruitment agencies better measure and demonstrate the value that they contribute to the success of the business?

There is a growing body of work on recruitment metrics that concentrates on the Quality of Hire. These metrics measure the more meaningful (and strategic) contribution of good hires as opposed to hires that either don’t measure up over time or that fail to deliver “as promised”. Recruitment agencies should be actively working with HR departments and Management to create these and other Quality of Hire metrics and so demonstrate their continuing value and relevance.

Here are a few value based metrics to consider working with your customers on implementing, if they have not already:

1) Overall Quality of Hire

This is driven by performance management ratings and/or 360 degree feedback data at the 6 to 12 month marks into the new employee’s job as compared to their peers. To ensure consistency throughout the business, the Quality of Hire standards should be defined and agreed up front with all stakeholders; that may be simply the overall performance rating or something more specific to each individual role, although that becomes a much more complex metric to manage.

2) Employee Retention.

This links in with the above Quality of Hire metric. A business wants to retain quality talent but lose those who are under-performing. So the key to this metric is to measure the retention of high performing new hires against those who are under-performing and left the business. The key focus being to increase the former and reduce the latter.

3) Satisfaction Surveys

  • Manager Satisfaction – Focused on the percentage of managers who are satisfied with the hiring process and the successful candidates through a manager survey. This metric provides important, easily tracked data that can help provide historical insights into a hiring manager’s preferences before recruiting begins, as well as evaluate staffing performance post-hire.
  • Candidate Satisfaction – Focused on the percentage of new hires who are satisfied with the hiring process through a candidate survey. Additional candidate metrics may also be valuable from candidates who were not selected, and especially from candidates who declined offers.
  • Team Satisfaction – Focused on the feedback data gained from 360 feedback surveys. This provides data on whether the candidate hired was a cultural fit for the target environment.

4) Pipeline Development

One of the keys to proactive management of the Talent Supply Chain is building a pipeline of “warm”, viable candidates to fill key strategic or critical positions within the target business. The metric rests on both the quality and size of the pipeline under management. This metric can feedback into metrics associated with the Sourcing strategy for the business.

Jim Lefever is the Managing Director of HR2BE which provides organisations with individually tailored, end to end solutions covering HR Solutions, Change Management and Business Effectiveness.  Jim is a Certified Associate of AHRI and member of the Board of the Change Management Institute.

A Response to this article by Ross Clennett FRCSA is available here


Follow HHMC on LinkedIn Follow HHMC on LinkedIn

Follow HHMC on Twitter Follow HHMC on Twitter