What Drives Effective Recruitment Metrics?
If one chose to measure their recruiting program with the entire plethora of metrics the internet suggested, they would likely spend very little time actually recruiting and may still end up with a unclear state of affairs to boot! HR executives are constantly evaluating the performance of the different HR functions, and evaluating the way in which they are measuring performance. With Recruitment having the highest business impact of all HR functions1, there is particular attention being paid to how its performance is being measured.
Most recruitment dashboards contain a variation of these very familiar metrics; time to fill, cost per hire, vacancy rate and source of hire. These metrics are easy to measure and very important. They speak to the efficiency of the recruitment program. At the same token, their focus is narrowly on cost and time, which is just a piece of a relevant story. But what if an executive asks, “Are we hiring the best people in the market for our critical roles?” These basic metrics do not always tell the story.
At HirePower, we are increasingly seeing a demand to understand the effectiveness of a recruitment program. Effectiveness metrics will speak to measurable business impact and will shed light on the quality of the hires being brought into the business. Quality of Hire has always been an elusive metric that recruitment professionals love to hear about but have difficulty determining an exact formula that tells the story within their organization. Additionally, the Quality of Hire metric is typically the product of two or more indicator metrics with different weightings applied to each indicator. The ‘harder to measure’ aspect of this metric tends to be the reason it is left off of recruitment dashboards, despite it being a high value measurement.
Examples of Indicators used for a Quality of Hire metric include:
– Post-hire assessments: 90-day new hire performance rating, new hire performance rating at 12 months, 12 month new hire performance rating to 12 month new hire performance rating of prior year hires
– Hiring Manager Satisfaction: 90 day post-hire survey, quarterly survey of all new hires
– New Hire Turnover rates: turnover at 12 months, new hire failure rate at 12 months
Organizations that are paying attention to the effectiveness of their recruitment programs tend to incorporate metrics such as: profit per hire, quality of hire (many ways to measure), quality of candidates, diversity hires in critical positions, time to productivity, new hire failure rates, hiring manager satisfaction, just to name a few.
Recruitment Leads have to understand two things:
(A) What matters most to the business and which key metrics will tell a relevant story to executives; these metrics should seek to answer important business questions
(B) What variables will help measure progress on key deliverables and indicate when/where course corrections need to be made; these are things you don’t necessarily report to executives but are used internally for continuous improvement
If you develop strategic recruiting metrics that are aligned with the overall business objectives, you will be able to speak the language of executives and also gain control of recruiting outcomes. The last thing a recruiter wants to do is spend precious time gathering low value metrics in vain!
SOURCE: Realizing the Value of People Management – From Capability to Profitability. Boston Consulting Group. August 2012
SOURCE: Cornell University ILRHR, Center of Advanced Human Resource Studies. Moon, Clara and Li, Lingmin. March 28, 2012. http://www.ilr.cornell.edu/cahrs/research/upload/Round-2-Moon-and-Li.pdf