Post on 30-Oct-2014
description
Recruiting metrics: measurement tools for today’s recruiter that demonstrate return on Investment SkillSurvey Webinar Series
Presented by:Stephen Lowisz
Author, Educator and Speaker
Understand what metrics are and why we use them
Understand why traditional
metrics may not support today’s business objectives
Understand how to measure
metrics that drive desired recruiter behaviors and outcomes
Review sample metrics dashboards
In this discussionYou will…
How do you define
metrics?
Standards of measurement that
HR professionals use to gather,
analyze and present important
information regarding the hiring
process.
They are used to make better
informed
decisions in order to receive
the best return on investment.”
(NAS Recruitment Communications)
What are recruitingmetrics?
Steve’s definition:
A Quantifiable Measurement
that can be compared to established benchmarks
andencourages behaviors focused
on
candidate quality and return on investment (ROI).
What are recruitingmetrics?
Advance the relationship betweenrecruitment and the hiring managers — align the RIGHT objectives
Provide credibility to the recruitment department by displaying that theyunderstand the overall business goals and objectives
Define what is important and expected of each recruiter
Drive consistency in delivery of recruitment services to the organization
Provide a platform to measure recruiter accountability and performance.
What do recruiting
metricsdo?
If we use metrics correctly, they…
Be actionable and predictive
Be consistent in what they measure
Be tracked over time in order to generate internal benchmarks and analysis of internal performance
Be open to peer comparisons*
Be able to drive recruitment behavior focused on “quality of hire” and“return on investment”
The Bottom Line: What gets measured, gets improved!
The purpose and importance of utilizing correct recruitingmetrics
Effective recruiting metrics must…
Why are most metrics wrong?
The Lesson is Simple….Metrics must derive from and align with business goals and objectives.
Metrics selection should only occur after understanding the needs the metric addresses.
Most do it backwards! We create processes around the metrics we want to see.
Example: Continental Airlines• Post Bankruptcy• Initiative only to reduce cost• Reward Pilots for reduced fuel costs• Result – customer satisfaction fell and they went to competitors
The purpose and importance of utilizing correct recruitingmetrics
What are you today? measuring
Cost per hireTime to Fill
more HR and a lot more transactional
Traditional Metrics:
Recruiter of the past:
Cost Per Hire:
• Only looking at initial cost and not the long-term cost of hiring the wrong candidate
• Does not account for “quality of hire”
• Does not consider the production the candidate will/will not deliver
• Drives recruiter to “sell” candidates internally
• Creates conflict between recruitment and hiring managers
Recruiter of the past:more HR and a lot more transactional
Problems caused by thesemetrics
Time to Fill:
• Recruiter often manipulates ATS system
• Recruiter focuses on “lowest hanging fruit”
• Recruiter focuses on “filling the seat” faster and cheaper, not better
• Focus is on immediate cost of vacancy, not Long-term cost of greater turnover % and additional recruitment costs
Recruiter of the past:more HR and a lot more transactional
Problems caused by thesemetrics
Recruiter of the past:more HR and a lot more transactional
Constant change
What is changing?Candidate Trends
Recent economic uncertaintyhas made employed talent more passive and less likely to switch employers
“My job isn’t great, but I’d rather stick it out here than be last in - first
out somewhere else”
Percentage of new hires rated above average has fallen significantly over the past year
The percentage of very passive talent willing to switch for better pay has decreased significantly from 2006 - 2010
New hire satisfaction with the recruiting process has fallen significantly over the past year
Metrics focused exclusively on time to fill and cost per hire have created conflict with the business and potential candidates.
The profile of today’s recruiter needs to dramatically adjust to support the needs of the business.
What matters most to business leaders is not always in line with what matters to recruiters and their leaders.
Regardless of intent, recruiting metrics drive specific recruiting behaviors.
What is changing?
The Conclusion:
What’s important to your business?
What matters most
The Aberdeen Group Study
metrics
Develop and maintain a function
capable of identifying and
recruiting qualified candidates who
have both short term and long term
impact on the organization —
CANDIDATE QUALITY
Provide a level of service that
would be considered “priceless”
while driving down cost and
increasing return on investment
Key performance indicator What do our leaders want?
How to measure?
What to measure?
• Sourcing Channels• Recruiter Efficiency• Acceptance Rate
• Candidate Satisfaction
• Manager Satisfaction
• Quality of Hire
• Efficiency Ratio
Results-producing
Key Performance Indicators
Critical Success Factors
metrics
and how to apply them
How to apply these metrics:• Difficult to track, difficult to define
• Source is only as good as the recruiter who uses it!
• Track in ATS as source of candidate • Report quarterly source of hire
• The percentage of new hires from each defined candidate source • Candidates should come from multiple sources
• Using talent pools that are appropriate for the position • Active AND passive candidates
• Percentage per hire per source, with highest on-the-job performance ratings
to measure: Sourcing channels
metrics
Efficiency ratio/acceptance rate
metrics
How to apply these metrics:
• Recruiter Efficiency/Acceptance Rate
• # Calls made compared to # Return Calls
• # Return Calls compared to # Candidates Developed
• # Candidates Developed to # Candidates Presented
• # Candidates Presented to # Hires
to measure:
• Phone call• # of Calls Made 20 50%• # of Calls Returned 10
• Screens• # of Calls Returned 10 50%• # of Candidates Developed 05
• Interviews• # of Candidates Developed 05 60% • # of Candidates Presented 03
• Offers• # of Candidates Presented 03 42%• # of Offers Made 1.25
• Hires• # of Offers Made 1.25 80%• # of Offers accepted 01
Results-producing and how to apply them
Efficiency
Acceptance
metrics
How to apply these metrics:
Candidate Satisfaction • The percentage of new hires who are satisfied with the hiring process
Candidate Survey • 4-6 Questions regarding process • Scale of 1-5 • Positive experience improves company brand and increases referral rate
Results-producing
metrics
What would you ask each candidate?
Candidate Satisfaction Survey
Lowest Rating = 0Highest Rating = 5 Criteria Importance
RatingNumber of interviews held 0 1 2 3 4 5
0 1 2 3 4 5
Scheduling and timeliness of interviews 0 1 2 3 4 5 0 1 2 3 4 5
Recruiter’s explanation of benefits 0 1 2 3 4 5 0 1 2 3 4 5
Length of overall recruiting process 0 1 2 3 4 5 0 1 2 3 4 5
Recruiter’s knowledge of position 0 1 2 3 4 5 0 1 2 3 4 5
Communication’s from recruiter 0 1 2 3 4 50 1 2 3 4 5
First day new employee orientation 0 1 2 3 4 5 0 1 2 3 4 5
Manager’s ability to lead and provide direction 0 1 2 3 4 5 0 1 2 3 4 5
Tools provided to complete job (computer, phone) 0 1 2 3 4 5 0 1 2 3 4 5
Job as described compared to actual position 0 1 2 3 4 5 0 1 2 3 4 5
Review of goals and objectives by manager 0 1 2 3 4 50 1 2 3 4 5
Recommend as a good place to work to others 0 1 2 3 4 50 1 2 3 4 5
How to apply these metrics: Manager Satisfaction
• The percentage of managers who are satisfied with the hiring process
Manager Survey
• 4-6 Questions regarding process
• Focus on key deliverables
• Communication
• Quality of Candidates
• Understanding of Goals/Objectives of Position
to measure: Manager satisfactionmetrics
What would you ask
each manager?
Hiring Manager Satisfaction Survey
Lowest Rating = 0Highest Rating = 5 Criteria Importance
RatingTimeliness of initial recruiter contact 0 1 2 3 4 5
0 1 2 3 4 5
Effectiveness of planning 0 1 2 3 4 5 0 1 2 3 4 5
Recruiter’s understanding of position 0 1 2 3 4 5 0 1 2 3 4 5
Process overview 0 1 2 3 4 5 0 1 2 3 4 5
Recruiter’s knowledge of market 0 1 2 3 4 5 0 1 2 3 4 5
Sourcing options 0 1 2 3 4 50 1 2 3 4 5
Quality of presented candidates 0 1 2 3 4 5 0 1 2 3 4 5
Quantity of presented candidates 0 1 2 3 4 5 0 1 2 3 4 5
Diversity of presented candidates 0 1 2 3 4 5 0 1 2 3 4 5
Information provided to candidates 0 1 2 3 4 5 0 1 2 3 4 5
Assessment of candidates 0 1 2 3 4 50 1 2 3 4 5
Offer/closing effectiveness 0 1 2 3 4 50 1 2 3 4 5
Recruiting costs 0 1 2 3 4 50 1 2 3 4 5
Communications from recruiter 0 1 2 3 4 50 1 2 3 4 5
Recruiter’s ability to solve problems 0 1 2 3 4 50 1 2 3 4 5
to measure: Candidate Quality
Why does it matter
metrics
• Greatest impact on the performance of each organization
• Financial Impact of poor candidate quality exceed twice the candidate salary
• Quality is both specifications and performance• Specifications answers the question: “Did we hire the
appropriate person?”
• Performance answers the question: “ Did that person actuallyperform well in his/her job?”
to measure: Quality of hire
metrics
Quality of Hire Metric (6 Month Rolling)
PR – Performance Rating of new hire
EP – Employee Performance as a % of new employees
ER – Employee Retention of new hires after 12 month
N – Number of indicators used
QH=(PR
+EP+ER
)/N
Performance Rating:
• Average job performance rating of
new hires with at least 6 months of
tenure and hired in previous 12
months.
• Based on a numerical average.
• If based on letter ranking such as
A, B, C, convert to number and
percentage.
• 10 new employees
• Average 3.5 out of 5.0 = 70%
to measure: Quality of hiremetrics
to measure: Quality of hire
metricsEmployee
Performance %:
• % of new hires with at least 6
months of tenure, hired in the
past 12 months and meeting
expectations.
• 8 of 10 are meeting
acceptable levels = 80%
Employee Retention %:
• % of new hires meeting
expectations and retained after
12 months.
• Same employees used in PR/EP
• 10 new employees/6 remain after 12
months and meeting PR
• Average = 60%
to measure: Quality of hire
metrics
QH = (PR + EP + ER) / N
to measure: Quality of hire
metricsQuality of Hire = (70% + 80% + 60%) / 3
QH = 70%
The Impact:
“One top notch engineer is worth 300
times or more than the average. We
would rather loose an entire class of
engineering graduate then one
exceptional technologist.”
Allan Eustace, SVP R&D
to measure: Quality of hiremetrics
The Impact:
• Googleo Average employee generates $1.3 million
in revenue.o If the “Game Changer” produces just 10
times more than an average employee’s performance ($1.3 million multiplied by 10).
o For every “Game Changer” Google hires it could result in $13 million in new revenue each year!
o If that employee only stays 3 years, that is still $39 million in potential new revenue!
to measure: Quality of Hiremetrics
How to apply these metrics:• Efficiency Ratio
• Is a more accurate measurement of efficiency than cost-per-hire
• Takes into consideration that higher paying positions are more costly to fill
• Includes differences associated between compensation and candidate supply
• Includes candidate demand due to variations in market, position level, industry and geography
• Is the calculation of dividing the total staffing (internal & external) cost by total compensation recruited – 14.8% avg.
to measure: Efficiency ratiometrics
Total Recruiting Costs
Total CompensationRecruited
Recruiting EfficiencyRatio
to measure: Efficiency ratiometrics
Dashboardsmetrics
Dashboard: Sourcing Metrics
Question“What are the things we need to be doing to increase the passive candidate initial response %?” “What are we doing to help with efficiencies around active candidate screening to determine quality earlier on in the process?”
Dashboard: Sourcing Metrics
Questions“Does the talent pool of the target companies support business demand for the next 3 years?” “At current pace we will exhaust target companies talent pools?”“Do we need to expand targets or revisit profile requirements?”
Target Compa
ny
Total Candidates in
databaseTotal Hires
% We reject
Candidates
% Candidates
reject us
% of hires to applicati
ons
A 337 21 67% 9% (16:1)
B 222 13 57% 8% (17:1)
C 135 13 70% 8% (17:1)
D 533 16 71% 10% (33:1)
E 351 8 74% 7% (47:1)
F 64 1 80% 1% (64:1)
Dashboard: Sourcing Metrics
Manager Satifaction Results
0%
50%
100%
Qtr 1 Qtr 2 Qtr 3 Qtr 4
Actual Goal
Candidate Satisfaction Results
0%
50%
100%
Qtr 1 Qtr 2 Qtr 3 Qtr 4
Actual Goal
Candidate Quality - Survey Results Only
0%100%200%
Qtr 1 Qtr 2 Qtr 3 Qtr 4
Actual Goal
Efficiency Ratio
0%5%
10%15%20%
Qtr 1 Qtr 2 Qtr 3 Qtr 4
Actual Goal
Dashboard: Executive Summary
Recruiting metrics: measurement tools for today’s recruiter that demonstrate return on Investment SkillSurvey Webinar Series
Presented by:Stephen Lowisz
Author, Educator & Speaker