Early in my career, I worked in operations for two large transportation companies, Roadway and UPS. At both, I quickly learned that the operations function thrives on metrics. Over time, I have concluded that ALL areas of a business lend themselves to measurement. Yet, for years, we in HR/Recruiting avoided metrics either because we thought we were too good for them, or because we believed that measurement doesn’t apply since the (mistaken) perception was that HR, by definition, exists to advocate for employees. How do you measure the “warm and fuzzy”?
So, when the winds of business shifted a couple of decades ago and it was no longer acceptable to only be warm and fuzzy, some of us in HR/Recruiting quickly latched onto metrics that, at the time, seemed like reasonable things to measure. Within recruiting, many started collecting data such as “cost-per-hire”, “time-to-fill” and “source-per-hire”.
As we advanced our view of what to measure, others started to track the recruiting department’s workload, hiring manager satisfaction, the effectiveness of outreach/brand awareness, applications-per-hire and even the percentage of hires that are proactively sourced (which seems to imply that it only requires an individual recruiter’s ingenuity to find the hired candidate!). Metrics such as “value-of-hire” and “quality-of-hire”, focusing on the value that a particular hire brings to the business, were talked about, but rarely instituted.
Recruiters still struggle to measure what matters. In a TalentRISE survey last year of leading companies we asked respondents to name their top three priorities related to recruitment processes. Not surprisingly, the most popular responses were measuring quality of hire, client/candidate satisfaction, performance metrics, and ROI. (Source: 2014 TalentRISE Recruiting Innovations and Best Practices Survey)
The good news? Today, there is widespread recognition that the most valuable metric – and the one that really matters – is quality-of-hire (QOH). Others may help you evaluate the efficiency of your recruitment function, but that’s about it. They won’t reveal much more than whether recruiters are working as effectively as you’d like. What you really need to know is whether the work recruiters do is materially raising the bar on the quality of people joining your organization.
The problem, of course, is actually measuring QOH. There is no “one-size-fits-all” algorithm. It will mean different things for each business and possibly even for each individual contributor within each business unit. Measurement is perhaps best done by vertical. For instance, the measurement of an individual in a finance position requires different tools than someone in a sales position. However, at the vertical level, it’s difficult to determine who you benchmark against. Is it all the finance people within your company; within your industry or ALL the finance people with a particular title/level? QOH is also pretty subjective. Do you base it on a performance evaluation system? When do you measure it? At six months into the job? 12 months?
Questions abound but there are no easy answers since the metrics and measurement process must be tailored to your organization. However, several overarching principles can be helpful in establishing QOH and other related metrics for your business. David Earle of Staffing.org in his white paper for Jobvite Recruiting Analytics: 5 Ways to Benchmark Success is right on target when he recommends asking the following questions:
- Will everyone who sees them understand what they mean?
- Have they been compiled cooperatively, based on dialogue between recruiting and internal stakeholders?
- Does everyone agree that they are important?
- Do they speak directly to recruiters’, hiring managers’ and executive management’s objectives?
- Can they be easily accessed and compiled consistently and accurately?
When seeking input from within your organization, don’t neglect to look beyond your usual internal clients for expertise. The absolute best source of information is the individual ultimately responsible for the organization’s financial performance and metrics: the CFO. In my experience, even the most well-intentioned (or perhaps ignorant) recruiters overlook the value of soliciting input from the person whose job it is to constantly measure overall business results and who, by the way, certainly appreciates the magnitude of employee costs.
Once you’ve established the metrics, ensure that the process of tracking and analysis isn’t overly complicated or unwieldy. Recruiting tools and technology have made this much easier. The same technologies can also support and enable decision-making for strategic workforce planning and can be used to gather critical talent-related business intelligence. In fact, in recent years, this has evolved into a profession right in front of our eyes.
Back in my days at UPS we would repeat this age old quote: “Plan your work and work your plan. Because if you fail to plan, your plan will fail”. In thinking about recruitment metrics, we ought to substitute the word “measure” for “plan” and use that expression as a guide when improving our recruiting processes. We can also tap into wisdom from Lord Kelvin, an Irish physicist and engineer obsessed with measurement, who wrote: “When you can measure what you are speaking about, and express it in numbers, you know something about it. When you cannot express it in numbers, your knowledge is of a meager and unsatisfactory kind; it may be the beginning of knowledge, but you have scarcely in your thoughts advanced to the stage of science.”
Even more succinctly, Kelvin also said, “If you cannot measure it, you cannot improve it”. Which leads me to offer one last piece of advice: always follow-through on what you learn from your metrics – whether it’s good, bad or ugly – to improve your processes.
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