Assessing and analyzing the effectiveness of recruiting
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This document discusses metrics for assessing the effectiveness of recruitment. It provides details on four core metrics: (1) new hire quality based on manager ratings, (2) the ratio of actual start date to contracted start date, (3) manager satisfaction with the hiring process, and (4) staffing efficiency measured as total costs divided by total compensation recruited. It also outlines additional metrics for evaluating individual recruiters, such as performance of hires, manager satisfaction, diversity results, and responsiveness.
Assessing and analyzing the effectiveness of recruiting
- 1. Assessing and analyzing the Effectiveness of Recruitment Shubham Singhal 80303120053 NMIMS, Hyderabad
- 2. P a g e 1 | 8 Assessing and analyzing the Effectiveness of Recruitment Core Staffing Performance Metrics Recruiters, like all HR professionals, are under increased pressure to demonstrate their value to their organizations and customers. It is wise to be proactive in meeting this demand: by the time senior management actually asks for a demonstration of value, it is usually too late to act - they have already made up their minds. Recruiters can take advantage of four core staffing performance metrics: (1.) Actual Time vs. Contracted Time to Start, (2.) Staffing Efficiency, (3.) Hiring Manager Satisfaction, and (4.) New Hire Quality. These metrics involve only a modest level of data collection and will not only provide a measure of the value that recruiting brings to its customers, but just the simple of act of measuring will help improve operations. Here's a breakdown of each metric, the data needed to calculate it, and what information they provide. New Hire Quality This is the rating of the new hire by the hiring manager. It is recommended that this evaluation be conducted three to six months after hire. It takes at least three months before a new hire performance can be accurately assessed and after 6 months, work place influences become a dominant factor in new employee performance. To fairly judge the quality of a new hire, it's important to define expectations prior to recruiting and then compare these expectations to actual performance. The following list provides a starting point for developing the criteria for new hire: Goals System compatibility Capacity Motivation Knowledge and skills Performance
- 3. P a g e 2 | 8 Experience Customer compatibility Work group compatibility Organization compatibility Change/learning posture Actual Time vs. Contracted Time to Start In lieu of the traditional "Time to Fill," metric, which can be easily manipulated and distorted, consider using the ratio of the actual start date to the targeted start date that gets negotiated with the hiring manager. This ratio indicates how closely you met the expectations of the hiring manager. In addition, negotiating a start date with the hiring manager helps set realistic expectations about when someone will be in their seat working, which is what the hiring manager really cares about. In addition, using this metric will help reduce the likelihood of the "fill all open positions ASAP" fire drill that many recruiters must contend with. Hiring Manager Satisfaction This is the hiring manager satisfaction rating with the hiring process. Hiring manager satisfaction is often based on a general post hire questionnaire but there is an inherent problem with this approach -- the hiring manager has no pre-established guidelines by which to judge the recruiter. A fairer and more useful questioner is one which is completed before and after the recruitment process for a new position. This type of questionnaire ensures that both the hiring manager and recruiter are clear about what they expect from the hiring process. Staffing Efficiency While the traditional Cost-per-Hire metric is widely used and provides some meaningful indication of effectiveness, it does not account for variations in factors such as the level of the position being filled, labor market conditions, and availability of workers by region. Staffing Efficiency ratio is easily calculated as follows:
- 4. P a g e 3 | 8 Determine your Total Costs the sum of your Internal Costs (salaries, office space, supplies, general overhead) and your External Costs (all external expenses which are incurred to specifically identify candidates - advertising, contingency and retainer fees, research costs, annual fees for posting jobs on the Internet). Divide your Total Costs by Total Compensation Recruited (TCR) - the sum of the base STARTING salaries for each external hire during their first year. External compensation recruited is the best measure of recruiting production, and the Staffing Efficiency metric will illustrate how efficiently you are bringing in this compensation. Staffing Efficiency = Total Costs/TCR. Staffing Efficiencies in the range of 5% - 9% are considered excellent, and those above 16% indicate some needed attention. However, these ranges can vary by industry, organizational size, and region, and it is best to compare your own results to benchmark data. The hiring manager and recruiter should meet prior to recruiting to review all these areas and determine expectations for each. By proactively taking accountability for their contributions and backing up their assertions with credible metrics, recruiters will actively demonstrate their value to their organization and customers. By using the four core staffing performance metrics to assess their effectiveness, recruiters will be put themselves at the leading edge of the human resources profession that is under increasing pressure to demonstrate its value. It is always far better to lead with metrics than to be asked to produce them.
- 5. P a g e 4 | 8 The Recruiter’s Scorecard It is important to realize upfront that many of the criteria listed in this scorecard require data or information that must be collected by central management. If you fail as a manager to take the necessary steps required to gather this information you are (whether intentionally or not) restricting every individual recruiter’s opportunity for praise, recognition, and continuous improvement. It’s also important to note, that it is common knowledge that individual recruiters do not have total control over each of the factors in the hiring process that influence an individual recruiter’s effectiveness. Rather than complaining about this the lack of control, recruiters must instead assume the responsibility of influencing managers and other process owners in order to ensure that the desired results are achieved. Rather than whining or blaming others, recruiters must accept their role as the “captain of the ship” if they are ever to be rated as excellent in recruiting. Following are the metrics recommended for individual recruiters: 1. Performance of hires Performance appraisal rating of new hires. What was the average performance appraisal score of the people the recruiter hired (ratings after six months and after one year)? How does that average compare to the average performance appraisal rating of all new hires? (This is a measure of the quality or on-the-job performance of the hire.) The number of new starts. How many new hires resulted from the work of the recruiter? How does it compare to the average number of hires for all recruiters? Hard-to-fill positions. How many hard-to-fill or key positions were filled as a result of the work of the recruiter? How does it compare to the average number of hard-to-fill hires for all recruiters? Voluntary turnover. What was the voluntary turnover rate of new hires (at the end of six months, and the first year)? How does it compare to the average voluntary turnover rate of all new hires? Involuntary turnover. What percentage of new hires had to be terminated within the first year? How does that percentage compare to the average involuntary turnover rate of all new hires?
- 6. P a g e 5 | 8 2. Manager satisfaction with the results By sending a user survey to all managers (or a representative sample of managers) immediately after a hire is completed, you can assess their satisfaction with the primary recruiter on that hire. Each quarter you should summarize the results and then assess: Satisfaction with the hire. What was the average manager satisfaction score with the quality of the person hired (for each recruiter)? How does that satisfaction rate compare to the average manager satisfaction rate with all recruiters? Satisfaction with the quality of the final candidates. What was the average manager satisfaction score with the quality of the final candidates from each recruiter? How does that satisfaction rate compare to the average manager satisfaction rate with all recruiters? Satisfaction with the quality of the resumes submitted. What was the average manager satisfaction score with the “quality” of the resumes that were submitted to them for review (by each recruiter)? How does that satisfaction rate compare to the average manager satisfaction rate with all recruiters? 3. Diversity results Diversity hiring ratios. What percentage of all hires made by this recruiter this year were diverse? How did that percentage compare to the average diversity hiring rate? Diversity candidates presented. What percentage of all resumes and candidates presented to all managers were diverse? How does that percentage compare to the company average? 4. Employee referrals Percentage of referrals. What percentage of all hires came from employee referrals? How did that percentage compare to the company average? (Note: The extensive use of referrals is important, because a high referral rate has many added side benefits. As a result, it’s important for recruiters to actively encourage managers and employees within their assigned business unit or assigned job family to refer top quality candidates.)
- 7. P a g e 6 | 8 5. On-time results Percentage of hires by “need date.” What percentage of hires were completed on or before the start date that the manager specified? How does that percentage compare to the company average? (Note: This requires you to put the “date needed” on all requisition forms. The date needed is a superior measure compared to the traditional time-to-fill metric, because hiring people fast when they are not immediately needed is a waste of resources. In addition, fast hiring relative to a fixed standard (the standard number of days to fill) means little if the damage to the business begins the first day after a position remains unfilled after the need date.) 6. Candidate, applicant, and new hire satisfaction By sending a user survey after a hire has been completed to all finalists and new hires, as well as to a representative sample of applicants and interviewees, you can assess their satisfaction with the primary recruiter on that hire. Each quarter you should summarize the results and then assess: New hire satisfaction. What percentage of new hires stated that they were “extremely satisfied” when they were asked to rate how satisfied they were with the services provided by the recruiter and with the overall hiring process? How does each percentage compare with the average of all new hires? Finalist’s satisfaction. What percentage of finalists (those who were given second interviews or the top five final candidates), when asked to rate how satisfied they were with the services provided by the recruiter and with the overall hiring process, answered “extremely satisfied”? How does each percentage compare with the average of all finalists? Interviewee satisfaction. What percentage of interviewees stated that they were “extremely satisfied” when they were asked to rate how satisfied they were with the services provided by the recruiter and with the overall hiring process? How does each percentage compare with the average of all interviewees? Applicant satisfaction. What percentage of randomly selected applicants stated that they were “extremely satisfied” (for positions controlled by the recruiter) when they were asked to rate
- 8. P a g e 7 | 8 how satisfied they were with the services provided by the recruiter and with the overall hiring process? How does each percentage compare with the average of all applicants? 7. Responsiveness By using “mystery shoppers,” or asking selected candidates and managers about the time it takes for a recruiter to return a call or inquiry, you can assess a recruiters’ overall responsiveness to their customers. It is important to note, however, that the recruiter’s total req load should be used as a mitigating factor when you assess an individual’s responsiveness. Response time. What was the average number of hours it took for a recruiter to return a call or inquiry from a candidate or a manager? How does the response rate compare with the average for all recruiters? Response accuracy. What percentage of answers provided by the recruiter could be judged to be accurate when a sample of these answers are assessed by recruiting management? How does that accuracy rate compare with the average for all recruiters? Time to fill. What is the average number of days it takes a recruiter to fill a position? (Note: The time to fill is only important if it is considered simultaneously with the quality/performance of the hire. Also, as noted earlier, time to fill is always less important than the number of positions filled by the need date.) Internal cooperation. How well and how often does this recruiter cooperate with other recruiters and other HR functions? (Note: Although this is a subjective assessment, it can be measured through an anonymous survey among all recruiters and HR professionals that are some how involved in recruiting.) 8. Other indirect indications of a quality recruiter Although these are not specific recruiting results, each of these actions can eventually have a direct impact on overall recruiting success. Contribution to branding. How many talks were given by this recruiter? How many audience members attended? How many articles was this recruiter quoted in, or how many articles were
- 9. P a g e 8 | 8 authored by this recruiter this year? Did this recruiter actively participate in the team whose goal was to have your firm listed on the different “best place to work” lists? Did this recruiter actively participate in the employee referral team? Sources used. What is the utilization rate by this recruiter of the sources that produce the best- performing hires? Use of agencies and executive search. What percentage of this recruiters hires required the use of outside sources? How much money did this recruiter spend on external search help, compared to the company average? Names. How many new names did this recruiter add to the company’s candidate database? Relationships with new hires. Does the recruiter have evidence that they routinely ask new hires for the names of other potential candidates at their old firm? Do they also ask the candidate what worked and what didn’t during the hiring process, in order to improve it? Hires from competitors. How many hires that came from direct competitors was this recruiter responsible for? (Note: In these cases, your organization gets competitive intelligence, and the competitor’s performance is likely to decline) Complaints. What is the number or percentage of employment-related inquiries, complaints, or lawsuits (EEOC, OFCCP and civil) this recruiter was responsible for?