On Recruitment Metrics
Organizations have become fixated on metrics. From performance management systems to recruitment, we believe that numbers are more objective and fairer than human judgment, experience, or even common sense. In some cases, this may be true, but we often report on things that cannot or should not be measured. The fewer and more focused the metrics are, the better. To report lots of numbers for the sake of reporting is a waste of time.
Metrics used in organizations need to provide insight into whether or not goals are being met or how well a function or department is fulfilling its purpose.
If the purpose of recruitment is as straightforward as I believe, its purpose is to find, attract, and influence people with the skills and capabilities the organization needs.
Other aspects often associated with recruiting, such as assessment, generating offers, making the hiring decision and controlling the success of the new hire, either are administrative activities that could be automated or belong to the hiring manager who is the primary person responsible for recruiting. Recruiters assist them in that process, but their primary purpose is to attract. find, and influence candidates. This has a profound impact on what metrics get reported
Let’s examine three commonly reported metrics - cost per hire, time to fill, and quality of hire - and see if they show how well recruiters are finding, attracting, and influencing potential candidates.
Cost Per Hire
The cost per hire is a questionable metric for several reasons. The cost per hire for a particular role rarely varies very much from quarter to quarter or year to year. The costs hover around a mean, making the exact figure virtually meaningless. All anyone needs to know is that, as a rule, junior people cost less to hire than more senior people.
In addition, what can anyone do to reduce that cost significantly? In most cases, very little because a major portion of the costs are fixed, including salaries, general overhead, equipment, and licenses.
And finally, how much does senior leadership care about cost? Shouldn’t the focus be on the contributions a new employee makes?
Time to Fill
Finding the best or the right person may not be easy and can take time, but an effective recruiter would have a proactively built a pool of potential candidates. Proactive sourcing is the best way to ensure that you can quickly meet a hiring manager’s need. Your focus should be on understanding and predicting future needs and then finding the right people. You should focus on metrics that track how quickly you are prepared to present candidates.
Time to fill is not a good measure because it is not entirely in the control of recruiters who actually have very little control over the responsiveness of hiring managers or candidates. It is not wise to report or take responsibility for a metrics you cannot control.
Quality of Hire
Quality of hire is an equally poor metric for a host of reasons.
The hiring manager decides the ultimate quality of a candidate, and his criteria are often intangible and determined months or even years after someone is hired. Every hire is judged by a different standard according the the manager, and the circumstances of the job.
I propose that candidate quality cannot be measured with numbers. It is not possible to define it in a way that can be objective or meaningfully connected to the recruitment process.
Without a defined, objective measure correlated to quality, we are left with subjective judgment. We all have been in situations when one manager thinks an employee is great, and another manager feels the opposite.
Another major flaw is to attempt to measure how quickly a new hire is productive. The first challenge is to decide what good productivity means and the second challenge is to make the choice that productivity is more important than judgment or innovation.
Productivity varies widely depending ion the job. Measuring it is very hard to do for managerial and positions where the output is not tangible. On top of this, how much of the level of productivity can you tie back to the hiring process? The variables that influence productivity include training, the work environment, the new employee’s teammates, and the corporate culture. There are too many to say that the recruiting process alone causes or even has any real impact on performance.
Some recruiters measure quality by looking at a new hires performance rating. But, it does not follow that recruitment leads to poor or good performance. Once again, there are too many other variables that affect performance far more than recruitment. Performance ratings are subjective and depend as much on personality, and the relationship the new hire and the manager have with each other than on actual performance. Because of this many major organizations have given up rating performance altogether in favor of continuous feedback.
And finally, the reasons someone leaves are more likely caused by the manager, economics, the corporate culture, or some other factor than because of the type of person recruited.
Even if there is a slight correlation between recruitment and turnover, the real question is how much difference? Is the difference enough to justify the extremes we go through to determine someone’s capabilities? I believe that the ultimate responsibility for quality of hire lies with the hiring manager and not with recruitment and is a subjective judgment.
Too many of our metrics are reported only because everyone else does and not because they make any real sense. Senior leadership would much rather see metrics related to the purpose of the recruiting function.
I propose a few metrics that perhaps senior leadership would prefer to see. We should all discuss this with them and then determine which of these, or some other metrics, are the most useful for changing our processes, activities and behaviors.
Metrics Leadership Might Like to See
Here are a few ideas on metrics that make more sense and would provide leadership with a more useful idea of how well recruiting is performing.
How effective is T.A. in attracting needed talent?
Job posting effectiveness (# of qualified vs unqualified candidates who apply)
Time to present candidates with critical skills and abilities
Number of key employees hired from competition
Size and variety of talent pool
Breadth and depth of our talent map
Ratio of offers to accept
If you are interested in a more in-depth discussion about good recruitment metrics, please download our white paper.
This white paper more fully expands on the article above and adds several sets of more relevant metrics.