As a manager you need to understand how to manage your recruitment and hiring processes. Below are eight tips on recruitment metrics, including how to measure cost-per-hire and quality-of-hire.
- Make metrics a requirement – Agree upfront that you cannot improve anything unless you measure it. Metrics in recruiting becomes the key feedback tool for continuous improvement. Dollars and numbers are the language of business and recruiters are not exempt from using the language. For every major goal you set, develop a measure or metric. Create and maintain a company-wide recruiting scorecard because “whatever you measure, improves.”
- Measure cost-per-hire – It’s important to build a business case for great recruiting by turning all of your measures into dollar impacts. Calculate the ROI and demonstrate that hiring top performers has a significant business impact over hiring an average person in the same job. Demonstrate that great hires are more productive than average hires and show the dollar difference between them. The language of business is dollars and numbers, so use these as your measuring units. Along with measuring cost per hire, measure the cost of a bad hire!
- Measure quality-of-hire – The most important metric is the quality of hire, which means the relative success rate of new hires on the job. If you only measure one, measure the most important one: performance of hire.
- Measure productivity – After the quality of hire, the most important indicator of great recruiting and retention is to improve workforce productivity. It’s essential that managers monitor that in order to determine the real ROI of recruiting. Periodically measure your workforce productivity by comparing the ratio that is generated when you divide the number of employees into the firm’s total revenue. Try to improve that revenue-per-employee ratio through great hiring and retention. Develop actions that attract and retain top employees with the goal of maximizing overall company productivity.
- Measure time-to-hire – Track the number of days, weeks, or months it takes from the start of the process to the time an offer is accepted. The best recruiters find new talent fast, but that is only half the equation. If your line managers are consistently unavailable for interviews or cause problems for the recruiters, then improvements must be made. Top performers want to feel wanted and will not tolerate unreasonable delays.
- Measure “customer satisfaction” – Periodically survey a sample of applicants and new hires to see if they are satisfied with the recruiting process. Then examine your present recruitment process in order to identify areas where applicants can be given more say.
- Rewards are also important – In addition to measuring success, it is important that you incent and reward your recruiters and managers for meeting their goals. Reward everyone who helps to recruit, develop and retain top talent! People do what is measured and they do it faster if it is also rewarded. If you care about something (performance of the hire) you need to measure and reward it, just as external headhunters will work harder because of their reward structure.
- Other things to measure – Don’t forget to measure important things like diversity, new-hire retention rates and time-to-productivity. Also measure and track the most important things to your business, for example (a) the ability to fill mission-critical positions, and (b) the actual sources that yielded top performers and the greatest satisfaction for both the hiring team and the candidate.
Written by TalentClick CEO Greg Ford, M.Ed. and Dr. John Sullivan.