As a forward-thinking HR leader, you already measure the success of your talent acquisition programs. But are you using the right metrics?
Now is the time to examine your approach. According to LinkedIn’s Global Recruiting Trends Report 2017, hiring volume this year will increase over last year by 45 percent in Australia, 62 percent in Southeast Asia, and 50 percent in China.
More hiring means hotter competition. With top talent in high demand, recruiting continues to evolve from a reactive to proactive process, requiring a greater focus on strategic sourcing, effective talent pooling, and candidate experience. By leveraging data from this year’s surge in hiring, companies can improve their recruiting processes and outcomes. This, however, requires a focus on the right metrics.
Shift from macroeconomic metrics
HR’s current metrics stem from a legacy recruiting model. I recently interviewed Riges Younan, SVP Asia Pacific for Avature, about the historic shifts in talent acquisition. Within the past couple decades, global companies began creating in-house talent acquisition teams.
“Suddenly, HR was responsible for a new breed of a person – a headhunter, effectively a salesperson,” Younan said. “The process has transformed from what was once an HR, compliance-driven process into a sales and marketing process, with all the complexity that entails.”
[Tweet “HR’s current metrics stem from a legacy recruiting model that won’t last in the modern era”]
To combat this, HR introduced the Applicant Tracking System (ATS) as a system of record to ensure the new in-house recruiters were complying with processes and policies.
Although the move from agency to in-house had the potential to reduce fees, it also required a change in mindset for agency recruiters who typically posted jobs, waited for applicants, and matched people with open jobs. In-house recruiters needed a whole new set of skills.
“They needed to be marketers and salespeople along with being recruiters,” Younan said. “They had to learn not only digital marketing tactics but also proactive sourcing strategies to find the right people.”
To measure the success of the new in-house recruitment efforts, companies turned to metrics that made financial sense: cost-per-hire and time-to-fill. But these data points have serious limitations.
“Both factors are driven by the economic environment,” Younan said. “Cost-per-hire is a report that satisfies the need of the finance department, and time-to-fill only indicates how easy or hard it is to hire people at a given time.”
What’s more, neither illustrates the volume of candidates, the quality of a new employee, or participants’ satisfaction with the recruitment process. Rather than looking at lag indicators, the HR organisation needs to look at lead indicators that drive better hiring results.
Measure recruiter effectiveness
We at Avature recently hosted a live webinar on benchmarking and metrics with a talent acquisition leader from ABB, a global robotics and technology company. Four years ago, ABB created an internal talent sourcing team in the United States and began measuring recruiters’ efforts – with both day-to-day and end-of-year targets.
“Our day-to-day activities need to be measured,” said Bill Fowles, who manages the U.S. talent acquisition team. “I’m a firm believer that everybody needs their targets and goals.”
Recruiters document their phone screenings and measure the conversion rates from screen to interview and interview to hire. They engage with two prospects daily for a target of 40 candidates per month.
[Tweet “cost-per-hire & time-to-fill are fine, but do they really capture a recruiter’s effectiveness?”]
“We need to reach enough candidates to get to the right submittals,” Fowles reasoned. “Our end game is going to be our hires.”
To ensure recruiters talk to the right people, the company maintains an 80 percent benchmark for submittal to hire. ABB tracks the caliber of new employees primarily through the satisfaction of hiring manager – a top metric for quality of hire.
According to last year’s LinkedIn Global Recruiting Trends Report, most companies measure quality of hire with feedback methodology or long-term methodology:
- 50 percent through new hire performance evaluations
- 49 percent through turnover or retention statistics
- 43 percent through hiring manager satisfaction
Fowles explained that many factors contribute to how new hires perform or how long they stay. Hiring manager satisfaction provides “real-time feedback on whether recruiters are submitting the right candidates.”
After each hire, a recruiter sends the hiring manager a short survey focusing on five key pillars of hiring satisfaction. The talent acquisition department has used this method for about three years with great results this past year: a 48 percent response rate with an 83 percent satisfaction score.
“For us, this was a key metric that we could take to our executives,” Fowles said.
And when it comes to measuring performance, talent acquisition leaders are wise to focus on metrics with a lasting impact on the business and talent outcomes.
Focus on the metrics that matter
HR is in the midst of a second digital transformation. Companies are cultivating true engagement in which candidates, recruiters, and hiring managers are all highly involved in the complete recruiting process, from shoulder tap to first day and beyond. If recruiting organisations really want to improve the hiring process, they should focus on maximising the success of these internal relationships.
So if this is optimised talent acquisition, what exactly are the right metrics to measure its success? Join us at the Australasian Talent Conference 2017 to find out.
Attendees will have the opportunity to explore this new recruiting model with Younan as he presents “Reporting: Why time-to-fill and cost-per-hire are dead-on-arrival metrics” on June 21 from 1:45 to 2:30 p.m.
Younan will dive into how to tailor recruiting metrics to a particular business, and its departments and types of jobs. He will also identify the right measurements – including the single most important metric – for servicing stakeholders and hiring successfully.
This article is sponsored by Avature
Less than ONE week to go! Wrack your brains over the biggest questions and tackle the biggest challenges in talent acquisition, only at The Australasian Talent Conference. Tickets available here.
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