Whether you’re running a department of recruiters or you’re one of the recruiters, the following two metrics are all you need to maximize performance:
- Sendouts per hire: Without a doubt the most important metric.
- Hiring manager and recruiter interview assessment difference: Possibly the most important overlooked metric.
If you manage your efforts around these two metrics, within months you’ll reduce cost per hire and time to fill to the absolute minimum level possible, while at the same time dramatically improving candidate quality. To begin, you need to understand my point of view regarding metrics. It’s contained in these two fundamental rules: Rule 1: The only purpose of metrics is to tell you if something isn’t working. Then fix it. Rule 2: Metrics need to be real time (now, today), not historical (tomorrow, next week, next month). The purpose of tomorrow’s metrics is only to let you know if what you changed yesterday worked. If not, start over with rule #1. In my opinion, the primary purpose of metrics is to tell you if the recruiting process is working or not. Working means finding top people quickly for every job assignment. Historical reporting is what you do after the process is under control, to see how well you did. Just so you know I’m not blowing smoke on this one, I started my career working on the CFO’s staff at the corporate office of a Fortune 50 company, reviewing metrics for over 60 operating units. To be successful at this company, every division CEO and line manager knew they had to be on top of what was happening on a daily basis. If something got out of control, they were required to fixed it immediately. We even developed forward-looking metrics to determine what was going to break down in the future (we’ll discuss how to do this in a future article). Historical reporting and accounting data was only used to determine if the fix worked, not to figure out what to fix. In my opinion, this is the correct way to use metrics. Unfortunately, most articles I see written about metrics miss the mark. Time is the critical variable in any real-time process control environment. It could be monitoring a missile in flight to correct its course or establishing a six-sigma process to control techniques for a factory. Metrics need to provide timely data to tell you what’s going on. That’s what sendouts per hire and interviewer assessment difference can do for a recruiter or recruiting department. Let’s take the factory analogy a step further. If you compare running a recruiting department to a factory, and if each recruiter and hiring manager team comprises a work station, you’ll see the importance of daily metrics. In this case, our factory is a bunch of recruiters and hiring managers completing search assignments. The end product is a hired candidate. Just like in a factory, you need to measure what’s happening with the equipment. Sendouts Per Hire Sendouts per hire is the best way to measure this. If it’s above four, it means the process is out of control. Either the recruiter or hiring manager doesn’t know the job requirements or don’t know how to interview, or the recruiter can’t source top candidates. Whatever it is, I suggest you stop the search assignment whenever the sendouts-per-hire ratio exceeds four. Perfection of course is a sendouts-per-hire ratio of one. In fact, this should be your primary objective: presenting only one candidate per assignment. If you can do this, you’ll drive down cost per hire, reduce the time to fill, and dramatically improve candidate quality. I’d even suggest that you put a plan of action together, trying to figure out what it would take to achieve a sendouts-per-hire ratio of one. Then compare what you’re now doing to this ideal process. The differences should represent your action plan for the next six months. (We’ll be discussing how to do this at my pre-conference workshop at ER Expo 2003 West.) If you could consistently achieve a sendouts per hire goal of one, you’d have more time to find just one great candidate for the next assignment. You could then focus on quality instead of quantity. You would also be able to complete assignments more quickly or handle more assignments. Your cost per hire would certainly drop dramatically. Since quality would be increasing, your hiring manager clients would consider the “one sendout per hire” recruiter to be the most important person in the company. Surprisingly, you can’t reduce cost per hire and time to fill by focusing on cost or time. Focus instead on sendouts per hire. This is where you waste most of your time and incur most of your costs?? doing assignments over and over again. One sendout per hire is not easy, but it’s not impossible either?? and by just trying to reduce sendouts per hire to one, you will reduce cost and time per hire and increase quality. Interviewer Assessment Difference One way to determine if the problem with too many sendouts is lack of job understanding or weak interviewing skills is to use the second metric: interviewer assessment difference. This metric measures the difference in assessment scores between different interviewers for the same candidate. An example best illustrates why this is so important. Imagine that you and I are a recruiting team: You’re the recruiter and I’m the manager. You’ve just sent me your first candidate. If I score the candidate a 6 on a 10-point scale measuring ten core traits, and you measure the same candidate a 9, something is wrong. (See my article A Perfect 10 for details on this). If you’re the recruiter, you think you’ve sent me a good candidate. I think you’ve sent me just an average candidate. You’ve spent a lot of time to get this candidate to my desk. I think it’s been a waste of time. If you do it again and again, I think you’re a weak recruiter. You think I’m uncommunicative and unresponsive. But since we’re on the same hiring team, we need to work this out and figure out what’s wrong. To resolve the problem, we both must first agree on real job needs. This is the only way you’ll stop sending me weak candidates. This is the P in POWER Hiring. It stands for performance profile, and how to prepare one is explained in my recent article on the subject. Immediately after every interview, we need to justify to each other why we ranked the candidate differently. In the process of proving or disproving, we’ll discover that we’re either on a different page regarding the job or we used bad interviewing techniques (see my two recent articles on interviewing?? The Best Interview Question of All Time and My Favorite Interview Question?? for help here). This process of challenging each other will be a learning process for both of us. The interviewer assessment difference is your first clue that something is wrong with your hiring process. If the difference is more than one, we need to stop the process and figure out what’s wrong. This is what metrics are for, and why this is such an important metric. For example, if a piece of equipment was producing too much scrap, you wouldn’t continue producing the scrap?? you’d turn off the equipment and fix it. The interviewer-assessment-difference metric is the equivalent of a factory scrap report, but somehow this important metric is overlooked by most recruiters. We continue to produce scrap. When the hiring team agrees on candidate competency, the interview assessment difference is zero. This means that everyone knows the job and how to interview accurately. If the candidate is very good or excellent, we’ll now be able to hire the first candidate sent in. If our assessments agree, but the candidates are weak, then we know we have a sourcing problem. All the recruiter needs to do now is to develop new techniques to find better candidates. Once this problem is solved, you’ll be able to consistently achieve sendouts per hire of one. Of course, in the real world, you’ll probably never be able to get sendouts per hire down to one and interviewer assessment difference down to zero. But it’s the trying that matters. This is the process improvement piece. Just by trying, you’ll improve candidate quality, minimize cost per hire, reduce the time to fill, and be able to handle more assignments. That’s pretty cool, and you won’t even need to worry when the historical reports are published. They’ll be great?? and you’ll probably get an award, or something. (Note: As many of you know, I host two monthly online discussion groups where we explore topics like this in greater depth. One of the discussion groups is exclusively for those in corporate recruiting management where we focus on metrics for recruitment management. The other group is exclusively for third-party recruiting management. Here we discuss everything about managing a recruiting practice. Both groups are sponsored by POWER Hiring, Staffing.org, and ERE. If you’re on the corporate management side you can join by sending me an email at corpmetrics@powerhiring.com, and for third-party recruiting management the email is recruiters@powerhiring.com. I’ll be presenting much of this information at ERE’s ER Expo 2003 West in San Diego in March, and hopefully we’ll get a chance to meet there. This is an event you won’t wan to miss if you want to be on the leading edge of recruitment management. Also, if you’d like a white paper prepared by Fisher & Phillips on why using POWER Hiring’s performance profiles are the best way to both minimize your legal exposure and maximize your hiring effectiveness, send an email to whitepaper@powerhiring.com.)