Recruiting Metrics - Part 2

Part 2 of our Blog post series on Reporting.  It came from recent discussions in the industry around reporting in HR and on Recruiting in general with the fairly widely held view - that many in HR and Recruiting have a natural aversion to collating facts and figures and doing reports (a gross generalisation we know - but not one that gets much argument against).  Please see the previous post: Part 1, for a look at the more general issues of reporting in recruiting.

In this Part 2, we look at some of the more common reporting metrics used.  Here they are:

1. Time to Hire.  

A measure from the time you first have your vacancy, to when the candidate actually starts.  It's a great measure and one that gets a lot of attention in good recruiting organisations.  However it should be tempered in use, as we all know it can be well worth not hiring, or waiting, if you can't find the right person, right now.  Because lets face it, the most expensive hire is a bad hire. After all we all know that a bad hire really does cost...  You will find that too much focus on this as an overall measure may well prove a mistake.  If you are not convinced, consider this;  a slack labour market makes it easier and quicker to get candidates whilst a tight one makes it much harder.  The overall labour market environment clearly plays a big factor here.  Let alone the obvious fact, that some roles will take longer and more effort to recruit for, than others.  Hence as a measure, it's not one you can easily compare between different roles or different businesses (though we have certainly have seen a few in HR try).   As a generalisation, if you have good recruitment tools, processes and facilities you will see this measure drop on a broad like-for-like.  To declare our own interest, we tend to find that clients notice in broad terms their Time-To-Hire rapidly decreasing when they install our systems.  Consequently we also make quite a thing out of it (that is our disclaimer out the way) as it helps in our markering.  However, the point here is that it's not as easy and simple a measure as it first seems.  

2. Sourcing Channel

This is where your candidates came from:  Job-boards, Agencies, Talent Pools, Referrals, Advertising etc.  You should certainly be able to count the numbers from each, using your system.  However the real insight comes from when you look at the numbers by stage of recruitment e.g. are you finding that your Job-board candidates tend to be ones most likely to drop out early on.  Tip: look at those candidates who get to the last stage - where did they come from?  Yes, it does makes the metrics more complicated.  But, we suggest you will likely find the insights well worth while... 

3. Cost of Hire

We could not miss this one. Of course you should measure the cost of hire…  But how?  What should you include; cost of adverts, agency fees, assessment reports/tests, a prorata of HR costs?   If you are looking at costs, I would also suggest you need to include manager-time in this as well.  This can often be a really big factor in recruitment.  A fairly common insight we have seen from those who do look at all costs; is that it highlights the time your managers spend.  Given this, are your managers getting recruitment training?  Another insight you may find is that it might make very good business sense to give them some recruitment/interview training, i.e. making their time more effective.  The real insight this measure can give, is where you can compare it to alternative courses of action e.g. if you do things differently what is the effect on Cost of Hire.  Again it's not so easy as it perhaps it would first seem at first glance. 

4. Retention

Are your staff leaving?  Does it feel like you are filling a leaky bucket?  Most companies we see, tend to under-call this - at least initially i.e. they think its a lower figure than it turns out to be.   However, Retention can vary considerably between different roles.  It is also influenced by outside market and economic concerns.  You often see retention figures banded about in the press and in HR articles.  What can be more worthwhile than just focussing on an overall number - is looking deeper  e.g. are those who are leaving, the more recent arrivals or do you have a largely loyal longterm workforce?  Are new arrivals finding it hard to fit in and stay?  Or, is it just certain; roles, locations or managers who have a retention problem?  An overall measure won't shed any insight into this.  And, just to complicate matters, perhaps you may even have a problem with too low a measure, with too many people just hanging on and going through the motions?

5. Outstanding Vacancies

This is an interesting measure and in our experience it is a key one that top management tends to focus on.  An 'Outstanding Vacancies' measure seems readily accepted by management as an overall recruiting health metric at a point in time.  Indeed it is sometimes even used as a workload proxy-measure for the Recruiting Team.  However (as we all know...?) recruitment very rarely operates in a nice steady state.  There are generally lots of peaks and troughs and an overall number like this does not - sadly - provide much insight.  What we would argue is more important; is looking at your recruitment stage by stage.  For instance, having most of your vacancies at a stage of just about to hire is very different from having most of them as just started advertising. 

6. Offer/Acceptance 

This is the ratio of candidates who make it through and whom you want to both accept the job and then actually start work when you need them.  Also known as ‘latter-stage attrition’ it can be the manager's nightmare.  It where a manager has spent lots of precious time and energy on the recruiting process and now has a favoured candidate, only to then see them turn the job-offer down.  Roles and situations do vary considerably though - complicating comparing measures.  Some roles see hundreds and even thousands of applications, others very few.  There are lots of variants to this measure e.g. applicants to offer, applicants to actual hire, applicants to start and interview to start etc etc...  However, as situations vary considerably, using it as an overall average measure (as many seem to do) makes little sense and will offer little in the way of actionable insight.

7. Diversity Measures

This is a massive issue for HR in the UK, US and Europe.  But of lesser consequence in some other countries. In general, these measures are around ensuring your sourcing strategies deliver a good mix of people on gender and ethic lines and that these candidates don’t get adversely discriminated in screening and interviewing etc.  It sometimes referred to as ‘workforce balance’.  It does however need some care in how you go about measuring, as taking an example; IT PHP developers.  In our humble experience these candidates seem to be predominately male no matter which country you look at.  On the other hand nursing staff tend to be female - at least in western countries.  Trying to ‘force’ a 50:50 balance is probably not realistic with these roles.  Though of course that does not mean you should not try to ‘balance’ where you feasibly can.  We would argue you should also take care to be sensitive in how you capture and record such information, so you don’t end up putting off the very people you are trying to be fair to. So, if you are capturing this sort of information we would consider making it very obvious - why you are doing so.  Also we would suggest you ensure that it remains hidden from hiring managers and let also candidates know its hidden.  After all managers are bright enough to game a system if its left open and not all discrimination is overly overt...   

So...

Our point is you don’t have to be like the guy in the picture above and be a slave to report generation.  As outlined above you can easily end up with reports and metrics that don’t help you run your recruiting operation.  So what do you do?  

As we have outlined above, reporting that focusses on overall averages/metrics will in many cases provide little actionable insight.  The answer we think, is that you have to be able to search through your data and go deep.   It sounds scary and hard work but it really doesn’t have to be.  Most of these reporting metrics only really become useful when you apply then on a more granular level, e.g. comparing Time-to-Hire across the various recruitment stages for two similar roles, or looking at Retention by employee role, tenure, manager etc, or comparing Sourcing Channel with how far candidates get in your recruitment process by vacancy.  Perhaps finding that some of your managers take a long time to complete interviews, or that you are losing staff mostly in one location, or that the people you actually end up hiring generally come from one advertising source.  That - is useful information...  You can do something practical with these sorts of insights.

However to do this you have to - as we advise above - go deep.  It is catching on and we are increasingly being asked for our systems to provide data sets in a form that can be readily analysed in depth by the client rather than provide a canned set of  standard reports and graphs (which we also do).    If you don’t have someone within HR, or your recruiting team, trained to a good level in Excel pivot tables or another BI (Business Intelligence) too.  We would recommend you train one of them up.  The humble Excel, used by someone who knows how to use it, can slice and dice even quite large datasets very effectively so you can investigate and see what is really happening.  It is really not very difficult and it enables you to report in any way you can realistically think of, enabling you to hunt out patterns and discover insights.  From the debates online and in person we have been a part of, it does seem there a growing number in HR with these skills.  

Hopefully this post will encourage a few more :-)