Recruiting Effectiveness Measurement

Last post I wrote about recruiting efficiency measures.  From the effectiveness side, we’re all used to things like first year turnover rates and performance rates.  Once again, we’ve been using these metrics forever, but they don’t necessarily measure actual effectiveness.  You’d like to think that quality of hire metrics tells us about effectiveness, but I’m not sure it really does.

When we look at the standard quality of hire metrics, they usually have something to do with the turnover rate and performance scores after 90 days or 1 year.  Especially when those two metrics are combined, you wind up with a decent view of short term effectiveness.  The more people that are left, and the higher the average performance score, the better the effectiveness., right?

Not so quick.  While low turnover rates are absolutely desirable, they should also be assumed.  High turnover rates don’t indicate a lack of effectiveness.  High turnover rates instead indicate a completely dysfunctional recruiting operation.  Second of all, the utilization of performance scores doesn’t seem to indicate anything for me.

Organizations that are using 90 or 180 day performance scores have so much new hire recency bias that they are completely irrelevant.  It’s pretty rare that you have a manager review a new hire poorly after just 3 or 6 months.  For most organizations, you expect people to observe and soak in the new company culture before really doing much of anything.  This process usually takes at least 3 months.  And while the average performance score in the organization might be “3” your 90 and 180 day performance scores are often going to be marginally higher than “3” even though those new hires have not actually done anything yet.  However, you’ll have a performance score that is advantageous to the overall organizational score making you think that your recruiters are heroes.  Instead, all you have is a bunch of bias working on your metrics.

I’m not sure I have any short term metrics for recruiter effectiveness though.  Since we don’t get a grasp of almost any new hire within the first year, short term effectiveness is really pretty hard to measure.  I’m certainly not saying that turnover and performance are the wrong measures.  I’m just saying that you can’t measure effectiveness in the short term.

First of all, we need to correlate the degree of recruiting impact that we have on turnover versus things like manager influence.  If we’re looking at effectiveness over 3 years, we need to be able to localize what impact recruiting actually has in selecting applicants that will stick around in your organizational culture.  Second, we need to pick the right performance scores.  Are we looking at the actual performance score? goal attainment, competency growth, or career movement in # years?  Picking the right metrics is pretty critical, and it’s easy to pick the wrong ones just because it’s what everyone else is using.  However, depending on your talent strategy, you might be less interested in performance and more interested in competency growth.  You might want to look at performance for lower level positions while the number of career moves in 5 years is the metric for senior roles.  A one size fits all does not work for recruiting effectiveness because the recruiting strategy changes from organization to organization and even between business units within the same organization.

Overall, recruiter effectiveness is not as simple as it seems, and unfortunately there isn’t a good way to predict effectiveness in the short term.  In fact, short term effectiveness may be one of those oxymorons.

Recruiting Efficiency Measurement

If you look through Saratoga, there are all sorts of metrics around measuring our HR operations.  For recruiting, these include all the standard metrics like cost/hire, cost/requisition, time to fill, fills per recruiter, etc.   Unfortunately, I’m not a fan of most of these metrics.  They give us a lot of data, but they don’t tell us how effective or efficient we really are.  You’d like to think that there is going to be a correlation between fills per recruiter to efficiency, and there probably is some correlation, but true efficiency is a bit harder to get a handle on.

When I’m thinking about efficiency, I’m not thinking about how many requisitions a recruiter can get through in any given year or month.  I’m not even sure I care too much about the time to fill.  All of these things are attributes of your particular staffing organization and the crunch you put on your recruiters.  If you have an unexpected ramp-up, your recruiters will be forced to work with higher volumes and perhaps at faster fill rates.  Once again, I’m sure there is a correlation with recruiter efficiency, but it may not be as direct as we think.

Back to the point, when I think about recruiting efficiency, I’m thinking about the actual recruiting process, not how fast you get from step one to step 10, or how many step 1-10 you can get through.  Recruiting efficiency is about how many times you touch a candidate between each of those steps.  Efficiency is about optimizing every single contact point between every constituency in the recruiting process – recruiters, sourcers, candidates, and hiring managers.

The idea is that you should be able to provide high quality results without having to interview the candidate 20 times or have the hiring manager review 5 different sets of resumes.  If you present a set of 8 resumes to the hiring manager and none of them are acceptable, you just reduced your recruiting efficiency by not knowing the core attributes of the job well enough and not sourcing/screening well enough.  If you took a candidate through 20 interviews, you just reduced your efficiency by involving too many people who probably don’t all need to participate in the hiring decision and who are all asking the same questions to the candidate.  Sure, there is a correlation between the total “touches” in the recruiting process to time to fill, but “touches” is a much better metric.

I know we’ve been using the same efficiency metrics for ages upon ages, and most of us actually agree that we dislike these.  Touches within the recruiting process makes a whole lot more sense to me, as it gets to the actual root of the efficiency measurement.

Employee Blogging for Recruiting

I’m not sure how many of you noticed the NYT article a few months ago on MIT student bloggers.

M.I.T.’s bloggers, who are paid $10 an hour for up to four hours a week, offer thoughts on anything that might interest a prospective student. Some offer advice on the application process and the institute’s intense workload; others write about quirkier topics, like warm apple pie topped with bacon and hot caramel sauce, falling down the stairs or trying to set a world record in the game of Mattress Dominos.

Posting untouched student writing — and comments reacting to that writing — does carry some risks. Boring, sloppily written posts do nothing to burnish an institutional image, college admissions officials say, and there is always the possibility of an inflammatory or wildly negative posting.  ((Lewin, Tamar, October 1, 2009.  “M.I.T. Taking Student Blogs to Nth Degree.”  Retrived from http://nytimes.com.))

Certainly we have our recruiters on the blogs (look how many recruiting and HR blogs there are nowdays).  And we’re all over linked in and facebook, especially facebook where we can characterize ourselves and our organization with some personality.  But I’m not really sure how many of us have looked into employee blogging.  Employee blogging are not those snippets of quotes that you see on recruiting pages.  They are not the rehearsed lines of “I love my company so much” branding with precision.  Instead, they are the raw, uncensored words of employees and their lives at your organization.

I think that employee blogging holds less risk than student blogging.  Students are expected to say whatever they want, but employees are still bound by the employment contract, and while we may tell people to write whatever they want, at the end of the day, employees still want to keep their jobs.  If you use employee blogs, you’re probably also selecting some of your smartest, most productive performers (and hopefully well compensated engaged employees too).  If this is the case, you have little to worry about.  What you will have is a blogging forum that tells potential employees what a day in the life at your organization really might be like.  Candidates get to hear from the mouths of real practitioners what to expect and what the culture holds, and even what some of the pitfalls are.  If you’re lucky, you not only attract the right people, but you might even weed out those who are not a good fit for the organizational culture.

In a few months, I’ll be hitting year number 5 of blogging at systematicHR.  Come on everyone, it’s time to get in the blogging game already.  🙂

Internal Staffing Through Social Media

We all know that the best way to find a job is by having great professional networks.  God, looking for a job through job boards is possible, but oh so difficult.  Shouldn’t the same go for internal staffing?  Rather than having internal job boards and postings, we should be deploying social medias to facilitate internal staffing transactions.  Here is the idea:

Employee plans around high potential employees, career paths, performance plans, and even succession plans should give us a pretty good view of what the possible next steps of each employee could be.  Rather than sitting around waiting for a position opening to pop up and hoping that the internal employee and the position opening get magically linked up, there are certainly ways to be much more proactive about this.

Often, employee job growth is a function of pure luck.  They either knew the right person and the hiring manager wanted to hire/transfer them, or HR stumbled upon someone and decided it was the right move the get them to the new department.  The science and predictability of moving people around the organization these days is more haphazard than science.

In the external market, people now join groups in social medias to acknowledge their interest in specific jobs or job families.  If you want to get into compensation, you can link up to people who are already in the compensation field.  If I’m an internal employee, why should I not have an internal social network of people who are in the compensation department?  I could connect to people, do informational interviews, ask questions about the skills needed, and understand the realities of working there.  Best yet, rather than hoping that magic occurs, I have a direct link to the people in the compensation department and when an opening actually happens, the probability that I’ll become aware of that opening grow significantly.  The hope is that someone in comp that I’m linked to is just going to let me know as soon as something happens, and not only am I linked and have some good awareness of the requirements, but I’ve also had time to prepare myself and develop the necessary skills.

Internal mobility is something that talent practices can execute within our HR organizations, but we can also put a lot of power in the hands of employees if we can correctly deploy social medias and have our employees adopt the idea that they can actively manage their own futures.  One of the key parts of the employee engagement equation is control.  Not only do employees need to love what they do, but they also need to feel some measure of control over their own destiny.  Deploying internal social medias in this way makes sense on so many levels, and HR really needs to get on the bandwagon of actually starting to deploy this stuff.

Market Salary Rates

The HR Capitalist had a post the other day about pricing candidate salaries.  But as usual, I have my own opinions.

Say it with me – the market rate for any candidate is the $$ amount they will accept.  They’ve got info about what they are worth, you’ve got info about what they are worth.  When it all comes down to it, ranges give guidance, but you can’t rely on the extremes in the offer process.  You use the range to close business.  ((Dunn, Kris, December 8, 2009.  “Say It With Me: The Market Rate for any Candidate is the $$ Amount They Will Accept with Mimimal Counters…”  Retrieved from http://www.hrcapitalist.com/.))

I’m not totally sure I agree.  Chances are, the hiring organization does not really know what the prior salary of the candidate was.  We know that many candidates lie on resumes, and since their prior salary is not usually written, salaries probably also tend to get inflated.  We also have a pretty reasonable range of salaries that our compensation departments are doing.  These global surveys are pretty standardized across a number of consultancies, and are fairly predictable.  Candidates generally know the range of pricing they are looking at, as do the hiring organization.  It’s no secret what the typical ranges are for a candidate who is experienced and has been in the market.

However, rather than the market rate being how little a candidate will accept, I think that this idea is a recession strategy.  Since we have lots of people sitting on the bench right now either having been laid off or whatever, this strategy might work in the short term.  But in the long term, I’d like to think that we’re looking at recruiting and pricing more strategically.  If we are running a successful recruiting program, we are going to be recruiting people who are already employed, and perhaps are not even looking for jobs.  These are the best candidates as we all know (even if we all know it in theory but not in practice – they are the hardest candidates to get).  When we talk about positions that are highly collaborative or require a degree of innovation capacity, then the stakes go up significantly.  It’s not the lowest price a candidate will take, but based on the idea of a growth economy and the strategy of the position being filled, I believe it’s more about what the position is worth to the organization.

I’ve had it all ways, early in my career with a WAY lowball offer (which I took since I was rather inexperienced and it was still a good offer for where I was at – I later learned that all my peers were earning at least $10k more).  I’ve had the generous offer based on my skills and experience and the fact that I was not really interested in moving jobs, and I’ve had the fair offer (when I was actually on the bench myself).

At the end of the day, we need to make sure that we are hiring people in a cost effective way.  But if we decide that low salary pricing is the only way, then we deal a bad hand if we’re looking to fill strategic positions with high caliber employees.  The best people out there know they are the best and don’t take to this strategy well – they walk away instead.  Even the average people out there know where it’s at, and lowball salaries don’t make for long term engaged employees.  Decide for yourself if that $5k is worth disengagement or missing out on the best candidates.