Having access to accurate MI, reporting and analytics is essential to maximising the performance of any Financial Services Resourcing function. Whilst many Financial Services companies have their own internal analytics capability, enabling them to analyse historical performance, most don’t have access to accurate external market analytics or performance data. Those that do usually rely on data from their RPOs, which is often unverified. This lack of credible data puts Resourcing at a disadvantage when compared to other internal functions, including finance and marketing, who for years have utilised accurate external data.
Resourcing as a function has to become better at demonstrating the value it brings to an organisation. It needs to do this if it wants to evolve as a function and become a true trusted advisor to the business. We believe that with rapid advances in technology and the rise of Big Data and HR Analytics there is a huge opportunity for Resourcing to achieve this. However, the rise of Big Data is also the biggest threat Resourcing faces as, unless it can be controlled and understood, enterprise wide analytical functions will start to lead the agenda.
Central to Resourcing’s success will be the ability to evidence the quality of hires it is making and the impact these hires are having on the business’s financial bottom line. During a recent Resourcing Think Tank we set out to define exactly what Resourcing is and how we can potentially make un-tangible metrics tangible, for example, how can you measure your talent acquisition brand?
These are the thoughts and takeaways from the latest Resourcing Think Tank held on Thursday 16th June, hosted by Lloyds Banking Group’s Lynda Higgins (Colleague Services and Business Director).
The following summary has been prepared to reflect a segment of the discussion held amongst senior HR and Resourcing professionals from leading national and international businesses. Specific company details, experiences and examples have been omitted from this summary as all discussions are held under ‘Chatham House Rules’.
What can we measure in the Resourcing Function?
Firstly, it’s key to understand what it is that businesses actually want to see. We are all aware that Resourcing teams would like to see as much information as possible around everything that they do, however, we want to understand what key conversations to have with decisions makers that will have weight within the business. At the Think Tank, we came to the conclusion that there are a number of factors that hold importance including the following metrics:
- Cost of Hire
- Time to Hire
- 12 Month Attrition
- Lost or Gained Revenue
- Cost of a Wrong Hire
- Source of a Hire
As well as the above list, there are also several other measurable metrics that vary in relation to the specific preferences of the business. What we did find and agree on was that all of the above factors are measurable and can be backed by both Resourcing and Finance. Once the measurable metrics have been determined, the big question is how to present this data. We found that an alarming number of companies still use spreadsheets.
Internal and External Talent Acquisition Brand
How can you measure your internal or external talent acquisition function’s brand? To put it simply, it is very difficult. We came to a conclusion that there are a number of different measurable metrics and they all have to be looked at in conjunction with one another, for example:
- Internal Mobility
When the above factors are aligned, the impact will be a powerful insight into your brand and help identify any weak areas. You will have taken something that is historically un-measurable and made it measurable.
Quality vs Cost Per Hire
In theory, the more you spend the higher standard of candidate you should get. However, a bigger fee is not necessarily a guarantee of a quality hire. It may come down to choosing between hiring someone at a lower cost who has the potential to be a future leader, or paying a higher fee to get a well established candidate through the door.
For example, an experienced employee at Deloitte could move to Ernst & Young to do the exact same role, but may not settle and be deemed a bad hire despite having the necessary technical skills to perform the role. This then links back to culture, personality and the previous measures that should be taken.
As a result of the candidate driven market, candidates believe that they do not have to accept the first job offer they receive. They believe that they can justify a bigger salary, especially with counter offers being rife and more businesses understanding that losing a high performing employee is detrimental to the business in more ways than one. Looking at the long term effect recruitment has on a business, should you look to invest and upskill your current recruitment team rather than pay high agency fees? And would internal control result in a better candidate experience?
Why do people leave in the first three months? Is it the wrong role? Wrong manager? Wrong company? It could be any of these reasons. What we as Resourcing professionals can do is limit the amount of leavers. If you meet with the hiring manager, you are 86% more likely to fill the role. If you do not meet the decision maker, this falls to below 20% as you may not understand exactly what it is the hiring manager is looking for. Other factors which will increase success include, understanding the team culture, what the role entails, different personalities within the team and conducting psychometric tests to help you understand if a person will be a good fit for a business. The key to a successful psychometric test from the employer’s point of view is clearly defining the data that you are looking for and ensuring that it is being read by someone that can fully interpret the data and understand that this will lead to a metric of Quality of Hire.
Asking candidates to rate the recruitment process on a scale of 1-10 (10 being the best) at specific intervals can provide interesting data if managed in the right way. Respondents who rate either a 9 or 10 are seen as promoters of the business which, again, can also contribute to lower attrition and should also have a positive impact on referrals.
What should we be Measured on?
One of the key questions that we all want to understand is, ‘What does the business actually want to see?’. They may ask for specific data for you to include in your weekly/monthly update, but if you stopped sending them that data one day, would they actually realise a noticeable difference? Would it alter the day to day decisions of that leader? Instead of halting all data being shared, a better option is to replace it with meaningful information that shines a light on what it is Resourcing does and to demonstrate how a potential budget extension or an extra head could benefit the business. This link to our Revenue Calculator shows you the numbers that will help to get a conversation started and encourage Finance departments to take Resourcing seriously.
The Journey of Resourcing Insight
Resourcing Insight is a tool, developed by the Oasis HR Group, off the back of a Resourcing Think Tank held three years ago by Lynda Higgins at Lloyds Banking Group. During the Think Tank, it was acknowledged that Resourcing required a way to show businesses how a team is performing. Prior to this, resourcing teams were reliant on spreadsheets or Applicant Tracking Systems that, at best, are 60-65% accurate. Whilst every other part of the business was backing up its ideas with the use of Big Data and clever dashboards, Resourcing was getting left behind. This was our inspiration. In short, Resourcing Insight collects and verifies ATS, Finance and employee data from our customers that enables it to deliver a clear suite of accurate Talent Acquisition performance dashboards.
As Resourcing Insight takes the same ‘like for like’ data from all of its customers, it is able to deliver external market insight on the performance of their function. For the first time you can compare and contrast your performance against other businesses giving you a valuable external reference point in order to gauge success or build a business case for investment. More information can be found on the Resourcing Insight website.
- As a Resourcing function, we have lots of data available. It is about time we start using it. If we fail to do so, enterprise companies will, which will result in them making the decisions for us. However, if we can get an industry standard way of showing the data that we need, we can really start to influence decisions that can make us stronger as a function.
- We shouldn’t be scared to show the business how we are performing at the moment, regardless of if it’s good or bad.
- KPIs are not the Holy Grail. We can all use KPIs, however we should only use the ones that actually make a difference to the business.
- Is Quality of Hire more important than Cost per Hire? Obviously cost is important, however when you acknowledge the cost of a wrong hire, the importance switches to quality. This leads to having meaningful data that we are all confident in and can handle itself in a discussion with business leaders.
- The big question that always comes up is how to use Predictive Analytics successfully. The simple answer is that until the data being collected is at least 85% accurate, then predictive analytics will not work. Once we have at least two years of validated data, we can then seriously start to run our predictive models, but until that time we are no closer to getting to this stage.