These are the thoughts and takeaways from the latest Resourcing Think Tank (RTT) held on Tuesday 7th April 2015 hosted by AECOM’s Stephen Reilly (Director of Talent Acquisition, EMEA) titled ‘Redefining Recruiter KPIs”.
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’.
The ever-changing landscape in attracting talent means that the ways in which in-house Talent Acquisition staff are measured (and possibly incentivised) needs to evolve. This is especially true in the current candidate driven market which has had a great influence on the time and processes used for hiring. This Think Tank aims to discuss best practice in current and future recruitment KPIs whilst understanding the challenges businesses face in developing and implementing these.
Business Drivers for Redefining Recruitment KPIs
- Market changes – more recently the focus has swung from cost of hire to quality of hire
- In many organisations current KPIs do not reflect internal recruitment and instead focus solely on external activity
- KPIs often do not factor in the other projects recruiters need to work on, such as pipelining and candidate engagement, and therefore these aspects get sacrificed to meet KPIs – this may not have long term benefits
- There is a need for adaptability within KPIs due to different roles being affected by a diverse range of factors. This is especially true as companies become more global – one size cannot fit all
- Resourcing are often the only ones held responsible by KPIs within recruitment processes. Should this be two way with hiring managers being held accountable by being measured too?
- In some companies KPIs are used as targets – would it be better to use them as indicators to find out why and when things are going wrong to steer decisions rather than a number that is either hit or missed?
- Targets often don’t take into account quality of candidate experience which is essential for the employer brand
- Resourcing managers feel uncomfortable basing performance solely on KPIs due to influencing factors making it unfair
- Some business are finding that KPIs are too process oriented rather than having the end goal insight. This can lead to them actually having a negative rather than positive impact on resourcing functions and business objectives.
Many resourcing functions are currently using a set of KPIs that do not take into account the impact hiring managers have on the process. One suggestion is that hiring managers should also have KPIs for their role in the recruitment process. For example resourcing are targeted on how long they take to get a certain number of CVs to a hiring manager who could then be targeted on how long they take to give feedback on these CVs. Another metric could be how many days it takes hiring managers to inform resourcing when one of their team hands in their notice. This should lead to transparency in exactly what could be holding up the process when trying to fill certain roles. Another suggestion is that business partners could also be KPI’d in terms of providing information between resourcing and hiring managers to ensure the process is as efficient as possible.
Another suggestion is that hiring managers could be incentivised on their recruitment capability by basing part of their bonus on their role in this process, increasing accountability. Hiring managers should be educated on how to calculate the cost to the business of having a role sitting open as well as the barriers to filling a role and the cost of a bad hire – this should also increase accountability and awareness. Hiring managers should have the ability to forecast their need for roles so that resourcing is more aware and can become more predictive rather than reactive and pipeline for these. Something that also helps with this is if representatives from the resourcing team are involved in key business meetings to enable them to plan accordingly for hiring objectives.
As stated above KPIs cannot be “one size fits all”. Location, type of role and other factors can all impact results on many KPIs. To help improve the effectiveness of KPIs, resourcing should forecast more realistic measurements for each individual role based on historic evidence / achievement. Averages could then be calculated from this to create far more realistic KPIs which are adaptable to different roles and locations. This would also help to give the rest of the business more realistic expectations for when they can expect different roles to be filled. Resourcing should use all the data they already have to make these predictions, whilst recruiters are measured on how close they come to the forecasts for the specific role they are working on.
Recommendations for changes in KPIs and how to implement these
- Internal and external mix – developing KPIs for both, e.g. gathering data on employees to be predictive on their future career moves
- KPI individuals on quantity of pipelining
- Hiring manager KPIs
- Customer satisfaction (c-sat) (hiring managers) – conduct c-sat surveys with hiring managers, which are automatically sent once they make an offer to a candidate
- Job order closing meetings to discuss the process with hiring managers once it has been completed
- Quality of Hire – made up by attrition rate at six months, nine months, 12 months and two years. Resourcing teams can be held accountable up to this time which encourages them to ensure hiring managers are hiring the right people. However, this can be seen as unfair to measure as the hiring manager makes the decision and ultimately engages the most with the hire once they’ve joined so has the greater influence
- Candidate experience surveys – a response rate of 10% is typical and will provide useable data for discovering trends, however a higher response rate is much more desirable yet harder to achieve
- Net Promoter Scores Ⓡ can be used for both of the two points above – the simpler and quicker the survey, the higher the likelihood of response. Qualitative information also needs to be captured to ensure that if the feedback is bad, there is an understanding as to why, which in turn should be used to change process so respondents can see that their feedback making a difference
- Hiring manager capability – should hiring managers have their recruitment capability assessed before they are allowed to be a hiring manager?
- Having a balanced scorecard that takes into account many aspects such as quality and time
The problem some companies find is that KPIs are making recruiters make bad decisions for both candidates and the business in order to hit their targets. If KPIs were used for guidance rather than incentivisation would this stop this behaviour? Or are these targets needed to ensure recruiters are working in the right way? Agency recruiters are often seen as being financially rewarded on performance much more than in-house recruiters however they often have much lower salaries. The reason many in-house teams don’t want to use this type of reward scheme is because they do not want this type of environment.
For performance related bonuses it should be understood which metrics drive the right behaviours and these should be the ones that are used as incentives. One suggestion is that resourcing can set up as their own trading centre with their own P&L to make it easier to reward on performance rather than having a set budget.
In order to ensure the right KPIs are set for roles a hiring manager needs to inform resourcing realistically “what good looks like” when briefing for the role.
TA teams should have discussions with TA managers to discover why stats are at certain levels and KPIs should drive this. Stats should be used to better the process and know exactly where the problems are in the process and how to fix these. Issues should be raised and addressed together rather than someone just losing bonus due to not meeting targets. Instead KPIs should be used to create discussions. Manager discretion is needed to decide whether performance is a pure numbers game or not.
Having the right technology platform
The technology platform in place is crucial to gather data and then be able to use this to develop KPIs and forecasts. Companies need to ensure the ATS is the single source of data truth so that all data points are being captured to help resourcing be more informed and able to predict trends. However, it is essential to ensure the right data points are being analysed and captured and not too much data is inputted as this can be overwhelming. Are ATSs currently capable of creating reports that are clear and understandable?
Outsourcing and KPIs
When outsourcing to an agency should they take on the company’s KPIs and SLAs to ensure they meet companies’ objectives? This means that they need to come in-house and learn the ways that the company works and even have things such as the same quarterly reviews so they truly understand how to meet the objectives. This would ensure consistency in many elements of the process.
- Getting the right balance – ensuring resourcing are held accountable for their part in hiring but that this does not impact the longer term business goals and quality of candidate experience
- One of the main questions that came up in this Think Tank was around the structure of resourcing teams and what each member should focus their time on. We will be holding a Think Tank on this titled “Segmentation vs. 360: Structuring the Internal Recruitment Function” on 12th May so please keep an eye out for this summary to see more on this
- Hiring manager accountability
- Setting and meeting expectations of the wider business on the resourcing team
- Creating the right environment and culture within the resourcing team that encourages the right behaviours
Gathering data and conducting thorough analysis is essential to be predictive and ensure that the resourcing function is as efficient and successful as possible. With any business initiative it is essential to be able to demonstrate ROI for changes so it is essential to capture this data pre and post change. Some other ways to measure success were mentioned earlier such as hiring manager satisfaction, quality of hire and candidate experience.