Recruitment Success: An Iceberg

Measuring Success of Recruiting

-Atul Mohan

The success of recruitment largely decides the growth story an organization has to tell. However, measuring the success of recruitment is a big challenge. The number of factors effecting recruitment is large and as a function, recruitment is hugely dependent on external environments compared to any other enabling function. Above all, the talent acquisition function has to carry the extra burden of being face of the organization to the outside world.

“The role of recruitment is crucial. The two aspects of the academy are recruitment and coaching. Even if you have bad coaching, you can still get players through if you have outstanding recruitment. But it does not work the other way round. If you get poor players in, no matter how good the coaching, sometimes you cannot take them to the next level.”

~ Gary Issott

It is often said that recruitment is all about getting the right people, at the right time and at the right cost. However, it is simpler said than done. The signs for successful recruitment process and organization are many; some are measurable and immediate, some are long term and a few are more qualitative than quantifiable. However the success of an organization in long term is due to appropriate balance between softer, non-quantifiable factors and finite measurable numbers. Excess focus on direct numbers may be myopic view to the larger picture. Yet, the importance of numbers in recruitment cannot be ignored. Thus, the dilemma continues- short term versus long term factors to measure the success of recruitment in an organization. The change in focus from short term approach to long term and how the stance changes as per organizational needs is discussed later on.

Internal and External Facing Function

This function bears the load of

·         being face of organization to external world,

·         being the gateway to people in organization thus maintaining organizational dynamics as well as quality of employees

·         maintaining an optimal cost of hiring

·         directly being responsible (partly) for success or failure of  a team’s growth

·         safeguarding the process and ensuring the required checks and balances

Considering high stakes of both internal and external people, recruitment faces a stiff task to measure up the different expectations simultaneously. Balancing between two extremes is a common problem with recruiters. Speed of sourcing versus vendor hiring cost, quality of resource versus salary cost, fitment versus number of open positions are some of the most prevalent dilemmas for hiring team. In situation of paradoxical asks, it is important to define an organization’s success factors and take certain call outs.  A scorecard approach with direct measurable impacts may help in better approach towards recruitment. The below diagram may represent a typical approach while conceptualizing recruitment process. However, this may differ considering the stage of evolution an organization is in.

 

As we can see that process and internal customer’s view holds paramount importance while defining the starting point and everything ends up with financial impact to the company. Hence whatever customer demands as requirement for recruitment team and the process followed by the recruitment team shall be aligned to financial impacts a company is looking forward or is ready to bear at that particular juncture. For instance, while launching new project, a company may look for best in industry to kick off a project and recruitment team can work with best in class placement agencies to land up such resource irrespective of placement and salary cost. Any second option will always be the second best one. Hence, what shall drive recruitment, will come from the top. Needless to say, management’s expectation from the business may vary. Irrespective of driving force, there will always be certain measurable for recruitment. The importance attached may differ but these factors are critical while recruiting.

The Immediate Measurable Factors

1.       Positions filled within SLA

Position filled is always the most visible and measurable parameter for recruitment. Sometimes people ignore how hiring has fared against timelines. However, as always said, hiring is about having right skills at right time, meeting the time line is equally critical. For different skills and levels, the SLAs may vary depending on criticality of the position for the organization. For organizations in highly competitive space (new application/ game development, new product features etc.), timeline can make or break the success of any new launch intended. 

2.       Critical positions filled

This point can be considered as subset of above point. As it is all about getting right people, we need to have critical or right people in. Not everyone is a thought leader and we need to get some critical resources to give strategic thought direction to the organizational vision and mission. These positions can be ten times more critical than any normal resource hired by the company. Design consultants, system or solution architects, head of business verticals are some typical examples for highly critical positions. Sometimes a company may be ready for delay in hiring but nothing less than a 90% match between available profile and requirement.

3.       Individual process SLA

Recruitment is sequential flow of a candidature through various stages of filtering. At each stage, there should be a definite timeline to meet. One cannot have timeline skewed towards one process while maintaining the overall timeline. Adherence to timelines at each stage describes the efficiency of overall recruitment process and maintains the interest of candidate in organization. Also, this helps in more predictability and aids further planning for the open position. Imagine two scenarios; one where a candidate goes through rounds of discussion within two days from applying for a job and getting no communication in between till his final offer which comes on fifteenth day. The second scenario can be almost equally spaced process completed within same timeline. The chances of connect being greater and candidate joining in second scenario is much more than the first scenario due to continuous communication between organization and the candidate. Second scenario will also help in proper planning for back-ups as one need not wait till process end to find the outcome.

4.       Cost per hire

A much talked about parameter these days is cost per hire. People may have different ways to calculate and different areas to focus to keep the cost in control. Cost of hiring will depend a lot on company’s focus, recruitment strategy, the kind of business space the organization is in etc.

Vendor cost and salary cost will be higher for organizations where timing against competition is very important. Product companies typically have higher cost per hire compared to services industries as success of a product is quite often due to advantage from being the first mover. A company may adopt a lean recruitment team-high cost per hire model if the liability needs to be reduced. Similarly, there could be a many factors influencing cost per hire yet it remains a significant parameter to measure success of overall recruitment for the organization.

5.       The funnel of CV

Often ignored while considering the recruitment effectiveness, funnel of CV is very important area of hiring. Effective recruitment is to get the right profile in the first go. A healthy selection ratio confirms effective and productive recruitment. Imagine going through hundred profiles for a single hire vis-à-vis going through two or three profiles for that hire. Add collective time loss of panelists to recruiter’s time and calculate the total productive time lost!! More number of profiles also means considerable delay in hiring. One point not to ignore here is that success of any resume sourced is on overall fit of resume with the organization. Overall fit means considering all factors like budget, skills, experience etc. and not only skillset required. Too many rejects for a particular position also sends a negative signal about the position among the job-seekers.

There can be some other factors too which can define the efficiency of recruitment for a particular organization. For instance, some organization may focus on certain region, gender or social strata while recruiting. However these factors may be very organization specific.

Long Term Measurable

1.       Infant attrition rate

Any hiring is a cost and an investment. If people leave the organization early, time and continuity of production are lost. Above all it is also a reflection of hiring misfits or miscommunications during the recruitment process. These impacts the cost directly as same process needs to be re-done and the organizational plans are delayed till the skill is hired.

2.       Offer to joins conversion

The job of recruitment team is to land people and not to make offers. Higher number of offers per person joining the organization can be detrimental. Firstly, it is loss of productive time for the recruitment team as well as interview panel. Secondly, it reduces the pool size for a particular skill set as you may not want to revisit the people who have been offered once already. Thirdly, it gives a very negative feeling among talent pool as so many offer rejects can be interpreted as sub-standard offer. Also, this factors need to be critically balanced with infant attrition. Having 100% offer to join conversion and 50% infant mortality is not right either.  Practically a hundred percent offer conversion and all joins being super performer is not possible. Hence, either some people need to let go before joining or we shall be prepared for infant mortality.

3.       Performance rating of new hires

How a newly joined person is performing in the system tells whether the hiring decision made earlier has been correct or not. It also gives an indication of correct fitment in terms of position and team. Some companies follow up probationary period policy. In case we are having a good proportion of people not getting confirmed within stipulated time, one can surely assume that recruitment has not done its job properly.

4.       Employee Satisfaction

Any person while taking an interview passes through recruitment as they are the gatekeepers to any organization. The first employee satisfaction survey taken by the employee tells us if a person has got what he has been promised by recruitment as well as experience during the recruitment process. A well connected recruiter can actually help a candidate in making a right decision regarding his job.

5.       Voice of customer

Other departments are clients for recruitment. Their perception about recruitment is very important. This might not be based entirely on meeting targets but a lot on customer management, understanding of requirement and focus on critical positions.

6.       Parity within similar roles

This is an important factor as it shows how much understanding of profile the recruitment team has and whether they are able to equate two profiles in terms of impact on their respective business. This helps in proper compensation benchmarking, prioritization of hiring, defining hiring process and correct assigning of focus and recruitment tools. Though some may pass this baton to Organization Development team but recruitment is an equal owner of creating parity within the organization as it has a broader view of the organization.

Intangible Factors

All the measures are not tangible. Many factors are strong indicators of success of recruitment. However, to quantify them always and especially pin pointing one of them as critical or judge it in a span of even a year or two might not be possible. Such success factors are long term sustained initiatives.

1.       Branding

Recruitment and branding for organization go together. Right recruitment helps in building brand for organization in long term, though direct correlation cannot be established. Yet, the kind of talent an organization is able to attract is reflection of the brand value the organization is able to create. However, other policies and work environment are also contributing factors and hence correlating with recruitment only may not be possible.

2.       Success of new initiatives started in organization

In era of company diversifying into different business, thought leaders for new business are generally hired from outside who are experts of their fields. Most of these initiatives are into highly competitive space like gaming, e-commerce, products or platform development. The stiff competition means vying for same talent pool and hence success of any new initiative can be contributed towards recruitment yet without any direct correlation.

3.       Quality of hire

Cultural fit with any organization, gelling with team, creating healthy environment or creating rift within team, such factors are not direct measurable. These factors are different from skill set and performance. This is more about the mutation one is able to bring into the work style to match up to the organizational DNA.

4.       Knowing the market

Knowing your competitors, the place of availability of required talent pool, comparative compensation and hiring strategy always determines the success of recruitment. At the end of the day, most of us are eying the same talent pool. In some cases a benchmarking is possible but only with certain disclaimers. Compensation surveys can be accurate only to the extent of participating organizations. It doesn’t mean that a competition may not lie outside the published list. Same way a peer industry can also be threat and hiring by recent e-commerce companies from logistics and courier companies is just an example.

5.       Process adherence and compliances

Recruitment process compliances help a company in not only being safe from legal issues but also help the organization in attaining brand value.  A strong process contributes a lot towards other factors like parity creation, employee satisfaction, predictability of cost etc.

6.       Competency profiling

For every role, there are certain competencies identified but sometimes they do not get translated into interview process, thus force-fitting the actual process over desired one. Recruitment needs to get this process correctly established as this in turn will affect correctness of hiring decision. Appropriate recruitment tools for the position will also impact candidate’s experience during the process along with evaluation of correct technical and behavioral abilities. This will in turn ensure the quality of hire and success of the program hired for.  

7.       Candidate experience

A candidate goes through various rounds before final selection and his experience, communication of next stage of the process etc give them their ‘moment of truth’ regarding their organization. The effectiveness of recruitment process for the given position will impact the feeling candidate carries back after the process. The candidate is not only any organization’s walking-talking advertisement to the outer world but also will decide success of recruitment by joining or not joining depending on his experience with the recruitment team.

A scorecard approach

An ideal scenario will be to incorporate all the factors, give them a score and develop a scorecard to measure the success of recruitment. In reality, all such data points are not available to maintain a score and give a quantifiable face. In absence of availability of data and inability to develop a correlation equation between success of talent acquisition as function and other factors, it is advisable to select a few of the aforesaid factors, prioritize them through heuristic evaluations and develop a scorecard of the same.

Without attaching any conclusion, the score lines will not hold any significance while proposing the model. There needs to be a key to tell us where a recruitment system needs to focus. The overall rating can be marginally lesser compared to individual process scores. This is precisely based on the reasoning that one might score high in one area but to match the same score in aggregate requires all areas to be equally high and requires high degree of consistency through out the recruitment process. The table below will elaborate it further.

Overall rating Score:                                                                       Individual Attribute (Recruitment Step)Scores :

Overall Score	Assessment of recruitment process		Overall Score	Assessment of recruitment process
>8.5	Strong recruitment process		>9	Strong in particular recruitment process
7.5- 8.5	Processes needs some fine tuning		8-9	Can be fine tuned
6-7.5	Need more scalability and robustness		6.5-8	This process has to develop more
<6	Lack of overall process and recruitment is more ad hoc		<6.5	This particular area is a matter of concern for the recruitment team.

                                                                     

Among the points mentioned above, the most important factor determining the success of recruitment is number of positions filled against given target for the time period within the desired timeline. The factors mentioned earlier shall be appropriately incorporated to create a relevant scorecard for the organization. This may differ significantly depending on organizational maturity and needs. 

Sl No	Factor	Weightage (in%)	Actual Score (on 10)	Weighted Score (C*D)
1	Filling up of position within desired time period	25	Score for individual attribute
2	Cost per hire	10
3	Critical positions filled	10
4	Voice of customer	10
5	Performance rating of new hires	10
6	Process adherence	20
7	Infant attrition rate	15
Total		100		Aggregate score of Talent Acquisition effectiveness

Some extra factors can always come in and some regular ones may walk out of the scorecard. These changes can be even for a short term and not necessarily be a shift in gear considering the change in market, company strategy or any other environmental changes. Factors like cost per hire and process may not be so critical for newer organizations and performance of new comers also can be ignored during initial days. However, as the organization grows, process, scalability, cost per hire becomes more important. The organization gains critical mass to run up even while recruitment process is on. Sometimes, the changes in stance can be seasonal as mentioned earlier. A new project can suddenly spike focus on hiring overriding all cost and efficiency factors. The below graph shows the generic shift in priority as an organization moves towards maturity from it’s infancy.

Relevance to a company

The success of recruitment will define the success of growth any organization is targeting. However, there will be always some amount of variation depending on organization to organization. As mentioned, few factors might be much more important than others and at any other place. One such factor for large organizations (like IBM, Dell, Infosys etc) is adherence to processes and compliance. Being a large global organization, these companies cannot rely only on manual sieving and interventions to meet hiring targets, especially when it is as high as 25K annually, which is greater than sizes of few mid-sized organizations in the country. In addition, all the geographies have their idiosyncrasy to adhere and hence any failure to adherence can bring in lot of legal issues and trouble for the company. Another very important factor for any company can be the infant attrition rate. This delays the fulfillment of required resources and hence delays the deliverable which can be detrimental for all companies. For some organizations who survive from project to project, this can be almost fatal. For large organizations like software services, the company hires 25-30 thousand people per year and if this rate is 30%, we are talking of more than eight to ten thousand people leaving the company within a couple of months from the day of joining. This exodus may result in creation of negative perception in the outer world.

Owing to the volume of hiring, it is important for bigger as well as growing organizations to reduce cost per hire. Saving of one thousand rupees per hire can mean an impact of rupees 5 million if one is hiring five thousand people in a year.  For younger organizations, excess cost of hiring may not be advisable as it will eat into company’s funds. Having said that, these initiatives largely depend on thought leaders and experts coming in from outside. The challenge here for recruitment is knowing the availability of talent and move fast in getting the critical mass onboard.  The need is to have the correct expectation setting at the time of hiring while at the same time keep an eye on cost of hiring. A delicate balance only will define the success of organization here.

Above all, an organization must try to build up one’s performance development program starting up from recruitment feedback itself. This will create a long term career progression plan which is like an investment for the organization. This move can only come if we ensure a harmonious marriage of competency based interviewing with correct fitment. In turn, it will create a positive impact on other success factors like early attrition, performance of new hires and in cost per hire.  

References

http://www.rcchr.co.uk/pdf/Metrics.pdf

http://www.personneltoday.com/articles/2007/03/14/39647/employers-spending-money-on-recruitment-without-measuring-return-on.html

http://jobfunctions.bnet.com/abstract.aspx?docid=996027

http://www.zyoin.com/it-staffing-recruitment-business/