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How to Assess the Effectiveness of Recruiting
Recruiters, like all HR professionals, are under increased pressure to
demonstrate their value to their organizations and customers. It is
wise to be proactive in meeting this demand: by the time senior
management actually asks for a demonstration of value, it is usually
too late to act - they have already made up their minds.
Recruiters can take advantage of the following yardsticks :
(1) Actual Time vs. Contracted Time to Start
(2) Staffing Efficiency
(3) Hiring Manager Satisfaction, and
(4) New Hire Quality
These yardsticks involve only a modest level of data collection and
will not only provide a measure of the value that recruiting brings to
its customers, but just the simple of act of measuring will help
improve operations.
Actual Time vs. Contracted Time to Start
Consider using the ratio of the actual start date to the targeted
start date that gets negotiated with the hiring manager. This ratio
indicates how closely you met the expectations of the hiring manager.
In addition, negotiating a start date with the hiring manager helps
set realistic expectations about when someone will be in their seat
working, which is what the hiring manager really cares about. In
addition, using this method will help reduce the likelihood of the
“fill all open positions ASAP” standing instruction that many
recruiters must contend with.
Staffing Efficiency
While the traditional Cost-per-Hire metric is widely used and provides
some meaningful indication of effectiveness, it does not account for
variations in factors such as the level of the position being filled,
labor market conditions, and availability of workers by region.
Consider using the Staffing Efficiency ratio. It is easily calculated
as follows:
Determine your Total
Costs - the sum of your Internal Costs (salaries, office space,
supplies, general overhead) and your External Costs (all external
expenses which are incurred to specifically identify candidates -
advertising, contingency and retainer fees, research costs, annual
fees for posting jobs on the Internet).
Divide your Total Costs
by Total Compensation Recruited (TCR) - the sum of the base
STARTING salaries for each external hire during their first year.
External compensation recruited is the best measure of recruiting
production, and the Staffing Efficiency metric will illustrate how
efficiently you are bringing in this compensation.
Staffing Efficiency =
Total Costs/TCR. Staffing Efficiencies in the range of 5% - 9% are
considered excellent, and those above 16% indicate some needed
attention. However, these ranges can vary by industry, organizational
size, and region, and it is best to compare your own results to
benchmark data.
Hiring Manager Satisfaction
This is the hiring manager satisfaction rating with the hiring
process. Hiring manager satisfaction is often based on a general post
hire questionnaire but there is an inherent problem with this approach
— the hiring manager has no pre-established guidelines by which to
judge the recruiter. A fairer and more useful questioner is one which
is completed BEFORE and after the recruitment process for a new
position. This type of questionnaire ensures that both the hiring
manager and recruiter are clear about what they expect from the hiring
process.
Quality of new recruitments
This is the rating of the new recruitments by the HR department. It is
recommended that this evaluation be conducted three to six months
after hire. It takes at least three months before an accurate
assessment can be made, and after 6 months, work place influences
become a dominant factor in new employee performance.
To fairly judge the
quality of a new recruit, it’s important to define expectations prior
to recruiting and then compare these expectations to actual
performance. The following list provides a starting point for
developing the criteria for new hire:
- Goals
- System compatibility
- Capacity
- Motivation
- Knowledge and skills
- Performance
- Experience
- Customer compatibility
- Work group compatibility
- Organization compatibility
- Change/learning posture
The hiring manager and recruiter should meet prior to recruiting to
review all these areas and determine expectations for each.
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