Just Exactly What Are We Measuring?

Sorry for being dark for a couple of days. I made a trip to the northeast on Monday and got trapped in the "surprise" blizzard coming home last night.

As I continue to talk to customers--both existing customers and prospects--I continue to be puzzled by just how stuck many companies are in yesterday. It manifests itself in the obsession with process caused by the candidate glut of the past 3 to 4 years. It manifests itself in the naivete of the belief that high volume produced by job board posting equals recruiting productivity. And it manifests itself in the meaningless ways that staffing organizations measure themselves. The two primary metrics used today are cost-per-hire and time-to-fill, and occasionally hiring manager satisfaction gets thrown into the mix.

These metrics are outdated and meaningless. And in many cases they are either manipulated or outright wrong. For example, a lot of staffing organizations manipulate the time-to-fill metric by moving the position in and out of a "hold" status. Buyers of ATS functionality want to know if the time-to-fill reports are taking this manipulation into account to make the number look better. Is that not manipulation? A more meaningful measure would be time to deliver qualified candidates, and percentage of candidates delivered that fit the job description. Or as Jeff Hunter called it his recent  post, the "strike zone" metric. After all isn't the point of talenteering to build a better business by hiring better (or the right) people. By being proactive the time to deliver should be improved, but if it isn't are we going to hire someone fast just to make the metrics look better? Of course not, or at least I hope not--thirty days of opportunity cost to hire the right person is a lot cheaper than hiring the wrong person fast! In fact I think I even remember a home page tagline on Unicru's website at one point that said something like: "what's so great about hiring the wrong person fast?"

And cost-per-hire is also meaningless. Most of the time all of the costs are not figured into the cost numbers because they lived in another budget anyway. What is probably more important here is source effectiveness. Which sources produced the best candidates (producers) most economically.

Net-net of this discussion is that we need to move away from artificial efficiency measures and begin to define effectiveness measures that show how staffing is impacting the business with good return on talent investment. I don't purport to have all of the answers, but I do observe that many organizations are stuck in yesterday's metrics and are not focused on the what the objective should be--RESULTS. Producing the best results possible for the company at the optimum investment. That's the talenteer's approach. I would be interested in comments and ideas about the right talenteering metrics.

Comments

[Alan Whitford]

Hi and welcome back.

Ah, Metrics and measurement. Those 'dirty' words so often used by ATS vendors and consultants (like me) - yet so often misunderstood and misused by HR/Resourcing.

A agree with your assessment about 'stuck in yesterday' - yet over here we are stuck in Last Century. I wish that I could see more companes using some metrics - cost per hire, time to fill - may be outmoded, and probably not the right measures as you so clearly point out. However, that at least would indicate that HR/Resourcing realises that it has to measure something! That there must be a process in place to create base line statistics. That Resourcing and Line Managers, along with Finance and Marketing, share the responsbilities of planning and managing the hiring process (for them) and making the hiring experience (for the candidate) more efficient and relevant to the company's goals and needs.

Of course, real effectiveness measures (I like that phrase) require measuring things like: Employee impact, workforce satisfaction, reduction on headcount turnover (although this also is unsatisfactory if it is not allied with KPI data), company growth and success. Most of which, HR could really step up and to, if it wasn't so bogged down in Admin!

I hope this stream runs and runs.
Alan

[Jim Durbin]

A timeline for each requirement internally might make a big difference in understanding why reqs get filled and why they don't get filled.

Accurate reasons why a job is on hold (budget, no manager contact, no good resume, vague requisitions). That's tough because it assigns blame.

Time to hire is a terrible one. The time is skewed when managers open a requisition for one person and fill it in a day, while some jobs are open all year.

Not to mention that having metrics can be dangerous if you're ever sued. Any lawyer can show disparate impact if you keep accurate books.

I agree with Alan that hiring managers share the responsibility for tracking productivity - but it's too easy for them to push responsibility back to Human Resources, a game I learned about in my first corporate job.

My suggestion would be internal metrics for every recruiter to measure their success. Patterns always come out when you take the time to track what is happening.

[Alan Whitford]

Hi again

Serendipity strikes. An outstanding article today on ere

http://www.erexchange.com/articles/db/DA1364B6D13E4433B4EAE53ABD1E4712.asp

Written by Randall Birkwood - I knew him when he was at Cisco and I was running Resumix in Europe - Randall really nails the need for the right kind of metrics - those that affect the company.

Alan