Why the Imperfect Art of Evaluating Recruitment Success is Nonetheless Critical
The challenge of finding good staff has consistently been a ‘top three issue’ for pretty much every CEO in the construction sector for the last 20 years or more. Unsurprisingly, management and HR teams are constantly wondering whether they can and should be recruiting better.
What does ‘better recruitment’ mean?
‘Better recruitment’ will mean different things to different companies – some will want to reduce cost, others will want vacancies filled faster and others will want to attract ‘better’ candidates (an even more subjective concept).
How is recruitment success measured?
Metrics used to measure recruitment success can generally be divided into three categories: cost, efficiency and quality. However, simply measuring one aspect of recruitment performance is likely to be counter-productive and companies will typically build a dashboard of metrics covering all three areas.
Sadly, there is no one size fits all answer to measuring recruitment. Not only will the most appropriate metrics to use vary depending on the role, but what may constitute a good score or ratio for one role may be quite different to the next depending on seniority, function, location etc.
Cost
‘Cost per hire’ is probably the easiest and most common way to evaluate recruitment. The metric can be as simple as identifying all financial costs (recruiter fees, advertising fees, applicant tracking software costs, psychometric testing costs, referral checks, vetting costs etc) and dividing that by the total number of hires for the same period.
Efficiency
There are various metrics that can be used to assess the efficiency of hiring processes. For example, ratios of ‘applications to interview’ (number of applications % number of interviews), ‘interviews to hire’ (number of candidates a hiring manager needs to interview to make a hire) and ‘offer to acceptance’ (percentage of candidates who accept a formal offer) all help build up a picture of how efficient and effective the recruitment process is.
Quality of hire
Quality of hire is in many ways the Holy Grail for recruitment evaluation – most companies would happily swallow a 10% increase in recruitment costs if all their hires were as good as the top 25% of employees. But how can you measure quality?
* Performance reviews: while measuring ‘quality of hire’ through performance reviews would seem an easy and obvious solution it is highly subjective.
* Ranking scores for employees: asking colleagues to score one another can smooth over some of the subjectivity that come from performance reviews, however it can also be a measure of popularity rather than effectiveness.
* Length of tenure: assessing how long an employee stays with the company can also provide an insight into whether or not they were a good hire.
What is the point in evaluating recruitment success?
There is no magic bullet that will drive ‘better’ recruitment but by measuring what we perceive to be key steps through the recruitment process, companies are at least able to compare performance either historically or against expectations and to adjust, refine and replicate processes appropriately.
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