KPI's For Tracking, Measuring, Improving Recruiting Effectiveness
As a recruiting professional, we can no longer expect to recruit the same way we recruited 10 years ago or even 5 years ago and continue to get positive results. Too much has changed including candidate behavior and technology. While most recruiters do need to increase their activity level, we can’t focus exclusively on increasing our activity as our only means for success. Recruiter activity is important and most recruiters need to do more of it. But most recruiters need to work on achieving better results from the time and effort they're already investing. We must continually evolve and rethink how we recruit so we are not simply just interviewing and submitting more candidates, but recruiting more effectively and operating at a higher efficiency level.
Below are just a few questions that recruiters should be asking themselves everyday:
- How can I improve my sourcing effectiveness to improve my candidate submission to interview ratio?
- How can I more effectively interview, screen and qualify my candidates to increase my interview to offer ratio?
- How can I more effectively prepare and pre-close my candidates to increase my offer to acceptance ratio?
To improve your recruiter effectiveness and maximize recruiter results you need to start thinking about what you can do to source, screen and deliver candidates more effectively and in a shorter time frame. As you set your goals, you should give some thought as to what you might want to change about how you recruit. Evolving as a recruiting professional requires more than a desire to simply do more; it requires you to get outside of your comfort zone and apply different strategies and different recruiting behaviors in order to produce different results.
In this blog post, KPI's For Tracking, Measuring, Improving Recruiting Effectiveness, I'm going to help you:
- Understand the cause and effect relationship between recruiter activities, recruiter objectives, and recruiter results
- Identify the key performance indicators for measuring recruiter effectiveness
- Create a recruiter activity plan that provides the road map for achieving goals, exceeding quota and improving your recruiting effectiveness
KPI’s for Improving Recruiter Effectiveness and Maximizing Your Results
Posting jobs on job sites and sending out more email blasts broadcasting your open job opportunities is one way to attract candidates in an attempt to make more placements. But wouldn’t you rather make more money by getting better results from your current activity? Imagine for a second if it were possible to increase your average deal size from $28,500 in gross profit dollars to $32,000.00 through better candidate rate negotiation? That alone would give you an increase of 11% without changing anything else! As a professional recruiter, you have multiple ways to improve your recruiting effectiveness and increase your commissions. A few examples include:
Increase Your Deal Size Through Effective Candidate Negotiation: Recruiters who possess deep market expertise regarding candidate pay rates and salary don’t overpay their candidates. Strong negotiation skills also ensures candidates earn fair and equitable pay and the recruiter maximizes their commission earnings.
Increase Candidate Submittal to Interview Ratio: With strong sourcing and candidate screening skills and effective use of candidate interview questions, recruiters can increase their candidate submittal to client interview ratio. Imagine the impact if you could increase your candidate submittal to interview ratio from 2 out of 10 to 6 or even 7 out of 10.Increase Candidate Interview to Job Offer Ratio: Recruiters who possess a deep understanding of their candidates career goals and aspirations and have been properly trained to prepare their candidates for client interviews can increase their candidate interview to job offer ratio. Imagine the impact if you could increase your candidate interview to job offer ratio from 2 out of 10 to 5 or 6 out of 10.
This is just three examples of KPI's for improving your recruiting effectiveness. These KPIs (and others) should become the core of how you plan, measure, and manage your recruiting effectiveness and optimize your recruiting results because any increase in any one of these areas is an improvement in your recruiting effectiveness.
Why Measuring & Managing Recruiter Effectiveness Metrics Works
There is a well known business principle that states “if you can measure it you can manage it.” When you begin measuring something you naturally start paying attention to it and thinking about how to improve it. When recruiting professionals begin to start tracking and measuring their recruiting effectiveness metrics, they start to think about how they can make each deal just a little bit bigger, how to close each deal a little bit quicker, and how to ensure each deal closes on the expected close date.
Smart recruiting managers are keen to attach rewards and incentives as a way of reinforcing this behavior but it is not always the rewards or incentives that drives and reinforces the recruiter behavior. A change in recruiter behavior is driven by a change in thinking. The way recruiters think is shaped by the conversations they have with their manager including the questions they ask, and the questions recruiters ask themselves.
Before skills and knowledge can be transferred to recruiters and applied, a shift in thinking needs to take place. For example, once you start working on a new job order, a shift in thinking should take place in which you focus on the following:
- How can I source the right candidate for the job quicker and more effectively?
- How can I maximize the profitability of this placement without underpaying the candidate?
- How can I pre-close my candidate in which my candidate allows me to accept a client job offer on their behalf?
- How can I be more certain my candidate will accept the offer on the date the offer is made?
It is this shift in thinking that separates the top 10% of recruiting professionals from everyone else. The first step in becoming a top performer starts with a shift in your thinking and how you track, measure, and manage your recruiting effectiveness metrics with your manager. This is why we focus a great deal of time in our recruiter training programs teaching recruiters to change their mindset.
Finally, the task of simply tracking recruiting effectiveness metrics will not close deals for you. But proactively tracking and measuring and trying to influence the size of each deal gives you a significant leverage point for improving your recruiter results.
Recruiter Goal Activity Planning
Very few recruiters have the discipline to create a plan that maps out exactly how they will achieve their goals. We refer to this as recruiter activity goal planning. As a recruiting professional you probably have personal goals such as saving for a vacation or a new home, or saving for your wedding or children's college education. To achieve your goals, the questions you really need to ask yourself are:
- How many placements do I need to make to achieve my goals?
- Do I understand how much commission my average placement generates and how each placement will financially contribute to the achievement of my personal goal(s)?
- Do I understand how many candidates I will need to source and screen to generate the candidate submittal volume needed to achieve my goals?
For most recruiters, the mere mention of recruiter metrics gives them the chills and makes the hair on the back of their neck tingle. But you should know that the true intention of recruiter metrics is to help recruiters improve their recruiting effectiveness.
Recruiter metrics have two primary purposes. First, they measure the future health of the company. Health metrics include total candidate pipeline revenue or weighted value of the pipeline, and they are typically tracked at the corporate level. By assigning dollar amounts and probabilities to various milestones in the recruitment lifecycle’s aggregated opportunities, recruiters and managers can build a credible forecast.
Second, recruiter metrics measure the effectiveness of recruiters at moving candidates through the recruitment life cycle. In essence, these metrics are designed to drive very specific recruiting behaviors. What many recruiting organizations struggle with however is understanding which metrics to measure and identifying and understanding the cause and effect relationship between the recruiter metrics.
Recruiter metrics can be broken into three categories:Recruiter Activities
Recruiter activities are the things you have 100% control over. Recruiter activities are the causes that lead to other effects. You can’t manage to a result such as placements or a candidate interview WITHOUT measuring recruiter activities because the recruiter can’t exert 100% control over the outcome. Recruiter activity examples include:
- # of call plans completed
- # of outbound phone calls
- # of outbound emails sent
- # of LinkedIn Messages sent
Recruiters have 100% control of completing recruiter activities.Recruiter Objectives
Recruiter objectives are influenced by the completion or execution of recruiter activities. We can’t exert 100% control over the outcome of a recruiting objective. Examples include:
- # candidate phone screens
- # of candidate submissions
- # of face to face/video candidate interviews
- # candidate references received
- # of client offers
Like objectives, results can’t be measured directly because recruiters can’t exert 100% control over the outcome. Results are influenced by the completion or execution of recruiter objectives. Examples of recruiter results include:
- Total revenue generated
- Total gross profit generated
- Total revenue growth %
Recruiters who operate without a detailed goal activity plan, one that maps out how they will achieve their personal financial goals typically lack the drive and motivation that it takes to consistently make placements and become a top performer. After all, a goal without a plan is nothing more than a wish.
To Get Started, Complete The Following Exercises
Candidates Sourced to Candidates Phone Screened
To determine your sourcing effectiveness simply divide the total number of candidates phone screened by the total number of candidates sourced. For clarification, a “sourced candidate” refers to any candidate resume or profile that you review that comes from your sourcing efforts including job postings, boolean searches and sifting through candidate profiles and resumes in your ATS, or on LinkedIn and the job boards. For instance, if I phone screened 12 candidates out of 55 candidates sourced for a job opening, that would give me a sourcing effectiveness rate of 22%.
Candidates Phone Screened to Candidates Submitted
To calculate your phone screen to candidate submittal ratio simply divide the total number of candidate submittals by your total number of candidate phone screens. If I submitted 3 candidates but conducted 12 phone screens, that would give me a candidate phone screen to submittal ratio of 25%.
Candidate Submittal to Client Interview Ratio
To calculate your candidate submittal to client interview ratio simply divide the total number of candidates who completed a client interview and divide it by the total number of candidates you submitted. For example, if you had 12 client interviews for the month and submitted 55 candidates, your candidate submittal to client interview ratio would be 21.8%. In the event the same candidate interviewed multiple times, only count that candidate once.
Candidate Interview to Job Offer Ratio
To calculate your candidate interview to job offer ratio simply divide the number candidate job offers received by the total number of candidate interviews completed. For example, if I had 12 candidate interviews and received 1 job offer than I would have a candidate interview to job offer ratio of 8%.
Average Placement Deal Size
To hit your gross profit goal you will need to understand your average placement deal size in gross profit dollars. Knowing this will help you plan for the total number of placements you will need to make to hit your goal. It is likely that your finance department already has this data. Simply review the hourly gross profit dollar amount each of your current and past consultants are generating and then tabulate the cumulative average.
Recruiter Fill Ratio
Recruiter fill ratio, also referred to as win rate is the total number of candidates you submitted to job orders divided by your total number placements. For example, if during the month you submitted 25 candidates and made 3 placements you would have a fill ratio of 12%. You need to understand your recruiter win rate to plan for the total number of job orders you will need to identify and qualify in order to achieve your goal.
What steps are you taking to track, measure and improve your recruiting effectiveness?