1. Delivering Results Since 1975
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Recruitment Four Meter Model
Measuring Recruitment Program Effectiveness
CV-C:DATAPPTMAURORECRUITMENT METRICS V7
2. 2
Western Management Consultants
Human Resource Management:
• Leadership development
• Job evaluation and classification
• Compensation, employee benefits and salary administration
• Performance planning and review systems
• Personnel planning and management systems
• Performance evaluation
• Training and development programs
• Employee attitude / satisfaction surveys
Executive Search:
• Candidate sourcing, interviewing and screening
• Candidate testing and evaluation
• Comprehensive reference verification
• Candidate negotiation
3. 3
The “Alberta Advantage”
Led Canadian Growth at 6.8%
3.5% unemployment – lowest
in Canada (avg. 6.1%)
90,000 new FT jobs in 2005
400,000 new jobs expected by
2014, but …….. only 300,000
new workers
42,000 moved to Calgary last
year
Source: Alberta Venture + Calgary Economic Development
5. 5
The “Alberta Advantage”??
The Result?
Labour widely seen as the
key pressure point
• Fewer workers
• Employee-driven work ethic
• “Perks” escalation
• Poor service / attitudes
Growing emphasis on
efficient and effective
recruitment, and on-boarding
Source: Alberta Venture + Calgary Economic Development
6. 6
Three Trends
“Race for the Basin”:
• Capital budgets have grown by
factors of 2 and 3 times
• Keen and growing focus on cycle-
times, speed of execution
Energy Sector “Maturing”:
• Increased emphasis on process
• Growing interest in measurement
and accountability
Outsourcing of all or part of
recruitment
• Trends in Calgary point to an increased focus on
NUMERICAL METRICS, creating an industrialized
process aimed at reducing costs, cycle time and
increasing productivity and ROI measures
*September 2006 “Business in Calgary” magazine
7. 7
“To continue to be heard at
executive table, the
Human Resources Team
must establish effective
processes, set
performance targets and
track results.”
Mauro Meneghetti
Western Management Consultants
9. 9
Key Considerations
Size of the Organization
Degree of Centralization
Role of HR in recruitment
Systems Maturity
10. 10
Strategic importance
Financial significance
Widespread impact
Operational relevance
Targets must reflect organizational
and role differences
Focus on items that are controllable
and variable
Criteria for HR Measures
11. 11
Recruitment Metrics – How to Choose
“Excellence in recruiting and retention can increase your
organization’s market value by 8 percent”
*Yeung and Berman, Pfeffer, Ostroff, and more…
Talent no longer refers to “innate ability”, but is a new
management buzzword used to refer to “brainpower” (either
natural or trained), and is used by some to refer to their entire
workforce and others to refer to the management of specific
competencies. The bottom line is, however it is defined – there is
a TALENT SHORTAGE looming *The Economist, Oct 7, 2006
12. 12
2006
Time to Fill
Offer Acceptance Rate
Training Investment (ROI)
Cost of Hire
Employee Replacement
Costs
% of employees trained
% employee utilization
Voluntary & Involuntary
separation rates
What Firms are Measuring Today:
2001
Cost of Employee
Behaviors (absenteeism,
smoking, etc.)
Turnover costs
Employee Replacement
Costs
Economic Benefit of
additional recruiting
Economic Benefit of
various training levels
Economic Benefits of high,
medium and low
performance on a
particular job
* The Wynford Group, Human Capital Benchmarking Survey*The HR Scorecard, Becker, Huselid & Ulrich
13. 13
Too hard to measure
Lack of process focus;
results in inability to repeat,
build on accurate data
Incomplete picture
Not “actionable”
Still a feeling of “lots of
people available”
Common Issues
14. 14
The 4-Meter Model for Recruitment
HR
OPERATIONS
STRATEGIC
ALIGNMENT
PROSPECTS
RECRUITS
15. 15
Strategic Alignment
Question Metric
How many Candidates do you
need?
Number of Candidates you need
to find by level, role, and skill set.
Are you meeting Executive
expectations?
Satisfaction survey and interviews
with key business leaders.
Are we getting our money’s
worth?
ROI of recruitment activity in
relation to avoided cost of
turnover.
16. 16
Prospects
Question Metric
Which methods for finding new talent
are most effective?
Response rates for all recruiting
tactics: web site, advertising in
media and direct mail, job fairs or
other events, referrals etc.
How long does it take to find the
types of talent you need?
Rate of talent acquisition by level,
role and skill set (time to hire).
Are we a preferred employer? Referral rate.
How quickly do you respond to
qualified talent?
Turnaround time for candidate
inquiries received via Web site,
email, phone, regular mail, referrals
and events.
17. 17
HR Operations
Question Metric
How do you decline candidates who
are not appropriate while ensuring
that they send you referrals? How
can you decline them graciously?
Time to decision and time to follow-
through communication and
appropriate closure.
Are your internal clients satisfied with
your ability to support their
recruitment needs?
Internal Client Satisfaction Surveys
and interviews.
How quickly are we filling positions? Cycle time from when the need is
identified to start date.
Aged “request” or “vacancy”
reporting.
How much does it cost to support the
recruiting process?
Time and money associated with
recruiting.
18. 18
Recruits
Question Metric
Is our process recruit friendly and
effective?
Candidate satisfaction with the
recruitment process (via surveys and
interviews with new hires).
How quickly do new recruits become
functional in their role?
On-boarding time.
Job progression rate.
Can you manage/handle their
referrals?
Conversion rate. Number of repeat
referrals.
Are the new recruits staying? Early days (3-6 months) turnover
ratio.
19. 19
The 4-Meter Model for Recruitment:
Hiring rate
Executive satisfaction
R.O.I. by employee category
Response rate
(attraction power)
Query response time
Referral rate
Acceptance rate
On-boarding time
Conversion rate on
Internal referrals
Candidate satisfaction
(with recruitment
process)
Early days turnover
ratio
Job progression rate
Internal client satisfaction
Gap-to-Hire cycle Time
% Appropriate closure
Cost per recruit
HR
OPERATIONS
STRATEGIC
ALIGNMENT
PROSPECTS
RECRUITS
20. 20
Strategic importance
Financial significance
Widespread impact
Operational relevance
Targets must reflect organizational
and role differences
Focus on items that are controllable
and variable
Criteria for HR Measures
21. 21
Implementing with Success…
Stakeholder buy-in
Communication throughout the organization
Consistent application
Support for change must come from HR
DATA is key
• accurate, timely and repeatable
23. 23
How to Calculate Common Metrics:
Formulas necessarily differ from organization to organization and MUST
consider both hard and soft costs that impact the organization most
profoundly.
These are just the “formulas” – creating the numbers that fill the
formulas is the trick!
Metric Description
Accession Rate New Hires + Replacement Hires
Total Headcount
Cost Per Hire __ Hiring Costs__ _
New + Replacement Hires
Cycle Time (time to fill) Days to Fill (from requisition)
New + Replacement Hires
Offer Acceptance Rate Offers Accepted
Offers Extended
24. 24
The Cost of Turnover
Direct Costs
• Separation Costs:
– Exit Interviews – interviewer’s / interviewee’s time
– Administrative Costs – destroying files, removing individual from electronic records
etc.
– Unused Vacation Time (payouts)
– Lost Client Revenues - service fewer clients during vacancy and training periods
– Overtime Pay – paying other employees to assume leaver’s work
– Case consultation (transferring clients from leaver to others)
• Replacement Costs:
– Advertisements, Recruitment Tactics (job fairs, referrals etc.)
– Application Processing (administrative and professional time)
– Entrance Interview (Interviewer’s/Panelist’s time)
– Selection Process (Interviewer’s/Committee’s time)
– Miscellaneous Costs (tests, travel, relocation, reimbursements etc.)
• Training Costs:
– Formal Orientation (Instructor’s and Trainee’s time)
– Formal Job Training (Instructor’s and Trainee’s time)
– Off-Site Training (Course costs and Trainee’s time)
– On-the-Job Training (Trainee’s time to develop proficiency)
25. 25
The Cost of Turnover (continued)
Opportunity Costs / Soft Costs
• Lost time
• Morale
• Intellectual capital losses (ideas, plans, concepts…future streams of
revenue).
Total costs estimated to be between 1.5 – 2.5 X the employee’s
salary (FOR EACH LOST EMPLOYEE!!)
26. 26
Our Client’s experience
Cycle time (actual time to fill positions from ad to “bum in seat”)
Controllable turnover
Acceptance rate (offer acceptance/decline rate)
# of recruits/month - # of vacancies
New hire determination ratios
Aged requisitions
Early days turnover