Thirty years ago the recruitment industry was being run exactly the same as today, however back then there was no such thing as the internet, databases, iPhones, SMS notifications, emails, Skype, Twitter, Facebook, LinkedIn or even ATS/Database. There was no such thing as internal or In-House Recruiters, we were all agency recruiters.
We had 2 sets of cards on a desk, a shared facsimile a telephone book, and of course, the telephone. One set of cards had our clients and prospects in it and the other set of cards had your candidates, and you never mixed the two.
Good recruiters kept close to their clients but more importantly they knew their candidates’ every move. They knew what roles they were going for, through which agency and even had a list called the Traitor List, which consisted of candidates who had deflected to another agency – how dare they.
The good consultants knew their numbers.
- They knew that if they put 5 people in front of decision makers, they would get a placement.
- They knew that if they had 50 candidates and knew exactly what they were looking for, they could find jobs for them; so they stayed close and built relationships with the people. (see this great post building relationships)
- They knew that if their candidate went to another agency, then they [the other agency] would probably place them
- They knew that each ad would bring in a certain number of candidates.
- They knew the cost of getting a candidate and valued that cost
- They knew that you don’t advertise on a long/holiday weekend as no one looks for jobs on holiday weekends and it was a waste of money.
- They knew that if you didnt get back to applicants in 3-5 days, the applicant was gone.
Back then, the more people you spoke to, and the more people you introduced to hiring managers, the more placements you made.
Today, nothing has changed. The more people you introduce to hiring managers, the more placements you will make. However, one major change has occurred, recruiters now have all the tools you could possibly imagine and, unfortunately, they have become lazy.
In a massive generalisation (which I am leaving myself open with), In-House, Internal or Corporate recruiters today have it easy. They throw an ad on an internet job board, have a look on LinkedIn and wait. How many of them know what the cost of acquisition is for a candidate, what the cost and efficiencies of the different types of internet job boards are, what their candidate utilisation rate is, how a poorly worded ad effects candidate utilisation. The answer is 2-5% of the internal (we wont even start on how many agency recruiters know) recruiters are versed in such language.
The costs of an Internal / In-house Recruitment team is massive. If a company has 5 recruiters on an average of $70k (TEC) per person, that is $350,000 in salaries alone. Couple that with advertising, LinkedIn membership, overhead, ATS/Database subscriptions, IT cost, and you have close to $700,000 worth of annual investment. So a company has a right to demand certain KPI’s be met.
Here are the KPI’s we (The In-House Recruitment Group) use with the in-house teams we run for our clients
- Time to hire – time taken to fill the role
- Cost of candidate acquisition – Monthly/Quarterly cost associated with candidate acquisition.
- Cost per hire -total cost per hire including recruiter time, candidate costs, advertising etc.
- Candidate utilisation – number of candidates in the database that are being utilised. If they are not going to be used, they shouldn’t be in the database
- Advertising channel efficiencies – measuring the number of candidates (not applicants) that come from each ad and the costs associated
- New hire turn-over – fall off rate of new hires
- Applicant : Candidate ratio – how many applicants become candidates
- Candidate : Interview ratio – how many candidates are interviewed by hiring managers
- Interview : offer ratio – how many interviews to offer.
By using the above KPI’s we are able to ensure our recruitment teams are as efficient as possible. As they say, if you measure it, you can manage/improve it, and if you can improve it, then everyone is happy.
So, are KPI’s the In-House recruiters’ friend or foe…………….
This post was written by Steve Begg, MD of In-House Recruitment Group. Steve can be contacted on +61 (2) 8005 6299.