If you’re going to measure and perhaps reward individual hiring managers for excellence, you will need to work with a sample of them to determine which output metrics are strategic, effective, and easy to measure.
Here are 23 possible scorecard measures as a starting point for that discussion. Note: the highest-impact factors are listed first in each of the four categories.
Category I — High business impact measures to consider
These business impact metrics should make up the majority of any strategic hiring manager scorecard.
- Quality of hire/retention rate — this is the most important of all measures because it shows the business impact of new hires. Although most use the term “quality of hire,” a better title is “the on-the-job performance of new hires.” The easiest way to measure it is by tracking the average performance appraisal rating of new hires after 6-12 months and then compare it to the average for new hires in that job or job family (note because hiring managers give appraisal scores, there is some subjectivity in this measure). A superior but more difficult approach is to measure new hire employee output directly. An alternative but more subjective measure of quality is to survey the manager who the hiring manager reports to in order to determine this executive’s satisfaction rate with the quality and the fit of the new hires (or alternatively, the percentage of new hires that met their expectations). A quality hire can also be reflected in a high retention rate, so also consider tracking the average turnover rate of a manager’s new hires within the first year and compare it to the average.
- Number of hires from target firms — if your firm identifies high-talent firms to recruit from, track the number or the percentage of new hires by this hiring manager who came from “targeted” competitors or high talent firms.
- Diversity hiring percentage — diversity hires may be harder to land and because they may have a high impact, track their diversity percentage out of the total number of an individual manager’s new hires.
- Candidate experience — a bad candidate experience can negatively impact future recruiting. So, if you expect an excellent candidate experience, survey a sample of applicants and new hires to determine the percentage who were satisfied or dissatisfied with their treatment by this hiring manager. The percentage that are very satisfied or above and the percentage dissatisfied are the comparison measures to use.
- Revenue loss due to vacant days — there is a direct and measurable dollar loss for every day that revenue jobs are vacant. If possible, work with finance to estimate the dollar loss due to each vacancy day in these positions. Then track the number of days that revenue-generating jobs under this hiring manager are vacant.
- Offer acceptance rate — this metric can indicate weak candidate closing skills on the part of the hiring manager. Recruiters can sometimes manipulate this metric to make themselves look good.
- Percentage of new hires from referrals — referrals generally produces the highest quality hire. And because hiring managers can greatly influence members of their team to make referrals, this measure can indicate whether a hiring manager is encouraging their team members to be “talent scouts” and to actively seek out quality referrals.
Category II — Lower-business-impact measures of hiring manager effectiveness
These measures get a lower priority because they generally cover items that have a lower level of business impact.
- Legal compliance and process adherence — if compliance is a major issue, track the number of discrimination complaints, EEOC, or legal issues related to this hiring manager that were raised during the period. Also, because many hiring managers prefer to “wing it” throughout the hiring process, measure their actual adherence to the corporate recruiting process. Or alternatively, have recruiters estimate each manager’s percentage of adherence in a survey.
- $ of external search spent — because the excessive use of external search may be unnecessary, track the percentage of this hiring manager’s hires who required the use of outside agencies, and their total dollar spent on agency costs.
- Percentage of new hires who must be terminated — a new hire who must be terminated or asked to resign must be considered as a hiring failure, so the percentage should be tracked. But since the hiring manager makes the termination decision also, you should be aware that this metric is also likely to be skewed.
- The number of unfilled positions — this metric can indicate that critical work is not being done because of excessive unfilled positions. The measure can also be problematic because not all positions have an equal negative impact when they go unfilled.
- The quality of the applicants you did not hire — some recruiting leaders worry that individual hiring managers are somehow missing high-quality resumes or are failing to hire high-quality candidates. If this is your concern, you can randomly sample rejected or passed-over applicants to determine the percentage that were extremely high quality in both fit and qualifications but for some reason were not hired. Google actually revisited some of these “misses” and hired them later.
- Employer brand contribution — if you expect individual hiring managers to help build the employer brand image through writing and speaking, periodically measure this manager’s visibility to applicants through a Google search of their name or by their PeerIndex or Klout scores.
Category III — Hiring manager efficiency and timeliness measures
Although these are not strategic business impact measures, they do indicate whether hiring managers are prioritizing recruiting. Provide hiring managers with a separate section of a scorecard covering “efficiency and timeliness.”
- Total time from resume slate received to hire — rather than measuring overall time to fill, instead measure the portion of hiring that the manager has the most control over, which is the number of days between when they receive their initial slate of resumes to the offer acceptance date for each position.
- Applicant-to-interview, interview-to-offer, interview-to/hire-ratio — these ratios can indicate a failure to prioritize recruiting or weak skill levels on the part of the hiring manager.
- Response time after resumes received — the average number of days that it takes a hiring manager to read and respond to a group of resumes presented by the recruiter is an important indication of how high the manager prioritizes recruiting.
- Time from first interview to last — managers can unnecessarily stretch out the interview process, resulting in the loss of some high-demand candidates. As a result, the average time that it takes to complete all interviews should be measured.
- Time to complete the position description — because managers are routinely slow to finalize their position description and hiring requirements, this time period between requisition approval and completing the position description should be measured. The number of times that the position description must be updated can also be measured.
Category IV — Hiring manager cooperation and communications measures
If you expect your hiring managers to be cooperative and communicative with recruiters and other hiring managers, track and report measures under this area. Provide hiring managers with a separate section of the scorecard covering “cooperation and communications.” Some of those possible measures to include in it are:
- Satisfaction and responsiveness to recruiters — most recruiting leaders expect hiring managers to continually communicate, to provide rapid feedback, to share competitive intelligence, and to be responsive to your recruiter’s questions and requests. To measure their responsiveness, periodically survey the recruiters who they work with and track the average satisfaction rate with the manager’s responsiveness and the support provided to their recruiter. The percentage who are very satisfied or above and the percentage dissatisfied are the comparison measures to use.
- Providing input into the sourcing strategy — because hiring managers are experts in their field, they should proactively provide their recruiter with help and advice on the best sources for seeking top prospects. A survey of recruiters that covers their satisfaction with the sourcing help provided by the hiring manager and their team is the easiest way to measure quality of their sourcing input.
- Completing documentation — managers are notorious for failing to complete hiring documentation. As a result, the percentage of new hires where the manager completes the documentation requirements on time should be measured.
- Cooperation and best-practice sharing with other hiring managers — if you expect your hiring managers to be cooperative and share best practices with other managers, you must measure it. Do that by surveying all hiring managers. Have each rate the individual hiring manager on a 0-to-100 scale on “their degree of cooperation and best-practice sharing.”
- Lead time provided to recruiters — sufficient lead time before a requisition is final can allow recruiters to build a talent pipeline. As a result, managers should be assessed in a survey of recruiters on how frequently and how much lead time they provide.
And Finally, It’s Time to Consider a Service-Level Agreement
After you have determined the performance expectations for both your recruiters and your hiring managers, it only makes sense to go the next step and to develop a service-level agreement. Service-level agreements went out of fashion a handful of years ago when hiring levels were reduced, but with the war for talent returning in many areas, it is time to revisit them.
An SLA is a shared agreement where both sides agree to perform at a certain stipulated level. It tells hiring managers what specifically they should expect from their recruiters, but it also simultaneously spells out what hiring managers are expected to contribute to the hiring process. Most SLAs cover minimum and maximum timetables, key deliverables, dos and don’ts, and any other administrative expectations.
Unfortunately, the state of metrics in recruiting is not good. This is primarily because many recruiting leaders get bogged down in philosophical discussions on what can be measured “perfectly.” All metrics have weaknesses, so perfect metrics should not even be a goal. The goal instead should be to continually improve and to spread best practices rapidly as a result of the different effectiveness scorecards. I you don’t like the metrics and the hiring manager scorecard formats that I have provided, feel free to create your own. There will be resistance from the whiners who are “too busy to keep score” but don’t let them slow you down.
Hiring managers should not be allowed unlimited freedom to do whatever they want, and a hiring manager scorecard is one way to gently guide them toward the right course of action. If you are really bold, work with finance to put a dollar value on hiring miscues and bad hires, so that you can include the actual costs of weak hiring behaviors in your report card. I have calculated the estimated cost of a bad hire can be up to 10 times their annual salary and weak hiring manager interview practices and candidate treatment can also severely damage your employer brand. Compared to the cost of a weak or bad hire, the traditional cost-per-hire calculation can only be classified as insignificant!
I’ve attempted in this article to answer all of the relevant questions related to developing a hiring manager’s scorecard. However, if you are a corporate recruiting leader and you have additional questions, feel free to post them in the comments section.