How to develop a recruiter scorecard for assessing individual corporate recruiter performance
Champions insist that you keep score. If you understand that concept, you will ensure that in addition to function-wide metrics, you will supplement them with a scorecard for assessing the performance of each individual recruiter. Everyone knows that corporations are measurement crazy, so I have found that by not measuring something (in this case recruiters), you are inadvertently sending a message to executives and employees that whatever you are doing is not strategic or even important (because if it was, we would measure it).
So unless you want to purposely send a message that “having top performing recruiters doesn’t matter,” you have no choice but to develop an individual recruiter scorecard. In order to do that effectively, you first need to understand the foundation design principles for individual scorecards and then you must select the actual measures that you will use in your scorecard. In part one, I introduced the concept and provided three examples of what a scorecard might look like. In this part two, I will cover the design details and a list of the measure to consider for your scorecard.
A CHECKLIST COVERING THE DESIGN PRINCIPLES FOR DEVELOPING A RECRUITER’S SCORECARD
Before you start, realize that many efforts to develop corporate recruiter scorecards have stalled because of flaws in the process that is used to develop the scorecard. To avoid these common errors, here are 12 basic measurement principles or scorecard design guidelines to follow:
- Involvement is critical — leaders can certainly impose measurement standards on their recruiters, but a far superior approach is to early on involve everyone who is impacted. Involvement of those concerned increases their understanding and the acceptance of metrics. Thus gather input on recruiter assessment from recruiters themselves, hiring managers, executives, and the CFO’s office. It is the responsibility of recruiting leaders to educate individual recruiters to the point where they understand and appreciate the value of each metric in the scorecard.
- Realize that all metrics have “ambiguous” elements — all metrics involve working with less-than-perfect measures (including corporate profit, by the way). So take it as a given that every metric will include up to 25 percent ambiguous elements. Many widely accepted corporate measures like brand, PR, and customer satisfaction are “soft measures,” so expect some of your recruiting measures to also be soft but still quantifiable.
- No one has total control over any process — you simply have to ignore complaints that recruiters don’t have total control over the hiring process. Yes, recruiters share responsibility with hiring managers, compensation, etc. but the same is also true of every other corporate process, including sales, marketing, product development, branding, etc. As a result, a foundation premise for individual recruiter accountability must be that it is the job of every recruiter to influence all of the others involved, so that they act appropriately. Since a recruiter’s primary job is to influence prospects and candidates, it’s not a stretch to expect them to also influence recruiting leaders and hiring managers, so that they act appropriately. A failure to effectively influence is just that — an indication of failure that should be measured.
- Measure final performance, not sub- items that contribute to performance — there are many actions and behaviors that are required in order produce recruiting results, but the scorecard should only include recruiting final outputs and results. Process and efficiency measures are important but they should not be confused with outputs and results, which is what the scorecard must exclusively focus on. For example, measuring hiring speed might seem important initially; however, since hiring speed is designed to result in higher quality hires, the scorecard measure should be the resulting quality of hire.
- Benchmark comparisons are required — the “level of difficulty or impact” is not the same for every recruiter, so individual performance must be compared to a relevant standard. That performance comparison standard might also include last year’s results, the average, the worst, or the best in your firm or even in your industry. Recruiters also have to be ranked and compared against each other based on their performance. In the cases where recruiting difficulty varies dramatically, the best way to assess a recruiter is to look at their percentage of improvement over the last measurement period.
- Weighting the performance factors is required — not all recruiting outputs have the same business impact or level of difficulty, so weight or prioritize the performance factors before the measurement process begins. For example, filling high-impact, revenue and executive jobs should be given added weight, as should filling hard to hire and mission-critical jobs. Prioritizing or weighting outputs on an A+ to C scale sends the message to recruiters that some outputs and results are more important than others.
- Minimize the number of metrics used — generally there should be a separate metric for these six factors: volume, quality, time, cost, satisfaction, and dollars of business impact. To avoid confusion and overlap, that generally means that there should be no more than 10 metrics in the scorecard. With experience, most find that the number of metrics in the scorecard gets smaller and more refined over time.
- Avoid time-consuming and easy-to-manipulate metrics — recruiters have been known to manipulate the way they work in order to look good on metrics (i.e. offer acceptance rates). As a result, select and refine your metrics so that they can’t be easily manipulated or “gamed.” Avoid metrics that require a great deal of time or cost to gather the data (i.e. cost per hire for an individual recruiter). And finally, metrics are designed to change behavior, so if reporting a metric over time doesn’t change or differentiate recruiting results and behavior, the metric needs to be reevaluated.
- Include team and cooperation metrics — even though you are measuring the performance of an individual recruiter, you don’t want excessive selfish behavior. So measure (and reward) a recruiter for their teamwork, team support, and how well they cooperate and share information with others.
- The distribution of metrics is powerful — distributing ranked performance metrics to everyone is extremely powerful because it increases internal competition, but it also because it identifies the superior performers so that others can learn from them.
- Don’t report too often — reporting individual recruiter results more than once a month is overkill and in many cases, quarterly or biannual reporting is all that is needed.
- Reward or recognition should be added — metrics by themselves improve performance but performance improves much more rapidly when that performance is recognized, rewarded, or both.
DETERMINING WHICH PERFORMANCE FACTORS TO INCLUDE
If you’re going to measure and perhaps reward individual corporate recruiters for excellence, work with your recruiters to determine which output metrics are strategic, effective, and easy to measure. Use the following list of 25 possible scorecard measures as a starting point for that discussion. Note: the highest impact factors are listed first in each of the three categories.
Direct Business Impact Measures to Consider
These should make up the majority of any strategic scorecard.
- Quality of hire — this is the most important of all measures because it can also be used to “validate” your recruiting sources and approaches. 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: 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 a recruiter’s hiring managers in order to determine their satisfaction rate with the quality and the fit of their new hires (or alternatively, the percentage of new hires who 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 recruiter’s new hires within the first year and compare it to the average.
- The number of new hires — track the volume of new hires produced by a recruiter to ensure that they are carrying their part of the load.
- % of key/hard-to-fill positions — because the impact of the job and the difficulty of hiring should be considered, for an individual recruiter track the percentage of all of their new hires who were in designated “key or hard-to-fill” positions.
- Number of hires from target firms — if your firm identifies high-talent firms to recruit from, track the number or their percentage of new hires who came from “targeted” competitors or high-talent firms.
- Percentage of hires by “need date” — measure whether managers are getting their needed talent on time by surveying hiring managers and asking them “what percentage of your hires started on or before your needed starting date?” It should be a recruiter’s responsibility to work with hiring managers to identify their “real” need dates.
- Diversity hiring % — because diversity hires may be harder to land and because they may have a high impact, track their diversity percentage out of all of their new hires. An alternative approach is to survey a recruiter’s hiring managers about their level of satisfaction with the diversity in applicants, interview slates, and hires. It is probably not necessary to track an individual recruiter’s EEOC statistics.
- Percentage of new hires who must be terminated — a new hire that must be terminated or asked to resign must be considered as a hiring failure, so the percentage should be tracked.
- Revenue loss due to vacant days — there is a direct and measurable dollar loss for every day that revenue jobs are vacant. As a result, track the number of days that revenue-generating jobs under this recruiter are vacant. If possible, work with managers to estimate the dollar loss due to each vacancy day in these positions.
- $ of external search spend — because the excessive use of external search may be unnecessary, track the percentage of this recruiter’s hires who required the use of outside agencies, and their total dollar spent on agency costs.
- Recruiter ROI — an individual’s ROI is extremely difficult to measure. However it is possible if you work with the CFO’s office to prioritize jobs and to quantify the dollar impact of both vacancy days and of high-quality hires.
Less-direct measures of recruiter effectiveness to consider
These measures generally have a lower level of business impact.
- 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 this recruiter and their responsiveness. The percentage that are very satisfied or above and the percentage dissatisfied are the comparison measures to use.
- Legal compliance — if compliance is a major issue, track the number of discrimination complaints, EEOC, or legal issues that were raised during the period.
- Best source used — in order to ensure that individual recruiters are using the most-effective sources, ask recruiters to log their one or two primary sources that were used for each requisition. Then periodically tabulate the percentages to determine how often an individual recruiter is using the recommended effective sources. Also consider calculating the ratio of active to passive sources that were used and the percentage of all hires who came from referrals (usually the highest quality source).
- Satisfaction and responsiveness to managers — if you expect your recruiters to be responsive to managers, periodically survey their hiring managers and track the average satisfaction rate with the recruiter’s responsiveness and the support provided to the hiring manager by the recruiter. The percentage that are very satisfied or above and the percentags dissatisfied are the comparison measures to use.
- Cooperation and sharing rating — if you expect your recruiters to be cooperative and sharing with others in talent management, you must measure it. Do that by surveying all recruiters and the managers of other talent-management functions (i.e. onboarding, compensation, relocation, referrals, employer branding). Have each rate the recruiter on a 0 to 100 scale on “the degree of cooperation and best practice sharing” of each recruiter who they have come in contact with.
- Employer brand contribution — if you expect individual recruiters to help build the employer brand image through writing and speaking, periodically measure this recruiter’s visibility to applicants through a Google search of their name or their by their PeerIndex or Klout scores.
- The quality of the applicants you did not hire — some recruiting leaders worry that individual recruiters are somehow missing high-quality resumes or are failing to hire high-quality candidates. If this is your concern, you can randomly sample applicants to determine the percentage who 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.
Administrative and Efficiency Measures That Can Be Used
Although these are important tactical measures, they are not generally considered to be strategic business impact measures. So in most cases, I would not recommend that you include them in your recruiter’s scorecard. Instead, keep a separate “efficiency dashboard” and provide your recruiters with access to it.
- Cost per hire — this measure is time consuming to calculate for an individual and cost becomes less relevant if the recruiter produces multiple high-quality hires in high-impact jobs. Do not fall into the trap of measuring cost without simultaneously measuring impact, because that is a violation of the ROI formula. Instead focus on the revenue impact created by high-quality hires in revenue-generating and revenue-impact jobs.
- Offer acceptance rate — this is a metric that is easy to manipulate, and, in addition, the quality of the actual hires is a more direct measure.
- Applicant-to-interview, interview-to-offer, interview-to-hire ratio — these ratios are easy to manipulate and they focus on process efficiency, rather than the quality and the impact of the hire.
- Time to fill — this is a broad measure that should be more targeted. This is because speed of hire is often critical only when you are trying to land a high-demand candidate or when a revenue/high-impact job is vacant for too long. A superior measure is whether key positions are filled by their “need date.”
- The number of unfilled positions — this metric can create problems because not all positions have an equally negative impact when they go unfilled, and some positions go unfilled because of a hiring manager’s preference. A better measure is to focus on the dollar impact of key positions that go unfilled.
- Quality of candidates presented — obviously you can’t hire quality people if you don’t have quality candidates, but quality of hire is the actual result measure to focus on.
- Requisition load — this measure can be misleading because not all requisitions are “real” and not every requisition has the same impact or the same level of difficulty. Requisition load should be managed by recruiting leaders but it should not be used among output measures.
- Employer brand strength — this is an important measure but one that cannot effectively be tied to an individual recruiter.
If You Are Seeking Benchmark Comparison Numbers
If you were an aspiring Olympic runner, it would make sense that you would want to compare your time to the times of other Olympic runners. But in the world of business metrics, getting direct comparison numbers is extremely difficult for the following important nuances/reasons:
Reasons why benchmark comparison numbers are problematic
- Secrecy — companies simply don’t want competitors to know their performance, especially in an important area like people management.
- Formulas — every company uses a different formula and/or data sets to calculate its metrics, so any direct comparison will have its flaws because the formulas used do vary significantly. For example, the largest variation is whether they include a manager’s time in their people-management cost calculations.
- Size, regional, and industry variations — unfortunately, accurately comparing firms of different sizes, from different industries, and in different regions/countries is almost impossible. The best comparison metrics allow the comparisons to be made based on size, industry, and region.
- Only competitors — many executives simply don’t care about the average, especially when you are among the leaders in a large industry. In these cases, executives unfortunately only care about the metrics of their three to five direct product competitors. Unfortunately, the surveys of most industry groups do not allow you to compare yourself to any specific firm. Incidentally, focusing only on product competitors can be a mistake, because some of your talent competitors in your region may not be your product competitors.
- Metrics sets — there is a wide variation in what metrics are collected by different firms. That means that one firm will have metrics that a comparison firm doesn’t collect. As a result, it is almost impossible to do a side-by-side comparison of the overall results produced by the same function in different firms.
- Time periods — companies have different fiscal years, so the comparison time periods for metrics may not be the same. That is a problem if environmental factors like the unemployment rate are changing rapidly during the measurement period.
- Data collection can be sloppy — some organizations simply are not focused on accurate data collection, and as a result, the recording of some data may be sloppy. In the area of recruiting, for example, some ATS systems capture the source automatically, while at other firms the recruiter enters it themselves. At some firms, recruiters don’t care about source so they sometimes check the same box every time. Some metrics can be gamed (e.g. offer acceptance rates) to make an individual look artificially good.
The best comparisons are internal
Because of the seven reasons cited above, focus on comparing yourself to yourself using one or more of the following internal comparisons.
- Percent of improvement — the best metric comparison is the percentage of improvement from the last quarter or year.
- Compare to other business units — you can also compare relative performance on a metric in a particular unit to the best, the worst, or the average metric in all other business units throughout the firm during this time period.
- To the best ever — you can also compare a top metric for a time period to the best performance at any time within your firm (and the bottom performance to the worst ever).
The best external comparisons come through a metric consortium
The best external people management comparisons are direct comparisons between your firm and your three to five top talent competitors. Form a metrics consortium with a third neutral party. In most cases, the consortium is led by a professor at a university. The consortium leader gathers the metric results from each of the members but then they hide or disguise the results from individual firms when the metrics are reported. That means that each member gets the highest, lowest, and average result from the member firms to use as a benchmark comparison but individual firm results are never reported.
The results are even more powerful if each of the consortium members reports the exact same set of metrics, using the same formula. Restrict the consortium to people-management metrics because a broader sharing can increase the politics to an unworkable level.
There are some quality benchmark metrics in recruiting
If you must use external recruiting metrics, I only recommend three general sources:
- Staffing.org — this group narrowly focuses on recruiting and candidate benchmark data but it charges a fee for its reports. Information on its reports can be found on the website or at http://www.staffing.org/store.asp
- The Recruiting Roundtable — your firm must be a member of the Corporate Executive Board in order to participate. This members-only sub-group includes some of the largest corporations. It specializes in sharing both metrics and recruiting best practices. It offers both a yearly Recruiting Benchmark Survey and an online metric benchmarking calculator (rIQ).
- PwC-Saratoga — this arm of the PwC consulting firm has been doing benchmark metrics covering all aspects of HR for decades. Some of its services require a fee and in some cases reports are available by industry, company size, or region. http://www.pwc.com/us/en/hr-saratoga/benchmarking.jhtml
- Narrowly focused metric providers — you can get some limited but high-quality recruiting metrics data from CareerXroads, SHRM-BNA, NACE, Best Practices,LLC, The Hackett Group, and the Corporate Leadership Council.
If you want to be respected in the business world, you have no choice but to measure your results. Unfortunately, I have found that less than 50 percent of corporate recruiters have their individual performance formally measured. The primary reason for that failure to measure is that recruiting leaders get bogged down in philosophical discussions on what can be measured “perfectly.”
All metrics have weaknesses so perfect should not be a goal. Once you accept that fact, it’s relatively easy to select “usable” metrics that cover the essential results that a recruiter should produce. If you don’t like the metrics and the scorecard formats that I have provided, feel free to create your own. Begin by stop listening to the “whiners” and any “it-can’t-be-done” recruiters and begin putting together a trial scorecard today. After you refine it, you can then move on to your next difficult recruiting challenge: developing an incentive and/or recognition program for rewarding the corporate recruiters who score high on it.