I’ve Got Data Showing Whether Higher-paid Recruiters Are Worth More or Not

rock star

Predictive analytics is one of the hottest topics in business today. Unfortunately, it is often misunderstood and misrepresented. Predictive analytics is about much more than graphs, dots, and plotted projection lines. Its real value is not the ability to crunch numbers and spit out data. The value comes from what we can do with the information in real life. And so, beneath the noise and chatter in our industry, there is a very important voice in the conversation. It is the story being told by the analytics themselves.

Today, we have the ability to examine that information through the lens of data science to reveal insights that are interesting, relevant, and often surprising. Let me begin with a topic relevant to every talent decision maker: the value of a high-paid recruiter.

Can You Buy Your Way Out of a Recruiting Challenge?

When an issue arises in recruiting, such as an aging requisition or an unsatisfied hiring manager, it’s tempting to conclude that something’s wrong on the recruiter side. You might buy into the idea that you need to deploy a hired gun — a great recruiter who might cost quite a bit more –and that recruiter will save the day. After all, you get what you pay for, and if you pay more for a recruiter, you get better recruiting, right?

So we asked ourselves, “Do high paid recruiters do a better job than their lower-paid counterparts, and if so, what exactly do they do well?” In our organization, we have more than 1,000 recruiters. Those recruiters come from many backgrounds and many skill levels. To truly answer the question, the initial challenge is to identify an apples-to-apples field of comparison. Metrics such as time to fill won’t necessarily tell the story, nor will volume and type of roles recruited. This is because the expectations would vary from one type of assignment to another.

We do, however, have a real area of common comparison for recruiters. That is, performance against goals. In our organization, we have a recruiter performance program that has been in place, in the same structure and format, for several years. It does evolve, as a great program should, but the structure remains consistent. We have been collecting and recording recruiter performance during that time. That means we have a statistically significant data set comprised of a large number of people and a long-enough time span to reveal real trends.

A Closer Look at Recruiter Performance

To address the question, we took a look at recruiter performance against goals on a monthly basis. We divided our recruiter population into four quartiles: highest paid, second highest paid, third, and then the lower quartile. For each section we calculated average performance against goals over a two-year span, giving each recruiter a number rating. A rating of “1” equaled an average of 100 percent goal fulfillment. This could mean that the recruiter was at 120 percent of goal one month, and 80 percent on another. A rating of .7 means that the recruiter met averaged 70 percent of goal, and a 1.3 meant that the average was 130 percent, and so on.

With that in mind, we graphed the performance for each group, identifying the median performance rate for each quartile and then the range of performance rate for each. When we compared the highest paid and lowest quartile, the results looked graphed out as follows.

RSR_C_ERE_PRGraphic_Feb2016_Smallv1

Higher Pay Buys Consistency, Not Heroics

A comparison of the highest-paid quartile to the lower quartile revealed an interesting comparison. In fact, the success rate for the most- and least-expensive recruiters, as reflected in goal attainment, was almost identical (identified by the black line for each group in the graph). So, if the median performance against goal is the same, why bother paying more to the top recruiters?

To find an answer, we applied another level of context to the same information. We graphed the actual range of performance levels for recruiters in each group. This is represented as the shaded areas around the median in the graph. Now, a real difference becomes apparent. In the higher-paid group, that shaded area is much smaller. In effect, there is much less variation in the performance between one recruiter and another.

In other words, the highest-paid recruiters may not have delivered more impressively by exceeding goals more than their more junior counterparts, but they did deliver more consistently. This may fly in the face of the idea of that “rock star” recruiter who magically finds purple squirrels and makes problems go away. It does emphasize a much humbler concept that truly delivers client satisfaction over time: say what you’re going to do, do it well, and do it reliably.

What Do We Do With the Information?

If we understand that recruiter performance can only go so far in improving results, how do we adjust the process to turn consistency into value? In the case of a recruiter, it is possible to improve the outcome in cases where large fluctuations in performance are the problem. A senior-level recruiter can, in fact, help ensure that results are delivered to expectation.

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This is not to say that people in lower-paid positions can’t also deliver great performance. Thorough training, management at the activity level to make sure individual activities that lead to results are completed, and tighter oversight can make a less experienced team perform with more consistency.

When you pay more for a skill, are you paying for rock-star heroics, or consistency and reliability? In the case of the recruiter, the benefits appear to lean in the direction of consistency and reliability. People may have varying opinions based on their experience with recruiters, but with the right framework for interpretation, the data reveals a solid answer.

 

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  • Bob Finder

    What a brilliant article!There is always lots of discussions if high paid recruiters are better or now,so I am very happy you wrote a post about that.We are trying to keep up with all the latest trends in recruiting as well and we post about that on our blog Job Board Finder News (

    http://www.jobboardfinder.net/news/)

    • Jason Roberts

      Thanks Bob.

  • Ben Sian

    Great article! I’d also be very interested in what happens to the data after you slice and dice it–comparing types of jobs recruited for, regional differences, etc. Maybe even comparing recruiter traits (e.g., tenure, former employer/industry, etc.) would yield interesting information. I also wonder about the generalizability of these results to corporate recruiters. Are Ranstad’s corporate recruiters subject to the same performance measures as their business? If so, are there significant differences?

    • Jason Roberts

      Ben, great questions. We level set based on the goal setting process. All of the recruiters in this example are basically corporate recruiters in RPO engagements. We did not find significant differences in number of hires based on pay. We do have significant variance in volumes though based on types of reqs supported. We tested tenure but didn’t find that it drove much variation. One thing that we wanted to test but didn’t have good data on was total experience. I took pay as an indicator of experience instead.

      Regarding the questions on corporate recruiters vs others…our recruiters who hire for us internally are measured in the same way. Our branch based recruiters supporting contingent work are measured very differently.

      • Ben Sian

        Interesting that tenure didn’t drive significant variation. I’d assume that tenure and pay correlated greatly so that’d show up in the data. (Then again, seeing as how some studies show that staying at a job for over 2 years are paid less, maybe that’s a bad assumption!) If we could get some decent quality of hire data at any point (not just with Randstad, but the industry in general), I’d love to see this replicated. Thanks again for the response.

  • bkjrecruiter

    Top Recruiters Have A Stronger Relationship With Their List/Network, Hence The Consistency Component… Great Read! B-

    • Jason Roberts

      If only we could measure that…

  • Rob McIntosh

    Great piece Jason. I hope many a head of TA reads and remembers this the next time budget cycles come up. I’m sure you looked at this but I am sure complexity of req and the diverseness of req types make A&B testing in this scenario a little more tricky.

  • Jason Roberts

    Thanks Rob! We did attempt to level set via goal/target adjustments, but you are right, dataset cleanup and alignment is the most significant challenge of this type of analysis.

    • Jason Roberts

      Also…Notice the box plots…Jason E. would love it!

  • Gareth Cooper

    Very good insight.
    Hopefully this douses the flames of exaggeration that media thought leaders ignite in public discourse leading the public to believe that recruiters are capable of magical acts.

    This is an ancient insight, a simple insight: “say what you’re going to do, do it well, and do it reliably”.

    Honestly, did we have to study data samples to realize this for recruitment or any profession for that matter??????

    Surely this is common sense! Surely this is what any hard and honest worker has learned from an honest and reliable upbringing!

    • Jason Roberts

      Agreed. It’s always good when data backs up common sense. The downside is that sometimes common sense is non-sense that can’t be supported by data…see the passive candidates are better than active candidates argument. More analysis to come…

      • Gareth Cooper

        Awesome! Looking forward to more of your research.

  • http://www.medievalrecruiter.com/ Medieval Recruiter

    Interesting data, however if recruiting wasn’t infested with Sales! types, would the rhetoric of ‘rock star’ this or that have ever been born and used? My guess would be no.

    I would also be interested in knowing if there was a consistency in the clients these recruiters dealt with over time, and if there was any attempt to randomize their experience across clients? Put another way, I’ve known companies that would take the world’s greatest recruiters and chew them up and spit them out; I’ve personally seen at least two companies do this with several well known retained firms that have otherwise excellent track records. Even the most ‘polite’ recruiter will acknowledge some clients as more ‘challenging’ than others. Was this accounted for in this study?

    You could be dealing with a chicken or egg scenario. With recruiter’s salaries often being at least in part accounted for in commissions, difficult clients/accounts could conceivably contribute to differences in pay and consistency of performance over time. With absolute performance measures being so close with only consistency varying very much, if the factors of potentially ‘challenging’ clients are not accounted for, they could make the differences between the two populations ultimately meaningless or nonexistent.