Metrics for Assessing College-hire Effectiveness and ROI

It would be pretty hard to throw a stone in most HR organizations without hitting someone who manages an antiquated process. Despite significant changes in how people live, work, and play, many HR practices continue on as if they were operating in 1960. For years employment advertising specialists relied on channels with shrinking audiences, simply because that’s how it was always done. Now, as more and more newspapers fail, the award for most antiquated recruiting practice looks like it will pass to college recruiting. Like employment advertising, college recruiting is an activity bound by tradition. While numerous studies demonstrate that an increasing percentage of students no longer engage on campus career-related services/events, such channels remain the focus of most corporate practices.

Like all practices that augment the capability and capacity of the organization, college recruiting needs to run more scientifically, with decisions based on data and research. If you are looking for metrics to assess the effectiveness of your college recruiting practices, consider a few of the following:

A+ Level Business Impact Metrics

The most important metrics are those that demonstrate that new college hires positively impact the business. Possible metrics include:

  1. Observed Job Performance: In roles where it is possible to capture real data on job output, consider comparing performance of recent college hires to existing employees in the same role or to college hires from previous time periods. Selecting a market basket of such roles across the organization to evaluate should serve as a decent indicator of overall practice effectiveness.
  2. College Hire Retention: Getting great college hires is one thing; keeping them long enough to produce a positive return on investment is another! Calculate your retention rates at six-month intervals for three years.
  3. College Hire Diversity: You don’t need to prove that increased rates of diversity in the workforce positively impact business results; numerous studies have already done that for you. Instead, measure and report how well your practices are doing at increasing the rate of diversity hires you produce. Compare actual rates to either pre-established targets or rates from previous time periods.
  4. % to Plan: How successful are you at recruiting the right number of college hires by the target time desired?
  5. Termination Rate: Percentage of college hires that must be terminated during the first two years of employment.
  6. Training Failure Rate: Percentage of college hires that fail during initial training.
  7. Total College Hire Compensation Recruited: The total compensation including all one-time bonus payments for college hires generated during a specific time period.

Supplemental Ways to Measure New Hire Performance

In addition to measuring on-the-job performance, there are some other measures that indicate program performance. They include:

  1. Bonus Compensation Rate: If your organization uses a variable reward structure, look at the average bonus compensation rate of recent college hires compared to hires in previous periods, adjusting for changes in the size of the bonus pool.
  2. Promotion Rate: Great hires advance rapidly, be they college or experienced hires. Look at the rate of college hires promoted at six-month intervals for the first two years of tenure.
  3. Training Scores: If your organization requires new hires to attend a battery of training events, considering aggregating individual scores from training assessments into a single new hire training score. Compare this score to past college hires.
  4. % of College Hires in Top 50% Ranking: While some in HR consider forced rankings harsh, a true measure of whether or not your college programs are producing great hires is the percentage of college hires managers place in the top 50% when forced to rank their downstream organizations.
  5. 360° scores: Average 360 scores of new college hires after one year.

Process Efficiency Metrics

The following metrics measure whether your college hire program is efficient and effective:

  1. Stakeholder Satisfaction: Manager, applicant, and new-hire satisfaction with the process.
  2. Employer Brand Ranking: Firm ranking scores from the Universum brand survey.
  3. Applicant Quality: Percentage of applicants that exceeded the minimum qualifications. Alternatively, average GPA, or SAT of new hires (within grad and undergrad categories) or average final interview scores assigned to new hires by hiring managers for firms that use a numerical rating system.
  4. Intern Conversion Rate: The conversion rate of top-performing interns to permanent hires.
  5. Offer Acceptance Rates: Percentage of offers accepted (note: without looking at the quality of the candidates who received offers, the statistic can be misleading. You can get a very high offer acceptance rate because you’re making offers to low-quality candidates who no one else wants. Instead, look at the offer acceptance rate of highly desirable candidates who have offers from other firms, in order to see how competitive you are).
  6. Head-to-Head Hire Rate: Percentage of hires that accepted an offer over offers from key talent competitors.
  7. Cost per Hire: The cost per college hire (compared to last year and the cost of an experienced hire). Be careful, because a cheap hire may or may not be a quality hire).
  8. Top Schools Percentage: The percentage of hires from “top-10″ targeted schools.
  9. Local Schools Percentage: The percentage of hires from “local” schools (local hires frequently have higher retention rates and lower salary costs).

Internal Program Effectiveness Metrics

After you assess you program using a sampling of the metrics listed above, you should also look at program metrics which have an internal focus and generally are not reported outside of HR. Those program metrics include:

  1. Goals Met: The percentage of program goals that were actually met.
  2. ROI: ROI (benefits minus costs) of the program.
  3. List Rankings: What percentage of recognition type ranking applied for were received. Include local, state, and national rankings like BusinessWeek’s Best Place to Start a Career ranking.
  4. College Career Site Effectiveness: Monitor statistics related to raw hits, hits to event specific landing pages, duration of stay, and conversion (completion of application, registration for newsletter, etc.).
  5. Number of Attendees: Percentage of targeted attendees at info sessions, career fairs, and interviews (note: it measures volume but not the quality of the attendees).
  6. Critical Incident Count/Cost: Number and cost of EEOC/legal issues resulting from college hiring practices challenged.
  7. Online Comment Ratio: The amount of both positive and negative information about the firm that can be found by applicants online.
  8. Number of Applicants: The overall number of formal applications received each year (note: volume doesn’t indicate quality).

Final Thoughts

The time has come for college recruiting programs to raise the bar and to demonstrate their effectiveness and impact in the same ways that normal recruiting programs do. In tight economic times when college hire budgets are being reduced dramatically, now is an ideal time to demonstrate just how effective college hiring can be.

About the Author

Screen Shot 2015-05-19 at 9.41.40 AM
Dr John Sullivan is an internationally known HR thought-leader from the Silicon Valley who specializes in providing bold and high business impact; strategic Talent Management solutions to large corporations. He’s a prolific author with over 900 articles and 10 books covering all areas of Talent Management. He has written over a dozen white papers, conducted over 50 webinars, dozens of workshops and he has been featured in over 35 videos. He is an engaging corporate speaker who has excited audiences at over 300 corporations / organizations in 30 countries on all 6 continents. His ideas have appeared in every major business source including the Wall Street Journal, Fortune, BusinessWeek, Fast Company, CFO, Inc., NY Times, SmartMoney, USA Today, HBR and the Financial Times. He has been interviewed on CNN and the CBS and ABC nightly news, NPR, as well many local TV and radio outlets. Fast Company called him the "Michael Jordan of Hiring”, Staffing.org called him “the father of HR metrics” and SHRM called him “One of the industries most respected strategists”. He was selected among HR’s “Top 10 Leading Thinkers” and he was ranked #8 among the top 25 online influencers in Talent Management. He served as the Chief Talent Officer of Agilent Technologies, the HP spinoff with 43,000 employees and he was the CEO of the Business Development Center, a minority business consulting firm in Bakersfield, California. He is currently a Professor of Management at San Francisco State (1982 – present). His articles can be found all over the Internet and on his popular website www.drjohnsullivan.com and on www.ERE.Net. He lives in Pacifica, California.
  • http://hunts4u.com Todd Lempicke

    Great article. Here is a link to a video on a new online program that addresses at least some of the front-end metrics you are talking about and injects some technology into the sourcing and screening process making it much more efficient and cost effective than before.

    http://orpresents.com/resumegps/

  • nicholas garbis

    Love the article…it is a favorite topic of mine and something that I enjoyed working work on with a major retailer last year.

    I think you may have understated the importance of the ‘I’ (investment) in the ‘ROI’. The recruiting function will need to know how much was spent on college recruiting….ideally at a campus level.

    With the costs at hand, you look at the Quantity and Quality of Hire from each campus and really start to see where the ‘ROI’ is…..and where you should be devoting more resources.

    Additionally, taking the ‘Moneyball’ approach (nod to Michael Lewis’ excellent book), you can profile the schools with highest ROI and start to go recruit at schools you haven’t been to before.

    Nicholas Garbis, Sr. Consultant
    www. infohrm.com
    Infohrm – the global leader in Workforce Planning, Analytics, and Reporting.

  • http://www.groupereye.com Ted Williams

    Great article. I would love a metrics driven report on college recruiting. Forget all the feel good stuff. Which students did you hire? Why? How did they perform? How much did they cost? Hiring talented students has never been more important. They can be game-changers. The system is broken and it is going to take some type of revolution to fix it. I’m excited for it.

  • http://www.brillstreet.com Brandi Blades

    Fantastic article — never has it been more important to leverage the skills of Generation Y. Those who can do so effectively will find that the most talented individuals of this multitasking, social media generation will keep their business relevant and successful in the coming years. ROI indeed.

    But getting the most from your Gen Y recruits is a two-way street. Brill Street recently conducted a study where we asked Gen Yers how employers can help them help their employers, if you will. The results were startling. Are you giving your young hires the tools they need to get the job done (i.e., making use of Google Docs, Wifi, embracing social media, etc.)? Are you too busy locking browsers out of Facebook and Twitter to miss how important these social networking sites are to your company’s relevancy? Nearly 60% of respondents in the Brill Street study feel social media is discouraged in the workplace—yet 87% believe leveraging social media grows brands and businesses.

    Since Gen Y works differently, we must adapt the way we work with them in order to leverage their valuable skills.

    Brandi Blades
    Brill Street + Company (http://www.brillstreet.com)

    P.S. If your interested in learning more about the research, we’re more than happy to share the results.

  • http://www.experience.com Jennifer Floren

    Dr J ~ you are right on, as usual. It always amazes me how companies can get tricked into thinking that entry-level recruiting is the “low cost” sector of the labor market. Sure, the compensation levels are lower than mid- or senior-management… But it is often 1) the highest volume, 2) the highest turnover, 3) the highest level of training required, 4) the longest time between hire and productive contribution, and 5) requires the highest amount of time from managers/leaders who could otherwise be building the business. In other words, the entry-level can be the MOST costly — and is therefore the MOST important to measure and get right!

    I think your point that this arena is “bound by tradition” — but we’ve been working with more and more companies who are getting very serious about turning Gen Y hiring into competitive advantage… those who aren’t optimizing their efforts are going to be left in the dust very, very quickly.

    Our blog publishes all sorts of data to support this — please feel free to utilize it in any of your articles etc if it’s helpful!

    http://www.experience.com
    http://blog.experience.com

  • http://drjohnsullivan.com Dr John Sullivan

    Brandi

    Thanks for the comment and the offer of real data. If most college recruiting results saw the light of day, heads would roll.

    Some surprises that firms may encounter if they used real data include…

    • Cost – The cost per hire can be outrageous, especially if you include manager time (as high as $43k per hire)
    • Turnover – Turnover rates within 3 years can exceed 50%
    • Performance – First year performance levels and error rates differ by as much as 50% compared to experienced hires (Slow time to productivity)
    • Manager time – Coaching, guiding and training new college hires can be a drain on managers during the first 6 months
    • Top schools – The so called “top schools” do not automatically produce the best on the job performers (unless they are treated differently because they are labeled as a “top school” grad by their managers)
    • Placement problems – Bad initial placement within the organization is a bigger problem than whether you got a weak hire

    John Sullivan

  • http://www.admentis.com Miguel Corona, D.M.

    Dr. Sullivan – Your “reality check” list does is on point. Having directed CRR during my career, I can attest to the fact that “real data” is often met with some surprise. One caveat I’d add to your list is the assumption that the candidate accepts an offer. Many times, I’ve had candidates NOT accept offers AFTER investing resources into the process. Thanks for your insight and the article.