Why Metrics Are Essential for Success in Recruiting

In a highly competitive world dominated by CFOs who want to cut your budget, it is no longer optional to demonstrate your value. Everyone is accountable! If you are in a situation where “charm” has run out as an option, then it’s probably time to consider switching to metrics in recruiting to prove your impact. It’s interesting that when people ask me how you can easily differentiate between world class and average HR departments, the one factor that stands out dramatically is the extensive use of metrics (or lack thereof) to measure HR success. The very best ó like Intel, Cisco and Microsoft ó are metrics fanatics, while the worst use costs, feelings, and instincts to judge their success. When you look specifically at the employment functions in these top firms the differences get even wider. Most Fortune 500 recruiting departments are in the stone age when it comes to metrics. Why? Well, there are a million excuses. But they are all just that ó excuses!Business Reasons Why You Should Use Metrics in Recruiting Metrics help you manage better. They tell you what to do more of and what to do less of. Metrics allow you to focus your limited resources on tools and strategies that have a significant business impact. If you need a further push, here is a list of why metrics are beneficial in recruiting:

  • Metrics eliminate confusion. Employees and managers receive so many mixed communications and messages that deciphering what is important can be difficult. Weighted metrics both define what is important and they also tell the person precisely what level of performance is expected. What you measure and reward takes away all doubt about what is important.
  • Metrics allow you to focus on your high-priority issues. Metrics tell everyone what is and what isn’t a high priority. Without having to give a speech, metrics help focus everyone’s attention on the important issues. If what you measure is also closely tied to your budgeting process and your rewards, you are on your way.
  • Metrics help push continuous improvement. Comparing results metrics between different time periods tells you whether and how fast you are improving. Metrics help focus recognition and attention on those programs that are continuously improving. They also give stagnant programs a benchmark to compare themselves to.
  • Metrics allow you to come across as an expert. Experts are respected because they emphasize evidence over hearsay and data over conjecture. If you want to be credible, it is essential that you differentiate facts from opinions in your arguments. Specifically in technical departments (and anywhere within high-tech and financial firms) numbers and data are the language that everyone uses. If you use another language that substitutes feelings for numbers, no one will listen to you, because they will interpret the overuse of opinions as meaning that you just don’t have any facts. The best managers in business shift so that eventually they are making mostly fact-based decisions. Without data, it’s just an opinion.
  • Distributing metrics can change individual behavior. Only rewards change behavior faster that distributing ranked metrics to all. By ranking and distributing your metrics, you provide visible side-by-side comparisons that can be embarrassing to some and rewarding to others. Either way, the effect is to spur employees and managers into action.
  • Metrics are superior to culture in changing the behavior of your managers. Instead of relying on your corporate culture to drive actions, you should instead rely on metrics and rewards to send the message about how you expect people to behave in situations. You will find that by simply changing the metrics and rewards you can quickly change the behavior of most everyone. In contrast, most find that changing a corporate culture is extremely difficult and time consuming, which inevitably slows the needed change in behavior.
  • Metrics can help to improve your relationship with the CFO and CIO. Using metrics (especially those pre-approved by the CFO) sends a clear message that you are business-like. Tracking and quantifying your results can almost instantly get the CFO and CIO off your back, because it shows that you now think and talk like them (i.e., you both now make fact-based decisions). By measuring results you are demonstrating to top management that you are results oriented. Reports that are full of numbers and metrics will make the CFO happy ó not just because they are easier to read than most wordy HR reports, but also because they make your results more easily comparable to what others do.
  • Metrics help you allocate resources and tell you what to stop doing. Quantifying and comparing the success of every program highlights where resources should be cut and who should be punished or fired. Rapidly cutting underperforming assets (and shifting them to high ROI programs) is an effective way of improving your efficiency and performance.
  • Metrics can build coordination and cooperation. Metrics that cross departmental lines can encourage cooperation. When work is broken up so that parts of it are handled independently by two or more functional units, cooperation between them can be increased by using a metric (and a reward) that measures the final output after both parties complete work on it. The cooperation increases because both units eventually realize that neither unit can succeed unless the other unit also does its part. This “superordinate” goal, or metric, demonstrates to both units their degree of interdependency.
  • Metrics can help build self-confidence. Assigning a “passing score” to a task allows you to compare your work to a standard. Individuals can then easily compare their work to that passing score to determine how they are doing. For the best performers, that comparison helps to build self-confidence. Metrics can also give them legitimate bragging rights if they come out on top.
  • Using metrics sends the message that you are new school. “Old school” HR professionals often carry a reputation of being resistant to metrics and to change. By using metrics (and also technology) you send the message that you think differently and possess more business acumen than your forbearers.
  • Metrics tell you what to reward. If you work under a pay-for-performance system (which we all should), metrics tells managers who and what to reward and punish. Incidentally, rewarding what you measure makes things happen much faster.
  • Modern ERP and ATS systems make it easier. Because the best new HR software programs include metric elements, it is now much easier to find the data you need and calculate the appropriate metrics. Some software even contain analytics modules that can help you forecast trends and avoid errors.
  • Metrics help you ensure that you are meeting your goals and customer needs. It’s easy to assume that your internal customers are happy with you. But it’s better to find out for sure. Customer satisfaction metrics allow managers to know who is and who isn’t happy. In addition, if you provide senior management at year end with a report that lists your yearly goals and the metrics to prove that they have been met, you send a quick but clear message that you did what you promised. Lame Excuses for Avoiding Metrics The funniest thing about those who refuse to use metrics is that a large number of them come from an academic background in psychology. In college, psychologists are forced to “run the data” in every class they have. Surprisingly though, once they get into HR they all to often claim that metrics are dehumanizing and reduce people to “just numbers.” Go figure! Some additional reasons people use for avoiding metrics include (the rebuttal follows the excuse):
  • “I don’t have a degree in math or statistics.” Most metric calculations can be done on an excel spreadsheet or with existing software.
  • “Too many metrics are needed.” Don’t overdo a good thing. Keep the number of metrics below ten.
  • “Collecting data is expensive.” Over-collecting of data is common. Whenever possible, use existing information. You do not have to measure every event or job. Instead prioritize jobs, and business units and use sampling techniques to reduce the time and costs. Involve the CIO and HRIS in finding out what information is already available.
  • “I tried them, but the managers didn’t take them seriously.” Good metrics measure the things that senior managers care about. To build credibility you must pre-test your proposed metrics with a “hard-ass” person like the CFO to ensure they meet their muster. Don’t start out using soft metrics and your credibility will automatically increase.
  • “No one else in HR uses them.” That might be true, but look at those people as the next targets for budget cuts. In tough economic times, you prove your business impact or you are gone.
  • “Everyone likes and respects me already.” Being friendly and available is not the same as being productive and generating business results. Well-liked people are let go everyday during a downturn, so make sure you can prove your results are superior.
  • “I’m just overhead. There’s no output to measure.” Great recruiting directly impacts productivity, there is no doubt about that. If you can’t directly show your impact on the business then you are clearly not doing effective recruiting. Who you hire and how long they stay impacts every business unit. Strategic Areas in Recruiting Where You Should Have Metrics There is no standardized list of metrics that everyone uses. But smart recruiting managers focus on strategic impact areas like:

  • Quality (on-the-job performance of the hire)
  • Source effectiveness (quality and retention rate per dollar of cost)
  • New hire failure rates and the retention of new hires
  • Recruiter effectiveness
  • Manager satisfaction
  • Applicant satisfaction
  • Speed of hire (percentage of target dates met)
  • Diversity of hires

Conclusion Three trends in business are driving the increased need for metrics. First, as the use of technology spreads, capturing and analyzing data in all fields becomes easier and more widespread. As more departments become paperless the ability to sort data becomes easier and as it does the drive to be metric driven will also increase. Second, as globalization spreads, people will be placed more geographically apart. As a result, managers can no longer assess an individual’s success by physically looking at employee output. Instead, metrics will become the primary tool to measure and compare success between far-flung employees and their business units. The final driver of metrics use is the success of supply chain management. The supply chain process has transformed “back water” operations (like warehousing, ordering, and shipping) into widely talked about profit centers. Supply chain succeeded mostly because it shifted those operations to 100% metric-based decision-making. Other overhead functions have also noted this dramatic shift in status and they also have started to move toward fact-based decision-making. It is unlikely that any of these three trends will slow down in the immediate future. So now is the time to jump on the metrics bandwagon before someone in authority uses your lack of metrics as an excuse to cut your budget ó or to cut you!

About Dr John Sullivan

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.

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