Going Beyond Basic Recruiting Metrics to Drive Results
By Jessica Miller-Merrell ● October 5, 2018 at 3:15 PM
As a recruiting leader, you have done the work of auditing your team’s recruiting and hiring processes, made recommendations based on your audit, and have a rough plan of action. The real challenge isn’t necessarily recruiting the best talent, it’s about communicating what your team is doing and not doing, as well as making a business case to add tools or increase recruiting spend to drive the best recruiting performance to support your company.
The real challenge when it comes to recruiting metrics is educating your executive leaders on the challenges you face as a support team within a company and the impact that small changes can make on your recruitment and hiring. I outlined the basic measures in Must-Have Recruiting Metrics to Show Off to Your Boss.
In this post we’ll go beyond the metrics we’ve discussed in the past and discuss ways to articulate the value and educate leaders on how a small change can drive revenue and decrease expenses.
Making a Recruiting Business Case for Leadership
Presenting a solid business case for a budget to improve your recruiting processes, whether through new technology, staffing, or other support, means that you have to be fully up to date on your company’s strategy in order to understand what may or may not be possible within the current forecasted budget and business strategy. Part of this is understanding how the leadership in your company measures success. If success is measured more on whether a particular goal is reached rather than monetary measures, you may have to adjust your selling strategy to better appeal to that goal. Keep in mind that ROI is difficult to prove in HR efforts without KPIs, so you’ll want to focus heavily on your team’s results based on past progress.
Why Recruiting Metrics are the Lynch Pin of Your Recruiting Strategy
If you can clearly define a return on investment in relation to the organization’s business strategy, you’re already a step ahead. When presenting your business case, you’ll want to highlight the following areas in order to speak the same language as the leadership at your company:
- The payback period. This is the length of time it takes for an investment to make back the money initially allocated into the project. Your proposal should include the total investment and how it ties into your goals, with a focus on the timeline in which your team expects to see results. In short, how long will it take to see an impact of the investment?
- Internal rate of return. This is the interest rate at which the net present value of all cash flows from a project or investment equals zero. This includes both positive and negative flow. You’ll want to include net gains and net losses (prospective and past) in relation to the budget you’re asking for.
- The profitability index. This is the ratio of payoff to investment of a proposed project. Slightly different from your expected length of return, this should demonstrate expected success metrics and how an investment can improve areas that directly impact cash flow, such as reducing time-to-hire, staff overhead (if you’re working to streamline processes) or improving lost productivity per open requisition.
An example of what you could outline to measure the potential of a program’s effectiveness:
- Increased revenue attributed to new hires as a result of your proposal.
- Decrease in the time to hire attributed to your proposal.
- Increased quality of hire (performance of new hires vs. current employees).
- Your company’s brand (percent of positive recognition as a great place to work) as measured by industry surveys.
- The project’s overall ROI.
If you can clearly define each of these elements, your proposal will answer the important questions regarding the profitability of the project. It helps your case to speak the language of a CFO, using terms like ROI, human capital investment, stakeholders, and fiduciary responsibility.
Presenting a Business Case to Drive Results
Besides speaking the language of your c-level leadership, your results-based presentation that’s tied into your company’s bottom line metrics, and a strong case for a new initiative, you’ll also want to consider the following when you’re presenting to your company:
- Be prepared to back up your numbers. You can be sure that a CFO will want to know the logic behind your calculations. If you’re using your presentation to “show your work,” you’ll want to be very comfortable talking about the logic behind your numbers.
- Show market benchmarks. In human resources, when proposing an initiative that your team hasn’t previously executed, using industry benchmarks can help give your CFO an idea of how your organization ranks comparatively. Your competitor analysis should include regional and national benchmarks based on solid evidence. SHRM is a great resource for industry benchmarks in recruiting.
- Include case studies of other organizations who have been successful at implementing a similar initiative. These don’t have to be competitors, but case studies can help you demonstrate how your proposed initiative can potentially impact your company’s success. If it works elsewhere, it’s likely to work for you.
- Have a realistic implementation plan. This has to include both the financial aspects of the implementation, as well as the staff resources, such as the time to completion and the resources needed to execute your proposal. Remember to include third-party vendors, for example, if you’re proposing using new technology to streamline recruiting processes. Your vendor can even help you create use case scenarios to develop this part of your proposal.
- Keep it simple. Include an executive summary and an offer to follow up with more complex data. You don’t want to present to a room full of busy executives by reading from a length PowerPoint presentation. Top-line items are key, with slides to back them up that your leadership team can focus on after your presentation.
Topics: Recruiting Metrics
Updated December 21, 2018