Author David Snyder explains the metrics and equations recruiters and hiring managers apply to every job candidate and hiring decision.
One of the bright spots in today’s economic news is that many companies – even manufacturers – are beginning to hire again. But what comprises a good hire or abad hire? Recruiters look at a few metrics to make this differentiation.
In the end, it all comes down to three simple measures, according to David Snyder, author of “How to Hire a Champion” (Career Press, 2008): The candidate’s talents applied to the resources available must be able to achieve the business goals you’ve set. He breaks it out in a simple hiring formula:
Candidate’s competencies + Company’s resources = Company’s business goals
“There are many different ways to examine recruiting ROI and recruiting process,” said Snyder, also a national performance-management consultant and co-founder of North Carolina’s Champion Chronicles. “You can look at retention, recruiting costs or employee, management and customer satisfaction. But what most people forget is that you can’t put the cart before the horse. The cart is the hiring need, and the horse is the recruiting processes.
As hiring needs expand, then, what numbers will drive the recruiting process?
1. Recruiting cost ratios
How much an employer spends on recruiting a new employee. This can include recruiter travel, events, job fairs, supplies, recruiter salaries, bonuses offered to new hires and any other departmental expenses.
2. New hire performance
A gauge uses grading systems and hiring-manager input to create a performance metric usually based on the first 60 to 180 days of employment.
3. Hiring-manager satisfaction
A calculation of what hiring managers expect from the human-resources recruiting process through questionnaires.
4. Recruiting efficiency
A measure of retaining, training and feedback on new hires including that includes their length of employment.
5. Employee Starts
Cost of holding a position open and contract signing to new-employee start date can be long or short. Short timeframes here save companies money and long lapses can run up considerable costs.
But what does all this mean to the hiring company and to the candidate?
According to David Snyder, “In order to hire the right people and drive revenue, you have to do two things. First, you must have a balanced scorecard of some kind. In other words, you must clearly outline beyond a job description the exact business goals you want to achieve and how far you want to move the needle, and exactly what people will be held accountable for in terms of duties in order to reach those goals.
“Then, you have to carefully scrutinize the precise higher-order competencies, experiences, skills and character traits (such as integrity, reliability and determination) that you will need in your people in order to meet those goals.
“All other metrics are driven and determined by those simple starting points. Business-performance metrics are referred to most commonly as ‘key performance indictors’ (KPIs). The people who will meet those goals are your ‘success drivers.’ If you don’t qualify and quantify what makes a success driver, all other metrics, including recruiting metrics, have been gathered in vain.”