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Recruitment

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  • 1. Delivering Results Since 1975 Vancouver Calgary Edmonton Toronto Recruitment Four Meter Model Measuring Recruitment Program Effectiveness CV-C:DATAPPTMAURORECRUITMENT METRICS V7
  • 2. 2 Western Management Consultants  Human Resource Management: • Leadership development • Job evaluation and classification • Compensation, employee benefits and salary administration • Performance planning and review systems • Personnel planning and management systems • Performance evaluation • Training and development programs • Employee attitude / satisfaction surveys  Executive Search: • Candidate sourcing, interviewing and screening • Candidate testing and evaluation • Comprehensive reference verification • Candidate negotiation
  • 3. 3 The “Alberta Advantage”  Led Canadian Growth at 6.8%  3.5% unemployment – lowest in Canada (avg. 6.1%)  90,000 new FT jobs in 2005  400,000 new jobs expected by 2014, but …….. only 300,000 new workers  42,000 moved to Calgary last year Source: Alberta Venture + Calgary Economic Development
  • 4. 4 Projected Demand is Massive
  • 5. 5 The “Alberta Advantage”?? The Result?  Labour widely seen as the key pressure point • Fewer workers • Employee-driven work ethic • “Perks” escalation • Poor service / attitudes  Growing emphasis on efficient and effective recruitment, and on-boarding Source: Alberta Venture + Calgary Economic Development
  • 6. 6 Three Trends  “Race for the Basin”: • Capital budgets have grown by factors of 2 and 3 times • Keen and growing focus on cycle- times, speed of execution  Energy Sector “Maturing”: • Increased emphasis on process • Growing interest in measurement and accountability  Outsourcing of all or part of recruitment • Trends in Calgary point to an increased focus on NUMERICAL METRICS, creating an industrialized process aimed at reducing costs, cycle time and increasing productivity and ROI measures *September 2006 “Business in Calgary” magazine
  • 7. 7 “To continue to be heard at executive table, the Human Resources Team must establish effective processes, set performance targets and track results.” Mauro Meneghetti Western Management Consultants
  • 8. 8 Measuring Recruitment
  • 9. 9 Key Considerations  Size of the Organization  Degree of Centralization  Role of HR in recruitment  Systems Maturity
  • 10. 10  Strategic importance  Financial significance  Widespread impact  Operational relevance  Targets must reflect organizational and role differences  Focus on items that are controllable and variable Criteria for HR Measures
  • 11. 11 Recruitment Metrics – How to Choose  “Excellence in recruiting and retention can increase your organization’s market value by 8 percent” *Yeung and Berman, Pfeffer, Ostroff, and more…  Talent no longer refers to “innate ability”, but is a new management buzzword used to refer to “brainpower” (either natural or trained), and is used by some to refer to their entire workforce and others to refer to the management of specific competencies. The bottom line is, however it is defined – there is a TALENT SHORTAGE looming *The Economist, Oct 7, 2006
  • 12. 12 2006  Time to Fill  Offer Acceptance Rate  Training Investment (ROI)  Cost of Hire  Employee Replacement Costs  % of employees trained  % employee utilization  Voluntary & Involuntary separation rates What Firms are Measuring Today: 2001  Cost of Employee Behaviors (absenteeism, smoking, etc.)  Turnover costs  Employee Replacement Costs  Economic Benefit of additional recruiting  Economic Benefit of various training levels  Economic Benefits of high, medium and low performance on a particular job * The Wynford Group, Human Capital Benchmarking Survey*The HR Scorecard, Becker, Huselid & Ulrich
  • 13. 13  Too hard to measure  Lack of process focus; results in inability to repeat, build on accurate data  Incomplete picture  Not “actionable”  Still a feeling of “lots of people available” Common Issues
  • 14. 14 The 4-Meter Model for Recruitment HR OPERATIONS STRATEGIC ALIGNMENT PROSPECTS RECRUITS
  • 15. 15 Strategic Alignment Question Metric How many Candidates do you need? Number of Candidates you need to find by level, role, and skill set. Are you meeting Executive expectations? Satisfaction survey and interviews with key business leaders. Are we getting our money’s worth? ROI of recruitment activity in relation to avoided cost of turnover.
  • 16. 16 Prospects Question Metric Which methods for finding new talent are most effective? Response rates for all recruiting tactics: web site, advertising in media and direct mail, job fairs or other events, referrals etc. How long does it take to find the types of talent you need? Rate of talent acquisition by level, role and skill set (time to hire). Are we a preferred employer? Referral rate. How quickly do you respond to qualified talent? Turnaround time for candidate inquiries received via Web site, email, phone, regular mail, referrals and events.
  • 17. 17 HR Operations Question Metric How do you decline candidates who are not appropriate while ensuring that they send you referrals? How can you decline them graciously? Time to decision and time to follow- through communication and appropriate closure. Are your internal clients satisfied with your ability to support their recruitment needs? Internal Client Satisfaction Surveys and interviews. How quickly are we filling positions? Cycle time from when the need is identified to start date. Aged “request” or “vacancy” reporting. How much does it cost to support the recruiting process? Time and money associated with recruiting.
  • 18. 18 Recruits Question Metric Is our process recruit friendly and effective? Candidate satisfaction with the recruitment process (via surveys and interviews with new hires). How quickly do new recruits become functional in their role? On-boarding time. Job progression rate. Can you manage/handle their referrals? Conversion rate. Number of repeat referrals. Are the new recruits staying? Early days (3-6 months) turnover ratio.
  • 19. 19 The 4-Meter Model for Recruitment:  Hiring rate  Executive satisfaction  R.O.I. by employee category  Response rate (attraction power)  Query response time  Referral rate  Acceptance rate  On-boarding time  Conversion rate on Internal referrals  Candidate satisfaction (with recruitment process)  Early days turnover ratio  Job progression rate  Internal client satisfaction  Gap-to-Hire cycle Time  % Appropriate closure  Cost per recruit HR OPERATIONS STRATEGIC ALIGNMENT PROSPECTS RECRUITS
  • 20. 20  Strategic importance  Financial significance  Widespread impact  Operational relevance  Targets must reflect organizational and role differences  Focus on items that are controllable and variable Criteria for HR Measures
  • 21. 21 Implementing with Success…  Stakeholder buy-in  Communication throughout the organization  Consistent application  Support for change must come from HR  DATA is key • accurate, timely and repeatable
  • 22. 22 Questions ??
  • 23. 23 How to Calculate Common Metrics:  Formulas necessarily differ from organization to organization and MUST consider both hard and soft costs that impact the organization most profoundly.  These are just the “formulas” – creating the numbers that fill the formulas is the trick! Metric Description Accession Rate New Hires + Replacement Hires Total Headcount Cost Per Hire __ Hiring Costs__ _ New + Replacement Hires Cycle Time (time to fill) Days to Fill (from requisition) New + Replacement Hires Offer Acceptance Rate Offers Accepted Offers Extended
  • 24. 24 The Cost of Turnover  Direct Costs • Separation Costs: – Exit Interviews – interviewer’s / interviewee’s time – Administrative Costs – destroying files, removing individual from electronic records etc. – Unused Vacation Time (payouts) – Lost Client Revenues - service fewer clients during vacancy and training periods – Overtime Pay – paying other employees to assume leaver’s work – Case consultation (transferring clients from leaver to others) • Replacement Costs: – Advertisements, Recruitment Tactics (job fairs, referrals etc.) – Application Processing (administrative and professional time) – Entrance Interview (Interviewer’s/Panelist’s time) – Selection Process (Interviewer’s/Committee’s time) – Miscellaneous Costs (tests, travel, relocation, reimbursements etc.) • Training Costs: – Formal Orientation (Instructor’s and Trainee’s time) – Formal Job Training (Instructor’s and Trainee’s time) – Off-Site Training (Course costs and Trainee’s time) – On-the-Job Training (Trainee’s time to develop proficiency)
  • 25. 25 The Cost of Turnover (continued)  Opportunity Costs / Soft Costs • Lost time • Morale • Intellectual capital losses (ideas, plans, concepts…future streams of revenue).  Total costs estimated to be between 1.5 – 2.5 X the employee’s salary (FOR EACH LOST EMPLOYEE!!)
  • 26. 26 Our Client’s experience  Cycle time (actual time to fill positions from ad to “bum in seat”)  Controllable turnover  Acceptance rate (offer acceptance/decline rate)  # of recruits/month - # of vacancies  New hire determination ratios  Aged requisitions  Early days turnover