It’s no secret that one of the biggest expenses and assets for an organization are employees. From recruiting and hiring to training and retaining, managing human resources is a huge cost. If done well, it can also be the biggest asset. According to a recent study (August 2012), the Boston Consulting Group found that out of all HR functions, recruiting has the highest impact on revenue growth and profit margins. In this session, we explore the hidden earning potential of recruiting. Join Mike Mayeux, Founder and CEO of Novotus as he provides information that helps talent acquisition leaders share the impact of recruiting. As a leader in the recruiting industry, Mike uses nearly 20 years’ experience in the talent acquisition industry to steer employees, clients, and candidates toward success. With his unique understanding of technology, consulting, and recruiting, Mayeux leads the Novotus team to accomplish the goal of reinventing talent acquisition. Always on the cutting edge of interactive technology, Mayeux allows Novotus to lead the industry in tools and best practices that improve clients recruiting results. In this webinar, you will learn: 1) Methods of establishing quantitative results to show the business impact of recruiting. 2) Examples of the potential cost savings associated with recruiting. 3) A method for calculating the true cost of turnover. 4) Metrics to link lost revenue associated with recruiting and speed of hire. 5) A method to measure the revenue impact associated with quality of hire

1. The Boardroom Recruiting ReportThe Boardroom Recruiting Report
The stats every recruiting leader needs to know.
Presented by: Mike Mayeux, Founder & CEO, Novotus
Wednesday, September 25, 2013
An RPOA Leadership Forum Presentation

2. About RPOA
• Nonprofit 501(3) organization
founded in 2005
• Mission to “educate the
market about RPO”
• RPOA Leadership Forum,
Blog, Newsletter, Social
Networks
• Follow us on
@rpoassociation and
LinkedIn group

3. RPOA Leadership Forum
• Educational online
presentations lead by
RPOA Members and
Business Leaders
• Download
presentations and
signup for upcoming
events

4. The Boardroom Recruiting ReportThe Boardroom Recruiting Report
The stats every recruiting leader needs to know.

5. Introductions
Mike Mayeux
Founder & CEO
Novotus
Lamees Abourahma
Executive Director
RPOA

6. About Novotus
• Founded in 2002, located in Austin, Texas with remote recruiters
located throughout the U.S.
• Largest Texas-based RPO provider
• Management Team = 100 plus years experience
• Founding Member of the Recruitment Process Outsourcing
Association (RPOA)
• Consistent 35% annual growth with placements in 39 states and
10 countries in 2012.
• Inavero/CareerBuilder’s Best of Staffing™ Client Satisfaction
award 3 years running
• Telly Award™ winner for creation and production of corporate
career site video

7. Agenda
• Setting the Stage
• Cost of Turnover
• Speed of Hire Impact
• Candidate Quality Impact
• True Recruiting Cost
• Set Up for Success

8. Talent Acquisition - Assumptions
• Many leaders would agree that their people are:
– The greatest differentiator
– A key to competitive advantage
– Central to achieving key business goals
– Are the “face” to the market

9. Recruiting has 5.5 times the revenue and
profit impact of other HR functions.
Source: http://www.ere.net/2012/09/04/news-flash-recruiting-has-the-highest-business-impact-of-any-hr-function/

10. How do we share
information that helps
executives understand these
assumptions?

11. How do we demonstrate
so that we can:
• Gain more credibility with our organization’s
leadership?
• Gain headcount and budget dollars that we need
to improve results?
• Deliver the talent our organization needs?

12. Speak the language of your business
• Understand business imperatives
• Present those goals in a language that matters
most to the senior leadership team.
Days Territories
are open for
sales reps
(lost revenue)
Days Territories
are open for
sales reps
(lost revenue)
Replacement
costs for open
nursing
positions using
higher cost
temp agencies
Replacement
costs for open
nursing
positions using
higher cost
temp agencies
Lost billable
hours for oilfield
service workers
Lost billable
hours for oilfield
service workers
Delayed Projects
and business
impact of
lacking IT
resources
Delayed Projects
and business
impact of
lacking IT
resources
EXAMPLES:

13. Do the math.
• Partner with finance to build the ROI to
support your objectives.
Requesting 2 more
recruiters to handle
ongoing open sales reps
positions (average 50
open positions).
Requesting 2 more
recruiters to handle
ongoing open sales reps
positions (average 50
open positions).
This?
Increase Speed to Fill
open Sales Reps =
$2,500,000 revenue
increase. Need – 2
Recruiters
Increase Speed to Fill
open Sales Reps =
$2,500,000 revenue
increase. Need – 2
Recruiters
That?or

14. Cost of turnover is underestimated.
Turnover Cost of
Non-Exempt Workers
_______________ %
of base salary
Turnover Cost of
Non-Exempt Workers
_______________ %
of base salary
Turnover Cost of
Middle Managers
_______________ %
of base salary
Turnover Cost of
Middle Managers
_______________ %
of base salary
Turnover Cost of
Upper-Level
Managers
_______________ %
of base salary
Turnover Cost of
Upper-Level
Managers
_______________ %
of base salary
5050
100100 toto
150150
200200
toto
250250
Source: Staffing.org 201 0 C orporate Recruiting
Report
Actual Average Turnover Cost

15. Speed of Hire Profitability Impact
Company Highlights
Annual Revenue: $1.34 Billion
# of Employees: 8,791
# of Open Positions:1,318
Age of Open Reqs
Age 1 – 29 days: 758
Age 30 – 58 days: 244
Age 60-119 days: 145
Age 120 days +: 171
Company Highlights
Annual Revenue: $1.34 Billion
# of Employees: 8,791
# of Open Positions:1,318
Age of Open Reqs
Age 1 – 29 days: 758
Age 30 – 58 days: 244
Age 60-119 days: 145
Age 120 days +: 171
Example:
244 x 30 days x $418 daily rev = $3.06
million
145 x 60 days x $418 daily rev = $3.64
million
171 x 120 days x $418 daily rev = $8.58
million
Lost revenue of open positions over30 days old = $15.3 million
($1.34 billion ÷8,791) ÷ 365 days = $418 daily
revenue

16. Candidate Quality Profit Impact
Cost per hire can be
8-12% of first year
compensation
Cost per hire can be
8-12% of first year
compensation
Turnover can be
50 – 250% of first year
compensation.
Turnover can be
50 – 250% of first year
compensation.
Poor performance is a
multiple of compensation
over the entire employee
lifecycle.
Poor performance is a
multiple of compensation
over the entire employee
lifecycle.
Assume revenue for
average performing
employee = $418 per
day.
Underperformer =
$210 per day.
Assume revenue for
average performing
employee = $418 per
day.
Underperformer =
$210 per day.
In just two years, the
underperformer can cost
the company $152,570.
In just two years, the
underperformer can cost
the company $152,570.
Cost to hire
approximately $9,000
Cost to hire
approximately $9,000
Cost to lose (150%)
$112,500
Cost to lose (150%)
$112,500
Example: $75,000 base salary, middle manager

17. Ability to source high quality candidates
quickly can have high impact.
Do you want it: goodgood
fastfast
cheapcheap
Pick two.
Reduce poor
performance. Increase
organizational value.
Measure Quality of Hire
Reduce lost revenue / lost
productivity. Measure
Time to Fill

18. Calculate Recruiting Costs: CPH vs. RCR
RecruiterX RecruiterY
# of Hires 15 Engineers 7 Senior Managers
Total Comp of Hires: $750,000 $980,000
Recruiting Expense: $66,000 $84,000
CPH Calculation = $66,000 ÷ 15 = $84,000 ÷ 7
Cost PerHire (CPH) $4,400 $12,000
RCR Calculation = $66,000 ÷
$750,000
= $84,000 ÷ $980,000
Recruiting Cost Ratio (RCR) 8.8% 8.6%
At a glance, it may seem as though
recruiter X is a more efficient and
effective recruiter both in volume of
hires and CPH metrics.
In reality, they are almost even in
productivity and resource
utilization. RCR is a better metric
to use for comparison.

19. Use industry data to add perspective
- U.S. DepartmentofLabor
YoungerYounger
workersworkers
will havewill have
10+ jobs10+ jobs
by theby the
time theytime they
turn 30.turn 30.
Job hopping will continue to increase:

20. Use industry data to add perspective
PerceivedPerceived
CandidateCandidate
AvailabilityAvailability
Source: 2010 Corporate Recruiting Report

21. Create a Talent Brief
• This is an executive-level overview of talent
acquisition for the organization.
• Highlight:
– Talent Acquisition Strategic Initiatives
– Industry Landscape
– Key Metrics
– Difficult to Fill Positions
• Produce Semi-Annually

22. Example Talent Brief

23. Let the Numbers Tell The Story
• Implement Metrics
• Create quarterly, annual benchmark reports along with real-
time daily dashboard reporting.
Source: 2010 Corporate Recruiting Report

24. QuestionsQuestions

25. Where to find RPO providers?
• RPO Buyer’s Guide: non-paid to play, free, searchable list of
verified RPO companies provided by RPOA.
• Buyer: Find qualified RPO providers:
http://resources.rpoassociation.org/rpo-companies-buyers-guide
• Provider: Add your company:
http://rpoassociation.org/add-your-company

26. Register for next Webinar
The Unique Challenges and Solutions to IT
Recruiting
October 23 1:00-2:00 PM EST

27. RPOA Resources
• Fifty Shades of RPO: Loving your RPO partner after the sexy
sales tam leaves town [webinar]
• Recruitment Process Outsourcing – The Good, the bad, and
the ugly [white paper]
• Ten Things you need to know before you choose a
recruitment process outsourcing partner [white paper]
• Skip this step and kill your brand – recruiting etiquette 101

28. Thank you!
Contact us at info@rpoassociaton.org
Online: www.rpoassociation.org
Twitter: @rpoassociation
LinkedIn Recruitment Process Outsourcing
Association