With 2019 rapidly approaching, the new year is a perfect time to focus on maximising the growth you’re already seeing in your agency and what better way to do that, than with KPIs. Of course, one only needs to Google the term to realise how easy it is to get bogged down in deciding which KPIs to pursue.
I want to make a case for how you can approach KPIs in a way that effectively measures the right strategic goals for your recruitment business.
Do you really need KPIs, and why?
Done right, KPIs should guide your business towards a better workflow, a higher level of candidate care and more candidates being placed in the right jobs. Not to mention a direct impact on revenue by tracking the effectiveness of each recruiter on your team.
If setting KPIs hasn’t given you such insights this year, you might be a bit disillusioned by the whole idea. It’s possible you’re thinking they aren’t worth spending time on. Metrics are often talked about in recruitment but not always clearly explained, so these comments probably sound familiar:
“We don’t know what to measure.”
“We are proudly KPI-free because our people don’t need them.”
“Measuring effectiveness takes too long.”
“Our recruiting system is already unique and successful, why waste time measuring it?”
“Our team is struggling to hit targets, how will adding more metrics motivate anyone?”
Here’s the thing, though: however you approach them, you DO need KPIs to keep everyone on track. They serve important functions, helping your business to measure progress and analyse patterns over time, make adjustments and solve small problems before they become big ones.
What does a great recruitment KPI look like?
A great KPI is like a compass, pointing you in the direction you need to go and helping you maintain course even if you get turned around on the way.
If you know what your business goals or strategic directions are going to be for the next year, working out KPIs is really about looking at the actions you need to take, and the tracking you should have in place so you can achieve them. The KPIs themselves are not your goals, they’re the vehicle you use to hit the goals. A couple of characteristics of a great KPI are:
- The KPI is ‘SMART’. By this, I mean that it’s specific, measurable, achievable or attainable, relevant and time-based. The SMART system is often applied to strategic goals, but it’s just as appropriate for individual KPIs.
- It’s small enough to give your team a short-term ‘win’ so you all feel more inclined to stay focused on larger goals.
In recruitment terms, the most valuable KPIs are likely to be aligned with foundational business standards like candidate care, your company’s NPS (net promoter score) or your recruitment workflow. For example, Recruiter Insider, a JobAdder integration partner, allows recruiters to collect feedback from candidates & hiring managers throughout the recruitment process to improve the candidate experience.
Here’s Justin Hillier, Recruiter Insider’s CEO & Founder: “Every agency in 2019 needs to be shifting their attention to measuring the sentiment of candidates and clients right throughout the hiring process.
This should include detailed and specific data and analysis to help identify where each consultant can improve not only the experience they provide but also their skills at the same time.”
KPIs can also be linked to execution-based information like the number of meetings or interviews a recruiter has booked.
Looking for other KPIs to measure your recruitment business effectiveness? Download our 2019 scorecard for key metrics that determine your team’s outcomes.
The one KPI to measure regardless of business size
Whether you’re a solo recruitment outfit or a larger agency, you should still be making use of KPIs to measure your progress and success. Even single-person businesses should be able to identify the hiring patterns of their industry and clients, and how their placement of candidates is tracking over time. These metrics allow you to make adjustments to your processes and be aware of opportunities which are open to you.
If you really want to break down the idea of setting and working to KPIs, why not just track one thing to start with? The single most important indicator of performance will be the number of candidates a recruiter has out to interview at any given time, which is a simple metric to keep on top of.
Here’s how you can do that, by working backward.
Let’s say you decide that each recruiter in your team needs to have 10 candidates out at interview in a given month. For each candidate that’s been selected to be interviewed, your recruiter may need to interview 15 from which to pre-select. Those 15 candidates would have been chosen from between 150-300 CVs submitted for active roles or your available talent pool.
What these numbers give you, is a means of tracking your recruiter’s output at any stage of the process, with the end goal in mind. What they give your team is a clear course of action to achieve their primary KPIs. Frequently reviewing your recruiter’s KPI report helps you quickly find where a goal is unlikely to be met.
For example, if a recruiter’s active talent pool is only 120 candidates, they know they need to step up their sourcing activity to meet that final objective of 10 candidates out at interview. Structuring KPIs and your reporting in such a way to enable better management conversations and earlier intervention, preventing a bad week from becoming a bad month.
Monitoring actionable inputs or activity over outputs (such as revenue) keeps the focus on the elements within your team’s control. These include the number of interviews booked, the calls made, sourcing actions undertaken and so on. Essentially you want to influence the many things that contribute to the result rather than the result itself. Gain a deep understanding of the real drivers of success, then focus on these relentlessly to get the output you’re looking for.
Working with the information above along with a good hard look at your recruitment metrics will see you well on your way to confident KPI setting for next year. JobAdder customers should look at…..
You are at an even greater advantage if you are a PowerAdder customer. PowerAdder is JobAdder’s most powerful analytics solution, which allows you to drill down on top performers, measure diversity and find lead opportunities in your client base. As a first step, we recommend PowerAdder users review the Overview and Consultant Performance reports to identify what’s really influencing your results.
Follow this approach to kick-start the year right and your team will be set for success throughout 2019.