When it comes to the question of recruitment, many organisations have valid compulsions in opting for in-house recruitment. The merits and de-merits of such a choice may be dissected at length – but once the choice is made it is more important to identify the right criteria by which an organisation can measure the effectiveness of its in-house recruitment efforts.
Let us assume that the company has a competent in-house team to build an outstanding workforce. Efficiency and quality will be their primary objectives in determining effectiveness, of course – but what could be the key metrics to track?
Right-fit fulfillment is critical
The in-house advantage lies in intricately knowing the organisation and its business. This should be leveraged to achieve better role and culture fit, and to accurately position the employer brand. Three important metrics to track, here, would be:
Shortlist-to-interview ratio: How many of the short-listed applicants presented themselves for the interview?
Interview-to-offer ratio: How many of the candidates interviewed were made offers?
Offer-to-acceptance ratio: How many of the offered candidates accepted to join?
A less flattering ratio in the first two criteria requires a re-evaluation of the vetting process. If the second metric fails to pass muster, it is a call to the correct the mismatches between expectations and culture fitment, and in reading the market right.
Evaluating speed and responsiveness
Cost is a primary objective in deploying in-house recruitment team. While agency spend is reduced, it is offset by an increase in payroll costs of internal teams, besides advertising and other infrastructure costs. It is therefore important to monitor cost-related factors such as time to and cost of hire.
Time-to-fill is a valuable metric for internal recruitment teams. This metric can vary for different positions, and may be broken down into the following three measures to benchmark efficiency. ·
Time to present candidates – how efficient is the candidate pipeline process?
Interviewer feedback timelines - how effective is the hiring process?
Aging of requirements - how clued in is the talent sourcing system?
Achieving economy of recruitment
Cost per hire is a favorite metric used to measure the effectiveness of in-house recruitment. From a business perspective, optimising costs to hire the right workforce is logical – recruitment must be feasible for business and must compare favourably to industry benchmarks.
Cost per hire is calculated as the sum of internal and external costs incurred in the company’s recruitment efforts divided by the total number of hires for a specified period.
Care however must be taken to balance this with the quality of hire (otherwise the company will just get what they pay for). The next metric thus becomes an important one to consider.
Comprehensive performance as quality indicators
In-house recruitment teams hold a significant advantage in tapping performance metrics from HR teams to evaluate the quality of hire. These include:
- How quickly did they get up to speed, compared to high performing peers?
- Did they stay for a shorter or longer time than the organisation average?
- How many of the hires met and exceeded performance expectations?
- How did they demonstrate learning and growth to rise in the company?
- What value did they create for the team and organisation?
The above metrics will help organisations assess if the right people are being hired against the right role requirements and expectations. They will also enable better understanding of manager performance. Ultimately, they can create a continuous value-loop to benchmark future actions.
Collaboration – the biggest asset
The biggest asset for in-house recruitment teams is their access at will to managers and leaders. This enables them to design, build and nurture a symbiotic organisational culture of engagement and collaboration in maximising the company’s talent quotient and making a positive impact to the business strategy and objectives.
Such a highly collaborative exercise calls for meticulous tracking of efforts to achieve
- A best-in-class hiring experience to enhance the brand and attract the best talent
- Process efficiencies that reduce time and cost of hiring, and increase the quality
- A seamless value loop of talent management – from acquisition, performance management, potential development and succession planning.