The five best metrics to use in talent recruitment
Hiring A-Player talent is the most significant difference you can make to your growing business. Because it’s so important, it’s become one of my mantras. It dwarfs everything else. And I won’t stop talking about it. It was fundamental to my experience scaling three tech companies, and I see the results in the clients I coach. If you have a high percentage of A-Players, you will scale rapidly. End of. It’s like everyone’s in the SAS. Your teams will execute quickly, efficiently and with minimal fuss.
Take SmartSourcing, our outsourcing client from the Philippines. I’ve just got back from keynoting their culture day and was struck by the energy and passion I saw in every one of their people. Since we started working with them pre-Covid, they’ve grown from 125 to 450 staff. This time next year, they’ll be at 1000, growing 100% year on year. Their superb service results in every customer referring them to at least three others. As a result, their sales and marketing costs are virtually zero – a pretty enviable position. And underpinning all of this is A-Player recruitment.
How has SmartSourcing got so good at attracting talented people? By obsessing about certain metrics. If you know you need to improve your hiring process, read on. There are several metrics you can track.
1. Time taken from application to offer
SmartSourcing is laser-focused on this metric. They know that A-Players are in high demand. Their competitors will snap them up if they don’t act fast. And they also know if one of their customers says, ‘We’d like you to provide us with a new member of our team’, they need this to be quick.
Before we started coaching them, their recruitment process used to take 40 days from CV to offer. This was way too long. With our help, they drove it down to 20, then 10. They’re currently attempting to drive it down to 4. That’s a 10x improvement in less than a year.
Look at ways you can industrialise your process. What can you do at every touchpoint? Maybe some things in parallel? Or put in place online tools that deliver results quickly? SmartSourcing has gone a step further and set up an internal headhunting team, which has dramatically improved the speed of hire.
2. Quality of new hires
Assuming you’re successful at hiring, do your recruits fail or do you retain them? This metric focuses on the quality of your new hires. Look back at the last 12 months and assess whether this person is an A-Player (i.e. in the top 10% of available talent for a given job, salary and location). If they’re not, why are you hanging on to them?
We suggest an annual review here because any sooner, it’s too early to tell. In the first couple of quarters, the jury is still out. But by the end of the year, you’ll know if their performance isn’t up to scratch or if they’re a bad cultural fit.
An idea I nicked from Zappos and brought to Peer 1 was the ‘Foxtrot Oscar’ bonus. If someone quit in the first month, I paid them £2000. It certainly got attention from the media! After interviewing me, journalists would say, ‘Can I come and work for you?’ I’d say, ‘You think you’d get in? We’re pretty rigorous!’ But there was a serious point behind this scheme. We didn’t want to waste time and money onboarding someone who didn’t fit in our teams. Quality of hire was everything to us, and we wanted to get it right.
3. Hiring manager success rate
Keeping score on success rates within your management team is linked to measuring the quality of hire. Who does the best job hiring A-Players? If the new hire turns out to be a C-Player, who hired them? If Bob has hired seven people and three disappear in the first 12 months, it looks like Bob needs support or training.
When you’re looking at cultural fit, it can be helpful to identify a couple of people to be your ‘bar-raisers’. People who are good at spotting cultural fit at interviews and aren’t on the hiring team. This is one way you scale past the founder or CEO. These people couldn’t care less whether the candidate gets hired or not. They don’t have a veto but can advise the hiring manager whether they should proceed.
Not everyone is great at interviewing. I love it, but I know it’s not for everyone. Some people can be surrounded by talented people and pick the C-Player every time. So don’t let them recruit! Get one of your better hiring managers to recruit for them.
4. Internal mobility of new hires
You don’t want hiring managers to recruit people who get stuck in their roles. If you’re working towards a genuine meritocracy, you must promote every vacancy internally and make this your first preference. Hire for attitude, not skills, and build training programmes that will move people rapidly through your business.
Knowing how many people in your organisation have been promoted in the last year is useful. It’s gold dust for your interviews. You can tell candidates they have a 50:50 chance of being promoted in the first year after joining your company. Track this regularly and identify where people have got stuck. Are they an A-Player but happy to stay where they are? No shame in that – if that’s the case, then no further action. But if their manager stops their mobility, that’s entirely different.
Having good mobility in your business will help with retention. You can share this with everyone if you have clear data demonstrating your success. And if someone feels they’ve been overlooked for promotion, they can bring this to you instead of leaving to join your competitor.
5. Source of hire
Back in my Rackspace days, a third of our recruitment came from referrals from existing employees. Another third came from our graduate recruitment programme, and the remainder from job ads. We never had to use search. We were deluged if we ran an ad as we’d built a strong employer brand. One of our clients spent £500,000 on agency recruitment fees in July alone. With such a significant expenditure, we’ve advised them to track whether this is good value for money related to the quality of hires.
Sometimes you discover a unique fishing hole which can be particularly productive. At Peer 1, we connected the data centre recruitment efforts to Portsmouth Uni’s networking set-up. Some of our team were guest lecturers on the uni course, and we’d bring the students into the data centre to show them the physical devices. Following this, we advertised an apprenticeship and 34 out of 35 students on the course applied.
6. Number of applications
Track the number of applicants for each role. If it’s a core role and you spot this number decreasing, it will tell you something about the competitiveness or otherwise of your package. Or if you’ve been inundated with CVs, this might tell you your job ad was too broad. A well-written advertisement should filter candidates, so only people with the right qualities and skills apply. Similarly, the proportion of applications to interviews will tell you how well you specify your requirements.
What proportion of applicants starts after they’ve been given an offer? If this is low, look at the time it takes for you to offer. If it’s too long, your competitors might beat you to it.
7. Demographic data.
Are you attracting a diverse pool of people? If you want to improve, you need to track this. You may need to think more creatively about the roles you’re offering. Consider home-based, part-time or flexible hours to attract a broader base of applicants. Look at gender diversity. In my experience, once you’ve fixed this, it will often solve other issues, such as ethnicity.
We worked very hard to attract women into Rackspace and Peer 1. Whilst we knew it would be tricky with technical roles, we were successful with sales, reaching a point where it was 50:50 male: female. In fact, our most successful salesperson was female, and we’d tell that story at interviews. Coming to work with us was a more attractive proposition as a result. And as our gender balance improved, so did our ethnic mix.
- NAVIGATING AND COMMUNICATING CHANGE
- BUILDING COMPANY CULTURE
- CHOOSING THE RIGHT OPPORTUNITIES
- ORGANISING YOUR A-TEAM
Written by business growth coach Dominic Monkhouse. Find out more about his work here. Read his book, ‘F**k Plan B’ here.