Hr Practice In Infosys

Recruitment Management System - Finding the ROI on Recruitment

Introduction:

I did mention in my previous write-up that recruitment is a challenging job in KNOWLEDGE based industry, whether it is IT or ITES/BPO or Service Industry. Also, in one of my earlier mails I mentioned about "Performance Management System", this time round, it is "Recruitment Management System". Did you ever felt the need of it? Every year, a company spends millions on recruitment, but what is the result?

"According to the Corporate Advisory Board of Washington DC, the cost of replacing staff can be anything between 50% and 175% of that persons annual salary and, as we are all aware, employees in the new millennium do not stay with a company for life as perhaps their grandparents did."

Before proceeding further, I like to share some facts about recruitment, probably known to you, in a survey it has been found that -

38% of organizations produce no reports on recruitment activity whatsoever and are therefore unaccountable for the time and spend involved.

77% measure Cost per Hire (CPH) in some way or the other. The largest number favored the Staffing/Cost Ratio 52% of those that measure CPH make no differential between discipline or role rendering the CPH figure relatively meaningless Easily measured hard costs were most usually tracked (e.g. agency fees) Measurement of soft costs (e.g. management time) was rare

66% measure Speed to Hire (STH) in some manner Most common start point was vacancy sign off Most common stop point was start date - potentially very misleading due to different notice periods or other factors which determine the actual start date. Very few track the whole process consistently making it very difficult to pinpoint bottlenecks This lack of tracking exposes organizations to potential legal challenge

58% have some Customer Satisfaction measurement Of these, 77% measure only 'overall satisfaction', again making it difficult to address specific issues Only 10% use Service Level Agreements (SLA)

Only 54% have some measure of Quality of Hire, potentially the most important metric of all The most common measurement was the appraisal process - unfortunately whilst this is entirely appropriate for specific organisations it does not help promote standardisation across industries Most analysis is made against people at the same level leaving no room for an assessment of speed of progress to that role

Only 8% have any form of competitor benchmark Process measurements, which focuses on quantity (number of CVs) rather than quality (shortlist, initial CV rating against the job specification, hire ratios to CVs). Again lack of logging of critical process details leaves organizations potentially exposed in any legal action and indicates widespread non-compliance with Data Protection Act requirements.

Lets start with existing recruitment sequence/procedure:

Identify vacancy

Prepare job description and person specification

Advertise

Managing the response

Short-listing

Visits

References

Arrange interviews

Conduct the interview

Decision making

Convey the decision

Appointment action

The recruitment process for most organizations is designed along the same path; applications are received, either via an online application form, a postal form or a CV. Candidate are short-listed and invited for interview. The interview format can vary considerably, as we discuss later, and can include assessment centers. The number of interviews also varies. Some companies are satisfied after just one interview whereas others will want to bring back a further shortlist of candidates for one or more interviews. If you are successful at the interview stage you will receive an official letter offering you the job. This information describes what you can expect at interviews and assessment centers, and takes you through to making a decision about any offers that may result.

When considering whether or not to invest, most of us ask perfectly sensible questions like: "What will the return be?", "What's the risk?" and "How quickly will I get the returns?" Would you put your hard-earned money into high-risk investment schemes without knowing about their past performance? Would you invest with professionals who are very thorough, but who can't prove that their methods deliver business results? At the end of the day, the organization is interested in knowing the return on recruitment investments and HR Manager/Recruitment Manager is responsible for it and hence can be questionable. I remember, once someone asked me, how HR department can become "Earning Department", it is only by saving costs and saving expenses.

As organizations, one of the biggest investments we will ever make is in recruitment. Fortunately, as HR professionals, we can all prove that the business is getting outstanding returns on this investment. We can point at the money spent, and put intelligent estimates on the financial and human benefits accrued. We can show that our recruitment processes deliver outstanding performance, control costs, increase sales, maintain efficiency and develop the organization. We do not employ poor performers. The confidence of the business in what we do is exceptional, and we are perceived as being directly pivotal to the performance of the whole organization. Our credibility is beyond doubt.

That would be a wonderful position to be in, wouldn't it?

How many organizations expect sensible questions about the return on recruitment investment to be answered? The truth is that very few really do. Recruitment is evaluated on the basis of the speed with which positions are filled the feedback from participants and the percentages of candidates who end up being employed. Very few organizations expect that the true impact on business performance can ever be proven, or recruitment processes fine-tuned to deliver precisely the business benefits required. Instead, recruitment is allowed