1 Metric to Rule Them All

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Jun 5, 2018

Let’s stop with the madness, folks. With the influx of available data now available to your average (or even amazing) recruiter, it doesn’t take long to feel overwhelmed with it all. So your natural inclination is to ask “what metrics really matter?”

And everyone has an answer to that question. But they are rarely the right answer. Mostly people are suggesting vanity metrics as a means to measure your brand or impact (or whatever).

What’s a vanity metric? Any number we look at to feel good (or bad) about the performance of something that has no connection to the actual business performance is a vanity metric. (And what is business performance? Money. Duh.)

Here are some great examples of vanity metrics: Social likes (you can buy them, you can’t do anything with them without paying more money, and studies show no connection or correlation to sales or actions), number of applicants per rec (is more better or less? Exactly), reach (were you going to hire 100,000 people? No, so why is it good that 100,000 people saw and forgot your ad?), etc.

(This isn’t an insult to recruiting. Marketing relies on plenty of vanity metrics that can be seen the same way — companies still keep way too close an eye on their number of followers and audience reach.)

Since none of those metrics tells you anything you can use to make a business decision, they are vanity metrics and should be ignored.

The only metrics that show how recruiting and hiring impact the business are quality of hire (value added to the business) and duration of empty seat (cost to not fill the role). Both these numbers show how what the recruiting team does impacts the business in the only unit of measurement that a business cares about: cash.

But I don’t think it’s possible to measure quality of hire in a way that’s actionable. A quality hire is one who does the job well enough to promote within the business. The more they are promoted, the higher the quality. Hiring someone who does an amazing job who doesn’t want to grow (and the world turns around them) is a quality temp, not a quality hire. And since no one has a crystal ball to see how this person will get promoted twice in five years, how can you measure that quality?

Which leaves us with duration of empty seat (to save your eyes and my fingers, can we shorten this to DoES?). While DoES may seem the same as time to fill, they aren’t. TTF is a metric of how fast a recruiter could find someone to accept a job. It presumes that recruiting is 100 percent a recruiter’s job, and that’s not true.

Hiring is everyone’s job, from the hiring manager not asking for the impossible and being willing to be open to new talent opportunities, to the HR business partner and the comp & benefits team to level and structure the role, to the sourcer to find people, to the interview panels who show up engaged and actually complete their evaluations in a timely manner. Every one of these people are able to positively or negatively impact your time to fill, but are not actually beholden to the metric — it falls squarely on recruiting’s shoulders. When your hiring manager takes a week to make a decision, it’s still your job to make the hire quickly, which makes no sense.

If we remain connected to the business outcomes, hiring isn’t in itself a value. It is a cost. Until that hire can get onboarded, trained, and can create value of their own, they are a drag to the bottom line. They force the company to pay for overhead and insurance and add them to administrative tools before they’ve made a single sale, invented a product, or solved a customer issue.

The DoES is a value metric: what does not having a useful person in this role cost us? It’s a dollar figure (or euro figure or pounds sterling or indian rupees or whatever). Every day that role is empty is a loss of customers, loss of sales, or work put on the rest of the staff, who in turn are unable to do their own day jobs.

Depending on the job, this cost can be anywhere from $100 to even $10,000 (or more) a week. How many fewer sales calls can you make because no one was there to pick up the phone? How many deadlines got missed because no project manager was there to meet expectations? How much longer did angry customers have to wait on hold because no one was there to help them? That’s a business cost.

Through that lens, we see hiring’s function differently. Suddenly all those players who were slowing down the hiring process can see their value. How fast will that slow hiring manager turn around an eval when the empty seat is costing her $1,500 a week? The HRBP’s role in approving the opening or comp’s role in leveling now has a clearly-ticking clock sound behind it. In those roles, imagine the cost of waiting an extra day for a dozen roles and the motivation it creates to make things happen.

But beyond the obvious impact, it would have a seismic effect on recruiting. You know that hiring manager who won’t talk to a great candidate because they went to the wrong school? Are they willing to pay $1,000 to wait another week to hope a candidate from the “right” school shows up? How much better is your conversation with the hiring manager (the one who doesn’t “like” second-place finishers) when you say, “you can wait 4-6 weeks to see who applies, or you can have this person come in today and save $10,000. Your call.”? All those times you’ve watched great tech candidates get snatched away in mid-process because you couldn’t act fast enough will be a thing of the past.

This metric isn’t a silver bullet, but it sure is close. But what if I said it had the ability to improve your quality of hire?

Here’s my thinking. When you aren’t measuring DoES, processes are slow. Trust isn’t being built between recruiter (“The HM is taking forever to do X!”) and hiring manager (“Ugh, its taking forever to find someone for this role!”), so we build the interaction into something as transactional as possible. It’s the safest route forward, establishing service-level agreements and “rules” we all have to follow to keep each other honest.

That’s no fun. It also leads to hiring mediocre talent.

See, if hiring managers and recruiters don’t trust each other, if they treat each other as adversaries rather than partners, there’s a focus on just getting a butt in the seat.

Ask any salesperson: are they better salespeople when they have a huge pipeline of prospects in various stages of closing or when the cupboard is bare? When this lead is the only lead, they get overly focused on it, they get desperate. They offer and accept contracts that don’t have enough margin backed in. They end up doing work that isn’t in their area of speciality. And worse, a “no” may very well break them.

When they have a huge pipeline, they have confidence in each encounter because no single yes or no will break them. They can be choosy about the contracts they accept. They only pitch work they can excel at and give adequate profits. They are much better at their job.

The same is true for hiring. If the recruiter starts every intake with a clean sheet of paper and can’t rely on their pipeline, they are always starting from square one, a fact that the hiring manager will sense. But if very intake starts with dozens or even hundreds of potential fits in the recruiter’s back pocket that can be brought in within a week (instead of 4-6 weeks of waiting and phone screens), a better conversation about talent can be had.

Best case scenario, as all elements involved in hiring are now aligned to lower the cost of the empty seat, hiring managers can hire people who might have been considered “overqualified” before. The fear that this person will be “too good” and need to be promoted within a year, necessitating a new hire, is gone. The manager can hire someone amazing with the faith that a replacement can be found in days and weeks instead of months.

Ultimately, this can dramatically increase the company’s overall quality of talent. But only if you can align all the elements that impact your hiring process to a common north star. Focusing on the Duration of Empty Seat may be the only way to make that happen.

For more on this concept of measuring Duration of Empty Seat, listen to my podcast.

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