Why Metrics Don’t Matter Anymore, or Are You Missing the Big Picture?

May 13, 2004

Doing the wrong things more efficiently is not a good thing ó even if you do them well. [You might want to read that opening sentence again: it’s a key part of this interactive article. There are a few questions based on this at the end. If you answer them, even incorrectly, they’ll entitle you to a free guest pass at one of my upcoming public workshops. We’re in Boston on May 26 and Washington, DC on June 23rd. The point of this article is to get everyone to start thinking about problems from a different perspective. So make your answers as odd and as different as you can possibly imagine.] In less than ten years, we have seen a number of trends that have resulted in the centralization of the corporate HR/Recruiting department. Some of these trends include:

  • A reduction in the use of outside search firms
  • In-house buildup of corporate recruiting departments
  • The emergence of the Internet, providing everyone with instant research
  • Job boards to disseminate open positions overnight to the world
  • Second and third-generation applicant tracking systems that now really do work
  • Better filtering of resumes

Centralization of this magnitude should have brought a number of positive benefits ó including the use of best practices, quicker implementation of new systems and processes, and high user adoption rates at the recruiter and hiring manager level. As a result, the HR/recruiting department should be seeing enormous improvements in costs, quality, productivity and time to fill. But while costs have gone done a lot and time to fill has been shortened, changes in candidate quality have not budged much (according to hiring managers) and recruiter productivity seems to ebb and flow based on workload. Whenever data gives such mixed readings, it’s important to consider less obvious causes. It means something else is involved which has not been fully considered. (This is where your thinking needs to start getting odd and different.) Frequently, this is some strategic or big picture issue that has been overlooked. For example, are you aware that the best people stop looking for new jobs in periods of economic uncertainly? As a result, the availability of top talent is the same regardless of business conditions. This supply/demand effect has a major impact on how sourcing processes must be designed ó an impact that few companies have addressed. Another equally common mistake when developing solutions to complex problems is that the underlying frame of reference is often incorrect. At a small level, this is one of the reasons hiring managers and recruiters often disagree when evaluating candidates. (Here’s an area you might want to explore in your answer.) An example of this problem at a bigger level can be found in Time magazine’s April 26, 2004, issue dedicated to the world’s most influential people. Paul Ridker was recognized for determining that heart disease is caused by inflammation ó not blood flow restrictions. This change in frame of reference resulted in a whole new range of treatment approaches that affect the entire industry ó drug makers, health care providers, and the well-being of every patient. There are a number of alternative viewpoints like this that should be considered when making hiring process changes. The centralization of the HR/recruiting department is one of them. This provides a great opportunity for positive change that should not be squandered because the wrong problems are being solved. If you want to drive cost per hire down to the absolute lowest, increase quality to the absolute highest, improve recruiter productivity, and reduce time to fill to a few days, here’s what you must do:

  1. Stop being overhead. HR/recruiting is having an identity crisis. It wants to be a line function, but it acts like an overhead or staff department. If someone from manufacturing asks someone from engineering to change a spec to improve manufacturing performance, they argue about it, and eventually agree to some compromise in some reasonable time frame. This is what cross-functional cooperation looks like. When HR/Recruiting asks a line manager for some explanation about a new requisition, the hiring manager typically says that he/she doesn’t have any time. This is how you treat someone whom you don’t respect. Stop the Dangerfield-Aretha impersonations. To get respect, HR/Recruiting needs to take responsibility, deliver results, demand time to meet, ask good questions, show great candidates and know more about sourcing, the market, interviewing, job performance, human motivation, selection and closing than your hiring managers. Become an expert in your field. This is how you gain respect and become a line function.
  2. “Insource” the recruiting department. This is a trend that has already happened at most companies. It is by far the biggest cost savings possible, but if quality declines during the economic expansion there won’t be much to gloat about. Don’t assume that a third-party recruiter (TPR) is an ideal choice to fill a corporate recruiting position. Corporate recruiters handle higher volumes, need to be more familiar with the use of technology, and need to work less independently. These are not the traits of the typical TPR.
  3. Prepare a workforce plan that assigns a strategic importance to each position. Next to the insourcing of the HR/Recruiting department, the biggest possible cost savings is the use of a workforce plan. In fact, by planning ahead this tool will also allow you to increase candidate quality and reduce time to hire concurrently. Preparing a quarterly workforce plan is a rigorous exercise. It’s the equivalent of the budget, sales forecast, product plan, and production schedule in terms of importance. Preparing one is one way which HR/recruiting can become a line function. Once prepared, assign each position a level of importance based on the company’s strategic direction. Then organize the recruiting department around this plan and develop multiple long-term sourcing channels to fill each position before the requisition is formally opened.
  4. Stop doing searches over again. How much time is lost by managers changing job descriptions or recruiters sending in too many candidates in the hope that one fits? Reducing the number of candidates seen for any position is one of the best ways to reduce cost per hire and time to fill by another 50%. There are a number of ways to accomplish this. One, agree on the real job description (see my article on performance profiles for more on this) before looking. Two, start looking before the job is opened (see workforce planning above). Three, recruiters must make sure that everyone who is interviewing the candidates agrees to the performance profile and then lead the debriefing session to make sure objective evaluations are made.
  5. Stop looking for top candidates. Top candidates are on time, prepared, have good resumes, look sharp, sound sharp, and two-thirds of the time only talk a good game. Top employees work hard, achieve results, work well with people and exceed expectations, and two-thirds of the time they look average, aren’t eloquent, don’t have as much experience as you’d like, or aren’t as prepared as they could be. They also don’t respond to typical ads or fill in time-consuming applications. Start looking for and hiring top employees rather than top candidates. This change in frame of reference will have more impact on improving the HR/recruiting department’s performance (and metrics) than everything else combined.
  6. Use concurrent processing. Back in the early ’80s, the big biz buzz was concurrent engineering. Essentially this meant doing marketing, product planning, engineering design and manufacturing together rather than independently. For example, it used to take Ford about 60 months to roll-out a new car from the date of concept approval. With concurrent processing, it now takes about 33 months. HR/recruiting needs to figure out how to use more concurrent processing to reduce time to hire to a few weeks.
  7. Stop being a vendor. Recruiters need to become experts in their field. They must coach, counsel, and advise their clients and candidates. They must be viewed as part of the team, not as someone to be called upon when there’s a position to be filled. Start by learning the business. Develop your own personal in-house networks of top employees. Leverage these networks to find top people who are ready to jump when an opportunity develops. (This is another reason why the workforce plan is so important.) Learn how to write performance profiles. This is how you can improve personal metrics and department performance.

Doing the right things poorly is far better than doing the wrong things well. If you really want to improve HR/recruiting department performance, first become more effective, not more efficient. Start by figuring out the underlying issues if numerous attempts at change don’t work. Turn over every rock. Get outside input, especially from hiring managers and candidates. Don’t mistake activity for progress. Due to the consolidation and centralization of the HR/recruiting department, a remarkable opportunity has developed to implement real positive change. Don’t squander it by solving the wrong problem. HR/recruiting must take responsibility for hiring top people, on time, and at reasonable cost. Deliver results. Don’t make excuses. Stop being overhead. [Submit your viewpoint to me at I’ve made a few misstatements on purpose in the article. Did you spot them? Be thought-provoking and challenging ó even strange is okay. A decent response will get you one free pass, or two half-day passes, to any one of our all-day public workshops. We’ll also put you on our insiders list for our free online private conference calls.]

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