I estimate that hiring managers are responsible for more than 60 percent of all delays and errors during hiring. So if you want to improve your quality of hire, reduce position vacancy days, and improve process compliance, it only makes sense to try to get hiring managers to put a greater focus on recruiting. One proven solution is to adopt service-level agreements, which are one of the most effective tools that drive service delivery consistency in service-related functions outside of HR.
Service-level agreements, or SLAs as they are frequently called, are simply formal written agreements between the recruiting function and hiring managers that spell out the expectations and the responsibilities of each party. By spelling out responsibilities, timelines, deliverables and success measures in advance, you can reduce the blame game and improve your recruiting results.
Recruiting Is a Service Function
Since the recruiting function doesn’t actually make hiring decisions, it is defined as a “service function” that provides services to hiring managers. Unfortunately, I have encountered only a few recruiting leaders who have publicly acknowledged that recruiting is a service function. Even fewer leaders that are willing to admit that recruiting often has a less-than-stellar reputation for good service among both candidates and hiring managers. Once you acknowledge that great service delivery is essential in recruiting, it makes sense for recruiting leaders to follow the practices of other successful business service functions and to adopt service-level agreements.
Service-level Agreements Clarify Everything
If you are not aware of them, service-level agreements in recruiting simply define the expected levels of service and the roles and responsibilities of both hiring managers and recruiters. Service-level agreements have proven to be one of the most effective ways to improve recruiting results, to increase recruiting consistency, and at the same time, to strengthen the relationship between recruiters and hiring managers. SLAs are necessary because under the current system, neither recruiters or hiring managers control the entire recruiting process, and as a result, there’s a lot of blaming and confusion over who was responsible for what. But instead, by working together and jointly deciding “who will do what, when, and how” you will reduce confusion, increase accountability, and at the same time, you clarify everyone’s roles, responsibilities, and expectations.
If you are a recruiting leader and you are frustrated with the lack of cooperation and consistency that you are getting from your hiring managers, consider service-level agreements, which can if executed correctly, dramatically reduce that problem.
Top Reasons Why You Should Develop SLAs in Recruiting
There are many benefits associated with using service-level agreements in recruiting. They include:
- SLAs improve new-hire quality — service-level agreements have proven that they can improve recruiting results but they also have the added advantage of making recruiting processes and results more consistent and predictable. Although no one in recruiting has yet achieved Six Sigma or JD Power-level quality (the business standards), service-level agreements can dramatically improve the understanding of recruiting and reduce its conflicts, while recruiting results improve. The best service-level agreements should result in measurable improvement in the quality of hire.
- You will speed up the recruiting process — simply setting minimum and maximum times for recruiting steps will speed up your overall recruiting process. It turns out that by simply giving professionals (both recruiters and hiring managers) a deadline, most will make a prudent effort to meet it.
- Improved manager satisfaction — when recruiters have deadlines and the responsibility spelled out, they do a better job. That results in higher management satisfaction rates with the hiring process.
- Reduced hiring costs — streamlining the process and eliminating unnecessary delays and duplication will reduce the amount of valuable management time that must be spent on recruiting. In addition, your cost per hire will also go down.
- SLAs improve compliance — having an SLA makes everyone more aware of precisely what steps to take. By spelling out the steps in writing, you improve the chances that hiring managers and recruiters will follow your recruiting protocols. This should reduce some legal risks related to unequal or disparate treatment.
- You will dramatically reduce confusion and duplication — being confused about who does what and when can certainly slow down the hiring process and result in the unintended duplication of work. SLAs lead to clarity and agreement on what must be done and who must do it.
- Other business functions have already shifted — HR is the last major service function which has avoided making the shift to a data-driven function. Recruiting can learn lessons from the supply chain and customer relationship management functions, which have long ago defined their roles and expectations with SLAs. Recruiting can also improve its “businesslike” image by adopting them.
- The SLA creation process forces you to reassess everything — the process of putting together an agreement and deciding which recruiting services to offer and how to measure their performance forces recruiting leaders to take a step back. And SLAs will require them to prioritize customers and to determine what critical services that it needs to offer. This introspective process can force recruiting leaders to drop or redesign old recruiting approaches and to add new ones in order to meet their SLA promises. Making specific promises also forces recruiting leaders to better align their recruiting budget with their SLA promises.
- The agreement process improves the relationship — the process of jointly working together in order to create the SLA agreement by itself helps to improve the relationship between recruiters and hiring managers. The initial negotiation process also helps both parties understand the needs, expectations, and problems of the other party.
- Promises and defining roles improve accountability — because the agreement assigns accountability and forces managers to make promises, they are more likely to be aware of and to meet their obligations. Because the recruiting function has also made promises, they are also more likely to be accountable.
- Quantifying the business impacts in SLAs gets everyone’s attention — one of the key features of the most effective SLAs is a quantified list covering each of the negative business impacts that will occur if SLA provisions are not met. When hiring managers and recruiters know the dollar impact of both good and bad recruiting actions, they are more likely to meet their SLA obligations.
Key Elements to Consider Including in Your Service-level Agreement
Service-level agreements can range from the simple to the complex. The most basic service-level agreements are simply one-page narratives where each side generally promises to fulfill their obligations. However, the most effective agreements cover many different elements of the recruiting process in detail. The possible major elements of a complex SLA include:
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- Specify the goals of the process — clearly define and prioritize the goals of the overall process in order to ensure that everyone involved knows precisely “what you’re trying to accomplish.”
- The level of service that is promised — it clarifies the level of service that will be delivered for each job family, from no service up to executive recruiting level high-touch service (a list of the various possible service levels can be found in the next section).
- Business impacts and the “whys” are defined — perhaps the most important element, it outlines and quantifies the positive and negative recruiting and business impacts that occur when critical service-level recruiting elements are met or missed. Knowing “why” they need to act in a certain way and the business consequences of bad recruiting behavior on their team’s business results will have a powerful impact on hiring managers and recruiters.
- Define the role of each party — SLAs clarify the roles and responsibilities of all parties involved. Roles that frequently need clarification include interview scheduling, who participates in interviews, reference checking, documentation, and the role of employees in making referrals. Defining roles and making it clear who has ownership can reduce hesitation, as well as duplicate work.
- Specify the steps — the required and optional recruiting steps are listed in order to make it clear to everyone what steps must be executed, which ones can be expedited, and which ones are optional. If the step is to be undertaken is important, that is also specified. It’s probably also a good idea to include a visual process map or flowchart so that everyone can clearly see the steps and the flow of the process.
- Specify the deliverables — you should clarify the deliverables or outputs for all parties. From the recruiting side, the SLA outlines recruiting’s responsibility to deliver the expected quality and volume of candidates and the quality of hire. Performance standards for each major task must be agreed to in advance.
- Specify deadlines — it clarifies the expected deadlines, why they are necessary, and the minimum and maximum timelines for all parties. The ideal time for the overall process should be specified.
- Identify potential risk factors — the SLA should, based on past experience, identify and list the probability of all likely potential problems and risk factors, so that they can prepare for them. The SLA should also require (and specify who should conduct it) a failure analysis after every major process failure.
- Identify potential conflicts — it identifies all likely potential people and process conflicts in advance and it outlines how they should be resolved. If an escalation process is available, when and how it should be used should be spelled out.
- Identify cost responsibilities — if the recruiting costs are to be shared, the minimum and maximum expenditures should be spelled out, as well as who is responsible for the cost of each step/action. Some SLAs also specify minimum and maximum staffing levels or ratios.
- List unacceptable behaviors — if your recruiting process lacks structure, it might be a good idea to outline any unacceptable actions or behaviors (i.e. jokes, illegal questions, those not allowed to participate in interviews, etc.). When you specify the “don’ts” (based on past major errors), everyone knows up front what they cannot do under any circumstances. Any recruiting process steps that are not to be supported under the SLA should also be specified.
- List the success measures — SLAs should specify how the success of reaching each important goal and activity will be monitored and measured, including the correct quantity, quality, time, cost, and satisfaction level. What a passing score is; when the measures should be calculated; and who should do the assessment of the metrics should also be specified.
- Include potential rewards and penalties — it clarifies the rewards for compliance and the consequences or penalties for non-performance under the SLA.
- Provide easy access to SLA performance data — you need to operationalize your SLA by making the agreement and the performance data and the metrics monitoring compliance to it easily available to both hiring managers and recruiters. I have found the most effective communications platform to be the mobile phone, because it is available to everyone 24/7.
- Define key terms — define key terms so that everyone knows exactly what each keyword means. Specify any key formulas that may be used in the SLA.
- You should consider including the candidate experience in your SLA — although many in recruiting won’t acknowledge it, candidates are also service customers of recruiting. As a result, the best firms include the applicant/candidate in the relationship. This is because any bad treatment of them by a single hiring manager or recruiter can negatively impact your employer brand and future recruiting. Although no corporation I know makes a formal SLA with candidates, some have put together a list of promises that outline the positive things that a candidate should be able to expect during the hiring process. If you would like to expand your promises into an applicant/candidate “Bill of Rights” (although candidates might not be shown these rights), you can find some tips on how to do that here).
Six Different “Levels of Recruiting Service” That You Can Offer
The first broad purpose of a service-level agreement is to define the overall quality or level of the service that is to be delivered. Each firm defines which levels of service that it wants to offer, but these levels generally start at “no service” and then the service-level options increase in quality. A list of the typical service level options includes:
- No service — no help or corporate services are offered in this recruiting area or to this hiring manager or business unit.
- 100 percent vendor service — only external vendor service is offered but most recruiting functions provide information on the various vendor options that are available to hiring managers.
- Basic service — the basic minimum corporate recruiting service is offered (i.e. a corporate webpage, ATS service, referrals, college recruiting, and employer branding). In addition, the availability of external vendor services may also be highlighted.
- Full service — the standard “end-to-end” features of full-service corporate recruiting are provided.
- “Superior service” — the next-higher level of service is offered with advanced features and shorter timelines (sometimes known as “Cadillac” service). This might include a higher level of recruiting expenditures, using higher-quality and more expensive sources, providing one-on-one coaching, an expedited administrative process, and assigning the most effective recruiters.
- “White glove service” — superior high touch service is provided. The level of service is similar to that provided in executive recruiting.
In some organizations, priority business units receive a different higher level of recruiting service than what would be provided to a lower priority business unit. And in an HR department that operates under a “fee-for-service model,” the percentage of overhead paid by each business unit might vary by the level of service that they select.
Both external and internal service level agreements have become a standard practice in every part of the business. And since recruiting is in reality a service function, it only makes sense for it to follow in the successful footsteps of other business functions. You might initially think that creating a service level agreement will take a lot of time and resources. But before you let that discourage you, consider the small initial investment and compare it to the tremendous value that the business will receive from the resulting improvement in hiring manager behavior and recruiting results.
Recruiting leaders must realize that creating service-level agreements is just another step in the transition of the recruiting function into a more businesslike and data-driven operation.