Six Sigma in Recruiting, Part 3: Moving Beyond Metrics

You’ve done it. You and your team have established a dashboard of metrics for your recruiting department or staffing firm. You are carefully tracking and reporting on your activities with metrics that are representative of your efforts. Now what? As metrics become more of an entrenched part of recruiting management, there is a need to move beyond just tracking what your metrics are and to actively try to manipulate and improve them. Six Sigma and other quality methodologies focus on not just the measurement of activities, but also understanding the variables that affect those metrics and then systematically attempting to control those variables. These problem-solving tools can be applied to recruiting and hiring by taking the guesswork out of optimizing your efforts. Improving Results Please note that Six Sigma is an ideal ó especially in a service environment such as recruiting and hiring. It is something to be strived for. The term Six Sigma literally means 3.4 or fewer errors per million opportunities ó that’s 99.9997% accurate. You probably just said to yourself, “That’s not achievable or even applicable to recruiting!” Don’t get caught up in that number or that aspect of Six Sigma; it is not representative of the complete methodology of Six Sigma. Think about Six Sigma as a problem-solving toolset and as a systematic method for improving your business results. At the end of the day, just making a hire is no longer good enough. No rejected offer letter, unhappy hiring manager, or candidate that fails to make it through their first 90 days can be ignored. Limited resources, coupled with competitive market conditions, demand that you understand and strive for constant improvement of the individual components behind your metrics. The Vital Few Traditional wisdom to focus on the big and important things first is advice well taken in improving your processes. The Law of the Vital Few (also known as Pareto’s Rule of 80/20) is a statistical model that says that a small number of variables will cause the majority of effects (e.g., 20% of the salespeople bring in 80% of the revenue). In understanding your metrics, there may be many things that can influence them. But out of 50 or more possible variables, probably 5 to 10 will have the most effect on your outcomes. Within this smaller group of variables, these can be ranked to figure out which ones to work on first and then they can be addressed in priority. While many recruiting professionals feel they are doing all they can, a more systematic approach may help them more effectively reach their goals. A disconnect for many about Six Sigma is the belief that there are too many variables in recruiting and hiring ó with many outside of your control. The focus is not on controlling everything; it is on understanding what you can control and where you should prioritize and concentrate your efforts to achieve the most optimal results. Business Process Management A fundamental concept of Six Sigma is Business Process Management (BPM), which is the focus on improving and controlling overall processes to achieve business objectives. But rather than just focusing on trimming individual elements of your processes, the system as a whole is considered, taking into account that traditional trimming and streamlining may create short-term efficiencies at the expense of the overall business goals. For example, to address a reduced budget, an increase in spending on selection tools such as psychometric instruments may help to weed out candidates and result in lowered interviewing and travel expenses. The net impact on the budget may be neutral (or better), and will also result in improved hiring quality, increased productivity, and retention. This is the kind of net gain to strive for with BPM. There are three key ways to measure the quality of your processes:

  • Effectiveness: How well the process meets customer needs. Are the hiring managers getting the caliber of candidates to choose from that meet their needs? Is the recruiting experience acceptable to the candidate?
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  • Efficiency: The ability to be effective with the least amount of resources. This might be measured through cost-per-hire or recruiting efficiency metrics. The critical factor in this is the ability to be effective and to still meet customer needs.
  • Adaptability: The ability to be both effective and efficient in the face of change. This will determine the sustainability of your results over time, which will be where the true return on investment will come.

Because qualitative aspects of recruiting were often not tracked in the past, different cost and time measures were often manipulated at the expense of meeting customer needs. Accomplishing a certain number of hires with a reduced budget does not translate into being more efficient if it was at the expense of service levels or candidate quality. True business process management will balance qualitative measures with quantitative ones ó as well as the resilience of the process to adapt to change and sustain these measures on an ongoing basis. Sustaining Results Moving towards Six Sigma and true improvement in your business process management comes from not just achieving short-term improvements, but also from truly improving what you do on an ongoing basis. Anyone can work harder to accomplish more in a short period of time, but only by truly becoming more effective, efficient, and adaptable can you sustain consistent, long-term improvement. I have compared this in the past to the difference between doing a crash diet and consistently making healthy changes in your lifestyle. While reacting to budget cuts and resource limitations is a reality, recruiting management needs to have the vision to take steps to impact the long-term health of your organization. This can only come about by fundamentally improving how you do business. Conclusion As an industry, there has been considerable discussion about the importance of metrics in HR and recruiting. It is critical for you to get into a better habit of meticulously tracking the work that you do ó not just to demonstrate your successes, but also to build cases for change and to manage more strategically. After you have gathered this data though, the next step looms. You must systematically drive these metrics in accordance with your business goals by understanding, improving, and controlling the underlying variables. Whether you are a major corporation with thousands of recruiting transactions or a small staffing firm that is trying to squeeze every bit of results out of your efforts, there are management tools available to you like Six Sigma that can help you improve your operations. Don’t be afraid if these tools seem complicated or even confusing. The Internet was a foreign tool to recruiters at one time and now it is an integral part of how you do business.