Regardless of what industry you are in, you most likely understand that business is largely a numbers game. Numbers are everywhere, from tracking successes and failures to improving process operations and analyzing customer data. With all of these facts and figures running around, it would be foolhardy to think that the staffing and recruiting industry is no less a numbers game.
Now, with staffing and recruiting agencies that focus more on providing a consultative service rather than simply just access to a mass talent pool, the numbers become more critical. Successful staffing firms are tracking staffing metrics to understand a wide range of factors. The adoption of recruiting software has allowed recruiting professionals to gain access to necessary metrics faster than ever. Metrics allow staffing agencies to justify costs, show return on investments, predict hiring trends and even the potential success of certain candidates over others.
In the staffing industry, it’s hard to find anything more worth the recruiting software investment than hiring metrics. However, for the average staffing professional, it may be hard to truly understand where all these figures are coming from, how they are derived and what they mean.
Why should a staffing and recruiting firm use metrics?
Metrics in the staffing and recruiting industry can lead to a wide range of benefits. One of the greatest benefits is the advancement of the relationship between a recruiter and the hiring manager. Metrics and their proper application enable recruiters and hiring managers to align their objectives. In addition, figures allow for a staffing agency to prove credibility to current and potential clients. According to Qualigence International, recruiters are better able to display their understanding of an industry and whether they have appropriately achieved goals and objectives. With the help of recruiting software, a recruiter can enhance his or her ability to be actionable and effective in his or her role. Recruiting software and metrics allow an agency to generate internal benchmarks to better create performance standards and drive recruitment.
Three time periods most metrics cover in the staffing and recruiting industry
Understanding metrics begins at discovering what is being measured. According to ERE.net, there are three time periods that metrics should cover so that staffing professionals get the most out of the numbers.
1) Historical metrics. Too often when a staffing company is talking about metrics, it is focusing on historical metrics. According to Dr. John Sullivan at ERE.net, relying solely on historical metrics is a recipe for disaster. These metrics measure the events and data accrued in the last year and should not be used for real-time decision making because everything they tell a staffing professional has already occurred. These metrics are better used for trend analysis.
2) Real-time metrics. This type of metric allows a staffing professional to see what is going on as it is happening. This is helpful but could also cause potential problems. According to Sullivan, because real-time metrics occur for the most recent month or quarter, the figures could give a skewed glimpse of how the agency is performing. It’s best to remain aware, make slight adjustments and possibly look over how any changes in the economy or processes could be impacting the results.
3) Predictive metrics. Sullivan told ERE.net, that although predictive metrics are very rarely used in the staffing industry, these figures could be the most important of all. By using these figures, a staffing agency may be able to determine what challenges it could face in the future or whether an opportunity is on the horizon. Staffing and recruiting professionals seeking to work proactively versus reactively should consider the merits of using predictive metrics in decision making.
Key staffing and recruiting metrics to track
1) Number of positions filled. This figure tracks the number of candidate applications accepted for a position by a client during a fiscal year. This number falls under the historical metrics category and often helps recruiting professionals determine employee turnover and total costs spent annually on new workers. A recruiting software system put in place can help track this process easily and help professionals determine how best to improve performance.
2) Retention. Depending on the staffing and recruiting organization you are working for and what part of the industry it services, it could be important to track employee retention for replacements. How long are workers placed at agencies staying? This is of course less applicable to recruiters who are providing professionals who work in contract positions with a set end date. However, if retention is a figure being used by your firm, make sure that it also includes voluntary versus involuntary talent turnover for workers on assignment that takes the month, quarter and year into account. In addition, measure average overall time of employment, average number of talent on site, and whether the number of onsite talent appreciates over time.
3) Position vacancy rates. Staffing and recruiting professionals are often used to find a worker for a position faster and cheaper than an in-house human resource office. This means that every day a position is left unfilled an agency may be losing future orders from the client. Vacancies impact corporate revenue for a staffing and recruiting firm as well as the client. As a result, it’s imperative to find a person for the position in a timely manner and to ensure that the average vacancy time is not lengthy. ERE.net reported that it is a good idea to consider creating a standard vacancy rate so that recruiters have goals and benchmarks to measure their performance against.
At the end of the day staffing and recruiting professionals know that he/she who gets there first (with the right candidate/employee) – wins. Wisely using the reports and metrics possible through an advanced staffing and recruiting software system plays a crucial role in understanding and running operations that are consistently first.