In recruiting, metrics can serve as a revealing measurement of performance.
They can also distract you from the ultimate goal of any recruiting project: placing the best candidates as quickly as possible. In other words, doing exactly what your client hired you to do.
This considered, recruiting is a fairly straightforward practice. But, many search firms have decided to focus on things that don’t really measure success. A ton of extra, sales-type metrics have crept into recruiting: calls made, emails sent, resumes received—these are simply means to an end. And while it’s certainly acceptable to track these activities, it’s not okay to define success by these metrics.
At the end of the day, your clients don’t care about those metrics. At best, they are excuses (“Look at all the activity I did!”) that only come up when you’re not placing candidates quickly. There’s a difference between working and getting the job done. Activity does not equal productivity. Ultimately, how quickly and effectively you place a candidate defines your value to a client—not how much effort it takes.
Two metrics – Placement Rate (“PR”) and Days to Placement (“DTP”) – should define a firm’s performance.
Here’s how measuring these two key metrics will help your search firm determine what’s working and what isn’t.
Simplicity is key.
Determining Placement Rate is as simple as asking a yes or no question: Was a placement made? Either a search firm placed a candidate (yes), there was an internal hire (no), or the firm was let go (no). Placement Rate is calculated as follows:
Placement Rate = Total Placements / Total Projects
Average Days to Placement measures how long – on average – it takes to make a placement. It’s calculated as follows:
Day to Placement = Total Days of Placed Projects / Total Placed Projects
These two simple metrics offer a true measurement of effectiveness and efficiency. Tracking them – which you can do on your own or with a recruiting software like Clockwork – lets your search firm measure what’s really important. They are also an easy way to reveal top performers within the firm and keep people focused on what matters.
Tracking these two simple metrics helps win work and build a driven workplace culture.
We know from the Clockwork Recruiting Performance Benchmark Report that retained searches take 123 days on average to complete and the average placement rate is 71%.
So when a potential client approaches your search firm to help recruit a VP of Marketing for their software company, you should be able to say, “Yes, we can absolutely help. Based on 31 placements similar to your project, our average Days to Placement is 86 days. Our Placement Rate for this type of search is 94%.”
A response like this will let your prospective client know that you have a track record of success and use data as the true measurement of performance. It may seem radical, but in reality, it is simply focusing on the right metrics.
Firms that don’t track these metrics might approach a client with a lazy ballpark estimate like, “It should take, uh… somewhere between three and six months.”
A half-hearted pitch like this isn’t going to land you many clients.
Beyond that, creating lax expectations internally is counterproductive to the performance of your recruiting team. If a recruiter is three months into a search but feels like they have another three months-ish before reaching that “ballpark” estimate, there’s no sense of urgency. They’ll kick their feet up and leave 15 minutes early thinking they have all the time in the world to finish the search.
But when you bring these two key metrics into the equation, it quantifies productivity. And it can change company culture.
If you measure what is average and set the expectation that everyone in your firm should be above average in both DTP and PR on their projects, you’re fostering a culture of excellence. Your team knows how they are being measured and that the only really important things are making great placements and doing so efficiently. They will do what it takes to get the job done, to be “above average” in DTP and PR.
If that takes 10 calls or 1000, so be it.
Having a way to measure performance also helps you reward excellence. Implement bonuses for top performers, as measured by their PR and DTP averages against their peers. You can easily plot your firm’s average PR and DPT in a chart like the one below.
Those that perform above average are “great” or your “Top Left Performers”.
Those who are above average in only one of these key metrics are in the “good” category.
Those who are not above average in either metric need to step it up.
And, voila—you have a simple, metric-driven method of incentivizing strong performance.
The only way to truly get better and consistently grow your business is to track these two metrics and hold yourself accountable to being a Top Left Performer.
Remember, ultimately, clients only care about whether you can place a great candidate fast.
Focusing on the right metrics will help your firm deliver.