oponent of pushing for more of a decision science within the Talent Acquisition function since first entering the field – even in my early days of recruiting inexperience, I knew that we were not leveraging any of the similar decision sciences I had seen or used among my previous marketing, sales, and/or operations background.
Due to the potential complexity of your question, it’s important that we set a few guidelines up front. From a scientific standpoint, it’s important we state our assumptions before attempting to build a model. Let’s quickly do that:
1. First, your question involves web tools that enable ‘identifying and recruiting passive candidates’. Since your question revolves around the ‘passive’ candidate, we can eliminate any job boards and explicit advertising from our answer. In addition, we can also eliminate any non full-time direct-hire employees (as most are aware that short-term contractors usually fall into the ‘active-candidate’ category).
2. Secondly, your question involves the notion of ‘Return on Time Invested’ (ROTI). The notion of ‘Return’ originally derives from the Accounting and Finance function, and is stated quantitatively. As such, there must be a numerator and denominator, and depending on the circumstances, the quotient/product can be stated in one of the following manners:
a. Ratio (i.e. x:x, 5:1, 7.3:1)
b. Percentage (i.e. 200%, 0.98%)
c. Index Score (this will take into account certain independent variables and sometimes allows for a better side-by-side comparison of values.)
3. Thirdly, it is important that we define ‘Effectiveness’ to properly answer this question. The best definition I was able to find is, “The extent to which actual outcomes are achieved, against the outcomes planned, via relevant outputs or administered expenses.” The reason I believe this to be the superior definition is because there is attention given to ‘impact’ as well (this is where well-intentioned HR and TA programs fail as the programs may be effective, however lack true impact on organizational performance).
4. Third-Party Recruitment is concerned with several metrics, however there are 3 true mother metrics that drive all others:
a. Number of Placements
b. Avg Placement Fee
c. Annual Billings
[See note below.]
5. Corporate Recruitment is concerned with several metrics, however there are 3 true mother metrics that drive all others:
[See note below.]
[Note: Some may argue that there are several other important metrics to follow on the TPR side (such as Sendouts:Offer, Sendouts:Month, etc.), however the true mother metrics are listed above. Likewise, some may argue that there are several other important metrics to follow on the Corp Recruitment side as well (such as Interviews:Offer, Recruiter Efficiency, etc.), however the true mother metrics are listed above. The analogy is that we can follow numerous financial indicators for a firm and each metric offers independent value (such as ROE, ROA, Asset Turnover, etc.) . . . however the true mother metrics are Earnings-Per-Share (EPS), Market Capitalization, P/E Ratio, and Stock-Price.
This is where the tricky part begins – time allocation in terms of identifying ROTI. For example, we may spend a total of 8 hours ‘sourcing’ for a given role, however only 1 of those hours may have been spent on the actual source/channel upon which we’ve identified the passive candidate. What compounds this is exactly what Shally mentions – the current notion of an ‘integrated’ desk which involves several applications and browser windows open. As such, we may quickly source 10 channels in an hour period, upon which we enter a ‘deeper dive’ depending on our initial results. I only mention this because it’s easy to see just how complex the answer to your question can become. The only ‘real way’ to note true ROTI would be to keep clicking a timer as you move from source to source and from channel to channel.
Also, we must ask ourselves whether we are going to allocate the entire amount of time spent on the search itself into our ROTI number. Doing so will truly allow us to answer the question of how much our time was worth (for example, if we spend 40 total hours on a $40k fee, then we can identify that our time was worth $1k per hour on this individual search). However, although this will allow us to identify specifically how valuable our time was, there is no correlation back to the source itself. When I say that, I mean that we’re dealing with human beings and some take more emotional attention, persuasion, and closing than others.
Another factor that may serve to greatly complicate our attempts to quantify source value is how many degrees away our placed candidate is from the original source that led us in the candidate’s direction. For example, let’s say we find an initial candidate on LinkedIn, who then refers us to the candidate we actually place. Would that mean LI was not of value to us? Obviously, the original source was of great value, but it’s not so easy to identify this if we’re looking at things with black-and-white ratios.
In going through this process, I’ve given the concept of ‘waste’ considerable thought (in the Six Sigma and LEAN sense). I say that because some may say that although we spent 40 hours within a given search, 20 were spent on sources that did not yield a placement or hire. But were those hours technically waste? Not really, as sourcing is an overall process. An analogy would be an engineer that spends 40 hours trying to correct a problem, but spends the final 1 hour reconnecting a wire that was disconnected. Would this mean his prior 39 hours were waste? No, not at all. His previous 39 hours may have led him to the root cause of the problem.
Based upon all these things, this is my recommendation:
a. Group sources into categories. For example, LinkedIn may be in its own category due to its power as a source. Facebook, Twitter, and MySpace may also be in their own categories. Blog Searching may fall into a distinct category, as may several Boolean search strings using Google and MS Live. This would all be dependent on the individual organization and the differing external talent pools, etc.
b. Block out your ‘Sourcing Time’ into 15-minute blocks. By doing so, you will allow yourself to remain committed to a given ‘Source Category’ without overdoing it.
c. Source individual projects at a time. When I say this, I mean to focus on a given requisition or job family, etc. This is imperative for tracking purposes later.
[Note: I would recommend against grouping too many sources into the same category as this will reduce the power of this technique. If you know certain sources are effective given your personal needs, ensure the source is in its own category for tracking purposes.]
By engaging in categorizing out your different channels and sources, blocking out your time spent within each source/channel, and by sourcing individual projects or job families at a time, you’ll be able to track the entire time spent sourcing for a search. Upon doing so, this is how your tracking matrix may look per project or job family:
a. Source A (LinkedIn) = 6 hours
b. Source B (MySpace/Facebook) = 8 hours
c. Source C (Blog Searching) = 2 hours
d. Source D (Twittering) = 1 hour
e. Source E (Boolean Search ‘xyz’) = 4 hours
f. Source F (Direct Sourcing) = 16 hours
At the end of a month, quarter, or year, you can return to review your sources and total time spent within them . . . in addition to the mother metrics given your role (TPR or Corp Recruitment).
At this point, we can then overlay this time information onto our aforementioned mother metrics. Examples would include the following:
Third-Party Recruitment (LinkedIn Annual Review)
a. Time Spent Within Source = 240 hours
b. # of Source Placements = 12
c. Source Avg Placement Fee = $25,000
d. ROTI = 240 hours / 12 placements = 20:1 (i.e. we make a placement for every 20 hours spent within this source).
Third-Party Recruitment (Direct Sourcing)
a. Time Spent Within Source = 800 hours
b. # of Source Placements = 24
c. Source Avg Placement Fee = $28,500
d. ROTI = 800 hours / 12 placements = 66.7:1 (i.e. we make a placement for every 66.7 hours spent within this source).
Third-Party Recruitment (OVERALL Source Review - Annual)
a. Source A (LinkedIn) = 20:1
b. Source B (MySpace/Facebook) = 120:1
c. Source F (Direct Sourcing) = 66.7:1
[Note: Obviously, the lower the ratio, the more effective the source.]
Corporate Recruitment (Facebook Annual Review)
a. Time Spent Within Source = 110 hours
b. # of Source Hires = 6
c. Source Cost-of-Hire = $5,500
d. Time-to-Fill = 45 days
d. Quality-of-Hire = 3.5/5 Stars
e. ROTI = 110 hours / 6 hires = 15.7:1 (i.e. we make a hire for every 15.7 hours spent within this source).
Corporate Recruitment (Boolean Search ‘xyz’ Annual Review)
a. Time Spent Within Source = 150 hours
b. # of Source Hires = 15
c. Source Cost-of-Hire = $4,000
d. Time-to-Fill = 27 days
e. Quality-of-Hire = 4.1/5 Stars
f. ROTI = 150 hours / 15 hires = 10:1 (i.e. we make a hire for every 10 hours spent within this source).
Corporate Recruitment (OVERALL Source Review - Annual)
a. Source B (Facebook) = 15.7:1
b. Source E (Boolean Search ‘xyz’) = 10:1
c. Source F (Direct Sourcing) = 200:1
[Note: Obviously, the lower the ratio, the more effective the source.]
To conclude, Bill, I would suggest that we look at our Source data in such a way as to accumulate knowledge for targeted use on future searches/requisitions. In this manner, we will be better able to increase performance by using forward-looking projections to formulate leading indicators (an example would be TPRs’ or Corp Recruitment using the knowledge that Pivotal Talent Pool ‘X’ is populated primarily with candidates from Source ‘A’).
Our industry is in perfect position for a more intelligent decision framework to be architected and implemented, much as is being done by John Boudreau (Research Director of the Center for Organizational Effectiveness at USC Marshall School of Business) has done with the new notion of "Talentship". I would hope that some of the above answer adds to the growing field of opinions and research in our sector and I look forward to your thoughts and feedback.…
ke to be your representative,’ ” says Sabine Klahr, director of international programs at Boise State University. “We don’t answer those e-mails typically.”
“There are no standards at this point,” Klahr explains. “You could work with agents throughout the world who are not” — she pauses, searching for the right word — “they are not reputable business people, essentially. How do you know that you can trust them?”
Klahr’s question forms the foundation for the American International Recruitment Council. Incorporated as a nonprofit organization last summer and now counting 35 colleges as institutional members (including Boise State), the council is rapidly moving forward with developing standards and an “accreditation lite” procedure for certifying reputable international recruiting agents.
Yet, in embracing the practice of colleges paying recruiting agents per-student commissions, the AIRC aims to regulate an industry atop what many see as shaky ground, ethically speaking. The federal Higher Education Act bars such incentive compensation in domestic student admissions, but exempts international recruitment from the ban. The National Association for College Admissions Counseling’s Statement of Principles of Good Practice includes a ban on commissions based on the number of students recruited, “and it does not make any exceptions” for international recruiting, says David A. Hawkins, the association’s director of public policy. “All along we’ve noted that the use of agents in and of itself isn’t a problem. It’s the way in which perhaps they’re compensated that our principles would really be more applicable towards.”
By contrast, the commission approach is more common among Australian and British universities, increasingly fierce competitors with American colleges when it comes to attracting international students. Mitch Leventhal, AIRC’s chair and president, sees the strategic use of recruiting agents as a way for the United States to maintain its historic edge. (By contrast, recruiting fairs, he says, “are 1960s.")
“If you’re involved in this, you are associating with institutions who have sort of stepped beyond the question of ‘can we, can’t we,’ and are beginning to think differently about the way American higher education recruits globally,” says Leventhal, vice provost for international affairs at the University of Cincinnati, a founding institutional AIRC member.
“They were gracious enough to extend an invitation for us to join their effort when they announced their formal incorporation,” says Barmak Nassirian, associate executive director of the American Association of Collegiate Registrars and Admissions Officers. “We just as graciously declined, mostly because the very purpose for which they have now formally organized themselves is being debated within AACRAO. So we thought it’s premature for us to join that conversation, when there was at least some significant opposition within our own ranks to the very activity that they now seek to regulate.”
The AIRC’s institutional members, about a third of which are Ohio colleges, bring varying degrees of experience with agents, says Leventhal. “Some of them have been using agents for a long time, but they recognize they’ve been doing it in isolation.… Some have only recently adopted a strategy; some are considering it and they want to make sure they get it right. And then there are a couple, I think, who are not sure they’re ever going to do it.”
Officials at AIRC universities describe using a variety of payment models, including commissions, but also flat fees paid to agents and even loose institutional affiliations with agents who are paid only by students. At Cincinnati, Leventhal works with 12 to 15 agents. They earn, per student referred who is accepted and enrolled, 10 percent of net tuition paid the first year. (So if, for instance, after a scholarship, a student pays $17,000 in tuition in the first year, the agent earns $1,700 total for his or her services.)
Many colleges that have joined AIRC point to limited recruiting budgets (commission-based recruiting requires a much lower upfront cost than hiring a staff person abroad, say), and limited name recognition. Still, they strive for significant international student representation on their campuses. “We’re not a household name in the world,” says Michael Basile, director of the Institute for International Studies at Murray State University, located in southwestern Kentucky, a two-hour drive from the closest international airport. (“We’re not even within shouting distance of any large metropolitan area,” Basile says.)
“We really have to go out and dig,” Basile explains. “So I think there’s an advantage to having representatives that are located in different parts of the world that we want to attract students from.”
AIRC held its first meeting in Cincinnati in October, and, according to its timetable, expects to approve a set of standards and a certification process for agents at a meeting in May (to coincide with the annual meeting of NAFSA: Association of International Educators, in Los Angeles).
AIRC’s plans derive from American higher education’s historic process of self-regulation through voluntary accreditation. The process for certifying agents is under development, but here’s what Leventhal says is currently being considered: Agents would apply for certification, paying a fee; they also would pay for an IntegraScreen background check of their company. Following that, a certain number of employees would complete a professional development curriculum created by AIRC, which would probably focus on standards, best practices and structure of the U.S. higher education system. The agents would undergo a self-study as well as an external site visit before certification. Re-certification would come up after three years. After certification, a compliance board would investigate any complaints, and certification could be revoked, Leventhal explains.
The AIRC’s goal is to pilot the process with a very small group of agents in 2009. “Hopefully in 2010, we’ll then have systems in place so we can put a good number through the process each year,” says Leventhal.
He knows the council’s proposed approach is ambitious, but also, given a general reluctance to use agents in the United States, believes it must be so.
“What we need in this country to make people very comfortable is an established set of practices. So they know that it is in fact ethical and it can be done safely and you can hold your head high about it,” Leventhal says.
“I have exactly the same concerns that the people who are arguing against agents have. The difference is, I think we can address the concerns through the systems we’re so good at, self-regulation.”
There are many horror stories about abuses, both on the part of agents and that of American colleges. Even proponents of using agents relate such stories, although, as Leventhal says, they believe that these abuses can be addressed.
For example, when asked about a common concern that engaging agents on commission encourages an “any warm body” approach to enrollment management, Leventhal stresses that college admissions offices have an obligation to accept only qualified students, rather than take scores of unqualified students whom an agent might refer.
Admittedly, not all U.S. colleges are so scrupulous. Says Leventhal: “There are institutions in the U.S and we can all name them — and I’m not gonna, but it’s not hard – but there are institutions in the U.S, proprietary in nature, small struggling liberal arts colleges…. They’ve signed on dozens and dozens, hundreds of agents. There’s very little oversight of the agents. They’re going after the numbers. It’s not hard for the students to get in. I don’t know what their success and retention rates are.”
In May, The New York Times reported on the phenomenon of recruiters earning money from both ends — accepting commissions from colleges and direct payments from students themselves.
“In the mid-’90s, we did have some problems with agents that I would say they were less than … well, they were unscrupulous,” says Joe Tullbane, associate dean of St. Norbert College, in Wisconsin, an AIRC member. “That is, they would send students to you and you would pay their fees and a couple different things might happen. You might find that the agent had already charged the student a considerable amount of money — so in a sense, they were charging both sides for the same service. And that seemed wrong. Secondly, there were agents who would place a student and literally after you paid your money to them the student would change to another institution” (which would be harder to do now, post 9-11).
“There are plenty of them out there that are kind of fly-by-night operations that put a shingle out,” Tullbane says. “The last thing I want to hear as a small school is, ‘I can provide you with 50 students a year.’ Well, I only want two or three, from every country.”
Tullbane says he feels “pretty confident” about St. Norbert’s current checks and balances for its agents; it has about 60 on the books, he estimates, but works actively with about 15. He adds, however, that he’s hesitant to add any agents to their current roster. Speaking of why the institution joined AIRC, he says, “We felt here at St. Norbert that it’s unhealthy to sort of be your own assessment agency.
“Part of the reason we’re involved with the AIRC is so we can be assured that best practices and best standards are being established — so that when we work with agents, we know that everything is above-board and going on in the best possible fashion,” says Ray Lagasse, director of international programs at the University of North Dakota, another AIRC member. “It’s not just a rubber-stamping of whoever or whatever shows up on our doorstep. If they go through that procedure and then they obtain a particular certification, that rigor or those steps at least provide a particular level of assurance.
“We have heard horror stories,” he continues, of agents “promising this, promising that, in the name of a particular university. We do not have the time or the energy to deal with the fallout from any of this.”
Student-Centered or College-Centered?
Those critical of the practice of using agents look beyond the question of preventing flagrant abuses to ask further: Does the agent model best serve the interests of potential international students?
Peggy Blumenthal, executive vice president of the Institute of International Education, says via e-mail that “IIE supports any effort to set standards and disseminate best practices in the field of commission-based recruiting. Our position on use of third-party recruiters is that while we recognize that some U.S. campuses feel this kind of approach works best for them, in general we believe that international students are best served by having access to the widest possible set of options, and this is available to them free of charge from the network of over 450 EducationUSA advising centers supported by the U.S. Dept. of State’s Bureau of Educational and Cultural Affairs around the world.” (IIE hosts a handful of these centers, and also works with the State Department to provide training and resources to EducationUSA advisers. IIE publishes the quarterly journal, EducationUSA Connections.)
In a follow-up phone interview, Blumenthal explains, “Basically a third-party recruiter is working for a college or a few institutions, so they’re going to understandably be representing those colleges and are not going to be presenting the student with [questions like]: ‘Have you thought about a community college, have you thought about a state school, a big school, a small school?’
“Do you begin with a student focus or do you begin with a campus interest? They’re both legitimate ways to proceed but from IIE’s perspective, the best success comes when the student is matched with the right school after reviewing all the options.”
“This is a two-way street. It’s not only what’s best for the school. It’s also what’s best for the student,” says Nassirian, of AACRAO.
He adds that it can be exceedingly difficult to understand what’s really happening in the office of any given international agent, signed contracts and good intentions aside. “You’re not there. You can’t read the language; you don’t understand the customs. If you did, you’d be there yourself.”
AACRAO’s ethics committee has also been questioning the wisdom of low-budget internationalization efforts more generally. Nassirian asks: “If you don’t have resources to recruit those students, how do you believe yourself to be good destinations for them?”
— Elizabeth Redden
The original story and user comments can be viewed online at http://insidehighered.com/news/2009/01/06/recruiting.…