KPI's are bad for recruitment...

Before joining the recruitment industry wholeheartedly, I, like many others had a pretty rose tinted view of how recruitment worked. It wasn't until it became part of my career did the realisation hit me that far from the focus being on relationships and service, it was instead on sales, closing the deal and hitting KPI's.

Fortunately for me, there are some that believe this to be a waste of time and this has allowed the Courtenay HR business to flourish inside our parent group, where the focus is PRIMARILY on service and relationships. Failing to hit KPI's won't get you into trouble here, but woe betide you if you don't give the candidates and clients the experience they have come to expect. And thats exactly as it should be.

Thinking about that the other day made me realise that actually, KPI's, far from sorting out and highlighting the good recruiters from the bad, actually muddies the waters and can throw up a smokescreen behind which people who are not cut out for recruitment can hide. KPI's, just like Government statistics, seem so easily corruptible and therefore, are actually counter-productive.

In my book, there are only a few things to look out for, when someone first dabbles in recruitment, that highlight whether someone has the 'right stuff' and I look for these things in everyone that joins our business:

Can they take a brief well - can they get to the nub of what the client is looking for and are they able to translate that into something meaningful for candidates
Are the clients interviewing the candidates they propose - the first test. If they are, then its a sign that at the first post at least, they are near the mark.
Are clients inviting the proposed candidates back for second interview - the acid test in my book. An even stronger indication, if achieved consistently, that they are in tune with what the client wants.

Now, some of you may be thinking, "hang on, what about the obvious number 4? Are the candidates making placements?" Well, for me, that's just a matter of time if they have nailed the first three. Sure, you can get the situation where someone keeps getting to the final hurdle and failing, but in my experience that is rare. If they have done 1 - 3 in a professional and service driven manner, it will come. If not, then that's the criteria that shows they are not made for recruitment.

We don't obsess about numbers of CV's sent out, number of interviews arranged, number of calls made or number of 'deals' done. And my advice is that if you want to build a successful recruitment business filled with 'real' recruiters that will stand the test of time, neither should you.

Comment by Stuart Musson on April 9, 2010 at 6:52am: Excellent post Gareth!

We at PRS have also wonder why so many recruitment firms are focused solely on KPI rather than delivering outstanding service. I personally would rather see someone make 10 calls and place 9 people out of those 10 calls because they are the RIGHT calls. Overachieving on your revenue targets by a large % but getting berated because you only made 70 calls instead of 100. Does this really make a great working environment?

I do like the idea of some KPI’s being measured when an individual joins the Recruitment industry because it helps them establish the right work ethic however when they have become more experienced and have the work ethic; start to focus on exactly what you have explained here and you will have a very happy recruitment team.

With Precision Recruiting Services being a Rec2Rec company we are always hearing different points of view from the Recruitment Professionals we represent and everyone LOVES the independence of doing what they do best to make placements. We hear time and time again that the most Senior and biggest billers hate the micromanagement of KPI’s because it hinders their ability to deliver the service they know makes them successful!

Cheers,

Stuart Musson
President
Precision Recruiting Services Inc.
LinkedIN: www.linkedin.com/in/stuartmusson
Twitter: www.twitter.com/PreciseRecruit

Web: www.PrecisionRecruiting.ca

Comment by Richard Johnson on April 9, 2010 at 10:04am: I disagree (in part)
In running any business there needs to be a level of operational control. I can't sit behind every employee every day. Key Performance Indicators are just that. Indicators of Key Performance. Come up with a few and it will help your business needs immediately.
Example: I need my consultants to bring in £x every month, I could give them a phone, PC and tell them to get on with it OR I could assist them and explain that
£x comes by placing x no of candidates,
x number of jobs come by making x number of calls (you might hate it but its true)
x number of CV's sent out WILL = x no of candidates placed (we have a maximum of 5 CVs that go with any vacancy)
Together with other forms of marketing KPIs are indispensable but need to be used as a tool along with a whole host of other tools.

Comment by Mark Spencer on April 9, 2010 at 10:30am: Randstad is the king of KPI's you could work there for years without placing anyone and achieve all KPI's

Comment by Carol Mahoney on April 9, 2010 at 11:33am: I both agree AND disagree. Recruiting professionals know that number of resumes sent is not necessarily an indicator of performance. But I know first hand that hiring managers DO care about number of resumes submitted. In the last fifteen years of managing recruiters, I can count on one hand the number of times managers complained about too many resumes. And, conversely, the complaint of "not enough resumes" gets so old that it's almost a cliche. So...our job is to educate our clients about why they should come to value the right KPIs - but until we're successful winning the argument, we will need to grapple with managers' desire - albeit irrational- to get a pool of candidates to choose from.

Comment by Craig Silverman on April 9, 2010 at 11:39am: Stats are for showing trends and relationships to different parts of your business. If you don't track then you don't have any data so it is driving blind. Who cares if you hit a KPI and never close business? Truth is, nobody does for very long. Top performers always know their ratios of sendouts to placements for example. Keep it simple, track the numbers that count but don't focus on reports, focus on filling jobs, making clients happy, building relationships, and having fun doing it.

Comment by Manny Rao on April 9, 2010 at 11:44am: Gareth,
Great post. I have been preaching this for years to anyone who would listen.
A friend in the investment field once told me that when they hire new Stock Brokers they put them on the phone with lists of names to call. It gets to the point that they think success is when someone will take their call, then great success when someone listened to them. All the while losing the perspective of making a sale. Same applies to our business.
Yes, companies may complain of not enough resumes, but we need to educate them that is it quality 'on target' resumes that count, not the numbers. Isn't it up to us to not waste their time with off target resume submittals AND unnecessary phone call?

Comment by SKI on April 9, 2010 at 11:53am: >> Randstad is the king of KPI's you could work there for years without placing anyone and achieve all KPI's

I would that it was limited to Randstad. It is not. 80/20 rule: most businesses (our industry too) is 80% driven by the wrong "keys"...

Comment by Barbara Goldman on April 9, 2010 at 3:42pm: Ok, I might be getting grouchy, but we do need indicators when trying to manage a desk. The 'number of resumes sent out' is an indicator that makes me puke, however; what are you gonna do? It is the way some recruiters process.

In our office, we focus on total number of calls made, and we measure our successby the number of interviews, not resumes sent out.

I measure what is important, and meaningful to our office.

Number of interviews is extremely meaningful. I don't care how many people the recruiter had to screen, I don't care how he convinced our client to interview. I hope it wasn't by sending a resumes, but again, I could just be a grouchy old broad and not in step with the times.

Why do I measure number of outgoing calls at all? Well, it is a simple way to making sure everyone is on the phone, and one only has so many relatives. It is amazing how easy it is for a recruiter to start at 100 calls a day and go to 10, with that 10 'feeling' like 100. So we count the calls. Low call count takes three months to manifest itself in production. By the time production slips, and the recruiter realizes DAH got to make more calls! It is too late. We honestly need to look at the number daily.

It works. We count what is important to us. We are all adults. If you have to send a resume, a hot air balloon, or fly to the client site yourself, I don't want to hear about it. Just confuses the issue.

I would rather not measure the number of resumes sent out, to do so would be to encourage an unproductive behavior. In my office, a high number would mean that you are papering companies with resumes instead of providing service by presenting qualified people that they want to hire.

I guess we all gotta measure somthin'

Comment by Lisa Howarth on April 9, 2010 at 4:18pm: I definitively disagree with the lack of need for KPIs, Gareth. You bring up interesting points in that recruitment professionals need to focus on customer service and creating meaningful client/candidate experiences. But you could be the nicest guy with clients who really like you, but not be able to provide a decent candidate to save your life.

KPIs for me tell the story (over time of course) of whether a recruiter has what it takes. I don't look at the number of calls made, so much as the number of resumes sent and the corresponding ratios of interviews (meaning you're sending good people, not just resumes to reach your submission numbers), and the number of hires.

When a recruiter is not performing (i.e. having difficulty closing the deal), then it's time to look at base numbers like how many calls is he/she putting out. We, as good recruiters, know that it really is a networking game .. the more people you talk to (again, meaningfully .. not just "do you want a job?"), the better chance you have of connecting with the right candidate. As well, looking at total "talk time" (if your systems allow it) is a good indicator. The more time you spend talking to people, the more likely you are to say something meaningful to someone, or to learn something you can use in another conversation.

All that said, I do think that customer service is becoming a lost art. Trying to go above and beyond for at least one person every day will help to set you apart from the pack.

Comment by Ross Clennett on April 9, 2010 at 11:26pm: It's not KPI's that are the problem. It's the way in which managers mange their staff's accomplishment, or lack thereof, of said KPI's. If you use KPI's as a blunt weapon to manage people then you will build a culture of 'numbers for numbers sake'. It will make you some money for sure but it won't build a business that customers rave about.