Why bad managers give KPI’s a bad reputation.

Mention KPIs to a lot of recruiters and you get an instant negative reaction. As explained in the book ‘The Chimp Paradox’ by Steve Peters, the brain gets infected by bad experiences, so if a recruiter has been ‘beaten with a stick’ over KPIs, it’s natural that their view of them will remain negative and they’ll reject the concept of KPIs being a good thing.

KPIs used well are an amazing tool to plan and deliver success, highlight development areas and grow recruiters into business managers. However too many managers who have been battered with KPIs when they were a recruiter carry on that same draconian style of management. I hope to change some minds with this blog and to help both managers and recruiters discover how empowering KPIs can be.

Why are KPIs so hated?

Before I explain how to use performance measures effectively, I wanted to highlight the feedback I’ve had on the bad experiences recruiters have told me about.

Being targeted on the wrong things – It’s understandably frustrating if you get targeted on activity that you don’t believe leads to success. An example may be targeting new vacancies in a candidate driven market. How demotivating must it feel to be told to target new vacancies when you know the money is in finding good candidates to canvas out!

Giving everyone the same targets – If a recruiter makes £15k a month with 15 interviews, yet another takes 30 interviews to get the same figure, it’s madness to give them the same interview target.

Using KPIs as a stick to beat the staff – Some managers lose sight of what the numbers are for – to deliver more revenue! I’ve heard far too many bad stories of recruiters hitting their placement targets yet still getting a roasting over bad call times or CV sends that aren’t relevant to their style of recruitment.

Too many KPIs – During my work at Cranfield Business School we covered KPIs and studies showed statistically 3 KPIs are optimum. Admittedly these studies covered various industries, however in my experience of setting KPIs in recruitmen, between 3 and 5 works very well, less is more. The more you have, the more likely people measure the activity but don’t attempt to hit their activity targets, they just have too many to focus on.

Never reviewing them – Recruiters’ skills change, markets change, the recruitment industry changes, even the recruiter’s desk can change week to week, so the type and numbers of activity to obtain success are bound to change. As an example, a recruiter in a new market will need a higher number of new business calls to one who has been in it longer and so has existing clients, so surely the KPIs need to evolve to reflect this.

How to win back doubtful recruiters.

It’s very basic management, people are far more likely to commit to a task if they understand why they are being asked to do it, and even more if they buy into and agree with it. So applying the same principle to KPIs is to work through the selection of activity being targeted and activity numbers with the recruiter.

Either when setting new recruiters KPIs or reviewing your existing recruiters’ KPIs the principle is the same, discuss and agree what activities in their market and using their style would deliver increased billings if increased.

If you coach the recruiter on “what activities if increased this month would make you the most money?” your chance of getting it right is a lot higher. You can’t know everything about their desk, and you help the recruiter become more self-aware on what makes them money. This in turn makes it easier for the recruiter to self-manage in the future. You will also gain the extremely valuable buy in from the recruiter on the KPIs. As an example, to find more candidates with their recruitment style and in their market you may agree headhunt calls are the most effective way rather than job board searches, so headhunt calls should be a KPI. Remember, keep the KPIs at 3 to 5 so the recruiter has a much better chance of really focusing on hitting the activity targets.

I think it’s also worth mentioning that the use of the word “how” when coaching the recruiter on setting their own KPIs is key. Some of the results from the ratio calculations and new monetary target may see a large jump in what is required, which can give unrealistic activity targets. If your recruiter now has to deliver 20 interviews rather than 12, rather than just settle for the new target, probe further and ask “how” does the recruiter plan to work differently to achieve this. It’s no use having unrealistic KPIs, if you can’t agree a workable plan as to how they can make that increase then lower the monetary target until they start hitting their new KPIs. This can also act as a wakeup call for the manager or recruiter who kids themselves that the end of year figure will be way higher than their activity and / or skills can deliver.

It is important to review the type of KPIs at every KPI review. Although you have covered what activities the recruiter feels will make the biggest difference to their billings in the last review, circumstances on their desk may have changed. For example, if one of the KPIs last month was new vacancies and as a result the recruiter now has plenty of quality committed work, the KPI may need to switch to candidate attraction to fill those vacancies. Remember the KPIs must stay relevant to the recruiter so you maintain that buy in and you’re targeting activities most likely to produce success.

This simple recipe overcomes the previously mentioned reasons why KPIs are so hated.

The recruiter feels you are now measuring the right things
The KPIs are designed around the recruiter
The number of KPIs aren’t too many
The recruiter won’t feel the KPIs are simply a stick to beat them with, as they’re relevant specifically to them and born of discussion with them.
You are reviewing them to maintain their relevance.

KPIs need to be activities you can measure that when achieved increase the overall goal, usually billings. They also need to be in the recruiter’s ‘sphere of influence’ so events they can directly influence like making a headhunt call, or arranging a client visit. From here you then need to target activity numbers. For new recruiters you can base this on the company norm, or historical numbers proven to be successful. However, for existing recruiters you must use their efficiencies.

To read how to calculate ratios with the recruiter click on this link.