Recruitment Cost vs. Value of Hire

Last week I was invited to join a discussion panel at the In-House Recruitment Expo in London. The panel was hosted by WCN, global e-recruitment and talent management software provider, on the day we announced a strategic partnership with Cammio. One of the topics that came up was the cost of recruitment. Always an interesting topic as most people in talent acquisition, at some point, will have to justify spending and fight off budget cuts. Interestingly enough, the discussion focus is hardly ever on hiring value. I realized this inherent flaw in the system will never change as long as we continue to see recruitment as a disjointed process from HR.

That is not to say that cutting cost isn’t a good thing, it is about knowing how and when. Technology and process innovation will actually allow you to do so, but it should be seen as part of an HR value chain. Most companies still do not connect the dots when it comes to recruitment spending. There is little focus on the value an employee delivers after they have onboarded in terms of career development, length of stay and overall employee productivity. It actually seems so logical that most people will say this is a no-brainer. Why don’t we measure the value a hire delivers? The simple answer is that most of the time organizations use different software platforms for different parts of the process. In effect, this means that when a candidate becomes an employee, he or she becomes an entirely new person, digitally speaking. We have then lost the interaction history and start from scratch collecting data. This is really unnecessary, totally unproductive and prevents you from connecting recruitment cost to hiring value.

Any software platform today should give you easy access to data through API and web services. So even if you have decided to use a specialized HRIS and ATS, and there are many good reasons to do so, make sure the two systems are connected. Start measuring the candidate as they come in the application process and continue measuring when they are hired. This will give you valuable insights on not only hiring value, but also recruitment metrics on whom to hire (or not to hire) in the future. Your next budgeting discussion will become a lot easier. Rather than simply asking for budget, you are delivering proven value and better understand where to spend your budget next.


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