Recruitment Management System - Finding the ROI on

Recruitment
Introduction:

I did mention in my previous write-up that recruitment is a challenging job in

KNOWLEDGE based industry, whether it is IT or ITES/BPO or Service Industry. Also,
in one of my earlier mails I mentioned about "Performance Management System", this
time round, it is "Recruitment Management System". Did you ever felt the need of it?
Every year, a company spends millions on recruitment, but what is the result?

"According to the Corporate Advisory Board of Washington DC, the cost of

replacing staff can be anything between 50% and 175% of that persons annual
salary and, as we are all aware, employees in the new millennium do not stay with a
company for life as perhaps their grandparents did."

Before proceeding further, I like to share some facts about recruitment, probably known
to you, in a survey it has been found that -

1. 38% of organizations produce no reports on recruitment activity whatsoever and

are therefore unaccountable for the time and spend involved.
2. 77% measure Cost per Hire (CPH) in some way or the other. The largest number
favored the Staffing/Cost Ratio 52% of those that measure CPH make no
differential between discipline or role rendering the CPH figure relatively
meaningless Easily measured hard costs were most usually tracked (e.g. agency
fees) Measurement of soft costs (e.g. management time) was rare
3. 66% measure Speed to Hire (STH) in some manner Most common start point was
vacancy sign off Most common stop point was start date - potentially very
misleading due to different notice periods or other factors which determine the
actual start date. Very few track the whole process consistently making it very
difficult to pinpoint bottlenecks This lack of tracking exposes organizations to
potential legal challenge
4. 58% have some Customer Satisfaction measurement Of these, 77% measure only
'overall satisfaction', again making it difficult to address specific issues Only 10%
use Service Level Agreements (SLA)
5. Only 54% have some measure of Quality of Hire, potentially the most important
metric of all The most common measurement was the appraisal process -
unfortunately whilst this is entirely appropriate for specific organisations it does
not help promote standardisation across industries Most analysis is made against
people at the same level leaving no room for an assessment of speed of progress
to that role
6. Only 8% have any form of competitor benchmark Process measurements, which
focuses on quantity (number of CVs) rather than quality (shortlist, initial CV
rating against the job specification, hire ratios to CVs). Again lack of logging of
 critical process details leaves organizations potentially exposed in any legal action
and indicates widespread non-compliance with Data Protection Act requirements.

Lets start with existing recruitment sequence/procedure:

1. Identify vacancy
2. Prepare job description and person specification
3. Advertise
4. Managing the response
5. Short-listing
6. Visits
7. References
8. Arrange interviews
9. Conduct the interview
10. Decision making
11. Convey the decision
12. Appointment action

The recruitment process for most organizations is designed along the same path;
applications are received, either via an online application form, a postal form or a CV.
Candidate are short-listed and invited for interview. The interview format can vary
considerably, as we discuss later, and can include assessment centers. The number of
interviews also varies. Some companies are satisfied after just one interview whereas
others will want to bring back a further shortlist of candidates for one or more interviews.
If you are successful at the interview stage you will receive an official letter offering you
the job. This information describes what you can expect at interviews and assessment
centers, and takes you through to making a decision about any offers that may result.

When considering whether or not to invest, most of us ask perfectly sensible questions
like: "What will the return be?", "What's the risk?" and "How quickly will I get the
returns?" Would you put your hard-earned money into high-risk investment schemes
without knowing about their past performance? Would you invest with professionals who
are very thorough, but who can't prove that their methods deliver business results? At the
end of the day, the organization is interested in knowing the return on recruitment
investments and HR Manager/Recruitment Manager is responsible for it and hence can be
questionable. I remember, once someone asked me, how HR department can become
"Earning Department", it is only by saving costs and saving expenses.

As organizations, one of the biggest investments we will ever make is in recruitment.

Fortunately, as HR professionals, we can all prove that the business is getting outstanding
returns on this investment. We can point at the money spent, and put intelligent estimates
on the financial and human benefits accrued. We can show that our recruitment processes
deliver outstanding performance, control costs, increase sales, maintain efficiency and
develop the organization. We do not employ poor performers. The confidence of the
business in what we do is exceptional, and we are perceived as being directly pivotal to
the performance of the whole organization. Our credibility is beyond doubt.
That would be a wonderful position to be in, wouldn't it?

How many organizations expect sensible questions about the return on recruitment
investment to be answered? The truth is that very few really do. Recruitment is evaluated
on the basis of the speed with which positions are filled the feedback from participants
and the percentages of candidates who end up being employed. Very few organizations
expect that the true impact on business performance can ever be proven, or recruitment
processes fine-tuned to deliver precisely the business benefits required. Instead,
recruitment is allowed to carry on without anyone ever knowing if it is delivering the
goods, or if opportunities are being missed.

Because recruitment is not an exact science, it is allowed to continue (often very

thoroughly) without proving its true value.

But is it really so unrealistic to believe that we can measure the business impact of
different approaches to recruitment? More and more organizations are asking these
questions, and the ones who can respond effectively are achieving surprising business
results through their HR functions. A wide range of organizations in western countries,
have invested in examining the business success of their recruitment practices, and
achieved clear returns. Organizations are starting to find that, with some skill, it is
possible to assess the return on investment. It is possible to define the business benefits
required, and track the results. This is not just a bean-counting exercise aimed at proving
that we are right - it points the way to improve results, and deliver business performance
through HR.

What should a Recruitment/Hiring Manager do to calculate the return on investments on

recruitment?

A. Start off with a clear analysis of the organizational and commercial outcomes
required from recruitment. What is the business trying to achieve, and what part
will successful candidates need to play?
B. Develop clear ways of tracking and measuring these outcomes
C. Carry out an objective and open-minded analysis of the qualities people need to
perform. Ruthlessly avoid your judgement being colored by past practice or
"knowing what works from experience". if doing this well seems expensive in the
short run, it's never as expensive as doing it badly in the long run!
D. Ensure that you assess the full range of qualities needed for success - include
personality, motivation and aptitude as well as experience
E. Ensure that everyone involved in recruitment is trained to the highest possible
standards
F. Carefully connect recruitment to induction, training, management and
performance management - to ensure that the business does not just get the right
people, but nurtures and capitalizes in them as well

These approaches deliver returns of investment because

 • They identify people who perform,
• Reduce the risk of employing people who cannot (or will not) perform,
• Cut the costs of recruitment and development, and
• Play a major part in driving forwards organizational change.

In common with all people processes, recruitment is there to deliver tangible human and
business benefits. Devoting a little time to considering the return on investment is not a
nebulous luxury - it is essential to delivering the results the organization needs. It is also a
powerful way of positioning HR at the heart of the business. You will not regret

The need to have RECRUITMENT MANAGEMENT SYSTEM, its importance in

streamlining recruitment process and calculating the RETURN ON INVESTMENT.

As we are in 21st century, which is being governed by INFORMANTION

MANAGEMENT SYSTEM and wherein we are talking about SYSTEMS, be it
Performance Management System, Compensation and Benefits Management Systems
etc, we also have RECRUITMENT MANAGEMENT SYSTEM, hope you all knows
about it.

Technology has ushered in new ways of thinking about and executing on talent attraction,
selection, and acquisition.

• Applicants can be processed more efficiently and with greater care.

• Candidate relationship management, once reserved for top-tier professional
applicants, can be realized across every level of job seeker.
• Proprietary talent communities provide companies with opportunities for targeted
marketing and can ultimately reduce time-to-fill and cost-per-hire while
increasing the value of the employment brand.

These benefits provide a foundation for talent management to be in play at a broad and
individual level.

Don't be mistaken. If the biggest pain point in your recruiting process today is that you
have no way to track applicants electronically.

For most recruiters, a basic applicant tracking system, even if it starts as an Excel
spreadsheet or Access database, is a key to survival and certainly to efficiency. If
anything, the urgency to implement even a basic system has only increased in the past
few years, as the Internet has made it so easy for candidates to apply for jobs. If you don't
have an automated way to capture and search for candidate information, your job is going
to be defined by performing administrative tasks that consume a significant portion of
your available time-time that could almost certainly be better spent on higher-level
activities. The good news is that if you're just getting started with applicant tracking,
there are many good systems available today to fit almost any budget.
Recruitment Management picks up where applicant tracking left off. Tracking your
applicants efficiently is no longer a self-sustaining hiring process and you will inevitably
start focusing on the following areas to raise your recruiting process to the next level:

• Tight integration between the hiring management system and corporate

recruitment site. This is key because it is the basis for ensuring a consistent and
positive job seeker experience, and the most visible aspect of the online
employment brand interface. The hiring management system needs to support the
integrity of the company's brand first and foremost - which, depending on the
company, plays out at varying levels of complexity. An intuitive, flexible
interface, supported by data capture, provides insight into the job seeker and
drives the overall effectiveness of the system.
• Engaging above-average talent by providing a streamlined and user-friendly
online application process-one that candidates tell you is better than your
competitors'.
• The ability to seamlessly pre-screen candidates by asking job-specific questions in
addition to collecting their resumes. This component should also add value to the
applicant's experience while supporting recruiter productivity. If done well, a
well-thought-out approach integrated in to your Hiring Management System can
serve as a self-screen or job preview.
• The ability, at a glance, to see how a candidate fits with the job he or she has
applied for, individually and in comparison with all other applicants.
• Making it easy for your recruiters to communicate and build relationships with
candidates throughout the recruiting process.
• Additional recruiter productivity enhancement tools.
• The ability to extract data from your system to make decisions that support
continuously improving your recruiting and talent attraction process.

Conclusion:

At the end, I like to say that HR professional is having a big responsibility to hire a best
person from the available talent pool. At the same time, one needs to be cost conscious. It
is a good practice in recruitment to be objective and seek to identify the candidates'
abilities. Judge on individual merits and set the same standards for all. Whereas
generalized assumptions made about ability or ambition, based on applicant's sex, caste,
age, religious belief, sexual orientation or any disability, is a bad practice. One need to
use the technology, to get the best results from recruitment process.