Measure RPO effectiveness — Set and track relevant KPIs

Recruitment is a tedious process that costs much in terms of time, effort, money and people. From posting jobs to shortlisting, interviewing, making the offer and, finally, onboarding, the humdrum exhausts valuable resources of a company that could be used to develop the business if the recruitment process is outsourced.

However, partnering with Recruitment Process Outsourcing(RPO) firms does not mean you put your feet up and forget about it. For RPO to be effective, the recruitment partner’s performance needs to be tracked and measured with the aid of relevant KPIs.

KPIs to measure RPO effectiveness

It is natural to want to ensure that investing in RPO is worth it and that it meets at least the basic recruitment needs of an organisation. But how is worthiness evaluated? The answer lies in Key Performance Indicators or KPIs, as they are better known. These are quantifiable performance measures that evaluate success. KPIs are useful in discerning how close or far away an organisation is from achieving the set recruitment goals. There are plenty of KPIs for measuring hiring success. However, choose the ones most relevant to your objectives.

Recruitment KPIs

• Time to fill: This measures the time it takes to fill an open position — from the time the job is posted to the time the candidate enters the onboarding pipeline. Knowing this helps schedule subsequent recruitment cycles to get new hires at the right time.
• Interview-to-offer ratio: Do all the shortlisted candidates clear the interview(s) round? Wishful thinking. How many interviews were needed before the first offer was made? This KPI tells how many applicants are needed for each opening and how many should be invited to each interview round (most companies have multiples of these) so that you know you are talking to the right number of people at every stage.
• Offer-to-acceptance ratio: Happy with a candidate? Made the offer? Was it accepted? Hope so. But, well, the industry is becoming increasingly people-centric and they have the power to refuse. However, too many refusals is an indicator of a strayed recruitment process or some deficiency about the company, both of which need to be resolved. For this reason, offer-to-acceptance ratio is an important KPI to measure.
• Acceptance-to-joining ratio: Just as companies endeavour to hire the best talent, candidates also strive to join their dream company. Your offer may help tick seven out of 10 boxes, but why be satisfied with less? They may accept your offer only as a back-up till the time their desired offer comes along. This KPI thus becomes very relevant to today’s recruitment strategy that prioritises candidates.
• Cost per hire: Recruitment always costs, whether done by the company itself or outsourced. You want to make sure you are spending just the right amount to land high quality hires.
• Source of hire: Track which source (referrals, Linkedin etc.) gives you the highest quality hire, so that in the future you invest your resources wisely.
• Quality of hire: Perhaps this is the most important KPI. For, after all the time, effort and money spent, if quality is compromised, then the whole process comes to naught. This KPI calls for setting employee-specific indicators for ensuring that the RPO arrangement gives high-quality hires.

Employee KPIs

• Attendance record — Employees who can be banked on
• Work-engagement levels — Enthusiasm and dedication do mean a lot.
• Domain and technical knowledge — Is the hire someone who needs hand-holding seemingly forever? That’s at least one more person’s time and two people’s salary wasted.
• Target achievement — Goals met? That is important.
• Productivity — Maximum delivery with minimum resource usage is value-for-money hire.

Conclusion

‘Do what you do best and outsource the rest’ — Peter F. Drucker

Your business may be about technology or education, but you cannot function without the miscellaneous functions. And, as Joel Rosenberg says, miscellaneous is always the largest category. Where possible, this category is best outsourced, but not without involvement.

Tracking KPIs are necessary for improving hiring quality, increasing recruitment ROI (Return On Investment) and making the process more effective. An efficient RPO gives an organisation the much-needed competitive advantage.Thankfully, this option is possible with firms such as Careernet that offer expert services in this area.