Chapter 8. Measuring Staffing—A Better Approach to Hiring Metrics

As human capital management continues to be a major business imperative, providing a framework for making good decisions regarding such human assets is becoming essential. As mentioned in Chapter 3, underlying human capital decision science are the methodologies, systems, and tools, including the metrics that support the decision making process as it relates to human capital and the impact to the organization. However, a decision framework for understanding the human component of an organization’s asset base is still relatively new and has only recently received significant attention.

Most decisions regarding the investments a company makes to acquire, deploy, develop, or retain its human capital are still primarily based on internal Human Resources efficiency metrics and are of limited value in supporting human capital decision making by the rest of the organization. Efficiency-type measures typically gauge the performance of Human Resources functions or processes, such as staffing, and although important, are generally not tightly aligned with the mission of the organization. They focus on identifying the level of human resource programs generated for a given investment of resources—like time and money—and tend to be numbers driven. Typical examples of these staffing metrics include vacancy/fill rates, internal cycle times, and cost-per-hire or other cost elements. These measures help identify issues that need correcting by measuring the performance of Human Resources programs or processes.

As noted in the earlier chapters, many leaders are now arguing that the measurement of employee performance should be the primary focus of metrics since human capital (the employees), is the most critical asset to achieving an organization’s mission. They emphasize that measuring Human Resources processes and programs is important, but maintain that employee performance-focused metrics linked to business strategy should be of paramount concern. Unlike efficiency-type measures, these metrics are typically more subjective and enterprise-wide, helping to support human capital decision making across the organization. They focus on directly measuring employee performance and the effectiveness of related programs and processes and can be employed throughout the different phases of the employee lifecycle. Examples of these metrics can include quality of new hires, customer (hiring manager or employee) satisfaction, productivity, and internal mobility measures, as well as retention measures of high performance employees. This chapter will examine the key metrics available during the attraction and acquisition or staffing phase of the employee lifecycle and discuss their application in organizations today.

Although organizations have been using metrics since Xerox first popularized performance measurement as part of the benchmarking movement more than 20 years ago, it was Staffing.org that first provided a set of standard metrics to measure the performance of staffing operations that is still used today. Since the late 1990s, Staffing.org has been conducting an annual Recruiting Metrics & Benchmark Survey and publishing a benchmark report on the performance of staffing operations across a range of industries. Offering a superior alternative to the limitations of traditional staffing metrics, the report provides organizations four proven performance metrics, including both efficiency and effectiveness measures, to utilize in evaluating their staffing efforts and in measuring the performance of new employees. The 2006 Recruiting Metrics and Performance Benchmark Report captures financial data from more than 4,000 organizations and examines performance data related to New Hire Quality, Hiring Manager Satisfaction, Time, Cost, Efficiency, and more. Each of the five metrics will be discussed.