Everything you need to know about Hiring Success and how to get there. From the new ebook Hiring Success Fundamentals.
By 2027, approximately 75 percent of today’s S&P 500 companies will disappear. With modern companies operating at an unprecedented speed in a rapidly evolving market, many businesses fail to implement the strategies necessary for corporate endurance.
To thrive in today’s competitive marketplace, companies must out-think, out-maneuver, and out-hire their peers. Thanks to the advent of Hiring Success, companies can now quantify the cost, speed and quality of hiring and use that information as a metric for business success.
It starts with the fundamental idea that Hiring Success is business success — the focus of SmartRecruiters’ new ebook, releasing today.
The relationship between the right talent and business success is relatively simple in concept but, until now, was previously unmeasurable. Even at the executive level, the topic of “Labor Shortage” has been in the top five of the Conference Board’s CEO Challenge list for the last seven years.
Industry leaders know that companies need more than a few great recruiters or some terrific lucky hires, and Hiring Success now provides the tools for a systematic and repeatable operation designed to benefit businesses and their employees. After all, a company is the sum of the success — or lack thereof — of its entire staff.
SmartRecruiters believes you are who you hire, and that Hiring Success should be a central tenet of all businesses hoping to stand the test of time.
What is Hiring Success?
Hiring Success is defined as the ability to attract, select and hire the best talent for any role, on demand and on budget.
You can judge the Hiring Success of your company by examining three key elements:
Hiring Budget
This refers to the combined costs of all recruiting activity, although not the time spent by interviewers and hiring managers as they engage in the process.
Whereas Hiring Budget is traditionally seen as a cost, companies who strive for hiring success will see it as an investment, similar to a marketing budget. Hiring Budget is expressed as a percentage of the total salary of new employees, or New Hire Payroll (NHP).
I.e. Hiring Budget = Total Recruiting Costs / New Hire Payroll
Hiring Velocity
This refers to the speed of the recruitment process, and is shown as a percentage of the jobs filled on time. For example, a percentage of 50% suggests you only hire half of your new employees on time — a statistic that should be improved.
This is also a central element, as great employees can only benefit your company if they are hired on time — an obvious, but often overlooked point. It is, however, not as important as the quality of the hires made. A poor candidate, even if they are hired on time, is unlikely to lead your company to hiring success.
Net Hiring Score
Perhaps the most important element of hiring success concerns whether or not you’re actually hiring great employees. Net Hiring Score (NHS) measures the relative output and productivity of each new hire. It is devised in much the same way as the more familiar Net Promoter Score, with the obvious difference that a candidate, not a customer, is the subject of NHS. Ranging from -100 to 100, the score is derived from questions asked to both hiring managers and new employees concerning the latter’s fit in the role.
Once all these three metrics have been ascertained, they can be combined into a simple Hiring Scorecard representing the health and impact of the hiring function:
It’s important to note that a Hiring Scorecard is not completely dependent on NHS alone. Even if you have a high NHS, a low hiring velocity suggests there still room for improvement within your hiring process.
Sample Hiring Scorecard
Ultimately, all this information is used to produce a Return on Hiring figure.
Return on Hiring
Using the NHS, organizations can now easily calculate and understand the net impact of hiring quality on their organization.
This can be done with a simple equation, as follows:
- Calculate two numbers: Net Hiring Score (as a %) and New Hire Payroll (NHP) – which is the total annualized payroll of the new hires for any given period
- If NHS is non-negative: Net Return on Hiring = 2*NHP x NHS (as a %)
- If NHS is negative: Net Return on Hiring = NHP * NHS (as a %)
Organizations should then compare the net return they are receiving in relation to the amount spent to recruit – i.e. Hiring Budget. A conservative estimate suggests poor employees create a burden equal to their monthly salary, while great employees create a surplus equal to double their monthly salary.
With this metric, you can scrutinize your company’s recruitment process and discover whether it is conducive to Hiring Success.
HOW TO CREATE HIRING SUCCESS IN ANY ORGANIZATION
So, now we can measure Hiring Success. How do we help create it? The intricacies of Hiring Success for your company will depend largely on who you want to hire, and on what scale. However, there are some universal elements:
- A Professional and Engaging Candidate Experience
With demand for qualified candidates outstripping supply in certain key professions, it is more important than ever to attract and keep the best candidates out there. Clear, quick communication, ease of application and a well-defined brand, can all help improve the candidate experience.
- Extremely Collaborative and Engaged Hiring Managers
Through close collaboration, recruiters and hiring managers can share the burden of dealing with multiple applications, and come to better conclusions regarding candidates. Collaboration can also bring expert knowledge and experience from non-HR employees into the process.
- A Team of Highly Productive Recruiters
The most effective Talent Acquisition teams operate more like a sales and marketing function than standard HR departments, with clear processes, good communication, a grasp of data and integrated workflows that will greatly contribute to Hiring Success.
MODERN RECRUITING AND HOW LEGACY SYSTEMS COULD BE HOLDING YOU BACK
It should now be clear that Hiring Success is also critically dependent on a system which supports its key elements.
Unfortunately, most legacy ATS platforms cannot undertake the tasks required. Many are still based off the older notions of simply tracking a candidate through the process. They pay little heed to the concepts developed above. You need a system that doesn’t only work with an outdated paradigm.
So when looking for a new ATS platform, have these four questions in mind:
- Will this solution help find and engage top talent with an amazing candidate experience across all channels?
- Will hiring managers and teams openly embrace and use this solution every day?
- Will recruiters have the pipeline, insights, process, and control they need for their productivity to skyrocket?
- Will this solution easily integrate with my existing / future HRIS and with the dozens of point solutions my recruiters use?
SMARTRECRUITERS: THE HIRING SUCCESS COMPANY
SmartRecruiters’ mission is clear: connect people to jobs at scale.
We do this by providing a Talent Acquisition platform that is custom calibrated to achieving Hiring Success. Corporations can rest assured that with SmartRecruiters they have the partner they need to attract, select, and hire the right talent, on-demand and on-budget.
The core components of the SmartRecruiters offering are:
An Integrated Talent Acquisition Suite
An all-in-one platform that provides the tools you need to find and hire the best talent out there, whether they are actively looking for work, or not.
Our Built-in MarketPlace
All the services a recruiter needs, from job boards to background check vendors, are all pre-integrated into the platform.
An Enterprise Cloud Platform
The SmartRecruiters Talent Acquisition Platform has a modern, flexible, and smart global enterprise-grade technology stack with the capacity for seamless integrations and ease of use on mobile.
Consumer Class User Experience
SmartRecruiters’ platform was developed with ease of user experience as a guiding principle. Its user interface is clean, intuitive and requires no special training to use.
OUR HIRING SUCCESS METHODOLOGY
SmartRecruiters is also dedicated to the long-term support of its customers and has created a system of personalized Hiring Success Audits, Roadmaps and Metric reports to further improve your company’s recruitment process.
TO CONCLUDE
Recruitment is currently going through a revolution with low supply, high demand, and power shifting from employers to potential employees. This increased competition in the hiring marketplace means you can no longer rely on older concepts of recruitment and the software designed to support them.
To get ahead of your competitors and stay at the top of your game, you need to start thinking about Hiring Success today.
