Articles

Determining recruitment ROI to improve hiring strategy

The Covid-19 pandemic is having a dramatic effect on the way we work. With working from home becoming the ‘new normal’, employers are getting to grips with managing remote workers and maintaining productivity in the face of adversity. With many workplaces still shuttered and social distancing still prevalent, firms are resorting to remote hiring and video interviews. It’s often said that necessity is the mother of invention, and so it has proven to be the case during the current pandemic.

Given the economic uncertainty with which we’re all now faced, it’s all the more important to get bang for your buck when it comes to recruitment. This is why robust return on investment (ROI) measurements are essential. None of us know when, or whether, things will return back to ‘normal’. So, in the meantime, while we all hunker down and try to make the best of the situation, we have to take steps to ensure that every penny is spent wisely. This applies as much to businesses as it does to individual consumers.

In order to make the most efficient and effective use of your recruitment budget, you need to ensure you set yourself clear and attainable targets, and that you then reach them. Objective and robust targets are crucial for recruitment ROI. They allow firms to keep recruiting top talent without blowing a hole in their finances. Here, we’ll provide some top tips to help you use recruitment ROI to drive your overall hiring strategy. Doing so will assist you in boosting efficiency without sacrificing on productivity and performance.

Continually assess and review

The first thing you must do to get the most out of recruitment ROI is to undertake a thorough assessment of where your business is at, and where it needs to go. The pillar of any successful hiring strategy is a robust understanding of where you need to recruit, and how this fits in with your wider business objectives. 

Remember the point we’ve just touched on: in the current situation, with so much economic uncertainty around, it’s never been more important to invest wisely and astutely. That applies to all aspects of your business. Once you’ve settled on a hiring strategy, you need to use the right recruitment metrics to review it continually.

So, if a firm selling call centre software or omnichannel retail software is looking to recruit, for example, you’ll need to be aware of what such clients are likely to need and how this will affect their business goals. 

The turbulent nature of the current business environment means that this will inevitably be harder to predict than in normal conditions. You must be realistic about what you can hope to achieve in the circumstances which you face. Review your progress with regard to meeting your existing targets: how close have you come to achieving them? How conducive are wider business conditions to help you meet them? This will have a major bearing on your recruitment.

Recruitment methods

Albert Einstein is often said to have remarked that the definition of insanity was doing the same thing, over and over again, and expecting a different result. In fact, Einstein probably didn’t say that, but whoever did was on to something. If you find that a particular approach is hurting rather than helping your recruitment ROI, it’s time to move on and try something new. 

The way we search for work, as well as the way we do it, has changed a lot within the space of just a few years. Your recruitment methods need to take this into account. There’s been a lot of hype about how technologies, including AI, are in the process of transforming the modern workplace. With this in mind, wouldn’t you expect technology to also change the way people go about seeking work, as well? This is why you need to avoid wasting time on leads that go nowhere.

Work out how many hours your recruitment methods are taking from start to finish. Time is money, after all. Calculate how much time is going into everything from writing job descriptions to pursuing leads, screening CVs, and undertaking interviews. Calculate these against your hourly rate of pay to get an idea of how much money all this is costing you. Then you need to think about it in terms of manpower that could be deployed on other tasks.

Albert Einstein is often said to have remarked that the definition of insanity was doing the same thing, over and over again, and expecting a different result. In fact, Einstein probably didn’t say that, but whoever did was on to something. If you find that a particular approach is hurting rather than helping your recruitment ROI, it’s time to move on and try something new.

Staff turnover costs

Any employer worth its salt understands the value of hanging on to top talent once recruited and settled in. Staff turnover can be a hugely expensive business, forcing you to recruit, train, and integrate new employees – not all of whom are as good a fit as those they’ve replaced,  at considerable expense. If a business finds that it is struggling to hold on to experienced, talented, and knowledgeable members of its team, this could well be indicative of a very serious problem.

So, when you’re determining recruitment ROI, you also need to take these levels of staff turnover into consideration. Any recruitment ROI needs to incorporate the costs of training and recruitment, as well as the inevitable time it takes for new recruits to reach their full productivity. 

Retaining talent for the long term is the foundation of sustainable growth. Providing fulfilling opportunities, and creating a workplace that people genuinely enjoy being a part of, will do much to assist businesses in this important objective. High levels of staff turnover mean you’ll need to spend more on recruitment and training, not to mention losing the value that a talented employee adds to your firm. These things, thus, adversely affect ROI.

Look at how existing colleagues are performing and calculate how much in sales and revenue you’d expect from someone of a similar level of experience to your new recruits. This will help you work out a rough monetary value for how much they’re likely to bring into the business. Then take into account their personality traits – as far as you can ascertain them – and how far they are likely to be a cultural fit. Admittedly this is difficult to translate into monetary figures, but as it’ll affect turnover rates, it will have a real impact on your ROI.

Onboarding

Following on from our previous point, any recruitment ROI needs to take into consideration how new recruits to the team are likely to perform. Even when you’re recruiting someone with exceptional experience in the relevant field, the chances are that it’ll take some time for them to reach their full capacity in their new role. You, therefore, need to look at the performance of existing recruits to get a rough idea of what’s to be expected from any new additions to the team in terms of productivity.

Obviously, this is not an exact science as no two employees are precisely the same. Nevertheless, there are some key questions you’ll need to factor into the equation. For example, how are they likely to fit into the team personality-wise? How will their previous experience help them in getting to grips with the requirements of the new job? And how likely are they to stick around for the long term? How will their addition to the team enhance the customer experience? Research into current online store trends or patterns within your own niche might provide some guidance here.

You can use the interview stage to ask questions around these topics, thereby gleaning useful insights, as well as looking at how previous recruits have adapted along these lines. Direct onboarding costs (i.e. training and resources) are themselves fairly easy to calculate, but where it gets complicated is its effect on overall productivity – both that of the new staff member and that of their more senior colleagues who have to take time out to train and assist them.

Give recruiters the support they need

Whatever your business specializes in, you must prioritize providing recruitment teams with the tools and resources they need. They must be provided with the information they require in order to determine whether your hiring strategy is delivering the goods; this is essential for delivering real recruitment ROI. Recruiters who have the right data at their disposal can help to drastically improve efficiency in the recruitment and hiring process. They can cut out unnecessary waste and target your recruitment budget where it’s most likely to be effective. 

Data allows recruiters to concentrate their efforts on those sourcing channels which are most promising. At a time when business budgets are likely to come under sustained strain, this could make a huge difference to firms looking to adapt themselves to the changing environment. 

In determining recruitment ROI, you must ensure that recruiters’ resources are a key consideration. This could have substantial long-term impacts, and may potentially even be the ultimate difference between success and failure.

Sam O’Brien is the Senior Website Optimisation & User Experience Manager for EMEA at RingCentral, a Global VoIP, video conferencing and call centre software provider. You can connect with him on LinkedIn.

Maybe you'd like these too

Talent acquisition

Transitioning to remote work

By Mindaugas Skurvydas

Talent acquisition

8 tips on building a strong remote working culture

By Dave Burrell

Talent acquisition

Behavioral questions you should be asking

By Brendan McConnell