How recruitment business owners should target, measure and reward recruiters
We wanted to get an insight into the key metrics that recruitment managers and business owners felt their consultants should be targeted and measured on.
Being a very sales driven industry, we expected the results to focus predominantly on a recruiter’s level of activity as the key metric for measuring their success, but this was deemed as one of the least important areas of measurement with just 2% of respondents rating it at all.
In fact, the top five key metrics of measurement were all outcome-related metrics which is demonstrative of not only the changing face of the industry as a whole but also on the management styles of recruitment business owners .
I believe that this is such a positive shift from how many recruitment organisations have operated in the past and goes a long way to support the evolution of the industry’s reputation of being professional, valuable and effective as the emphasis shifts from the volume of activity to quality of activity.
As a manager of any sales led business, recruitment or otherwise, the easiest (and I would say possibly laziest) way to manage employees is to lay down a rigid set of easily measured activity-based key performance indicators centred around what ‘we used to do’, push consultants into mirroring those activities and then measuring their delivery against each KPI. It is visual, simple and easy to administer.
And of course, activity creates results and the more activity you do in recruitment, the more results you will get.
However, this way of working can be very short term, stifling innovation and creative recruiting and can create a false economy with regards to the internal workings of a recruitment business.
- Consultants can be praised and in effect, rewarded on being busy but not necessarily on being smart and effective.
- Consultants can easily fabricate their supposed effectiveness if they feel they need to because they are underperforming.
- Consultants can damage the company’s brand reputation by putting their focus on doing the numbers and hitting their activity KPIs, almost ignoring the results these activities create.
- Consultants can become a significant cost centre if managers pay salaries (and in some cases, bonuses) based on activity that doesn’t necessarily lead to tangible, bottom line results.
As mentioned before, activity is important but not in isolation and not as the main metric of success.
- Changing a consultant’s focus, especially when they are new to the business and/or recruitment, to results-based indicators forces them to think about ways to achieve those outcomes, which can bring new and better ways of working to the recruitment process.
- It also allows consultants the opportunity to treat their desk as if it was their business, focusing on efficiency and profitability, which in turn leads to higher margin business, greater levels of client exclusivity and increased quality in their activity.
- It helps develop the external brand reputation as one that delivers results that make a tangible difference as opposed to potentially one that makes a lot of busy noise with hit and miss results.
- And it breeds a culture of interdependent, commercially mature consultants who will not only be more engaged but will also be dependable and far more effective in the long term.
The task of a recruitment business owner/manager is to ensure that consultants understand the relationship between profitability, conversion ratios, and activity.
Managers target and measure consultants on profitability, together with the consultant they monitor conversion ratios and the consultants should review their activity to find incremental improvements.
The manager should share examples of best practice activity, train / develop the skills and attitudes of the consultants, give them access to live data around their conversion ratios and remove any excuse for the consultants not to be able to do their job.
The consultant runs their business (aka their desk) and the manager focuses on their engagement to ensure they are driven to produce more outcomes.
About The Recruitment Network
This blog article was provided by The Recruitment Network.
The Recruitment Network is the ultimate support club for recruitment business leaders. We give our members an unparalleled level of support, guidance and tools to help them transform their recruitment businesses with the ultimate objective of improving business performance, increasing business efficiency and significantly growing profitability and shareholder value.