For years, talent acquisition leaders have harnessed data analytics to measure the success of their recruitment efforts. By tracking recruiting metrics, they gained a deeper understanding of the time and money spent by their teams on filling jobs and the ability of their recruiters to source the right candidates.
But while recruitment KPIs (key performance indicators) have long been considered valuable tools for recruiting departments, they rarely reached the desk of the CEO. That’s changing now.
Fierce competition for talent has thrust talent acquisition to the top of corporate agendas. When asked about the biggest challenges facing their organizations, 57% of global CEOs in a Fortune/Deloitte survey cited attracting and recruiting talent. As a result, talent leaders are increasingly being asked to share recruiting metrics with the C-suite.
“We’re in a highly competitive labor market,” says Katie Sittler, people analytics manager at LinkedIn. “Not having the right talent at the right time presents a risk to the bottom line.”
With the focus on talent acquisition intensifying, the stakes are getting higher for recruiting leaders who will be engaging with the C-suite in ways they may not have in the past.
To make the most of their meetings with senior execs, talent leaders should think carefully about which metrics they will share and how they will be presented. While there are many reasonable options, focus on metrics that are directly related to your company’s strategic objectives, advises John Vlastelica, CEO of training and consulting firm Recruiting Toolbox, which trains talent leaders on executive influence.
“You want to be framing this as part of a larger business story,” John says. “You want to connect back to business outcomes and not sound like an HR person who lives in an insular world.”
If needed, recruiting leaders should also be prepared to offer insights on why their company might be failing to hit its recruitment targets and what actions companies should take to secure better results.
“I want you to imagine the executives saying ‘So what? Now what?’” John says. “‘Why are you telling me this? Why does it matter? How do we make these metrics actionable?’”
Are you ready to start sharing recruiting metrics with your CEO? Consider putting the following KPIs on your list.
1. Offer acceptance volume
What it is:
The number of people who’ve accepted an offer to join an organization versus the hiring plan within a set timeframe.
Strategic impact:
This data point will give the executive team a broad sense of whether a company is meeting its hiring targets.
“Offer acceptance volume against plan paints the larger picture” for CEOs, Katie says. When acceptances dip below targets, Katie’s team digs into funnel metrics to see where problems may be cropping up.
Within this category, talent acquisition leaders might choose to provide more granular information such as the number of accepted offers that are coming from within the company vs. how many are coming from external recruits. This can be a valuable metric for CEOs who are focused on increasing their company’s headcount.
2. Offer acceptance rate
What it is:
The percentage of candidates who’ve accepted offers relative to the number of candidates to whom an offer was extended.
Strategic impact:
Senior executives need to know whether the talent team’s recruitment efforts are yielding positive results. If employers are investing time and money on engaging with candidates but are failing to close the deal, that’s a concern for the CEO.
There are any number of reasons why an employer might have a low offer acceptance rate relative to its peers. It could mean the company needs to boost compensation and benefits or improve its culture. Recruiters might be falling short in assessing candidates’ priorities or they might be taking too long to extend offers.
As talent leaders investigate the root of the problems, it’s helpful to compare current offer acceptance rates to past performance. “Historical benchmarks,” Katie says, “help you assess whether anything has changed that might be keeping candidates from joining your company.” And when the acceptance rate falls below historical trends, her team will look at the reasons behind the offer declines to diagnose potential issues.
3. Time to fill
What it is:
A measure of the time it takes to fill a position from the day a job is posted to the day an offer is accepted.
Strategic impact:
Understanding how long it typically takes to hire isn’t just important for the talent team, it’s key to a company’s strategic planning. The success of a product launch or a company’s ability to meet sales targets is often contingent on an employer’s ability to secure talent.
By looking at historical time-to-fill averages senior executives can better forecast how long it will take to fill roles and complete projects. Knowing these, they can adjust their plans accordingly.
CEOs generally don’t see a lot of value in broad, across-all-roles-in-the-company time-to-fill numbers. Instead, John says, they want to see averages versus the plan for each major job category and for critical roles, like engineering and sales. Company-wide averages are typically not very helpful to CEOs or talent acquisition leaders. By slicing the data a bit more, however, you can better use time-to-fill metrics to diagnose root issues, fix blockers (like misalignment), and give executives what they typically want most: speed.
4. Diversity representation of hires
What it is:
A measure of how hiring numbers are contributing to a company’s commitments to workforce diversity.
Strategic impact:
It’s no secret that having a diverse workforce has become an increasingly important objective for CEOs. As pressure from investors and customers has mounted in recent years, companies around the world have publicly pledged to improve the representation of underrepresented groups. And there’s a growing recognition that diverse workforces help companies innovate and create superior products.
As a result, for a growing number of companies, tracking the demographics of hires and reporting progress to the C-suite is critical.
“This is a metric senior executives need to see,” Katie says. “Is this telling us anything about our hiring practices and processes, including trends over time? Is this an area that needs further attention to ensure our hiring practices are inclusive?”
5. Quality of hire
What it is:
A measure of the value that new employees bring to the company.
Strategic impact:
Of all the recruiting KPIs that talent leaders might choose to share with the C-suite, perhaps the most important is quality of hire. Hiring the right talent helps companies grow their revenues, while replacing employees that prove to be the wrong fit can be costly.
“The CEO,” Katie says, “needs to know if the investments that they’re making in hiring external talent is contributing positively to the company.”
While the quality-of-hire metric is critical, it’s also notoriously difficult to track. The definition of a “quality hire” is highly subjective, and factors outside the control of new employees can have an impact on their performance.
LinkedIn has a created a four-question performance evaluation that the company asks managers to fill out six months after new employees start their jobs. The goal is to arrive at a uniform assessment of new hires across job functions. Questions in the survey include: “Does the employee contribute to the team?” and “Would you rehire?”
But reporting quality-of-hire metrics to the CEO is just the starting point. Recruiting leaders should be prepared to explain why the company might be struggling to hire quality candidates and suggest strategies to help reverse the trend.
“You need to dive in,” Katie says. “It could be that you’re assessing the wrong factors in the hiring process, not defining the role or talent need correctly before kicking off recruiting efforts. Or maybe you’re not onboarding talent effectively so that they can ramp up within their role and team.”
John adds: “Be careful not to let the C-suite use proxies like candidate pedigree — prior schools or companies — to measure quality. That’s not a good proxy for quality and can reinforce a very narrow aperture, which hurts diversity.”
Final thoughts
As more CEOs seek to gain an understanding of recruitment trends, there are both opportunities and risks for recruiting leaders. Talent acquisition executives now have more power than ever before to become strategic advisors to the C-suite. They can ask senior execs for additional resources to empower their recruitment teams. And they can raise their own profiles within the organization.
But talent leaders who haven’t thought clearly about which recruiting metrics are relevant and how they help the CEO advance company goals could suffer the consequences.
“These are pretty high stakes conversations for your career,” John says. “Every time you’re in that room, you’re auditioning for a bigger job. If you do well, it’s incredible. If you perform poorly, you’ll probably get squeezed out and it will be your boss presenting the next time.”
Editor’s note: This blog post drew upon insights developed by LinkedIn people analytics team members Shubhika Dhawan, Amanda Ruiz, Maia Simonovsky, and Katie Sittler.
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Topics: Talent analytics Recruiting strategy Talent leadership
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