Skip to the main content.

2 min read

3 Ways Your Recruiting Agency Use Effects Your People Analytics

The term people analytics is hard to define, as it’s actually a concept that’s been around for a while. It was only after we gained the ability to crunch massive amounts of data that the term became mainstream.

VoloMetrix does a good job of defining the concept on a high level:

People Analytics is the use of people-related data to optimize business outcomes (and solve business problems) at the individual, team or organizational levels.

People analytics are used to optimize the most important resource an organization has – its talent. Executives are interested in a variety of metrics, but some of the most popular are your cost of hire, performance of various acquisition channels, and the evaluation of your recruiting team.

If you’re filling managerial positions, you may be sending some jobs to search. Keep in mind that the performance of your direct hire recruiting agencies will directly affect your people analytics team, and the outcome of the metrics mentioned.

The Expense: Recruiting Agency Use Increases Cost of Hire (But it Might be for the Better)


In a recent blog post, we mentioned that direct hire recruiting agency fees are 10 times the cost of a referral fee – but the quality of hire might be better.

Last year, a study by Bersin by Deloitte showed that a shrinking labor marketing pushed organizations to raise their acquisition budget by 7 percent. On average, talent teams were spending about $4,000 on open positions.

This numbers raises dramatically when a direct hire recruiting agency is used, as data shows the fee is 21.3 percent of the first year’s salary on average. But this may be worth it for a better quality of hire – something agencies have both the bandwidth and the expertise to produce for organizations.

The most important metric that executives want to see is the recruiting ROI. Quality of hire is directly related to your recruiting team’s performance – keeping an eye on the performance of your direct hire recruiting agencies will allow you to keep this metric under control, and possibly improve it.

Acquisition Channel: Through Which Channel Did Your Best Hires Come From?


Recruiting teams tend to spend a lot of time analyzing recruiting channels, and it’s no secret that the employee referral is the favorite acquisition channel of recruiting leaders. When it comes to managerial positions and executives, this isn’t always the case.

Agencies come into play when the search for top talent begins. It’s important to remember that executives and managers often have the largest impact on an organization – meaning their quality of hire will affect your recruiting ROI in a larger way.

If you’re not paying attention to your agency use as an impactful acquisition channel, you’re missing out on important recruiting insights. They directly affect your acquisition channel metrics, and should be measured relative to the impact each hire has on your organization.

Evaluating Your Recruiting Team: Tracking Your People Analytics – Who, What, Why and How


In addition to tracking hires, recruiting teams also track the effectiveness of their internal recruiters and their human resources (HR) teams as a whole. This includes the methods of individual recruiters, their effectiveness and their impact based on the quality of their hires.

Some recruiters may find more success leaning on employee referrals, while others may find better candidates through their social media networks. In some cases, recruiters like to send jobs to search to tap into a wider, more niche candidate pool.

In the last case, the success of your agencies will have a direct effect on the metrics you’re using to track your internal recruiting team. Understand the whole picture for each open position that was sent to search – the ‘who, what, when, why and how’ – in order to paint the most realistic picture of the effectiveness of your recruiting team.

For more information on how your direct hire recruiting agency use can affect your overall talent acquisition strategy, download our Recruiting Leader’s Guide to Direct Hire Agency Planning.


Quick Hires, Quality Talent: 6 Ways to Reduce Time to Fill

Quick Hires, Quality Talent: 6 Ways to Reduce Time to Fill

I'm sure this isn't a surprise—filling open positions quickly is super important to your organization, regardless of size or industry. After all, a...

Read More
Top 5 Terms for Every Recruiting Agency Contract

Top 5 Terms for Every Recruiting Agency Contract

Signing a contract is a big deal—especially when you're reviewing or signing on behalf of your organization.

Read More
Majority of U.S. Workers Considering New Jobs Due to Inflation

Majority of U.S. Workers Considering New Jobs Due to Inflation

U.S. jobless claims haven’t been this low since September 1968 – for the week ending April 2, initial jobless claims fell to 166,000 (a decrease of...

Read More