Understanding the strategic mindset of your CEO can take the success of your talent acquisition initiatives to another level.
There is one thing in particular that’s most important for reaching your goals—reporting the right metrics to your CEO.
According to the Deloitte 2013 report, Talent Analytics: From Small Data to Big Data, 75% of HR leaders acknowledge analytics are important to the success of their organizations. But 51% have no formal analytics plans in place. 40% say they don’t have the resources to discover sound talent analytics. Asked to rate their own workforce analytics skills, another 56% said poor.
If the metrics reported to your CEO and other executives aren’t resulting in positive actions, than it could be time to shift your focus. CEOs are hyper focused on an organization’s strategic goals, and your reports to him or her should align with these goals.
Your metrics should cover strategic goals like increasing revenue, productivity, innovation, and anything else that is particularly important to your CEO at the time. Tactical metrics that focus on costs are very useful internally, but might not be the best to bring to your leadership.
These five metrics will help you align with your leadership goals, and move your talent acquisition initiatives forward.
New Hires: Quality of Hire Improvement
Quality of hire is a well-known metric that originates in recruiting. This makes sense—hiring a volume of new employees means that with their additional skills, they will raise the productivity and quality of the overall team.
But tracking this progress over time is important, as it links each new hire to continuous growth, as opposed to keeping it a static metric. While this sounds complicated, it doesn’t have to be—measure the process instead of measuring the quality of all new hires.
You can start by focusing on the jobs that are traditionally already measured with numbers—sales, collections, call center reps and others. Look at the percentage for which their performance has improved, and then complement that measurement with new-hire retention rates and diverse hires.
Metric: Quality of Hire (%) = (Job Performance + Ramp-up Time + Engagement + Cultural Fit)/N
(All scored out of 100, N = number of indicators)
These numbers can help you work with your CEO to estimate total revenue increase as a result of better performing new hires.
Critical Roles: Performance Turnover
When you lose a top performer, it can be expensive. Measuring the percentage of employees in these critical roles who voluntarily quit each month over the whole year to get some visibility into who’s quitting and why.
Be sure to weigh your turnover rate by their performance, because performance is key in coming to a conclusion about how much turnover is actually costing you.
Metric: (Turnover Rate = # of Separations / Avg. # of Employees x 100) x (performance)
You can do this by putting a weight (this could be the percentage that the employee performed above average) on turnover of your top performers. This makes it count more than low-performer turnover.
Vacancy Days: Dollars of Revenue Lost
When a role is sitting empty, you’re losing some amount of revenue, and certainly an amount of productivity. This can be a result of slow recruiting, which can happen for a variety of reasons.
The highest impact of vacancy days happens in those critical roles, or roles where you often place your top performers. Because of this, you will also focus on those top-performers here.
Metric: Average yearly revenue by role/ # of working days
Calculate how much you’re losing everyday by dividing the average total yearly revenue generated by an employee in a specific role by the number of working days. Report the decrease in vacancy days and the dollar reduction in the amount of lost revenue.
New Hires: Failure Rate
It really stinks when a new hire has to be terminated in the first six months in their new role. You have to re-hire for the position—which is costly—and added to that cost is the damage the bad hire probably created.
You calculate this metric based on the percentage of new hires who were terminated 6-12 months after their start date.
Not only do you need to know how many people are leaving their new roles, but you need to know why—conduct a failure analysis after every new hire leaves to see what went wrong.
Metric: # of new employees hired in 6 months / # of employees terminated in 6 months
Working with your CFO to calculate a dollar amount lost is a good idea. Consider adding to your failed hiring metric the following—those who don’t show up on the first day, those that fail new hire training, those who quit within six months, and those who must be put on performance management.
Most Important: Organization “Hot Topics”
So far, we’ve only talked about fixed metrics. But there are probably some report metrics covering one or more hot topics in your organization at the moment.
These are the metrics that are keeping your CEO up at night, and are the ones that should be treated with the most care. Some of these high impact areas include increasing innovation, diversity in customer impact positions, onboarding, key skills shortages, and developing leaders.
The bottom line—you should be talking about more than just costs when you’re reporting key metrics to your CEO. In order to move all of your strategic goals forward this year, you’ll need to set yourself up for success by communicating data that truly impacts your organization.
Key data isn’t only about your hires, it’s also about how you got them. Don’t forget to discuss the data that might be your biggest costs to date—your agency relationships.
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