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Should we change our thinking around measuring performance beyond KPIs?

November 13, 2018

Key Performance Indicators (KPIs) have been around in one form or another since the beginning of business. We ask four experts their thoughts on KPIs and you may be surprised by their answers.

 

KPIs have long been accepted as part of the job in recruitment, after all it’s critical to measure the cost of each placement, the number of qualified candidates per placement, days to offer, retention and of course billings.

 

Or is it? At the recent RCSA conference in Noosa there was a lot of talk about how useful and relevant these historical measures of success are today. Some in the sector believe they are as useful as ever citing the adage: what you don’t measure you can’t manage. Others argued that KPIs are still relevant, but it is imperative to change what is currently being quantified by KPIs. Others still believe they are antiquated and have no place in the workplace.

 

We spoke with four leading experts in the recruitment and HR space to get their take on KPIs and their answers may well surprise you.

 

GREG SAVAGE

Principal at The Savage Truth

 

It is pretty well accepted that most recruiters hate KPIs and I would argue they can, in fact, do more harm than good when expectations are unclear or KPIs are unrealistic.

 

That said, I still firmly believe KPIs are an essential dashboard to a well-functioning recruitment agency. KPIs are frequently used because old-school managers are bereft of new ideas to increase productivity so instead persist with the same destructive cycle of pain and futility that are KPIs.

 

If KPIs are to work, there needs to be clear buy-in from the consultant, they need to be managed and measured by management and they need to be measuring and quantifying different metrics to what is being measured now.

 

I do believe there is a place for KPIs and I am a firm believer that you can’t manage what you don’t measure, but if KPIs are not developed smartly, they can become a dysfunctional aspect of the business. You can’t motivate by insisting on draconian KPIs, which cannot realistically be achieved.

 

I believe focusing on the activities which have been proven to lead to success, where the energy is centred very much on the outcome, is a stronger motivator than setting unclear or unrealistic KPIs.

 

I also believe establishing a clear work plan is effective at establishing consultant buy-in and I strongly recommend a classic backwards plan where targets are clear and the pathway to achieve this has been established. Instead of broad KPIs, I suggest recruitment consultancies focus on measuring and quantifying three key areas:

• Catchment - reach into the client and candidate communities

• Conversation - monitoring how frequently potential client and candidates are contacted and starting meaningful conversations on social media

• Conversion - where catchment and conversation is converted into a client or candidate

 

I believe KPIs are needed to some extent within recruitment, but I also believe we need to re-think what we are measuring and why. Is it driving the outcomes we want or is it a legacy of days gone by?

 

GEORGIA HENRY

CEO & Principal Consultant at Henry Reed

 

The concept of KPIs and having a yardstick by which to measure success is still relevant, but traditional KPIs or using KPIs in isolation are no longer effective for organisations who value innovation, agility and ethical work practices.

 

When KPIs are intertwined with the values and culture of an organisation they become a powerful way to drive improved performance.

 

Recently, I was working with a client who used KPIs to define every aspect of their employees’ work activities. The KPIs were prescriptive and didn’t allow employees to contribute their expertise or vary the pathway to success. As a result, there was poor engagement, high employee turnover, and KPIs were rarely achieved.