How to Measure the ROI and Effectiveness of Your Search Firm Partners

How to Measure the ROI and Effectiveness of Your Search Firm Partners

While most internal recruitment leaders utilize various performance metrics to measure success, I don’t find the same type of rigor when measuring their Search Firm’s performance.

Many organizations stack rank and select vendors based on cost of service, and while I don’t dismiss trying to be fiscally responsible, I don’t see why you wouldn’t measure your Search Firms like you do your internal recruitment team. Utilizing a balanced scorecard based on key dimensions is important to your internal customers.

Key Performance Dimensions:

  • Quality of Hire:
    • This can be measured by traditional metrics like 90-day, 1st year retention and overall length of tenure.
    • In addition, you can use your annual performance appraisal process to measure how well they are doing on the job.
  • Speed/Responsiveness:
    • Key traditional measures could include Time to Fill, Time to Start.
    • In addition, you might want to look at Time to Source and Present original slate of three candidates and Ability to meet key Service Level Agreements (presenting original slate of candidates, TTF, TTS, etc.)
  • Process Efficiency:
    • Time is the most precious commodity we have and reviewing resumes and interviewing unqualified candidates is not a good use of your time. Key metrics to measure efficiency include: % of candidates interviewed who were submitted for consideration, % of candidates extended offers who were interviewed, and % of candidates hired who were extended offers.
  • Customer Satisfaction:
    • Are you and your internal customers raving fans of their service? Some key dimensions to consider with respect to meeting and exceeding customer satisfaction include:
      • Understanding – Does the Search Firm understand your need? Do they understand your business and provide quality candidates?
      • Communication – Do they provide regular, consistent communication? Do they set a Communication Service Level Agreement, and do they meet it?
      • Quality – Are the candidates they are submitting high quality? Are the individuals you are hiring through your Search Firm improving your organization?
      • Overall Satisfaction – Do you enjoy working with your Search Firm? Are you proud of their performance? Would you work with them again?
  • Cost/Return on Investment:
    • Are the positions they are filling helping to increase revenue, decrease costs and/or improving the organization’s performance?
    • Some positions are very easy to quantify ROI
      • Revenue producing occupations like Sales, Doctors, etc.
      • Filling a position that is currently being covered by Contract Labor
    • Other impacts on ROI include:
      • Hiring leaders that reduce turnover (and costs associated with it)
      • Delivering projects on time and on budget
      • Improving customer satisfaction which leads to new sales and/or client retention

On paper, the lowest cost provider might be costing you more than you think when you evaluate their overall performance.

If you are interested in learning more about measuring the success of your vendors, don’t hesitate to contact us for more information.

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