The State of Recruiting

The State of In-House Recruiting

Ron MesterPresident & CEO ERE Media, Inc.

Topics for this morning

I. About our researchII. A Few Findings to Provide ContextIII. The Performance ImperativeIV. Priorities for Improving Performance

Excellent sample, with 1,353 “in house” respondents

• Respondents = readers from ERE, TLNT, and SourceCon (including some of you)– Mostly recruiters and HR– Also hiring managers and C-level execs

• Surveys completed the week of March 24, 2014

• Key demographics captured:– Company Role: recruiting, HR, hiring manager, C-level exec– Recruiting Role: leader, manager, recruiter, sourcer– Industry– Company Size (# of employees)– Location

Responding recruiters are experienced

Recruiting Leaders12 years

Recruiters

9 years

Recruiting Managers

11 years

Estimates using survey data

I. About our researchII. A Few Findings to Provide Context

a. About the recruiting departmentb. About the recruiting professionc. About recruiters

III. The Performance ImperativeIV. Priorities for Improving Performance

‘Talent Acquisition’ or ‘Recruiting’?

58% 25% 60% 24%

53% 26%

47% 26%

54% 15%

‘Talent Acquisition’ ‘Recruiting’

Recruiting leaders

Hiring managers

C Level

Recruiting team members

‘Recruiting’‘Talent Acquisition’

Most of the rest:

“I don’t care”

Let me start over…

Welcome to the

ERE Talent Acquisition Conference

Recruiting team size scales with company size

Up to 999

1,000 – 4,999

5,000 – 9,999

10,000 – 49,999

50,000+

Recruiters per 1,000 employees

Size of company Average team size

Estimates using survey data

Recruiting Leaders are comfortable reporting to HR

10% 11%

Currently reporting to Want to report to

CEO / COO

Key parties are aligned on how recruiting performance should be measured

Rank Metric Recruitment leaders

Others in team

HR Hiring Managers

C Level

1 Quality of Hire 4.5 4.3 4.6 4.7 4.62 HM satisfaction 4.3 4.4 4.3 4.3 4.23 Candidate satisfaction 4.2 4.2 4.2 4.3 4.04 Applicant quality 3.8 3.9 4.1 4.4 4.25 Time to fill 3.7 3.6 3.8 3.7 3.96 Offer acceptance rate 3.6 3.6 3.7 3.7 3.7

=7 Reqs per recruiter 3.5 3.3 3.0 2.6 2.5=7 Interview/hire rate 3.5 3.5 3.4 3.8 3.79 Source of hire 3.4 3.3 3.2 3.1 2.8

10 Cost per hire 3.2 3.5 3.6 3.4 3.511 Diversity of hire 3.2 3.3 3.4 3.3 3.1

a. About the recruiting department

b. About the recruiting professionc. About recruiters

III. The Performance ImperativeIV. Priorities for Improving Performance

The growth of in-house recruiting will likely be 3-5% by Dec 2015

Size of team Forecast growth in headcount

Small (2-5) 13%Medium (6-19) 2%Large (20-49) 3%Very Large (50+) 3%All teams 3-5%

• 53% forecast recruiting team will grow (nearly a third say by 10% or more)

• 40% forecast flat• 8% forecast team will shrink

Would you recommend corporate recruiting to a friend or colleague?

50%42%

44% 44%

14%11%

Net Promoter Score

a. About the recruiting departmentb. About the recruiting profession

c. About recruitersIII. The Performance ImperativeIV. Priorities for Improving Performance

Recruiters are largely unsatisfied with their current job

Others in the recruitment

8% JSS

Recruitment Leaders24% JSS

Recruiters

-4% JSS

Sourcers:17% JSS

Managers:17% JSS*

* ”Job satisfaction score” (JSS) calculated like “Net Promoter” score: % of 9-10s less % of 1-6s

Recruiting leaders of med/large teams are likely to be “directors”

CURRENT TITLE

All Recruiting Leaders

Large (20+)

Medium (6-19)

Small (2-5) Solo

Chief 2% 0% 0% 4% 0%

EVP/SVP/VP 6% 15% 11% 1% 0%

Director 39% 58% 49% 33% 16%

Manager 36% 12% 31% 49% 40%

Lead/Supervisor

12% 12% 7% 13% 16%

Other 6% 3% 2% 0% 28%

Size of recruiting leader’s team

What keeps leaders and recruiters awake at night?

Candidate experience

Quality of hire

Workload

Workforce planning

Finding cultural matches

Ability to attract candidates

Hiring manager interactions

Recruiting team capability

Recruiting tools/process

Candidate / Skills availability

0% 5% 10% 15% 20% 25% 30% 35% 40%

LeadersRecruiters

% of respondents who commented and mentioned this issue

A simple, yet critical imperative

• Why?o Recruiting departments aren’t performing well

enough right nowo Recruiting is about to get harder

Improve performance noticeably, and soon!

The recruiting department’s report card is nothing to write home about

Grade your recruitment department performance

Recruitment Leaders B

Other team members B

C Level B-Hiring

Compared to last year, open jobs are as hard or harder to fill

Hiring managers

C Level

Rest of recruitment team

Recruitment leaders

0% 20% 40% 60% 80% 100%

40%Easier Same Harder

And many anticipate that filling jobs next year will be even harder

Hiring managers

C Level

Rest of recruitment team

Recruitment leaders

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

In particular, larger companies anticipate that filling jobs will be harder in 2015

Small (100-999)

Medium (1,000-4,999)

Large (5,000-49,000)

Very large (50,000+)

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Virtually every industry forecasts that jobs will be harder to fill next year

Business Services

Gov't/Educ/NFP

Software/IT/Telco

Health/Pharma

Financial Services

Retail

transportation

Manufacturing

Prof Services

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Easier Same Harder

Priorities for improving recruiting performance

ALIGNMENT INTERNAL PERFORMANCE INFLUENCE

Metrics

Workforce Plans Approach to the Work

Internal Team

Reporting Relationship

Talent Advisor

a. Alignment - METRICSb. Internal Performancec. Influence

There is reasonable alignment on what recruiting metrics SHOULD be

Rank Metric Recruiting leaders

Others in team

HR Hiring Managers

C Level

1 Quality of Hire 4.5 4.3 4.6 4.7 4.62 HM satisfaction 4.3 4.4 4.3 4.3 4.23 Candidate satisfaction 4.2 4.2 4.2 4.3 4.04 Applicant quality 3.8 3.9 4.1 4.4 4.25 Time to fill 3.7 3.6 3.8 3.7 3.96 Offer acceptance rate 3.6 3.6 3.7 3.7 3.7

=7 Reqs per recruiter 3.5 3.3 3.0 2.6 2.5=7 Interview/hire rate 3.5 3.5 3.4 3.8 3.79 Source of hire 3.4 3.3 3.2 3.1 2.8

10 Cost per hire 3.2 3.5 3.6 3.4 3.511 Diversity of hire 3.2 3.3 3.4 3.3 3.1

But recruiting leaders perceive some LACK of alignment in ACTUAL metrics

Metric Recruiting leaders

Their boss Hiring managers

C Level

Quality of Hire 4.5 3.9 4.1 3.8HM satisfaction 4.3 3.9 4.3 3.4Candidate satisfaction 4.0 3.3 3.0 2.8Applicant quality 4.2 3.5 3.8 3.1Time to fill 4.0 3.4 4.0 3.2Offer acceptance rate 3.7 2.6 3.9 2.5Reqs per recruiter 4.0 2.7 2.0 1.9Interview/hire rate 3.3 2.5 2.5 1.9Source of hire 4.1 2.9 2.2 2.2Cost per hire 3.3 3.1 1.9 2.8Diversity of hire 3.5 3.1 2.4 2.7

Recruiting leaders’ perception of:

Recruiting teams also perceive a LACK of alignment

Metric Recruiting team (other than leader)

Their boss Hiring managers

C Level

Quality of Hire 4.4 4.0 4.4 4.0HM satisfaction 4.4 3.8 4.5 3.5Candidate satisfaction 4.3 3.7 3.1 3.1Applicant quality 4.3 3.7 4.1 3.3Time to fill 3.9 3.8 3.9 3.5Offer acceptance rate 3.6 3.3 3.2 2.7Reqs per recruiter 3.7 3.5 1.9 2.1Interview/hire rate 3.3 2.9 2.6 2.1Source of hire 3.8 3.3 2.1 2.3Cost per hire 3.0 3.4 2.3 3.4Diversity of hire 3.6 3.4 2.6 3.4

Rest of the teams’ perception of:

a. Alignment – WORKFORCE PLANSb. Internal Performancec. Influence

Although workforce planning helps to align hiring intentions and priorities…

Rank Item Net Encouraged or discouraged

1 Talent forecasting ability -46%

• 21% ‘never/rarely’ do workforce planning

• Worst offending industries:– Professional Services (33% ‘never/rarely’ do)– Software/tech/telecoms (29%)– Retail (27%)

a. Alignment b. Internal Performance – INTERNAL TEAMc. Influence

Upgrading the caliber of your recruiting team is a ‘no brainer’, but will likely get harder to do

• You probably need to hire MANY new recruiters to:– Grow your team– Replace poor performers– Replace ‘undesirable’ turnover

• So do most other companies – so expect tough competition for talent

• You’re not that excited about contract recruiters

Many of you need more recruiters on your team

Size of team Forecast growth in headcount

Small (2-5) 13%Medium (6-19) 2%Large (20-49) 3%Very Large (50+) 3%All teams 3-5%

• 53% forecast recruiting team will grow (nearly a third say by 10% or more)

• 40% forecast flat• 8% forecast team will shrink

In addition, you likely need to replace poor performing recruiters

Performance, as graded by HR

11% of leaders say that concern over capability of internal teams is the one thing keeping them awake at night.

And you can expect to lose some unhappy recruiters

Others in the recruitment team

8% JSS

Recruitment Leaders24% JSS

Recruiters

-4% JSS

Sourcers17% JSS

Managers17% JSS*

* ”Job satisfaction score” (JSS) calculated like “Net Promoter” score: % of 9-10s less % of 1-6s

You don’t see contract recruiters as an ‘upgrade’

Recruiters

Managers

Leaders - Large teams

Leaders - medium teams

Leaders - small teams

Leaders

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Regular recruiters worse

No idea

No dif-ference

Regular recruiters better

a. Alignment b. Internal Performance – APPROACH TO

THE WORKc. Influence

You can rethink how the recruiting department does each part of its work

• Don’t do a particular function/responsibility• Do it yourself– With generalists– With specialists

• Get someone else to do it– Another department (in HR or elsewhere)– Outsource

• Use different tools/vendors to get it done

We asked about many types of recruiting responsibilities / functions

Recruiting processesSourcing

Screening/assessmentInterviewing

Background checkingOnboarding

Planning/AnalysisBig Data / AnalyticsWorkforce planning

Vendor/Tool Management

Temp staffing firms

Search firm

Recruitment technology

Candidate PoolsTech/engineering/scientific

Blue collarHigh volume

Temp/seasonalCollege

ExecutiveDiversity

Military veteransInternational

Candidate AttractionEmployer branding

Corporate career siteSocial Media

Recruitment advertisingReferral programs

We also asked about many types of recruiting / vendor tools

SourcingAd agencies

LinkedIn paidLinkedIn freeJob Boards

Job aggregatorsReferrals

Recruiting ProcessATS

CRMCandidate profile aggregators

Video interviewing Assessments

Background checking

3rd-Party RecruitingRPO

SearchTemp staffing

VMSMSP

The most common approach is “do it yourself with specialists”

Medians for all teams across all recruiting functions

Do It Ourselves: 91% Someone Else Does It: 9%

Specialists: 67%

Generalists: 33%

Another dept: 73%

Outsource: 27%

A few exceptions stand out

• Generalists are commonly used for:– Temp/seasonal recruiting (56% of ‘do it yourself-ers’)– Military veteran recruiting (52%)– Workforce planning (41%)

• Outsourcing reasonably common for:– Background checking (36% of all who do this)– Temp/seasonal recruiting (20%)– Executive recruiting (13%)

User and satisfaction levels are correlated for vendor categories

3.8 LinkedIn Paid

3.6 Referrals Background checking

3.5 LinkedIn Free

3.4 Assessment; Job aggregators

3.2 Video interviewing ATS

3.0 Temp staffing firms

2.9 Empl ad agencies Job boards

2.8 RPO CRM

2.7 VMS; MSP; Cand prof aggregators

3rd party search

1.5 2.0 2.5 3.0 3.5 4.0 4.5

USAGE RATING(c) ERE Media, Inc.

To improve performance, you should RE-THINK these approaches

• Stop doing some things you’re doing. Start doing others

• Consider leveraging other departments to do some work. Or do more yourself.

• Outsource more. Or less.• Specialize less. Or more.

Challenge everything that you’re doing today!

a. Alignment b. Internal Performance

c. Influence – TALENT ADVISOR

There’s a disconnect regarding the “talent advisor” role (hiring manager relationship)

Rank Discouraged by Net

1 Availability of talent forecasts -46%

2 HM openness to non-traditional candidates -31%

3 HM expectations about what recruiters can do -19%

4 HM incentives to meet hiring goals -14%

5 HM interviewing skills -3%

Rank Encouraged by Net

1 HM working relationships with recruiters +54%

2 Opportunity to act as a talent advisor for HMs +50%

3 Keeping recruitment skills up to date +44%

4 Capability of fellow recruiters +43%

5 Your employer brand +40%

HM = Hiring Manager

Perspectives about hiring managers vary by recruiting role

Leader Recruitment manager

Recruiter

HM openness to non-traditional candidates

-33% -39% -27%

HM expectations about what recruiters can do

-15% -21% -2%

HM incentives to meet hiring goals -13% -20% -10%

HM interviewing skills

-19% -16% +19%

Net Encouraged/Discouraged

Recruiters have a tough challenge ahead overcoming hiring manager perceptions

Grade their dept’s performance

Recommend as a profession

-4% NPS

Hiring Managers

The good news is that hiring managers know they need to improve

Grade managers hiring capabilities

Recruitment Leaders C+

Other team members C+

C Level C+

Hiring managers C+

a. Alignment b. Internal Performance

c. Influence – REPORTING RELATIONSHIP

HR is currently the primary home for recruiting

Someone else in HRHead of HR75%

CEO / COO/President

Leaders currently reporting to…

And, overwhelmingly, most believe that it belongs with HR

11% 7%

Think it should report to…

CEO / COO/ President

84%69%

12% 27%19%

Rec leaders HR Hiring managers C Level

For recruiting, it’s not ‘home sweet home’ with HR or the C Suite

HR C Level

Grade their recruiting dept’s performance B- B-Recommend recruiting as a profession (NPS) 14% 7%

The larger the company, the more distanced the recruiting function leaders become from the most powerful decision-makers

Small companies

(<1,000)

Medium companies

(1,000 - 4,999)

Large companies

(5,000 - 49,999)

very large companies (50,000+)

0%10%20%30%40%50%60%70%80%90%

Someone else in HR (be-low HR Leader)

Functional lead (HR, Finance, Marketing, IT)

C Level (CEO/COO/Pres-ident)

Recruiting currently reports to:

40% of recruiting leaders are unhappy with their reporting relationship

60% OK as is

25% want

an upgrad

10% want

to move down

5% want

to move across

54% of leaders who report to the CEO /COO / President

don’t want to

72% of leaders who report to “someone else” in HR

believe they should report to the Head of HR

Of those reporting to the head of HR, 13% want an

“upgrade”, 5% want to move down – and 4% want their

own Talent department

Final thoughts on the

Performance Imperative

Ask tough questions. Take action. Improve!

ALIGNMENT INTERNAL PERFORMANCE INFLUENCE

Metrics

Workforce Plans Approach to the Work

Internal Team

Reporting Relationship

Talent Advisor

Example…Action is needed on ‘Quality of Hire’

Recruiting Leaders say..• Should be recruiting’s #1 performance metric, and it’s your

#1 focus; BUT…

• It’s not #1 for your own teams

• Hiring Managers get a ‘C+’ for their hiring skills, so can you rely on their ability to choose “quality”?

• You give yourselves a ‘B’ on performance, and filling jobs is about to get harder. Impact on quality?

You’d think that ‘Quality of Hire’ would be keeping you awake at night

Candidate experienceQuality of hire

WorkloadWorkforce planning

Finding cultural matchesAbility to attract candidatesHiring manager interactions

Recruiting team capabilityRecruiting tools/process

Candidate / Skills availability

0% 5% 10% 15% 20% 25% 30% 35% 40%

Leaders

% of respondents who commented and mentioned this issue

But it’s not!

Recruiting Talent Acquisition matters

A lot.

3 cornerstones for building a High Performance Workforce

1. Assemble the right combination of talent2. Establish performance-enhancing infrastructure3. Earn unwavering engagement

ACT NOW!

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