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Boardroom recruiting report webinar
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The Boardroom The Boardroom Recruiting Report Recruiting Report The stats every recruiting leader needs to know. Presented by: Mike Mayeux, Founder & CEO, Novotus Wednesday, September 25, 2013 An RPOA Leadership Forum Presentation
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It’s no secret that one of the biggest expenses and assets for an organization are employees. From recruiting and hiring to training and retaining, managing human resources is a huge cost. If done well, it can also be the biggest asset. According to a recent study (August 2012), the Boston Consulting Group found that out of all HR functions, recruiting has the highest impact on revenue growth and profit margins. In this session, we explore the hidden earning potential of recruiting. Join Mike Mayeux, Founder and CEO of Novotus as he provides information that helps talent acquisition leaders share the impact of recruiting. As a leader in the recruiting industry, Mike uses nearly 20 years’ experience in the talent acquisition industry to steer employees, clients, and candidates toward success. With his unique understanding of technology, consulting, and recruiting, Mayeux leads the Novotus team to accomplish the goal of reinventing talent acquisition. Always on the cutting edge of interactive technology, Mayeux allows Novotus to lead the industry in tools and best practices that improve clients recruiting results. In this webinar, you will learn: 1) Methods of establishing quantitative results to show the business impact of recruiting. 2) Examples of the potential cost savings associated with recruiting. 3) A method for calculating the true cost of turnover. 4) Metrics to link lost revenue associated with recruiting and speed of hire. 5) A method to measure the revenue impact associated with quality of hire
Transcript of Boardroom recruiting report webinar
The Boardroom Recruiting ReportThe Boardroom Recruiting ReportThe stats every recruiting leader needs to know.
Presented by: Mike Mayeux, Founder & CEO, NovotusWednesday, September 25, 2013
An RPOA Leadership Forum Presentation
About RPOA
• Nonprofit 501(3) organization founded in 2005
• Mission to “educate the market about RPO”
• RPOA Leadership Forum, Blog, Newsletter, Social Networks
• Follow us on @rpoassociation and LinkedIn group
RPOA Leadership Forum
• Educational online presentations lead by RPOA Members and Business Leaders
• Download presentations and signup for upcoming events
The Boardroom Recruiting ReportThe Boardroom Recruiting ReportThe stats every recruiting leader needs to know.
Introductions
Mike MayeuxFounder & CEONovotus
Lamees AbourahmaExecutive DirectorRPOA
About Novotus• Founded in 2002, located in Austin, Texas with remote recruiters
located throughout the U.S.• Largest Texas-based RPO provider• Management Team = 100 plus years experience• Founding Member of the Recruitment Process Outsourcing
Association (RPOA)• Consistent 35% annual growth with placements in 39 states and
10 countries in 2012. • Inavero/CareerBuilder’s Best of Staffing™ Client Satisfaction
award 3 years running• Telly Award™ winner for creation and production of corporate
career site video
Agenda
• Setting the Stage • Cost of Turnover• Speed of Hire Impact• Candidate Quality Impact• True Recruiting Cost• Set Up for Success
Talent Acquisition - Assumptions • Many leaders would agree that their people are:
– The greatest differentiator
– A key to competitive advantage
– Central to achieving key business goals
– Are the “face” to the market
Recruiting has 5.5 times the revenue and profit impact of other HR functions.
Source: http://www.ere.net/2012/09/04/news-flash-recruiting-has-the-highest-business-impact-of-any-hr-function/
How do we share information that helps
executives understand these assumptions?
How do we demonstrate so that we can:
• Gain more credibility with our organization’s leadership?
• Gain headcount and budget dollars that we need to improve results?
• Deliver the talent our organization needs?
Speak the language of your business
• Understand business imperatives• Present those goals in a language that matters
most to the senior leadership team.
Days Territories are open for sales reps
(lost revenue)
Days Territories are open for sales reps
(lost revenue)
Replacement costs for open
nursing positions using
higher cost temp agencies
Replacement costs for open
nursing positions using
higher cost temp agencies
Lost billable hours for oilfield service workers
Lost billable hours for oilfield service workers
Delayed Projects and business
impact of lacking IT resources
Delayed Projects and business
impact of lacking IT resources
EXAMPLES:
Do the math.
• Partner with finance to build the ROI to support your objectives.
Requesting 2 more recruiters to handle ongoing open sales reps positions (average 50 open positions).
Requesting 2 more recruiters to handle ongoing open sales reps positions (average 50 open positions).
This?
Increase Speed to Fill open Sales Reps = $2,500,000 revenue increase. Need – 2 Recruiters
Increase Speed to Fill open Sales Reps = $2,500,000 revenue increase. Need – 2 Recruiters
That?or
Cost of turnover is underestimated.
Turnover Cost ofNon-Exempt Workers
_______________ %of base salary
Turnover Cost ofNon-Exempt Workers
_______________ %of base salary
Turnover Cost ofMiddle Managers
_______________ %of base salary
Turnover Cost ofMiddle Managers
_______________ %of base salary
Turnover Cost ofUpper-Level
Managers
_______________ %of base salary
Turnover Cost ofUpper-Level
Managers
_______________ %of base salary
5050100 100 to to
150150200 200 toto 250250
Source: Staffing.org 2010 Corporate Recruiting Report
Actual Average Turnover Cost
Speed of Hire Profitability Impact
Company Highlights
Annual Revenue: $1.34 Billion# of Employees: 8,791
# of Open Positions:1,318
Age of Open ReqsAge 1 – 29 days: 758Age 30 – 58 days:244Age 60-119 days: 145Age 120 days +: 171
Company Highlights
Annual Revenue: $1.34 Billion# of Employees: 8,791
# of Open Positions:1,318
Age of Open ReqsAge 1 – 29 days: 758Age 30 – 58 days:244Age 60-119 days: 145Age 120 days +: 171
Example:
244 x 30 days x $418 daily rev = $3.06 million
145 x 60 days x $418 daily rev = $3.64 million
171 x 120 days x $418 daily rev = $8.58 million
Lost revenue of open positions over 30 days old = $15.3 million
($1.34 billion ÷8,791) ÷ 365 days = $418 daily revenue
Candidate Quality Profit Impact
Cost per hire can be 8-12% of first year
compensation
Cost per hire can be 8-12% of first year
compensation
Turnover can be 50 – 250% of first year
compensation.
Turnover can be 50 – 250% of first year
compensation.
Poor performance is a multiple of compensation over the entire employee
lifecycle.
Poor performance is a multiple of compensation over the entire employee
lifecycle.
Assume revenue for average performing
employee = $418 per day.
Underperformer = $210 per day.
Assume revenue for average performing
employee = $418 per day.
Underperformer = $210 per day.
In just two years, the underperformer can cost the company $152,570.
In just two years, the underperformer can cost the company $152,570.
Cost to hire approximately $9,000
Cost to hire approximately $9,000
Cost to lose (150%)$112,500
Cost to lose (150%)$112,500
Example: $75,000 base salary, middle manager
Ability to source high quality candidates quickly can have high impact.
Do you want it: good good
fastfast
cheap cheap Pick two.
Reduce poor performance. Increase organizational value. Measure Quality of HireReduce lost revenue / lost productivity. Measure Time to Fill
Calculate Recruiting Costs: CPH vs. RCRRecruiter X Recruiter Y
# of Hires 15 Engineers 7 Senior Managers
Total Comp of Hires: $750,000 $980,000
Recruiting Expense: $66,000 $84,000
CPH Calculation = $66,000 ÷ 15 = $84,000 ÷ 7
Cost Per Hire (CPH) $4,400 $12,000
RCR Calculation = $66,000 ÷ $750,000
= $84,000 ÷ $980,000
Recruiting Cost Ratio (RCR)
8.8% 8.6%
At a glance, it may seem as though recruiter X is a more efficient and effective recruiter both in volume of hires and CPH metrics.
In reality, they are almost even in productivity and resource utilization. RCR is a better metric to use for comparison.
Use industry data to add perspective
- U.S. Department of Labor
YoungerYoungerworkersworkerswill havewill have10+ jobs10+ jobsby the by the time they time they turn 30.turn 30.
Job hopping will continue to increase:
Use industry data to add perspective
Perceived Perceived Candidate Candidate AvailabilityAvailability
Source: 2010 Corporate Recruiting Report
Create a Talent Brief
• This is an executive-level overview of talent acquisition for the organization.
• Highlight:– Talent Acquisition Strategic Initiatives– Industry Landscape– Key Metrics– Difficult to Fill Positions
• Produce Semi-Annually
Example Talent Brief
Let the Numbers Tell The Story• Implement Metrics
• Create quarterly, annual benchmark reports along with real-time daily dashboard reporting.
Source: 2010 Corporate Recruiting Report
QuestionsQuestions
Where to find RPO providers?
• RPO Buyer’s Guide: non-paid to play, free, searchable list of verified RPO companies provided by RPOA.
• Buyer: Find qualified RPO providers: http://resources.rpoassociation.org/rpo-companies-buyers-guide
• Provider: Add your company: http://rpoassociation.org/add-your-company
Register for next Webinar
The Unique Challenges and Solutions to IT Recruiting
October 23 1:00-2:00 PM EST
RPOA Resources
• Fifty Shades of RPO: Loving your RPO partner after the sexy sales tam leaves town [webinar]
• Recruitment Process Outsourcing – The Good, the bad, and the ugly [white paper]
• Ten Things you need to know before you choose a recruitment process outsourcing partner [white paper]
• Skip this step and kill your brand – recruiting etiquette 101
Thank you!
Contact us at [email protected] Online: www.rpoassociation.orgTwitter: @rpoassociationLinkedIn Recruitment Process Outsourcing Association
