Cost Per Hire, Time to Fill, and Quality of Hire – Pick Two and Call Me in the Morning…

Kris Dunn Candidate Pool, Driving Productivity, HR Technology, Kris Dunn, Recruiting

The latest article is up at Workforce Recruiting entitled "Evaluating Recruiting Effectiveness" and it’s pretty much what you would expect.  Everyone says recruiting and talent acquisition is core to the business, but everyone’s pointing to a lack of funding, a need for better technology and stressed recruiters as problems to overcome.

Welcome to recruiting in America, and to running a business.

Here’s the secret, and it’s like anything else in life – you can get new hires 1) good and fast, 2) good andThinking_blog cheap, or 3) fast and cheap.  The problem is that you can’t get all three factors (high quality, low average time to fill and low cost per hire) consistently over time. 

It’s Economics 101.  Without question, you can manage the factors you can control, become uber- organized, plan/prepare and make technology work for you.  Once you do that, further improvements require you to choose the two most important factors (quality, time or money) and live with the results of the one you didn’t choose.

Let’s examine your choices:

1. You want high quality – So does everyone else.  Once you make the smart jump to quality, you have to choose whether you are going to be patient with your recruiting/HR team and live with an increased time to hire (which keeps your costs low), or you are going to spend more on internal or external recruiting resources (which will drop your time to fill).

2. You want a quick time to fill – Great!  Pay more related for increased internal or external recruiting resources or accept that you’re not always going to get the highest quality if you force your internal recruiting team to fill it within 30 days.

3. You want to control your costs – Not a problem!  Just accept the fact that you will have lower quality over time (if you want low costs and a quick time to fill) or a higher time to fill (if you want quality as well as controllable expenses).

Again, a strong Director of Recruiting or competent HR pro can make improvements to all three factors by developing an efficient department that makes good use of talent/technology and is active in the talent game.  Once they develop an efficient department, however, it’s a market-driven game.  You can choose two of the three factors outlined above, but you can’t have all three.

It’s probably one of the best examples of the Talent game resembling a factory.  Once you streamline your department and get the natural improvements in all three areas, be a business partner and educate your internal customers on the trade-offs, and let them help choose what’s most important to them. 

Most will choose quality first, then be faced with the toughest choice of all in the talent game.  Do I want it early or cheap?

Good luck with that one!