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Recruiters pour good money after bad


Research has revealed that organisations are increasing their expenditure on recruitment – but failing to evaluate if the process is providing value for money.

The latest findings from the Recruitment Confidence Index (RCI), produced by Cranfield School of Management (CSM), reveal that 84 per cent of organisations expect their overall recruitment expenditure to increase or stay the same over the next six months.

But only 49 per cent systematically evaluate the success of an individual recruitment process. Although two-thirds evaluate the success of their overall recruitment process, only a quarter of these do so on a ‘cost per hire’ basis – which, CSM argues, is the true measure of a process’s value for money.

Dr Emma Parry, research fellow at Cranfield School of Management, said: “These results paint a worrying picture of organisations throwing money at recruitment without any idea if they are receiving a suitable return on their investment.

“This suggests that when recruitment is unsuccessful, recruiters just spend more and more on the same processes, rather than systematically assessing the success (or failure) of the methods they are using and making changes accordingly.”

The research shows that 32 per cent of organisations have invested in a recruitment management system that may be able to track the success of recruitment in terms of costs per hire, but only 51 per cent are using the system to produce statistics that could assess the success of individual recruitment methods.

Commenting on the findings, Adam Wright, client services director at Konetic which sponsored the research said: “Unfortunately, we weren’t surprised by these results. Some companies purchase recruitment software and then try to change their internal processes to match the way their new systems work. This can create huge friction within an organisation, as end users become resistant to change and the ‘real world’ business objectives – improved management reporting and consequent cost savings – are not met.

“A much better approach is to set a practical business objective – such as direct cost savings, or producing a preferred supplier list of agencies – then identify the management information and reports you will need to verify that goal, and only then find a recruitment management system that will give you the data you need.”

The latest RCI findings also show that:

  • 43 per cent of respondents expect to increase their expenditure on commercial job websites, 34 per cent on employment agencies and 22 per cent on executive search (headhunting) over the next six months

  • 37 per cent of respondents who evaluate the success of their overall recruitment process do so based on the number of shortlisted candidates; another 35 per cent evaluate recruitment based on the time taken to fill the vacancy

  • 27 per cent of respondents who evaluate the success of their individual recruitment methods do so based on the time taken to fill the vacancy, while 24 per cent use the number of shortlisted applications received using that method. In addition, 23 per cent evaluate individual recruitment methods based on the overall cost of using that method

  • Respondents stated that the ability to target particular groups of job seekers and the reach of a method were the most important factors when selecting which recruitment method to use.

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