The staffing industry tracks an array of Key Performance Indicators (KPI’s). The business of staffing has many components but in simplistic terms it is the placement of people into jobs. Whether it’s for direct hire (W2 employee to the client), or for contract placement (W2 employee of the staffing firm) these performance indicators help measure the performance of the staffing firm, the quality of the candidates they submit to jobs and the efficiency and quality of the client’s staffing process and overall strategy.
The number of submittals and interviews required to make a placement on a certain job can vary greatly. The skill set may be very hard to find in the overall workforce, or the client may have a very high bar in screening candidates for hire, both of which would drive-up the submittals and interviews required to successfully fill a job opening. With a healthy economy the lack of available skilled workers also makes filling jobs more difficult.
Sadly, there are times where the client company seeking to fill jobs makes the process more difficult than it needs to be due to a dysfunctional process and/or unrealistic expectations of available talent and compensation required to gain them as employees, whether contract or direct hire. The best processes allow for an efficient path through submittal, interview, offer and on-boarding, coupled with realistic market expectations relating to available talent and compensation.
Specifically, interviews required to fill a job can be a good indication of the overall process and candidate quality. Assuming that the variables such as client urgency and level of skill required is a constant at a medium to high level the metrics are mostly driven by client internal process, such as time required to get from submittal through interview to offer and quality of recruiting and thus candidates.
Many corporations implement an MSP/VMS (Managed Service Provider/Vendor Management System), a 3rd party to administer the staffing duties. Staffing firms that operate in these models, where the number of firms can be over 60, tend to have interview to placement ratios in the 2% to 8% range. This low return on recruiting investment de-incentivizes the vendors and lowers the overall performance of the staffing program. In staffing models with a select number of high-quality staffing firms the ratios of interview to placement tend to be in the range of 15% to 20%, or above.
The key take-away here is that if staffing firms have better returns on a ratio like interview to placement, they are more engaged and will provide a much higher quality of service. This leads to a win-win for both the client and the staffing firm. Clients should have staffing models that have the least number of high-caliber staffing firms required for the jobs (REQ load) they need to be filled. This combined with a time sensitive interview to offer process can drive exceptional results.
– Tim Bruce, President, Protingent Staffing