In the third and final installment of our evaluation blog mini-series we take a closer look at how to evaluate recruitment agencies and their performance, helping identify the key measurements and the targets you should be expecting them to hit.
Cost & time to hire
This is the most important factor to evaluate when looking at your recruitment agency and should form the main focus of your evaluation process.
When evaluating this metric, you should be looking at the average fee per business division you are recruiting into, rather than a blanket fee across your business. For instance, if you’re recruiting into sales you should look at the average fee for that department and then do the same across the rest of the company.
When it comes to time to hire, it’s important to look at this from the point the vacancy is briefed until the offer is made – as well as a number of other metrics.
You should also look at the briefing to shortlist ratio, the time the role is briefed to submitting CVs - you need to measure all of these things to see which agencies perform best on speed of delivery.
This also requires some internal reviewing because if your agency is submitting CVs within 24 hours, but your recruitment manager is only responding two weeks later you will have huge problems in a competitive market.
Quality of candidate and retention vs fee percentage
As well as the cost and time to hire, you should be putting focus on the CV submission to interview ratio to judge if your agency is supplying you with a good range of quality candidates.
Ideally you should be looking at a minimum of 50% CV to interview rate.
Obviously, the best recruiters will be able to reach 100%, but if you’re getting any ratio below 25% you’re running into a real problem.
If these lower numbers are in the early days though, don’t go rushing to change agencies too quickly as it may just take your new agency a while to get used to your specific requirements.
The recruitment process
You should take a qualitative approach to evaluating the overall recruitment process and accurate record keeping is essential at this stage.
Even just a quick Survey Monkey review aimed at candidates who have been through your recruitment process will bring in lots of useful information to inform future activity.
Finding out why offers have been turned down, for instance, will help identify pitfalls in the process or identify if candidates are being mismanaged on factors like salary expectations.
This is something companies should be evaluating both routinely and after every recruitment drive.
Specialist vs generalist agency
Some companies like to go down the generalist route because these agencies have hands in a number of different areas and it’s easier to manage the process.
The drawback is that you don’t get the same quality service as you would from a specialist because the agency lacks expert industry knowledge.
For some roles, however, you need a specialist.
The best recruiters in the sales and marketing sector, for instance, are specialist because they are constantly networking within the sector.
Some will be contacting 10-20 people a week about specific area roles and exclusive contacts will come to that agency as a result, providing your business with fast access to a wider pool of top talent.
Specialists are also familiar with the best industry job boards and know the best way to target certain candidates in certain industries - the kind of invaluable knowledge a generalist recruiter just won’t have.
If you’re not sure if your agency is actually a specialist – there are a few who say they are when they’re not – a simple test is to ask which sector job boards it uses and ask for a list. A true specialist will have a mix of general and sector specific job boards.
Interview to offer
The final very important metric to measure for a recruitment agency is your interview to offer ratio. Essentially, the end result.
A company should be aiming to secure three candidates for second interviews.
If you have three candidates at the final stage of interviewing you have an 80% of a successful final placement. At two people that percentage falls to 50% and it’s 20% if you have just one person.
Having a good interview to offer ratio is important, particularly as the skills gap means companies have a smaller pool of talent to choose from in the first place and the best candidates are like gold dust.
Hiring a recruitment agency is always a big decision for a business, as is anything that results in spending money on external resources. The key is to do your research, know what success looks like and be constantly evaluating both internal and your agency’s approaches to recruitment to ensure you are getting the best ROI and increasing your chances of bringing in the best candidates.
If after careful evaluation, your recruitment agency isn’t working out for you, then perhaps fixed-fee recruitment is an option for you. To discover how to recruit without using an agency, click below to download our eBook.