kpi

To KPI or not to KPI – that is the question…

After working in the recruitment industry for 25 years and several sales roles in one form or another for the 5 years previous to that, KPIs have always been part of my working life… and I love them!

So, having already put my bias out there, this blog post will aim to see both sides of the story, from the senior recruitment consultant setting up on their own as essentially a ‘one man band’, through the true SME aiming to grow, to the international recruitment group with over 1,000 staff. I’ve worked with all of them in relation to performance management.

Firstly, let’s define a KPI as this seems to be where a lot of the animosity towards them comes from, because they are misunderstood. Making 50 decision maker calls per day is not a KPI. Doing 10 client meetings a month is not a KPI. They are a measure of activity levels, but as the name suggests – a KPI is an indicator of your key performance i.e. are you working efficiently and effectively?

So what is a KPI?

A KPI is a measurable value that demonstrates how effectively you are achieving your objectives / goals and they help you to evaluate your success at reaching those goals. 

If you have made 50 decision maker calls and booked 10 client meetings from those calls, then your KPI would be a ratio of 5:1, calls : client meetings. Now as a recruitment industry standard, that’s a pretty good ratio, but the KPI analysis needs to go a little further to establish whether you are working effectively and efficiently.

10 client meetings and no resulting business could mean that those meetings were: –

  1. not relevant contacts
  2. badly qualified
  3. where the consultant performed terribly at the meeting
  4. all high level PSL agreements with little chance of a quick win
  5. cancelled etc.

There’s a myriad of reasons as to why the business didn’t come off and this is what KPIs are for… not to monitor activity levels.

If we establish the critical performance indicators that are going to tell us on a weekly / monthly / quarterly / yearly basis as to whether we are on track to achieve, then that can only be a good thing… right?

So, why would you not want to establish KPIs for your business?

Having worked with hundreds of businesses, I get a lot of Directors stating that they don’t want to be a KPI driven business, with a major overload on the figures. It’s usually in reaction to previous companies that they’ve worked for and it wasn’t a positive experience, so they definitely don’t want to repeat it.

I’ve only really got one true answer for not establishing KPIs for your business, but it’s a good one. There’s no point in having KPIs if you’re not going to monitor and evaluate what they mean. Now, when I say you, I mean the plural ‘you’. It’s all well and good for the individual to be utilising their stats and incorporating them into their plans, but if their line manager isn’t monitoring this and giving them the opportunity to talk through what it all means, it’s a very dedicated consultant that keeps it going consistently for themselves. More often than not, the KPIs will be resented and eventually ignored.

A Melcrum study showed that over 60% of an individuals performance is influenced by the way that their manager communicates with them. So it’s not just about following up on the results – remember your staff will do what you ‘inspect’, not what you ‘expect’ – but the way that the line manager communicates with them can make it a positive or negative experience.

kpi3 So which KPIs are critical for someone working as a recruitment consultant?

I’ve already stated calls : meetings and then meetings : business gained, but here are 8 others to make it up to a round 10, that I would want every recruitment consultant to be monitoring and utilising in their business plans: –

  1. Calls : jobs on
  2. CVs : interviews
  3. Interviews : jobs
  4. Interviews : placements
  5. Jobs : placements or % fill rate
  6. Average % margin or % fee
  7. Average placement or timesheet value
  8. % of returning customers – year on year

There are some ideal numbers, percentages and ratios that can be used as a reference point, but to me it’s about your own business. Analyse where these stats are now and then establish where you want to be. The important part is to then work out how you are going to get there and what could possibly stop you.

So, to answer my initial question to KPI or not to KPI – that is the question”, my answer would be…

… an emphatic YES, but only if you are going to do it consistently and use it to direct your business and for your staff to direct their business plans… which coincidentally, will be my next blog post.

Angela Cripps

Angela Cripps has worked within the recruitment industry for over 25 years and runs Connemara UK Ltd. Her career started as a recruitment consultant, where she recruited both temporary and permanent staff for Blue Arrow in Catering, Industrial, Healthcare and Commercial sectors. She is now an Executive Coach, Mentor, NED and Trainer for the recruitment industry.

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