Managers don't care if recruitment money is well spent

Mar 14 2007 by Nic Paton Print This Article

Fewer than half of British firms are effectively monitoring whether the ever-spiralling sums they are spending on recruitment is money well spent and, even when they do realise things aren't working, their gut reaction is simply to throw more money at the problem.

Research by Cranfield School of Management has found that more than four out of five British are expecting their overall recruitment expenditure to increase or stay the same over the next six months.

Yet fewer than half systematically evaluated the success of an individual recruitment process, it found.

While two thirds of organisations did evaluate the success of the overall recruitment process, only a quarter did this on a "cost per hire" basis – the true measure of a process's value for money, said Cranfield.

Dr Emma Parry, research fellow at the school, 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," she added.

Around a third of organisations had invested in a recruitment management system that could track the success of recruitment in terms of costs per hire, but only around half of these were using the system to produce statistics that could assess the success of individual recruitment methods, Cranfield found.

Some companies bought recruitment software and only then tried to change their internal processes to match the way their new systems work, rather than buying software that fitted how they worked, the study suggested.

"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," said Adam Wright, client services director at recruitment company Konetic, which sponsored the research.

"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," he added.

Among other findings, four out of 10 of the firms polled said they expected to increase their expenditure on commercial job websites, a third on employment agencies and a fifth on headhunters over the next six months.