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3 Essential Metrics to Focus On in Your 2018 Headcount Planning

If you haven’t yet locked in all your 2018 hiring goals, it’s not too late. We’re only at Day 2 of 365. Still, the earlier you get serious about headcount planning with your hiring manager, the smarter you'll hire.

For an inside look at how it’s done successfully, we sought out the insights of one masterful recruiter/hiring manager duo at HotelTonight: Head of Talent Acquisition Hilary Clarke and Director of North America Operations Liz Eavey. Through grounding their collaboration in data-driven recruiting, they continually nail even their most ambitious hiring objectives. In our webinar, they shared the metrics they examine in five core stages of the recruiting process: headcount planning, sourcing, interviewing, candidate experience, and closing. Today, we'll delve into three metrics they prioritize in headcount planning, but you can listen to our webinar recording for their goal-setting strategies in all five stages.

Why focus on data-driven recruiting? 

Liz and Hilary have been working together for a little over a year, but they renewed their focus on metrics when they ramped up their goals in August 2017. First off, they set their sights on hiring 28 people for five offices worldwide in five months. Next, they aimed to open and staff a new NY office in six months. With those metrics constantly looming in their heads, they needed to get serious about metrics on a day-to-day basis. “Hilary and I are both in the business of people and numbers,” reflects Liz. “A metrics-led view of recruiting is key to our success.”

Could we find a better duo to share which metrics drive their headcount planning, then? We think not. Below, we list their three core areas of focus.

  • ROI

When Liz and Hilary zero in on headcount planning, one core metric they consider is ROI. As a profitable growth company, hiring cost vs. return is top of mind. “How much impact ($) will this person generate? How much will this person cost the company?” they ask in conjunction. Ultimately, employees are one of the highest costs for any given company, so you want to be confident that their future impact will exceed the price of employment. Furthermore, Liz and Hilary use a quantitative Resource Allocation model to determine placement of heads. In the past, hiring decisions were made on Liz’s team when a hiring manager said “I need more people on my team next year”. Today, on the other hand, they take into account factors like geography, seasonality, and matching supply and demand before they listen to those hiring manager’s demands.

Since taking a closer look at ROI in headcount planning, what results have they seen? 30+% year over year growth in an ROI positive fashion.

  • The candidate pipeline

To headcount plan effectively, there’s a lot to keep track of. You have to consider the net new hires you’ll bring to the team, inevitable turnover and the need for backfills, and even internal promotion that creates additional empty positions. To monitor all these shifts in their pipeline, Hilary and Liz decided to build a robust, shared dashboard. On it, they outlined which roles they need to fill and when, as well as their plan of attack to hire for them.

“We also looked at our past hiring performance,” remembers Hilary. “How many applications, phone screens, and onsite interviews did it take to get one hire?”. That way, they could know how many activities they needed to conduct each week in order to hit their overarching hiring goals. If they were behind on them, they could ramp up their efforts. If they were ahead, they could communicate that exciting information to the entire hiring team. Either way, this insight has been key to improving their overall hiring efficiency. It’s also substantial proof that one recruiter can’t possibly hire all the necessary people alone. The dashboard has become an effective way to share progress with the greater hiring team and advocate for additional recruiting resources.

Since building a shared dashboard to monitor their hiring pipeline, what results have they seen? 100% of their goals achieved, 4x improvement in speed-to-hire. Just as importantly, they’ve cultivated more teamwide trust and transparency throughout the recruiting process.

  • Attrition planning and impact date

“Before working with Hilary, I was ignorant to how metrics-driven recruiting is,” shares Liz. "Once we started looking at concrete goals together, it added a huge amount of credibility to the efforts of the recruiting team.” She remembers feeling like headcount planning was a black box, one into which she had no clarity or insight. Now, she can immediately see when the team is experiencing wins or challenges in the recruiting process. And what’s one of the most glaring challenges in the realm of recruiting? Turnover.

With that in mind, the final metric that Liz and Hilary examine in headcount planning is attrition planning/impact date. Ask many experienced hiring managers and recruiters about attrition, and they’ll tell you it’s inevitable. The essential takeaway, then, is that you have to prepare for it. In order to do so, Hilary and Liz began to proactively hire into anticipated backfills. By negotiating a portion of the hiring budget over the threshold at certain periods of time, they can ensure that they don't heavily suffer the consequences of turnover when it eventually occurs. They don't blindly determine the increase in hiring, however - it is always based off of historical data. They look at past patterns of attrition to best predict the future.

Now what’s this about impact date, you may ask? Well, Liz and Hilary used to set their hiring plan based upon offer date, or when an offer gets signed. When you actually look at headcount planning through the lens of which skill-sets you currently have and which you need, however, the offer date becomes somewhat arbitrary. Instead, Liz and Hilary have found it more useful to look at impact date, or the date at which the new employee begins driving revenue. Through marking that milestone for every new hire, they can more accurately determine which hires they still need to make.

Since using impact date to adjust their headcount and proactively planning for attrition, what results have they seen? Significant reduction in downtime and minimized loss of revenue.

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If you haven’t yet doubled down on headcount planning for 2018, we hope this helped! Cheers to Hilary and Liz for giving us such a close look at the metrics they most closely examine. If you’d like to hear the metrics they look at during sourcing, interviewing, candidate experience, and closing, don’t forget to listen to the full webinar here.

Oh, and Happy New Year!