Employers spending money on recruitment without measuring return on investment

Employers are “throwing money” at recruitment without measuring the return on their investment, exclusive research has revealed.

Less than half (49%) of the 557 organisations surveyed for the latest Recruitment Confidence Index (RCI) by Cranfield School of Management, in association with Personnel Today, bothered to evaluate the success of individual recruitment processes.

But more than eight in 10 (84%) organisations planned to maintain or increase recruitment expenditure in the next six months, and one-third have invested in a new recruitment management system.

Emma Parry, research fellow at Cranfield School of Management, 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.”

The latest RCI showed that monitoring the number of shortlisted applicants (37%), and the time it took to fill a vacancy (35%), were the most popular recruitment evaluation methods.

Four in 10 respondents planned to maintain or increase expenditure on commercial job sites over the next six months, with 34% spending more or the same on employment agencies and 22% on executive search and selection firms.

Adam Wright, client services director at recruitment software provider Konetic http://www.konetic.com/index-1.html,which sponsored the research, said he was not surprised by the results.

“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,” he said.

Measures used to evaluate recruitment process

 Measures  % of organisations
 Number of shortlisted applicants              37
 Time to fill vacancy              35
 Overall cost of recruitment              34
 Total number of applications received              29
 Cost per hire              26

Source: RCI

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