SI Review: February 2012

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Metrics to track

Why the fill ratio is a key measure of performance

By Gary Zander

One of the most important key performance indicators in the staffing business is the fill ratio. It indicates what percentage of your client orders result in a successful placement. To appreciate your fill ratio, you must also examine two other metrics — the percentage of résumé submissions that result in interviews, and the percentage of interviews that result in placements. Taken together, these ratios reveal how productively your staffing business is converting open job orders into placements.

Management Aid

On the tactical side, the fill ratio enables you to monitor the individual performance of recruiters and salespeople, compare and rank them, as well as set production goals. Further, it illustrates for your staff how incremental improvements in their ratios increase personal income.

On the strategic side, the fill ratio reveals your client experience and discloses the nature of the relationships you have with them. You can determine how productive you are in servicing each account, as well as how each client’s buying culture aligns with your servicing culture. You should use the fill ratio in conjunction with a revenue analysis to assess whether you’re making or losing good money from working those orders.

Here’s a look at the related ratios.

Job Orders. Recruiting is labor-intensive, so don’t pursue or accept job orders if you don’t have a realistic opportunity to make the placement. Every job order you accept should be acted upon purposefully, otherwise it only serves as a distraction. That means taking a “best-fi t” approach, performing deep recruiting, and covering the job order with two to three top candidates. If you can accomplish this with 70 percent of the job orders you accept, you’ll be well positioned to close more business.

Submissions to Interviews. This ratio validates whether you truly are the “trusted business partner” you claim to be. If you’re not converting at least 50 percent of your résumé submissions into actual interviews, then question whether your clients have confidence in your recruiting ability. Evaluate your evaluation process. If you are indeed recruiting the right candidates, are you effectively communicating their suitability to the client?

There are a number of reasons why your candidates are not being interviewed. One reason is because of poor presentation and positioning by your salesperson/recruiter. Or there could be a mismatch between what the client wants and what you’re recruiting for. On the other hand, your interview conversion rate could be low because your client is responding too slowly. As a result, your candidates get impatient and find other assignments. Regardless, if you’re not converting a respectable share of submissions into interviews, all that intensive recruiting time and energy goes down the drain, not to mention the lost opportunity to work on better job orders.

Interviews to Placements. If you’re getting lots of interview activity, you should be closing at least 30 percent of your interviews. Less might suggest your firm is stronger on the sales relationship side but weaker on recruiting. Or, your candidates are rejecting offers — and if so, why? Is this an internal issue, such as weak screening, poor candidate control, or inability to close candidates? Or is it a client issue — lack of urgency, constantly changing requirements, unrealistic expectations? To have come this far and not make the placement should be more than a disappointment — it should hurt badly enough to make you look under the hood and make appropriate changes.

Communicate with the Clients

As valuable and as knowing the fill ratio is for staffing firms, it is a “truth serum” for your clients. They need look no further to know the success of their talent acquisition program. Low client fill ratios means unsuccessful staffing suppliers, which means questionable client processes and poor results for all.

Like clients, staffing firms are in business to be productive and profitable and have choices where and with whom to do business. Clients with the most productive fill ratios capture the full attention and interest of their suppliers. Show me a client with too low a fill ratio and I’ll show you a supplier list of unmotivated staffing firms putting forth little effort hoping to get lucky. But it can be fixed. Work with your clients to identify and improve the bottlenecks in their process so that their fill ratios are reasonable enough to attract high performing suppliers and keep them motivated to work hardest on their behalf.

Gary Zander is president & CEO of Project One, an IT consulting company based in NYC. He can be reached at gzander@project1.com.

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Karen Jackson 03/23/2012 03:12 pm

Excellent post Gary. Capturing the data makes insight possible and therefore good decision making re: both internal operations and external clients. As you wisely point out, sharing that data with the client creates a better experience for both parties and distinguishes the staffing firm as a trusted advisor instead of an "also ran."


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