Retention Ratios

[Ken Schmitt]

Good morning all. I am attempting to benchmark some metrics for my clients.

Does anyone know where I might find some stats comparing the average tenure of employees placed by external recruiters vs. those placed through internal corporate resources? I am a member of SHRM and unfortunately, they were not able to find any metrics either.

Thanks in advance for your help,
Ken

[Simon Meth]

Hi Ken,

Interesting question! I have never seen any stats on that subject. Perhaps staffing.org or ere.net? I take it that the reason for the request is to justify either using or not using external recruiters. It seems to me that the source of the candidate probably isn't all that related to average tenure. After all, once an employee starts mostly everything is the same for internally or externally sourced candidates. The one differentiator I can think of is that the external recruiter is a resource for a disgruntled employee to speak with that an internally sourced employee doesn't have. Of course, if the relationship between the external recruiter and the client company has soured, the recruiter may encourage the employee to leave. Now that never happens does it?

Thanks,

Simon

[Ken Schmitt]

Simon,

Thanks for the input. I agree that there are always several variables that contribute to an employee leaving an organization, and it would be very difficult to distill which factors produce the largest impact. In actuality, my goal for looking at these numbers was to compare my retention ratio to the "average" recruiter as I believe this will be one way to differentiate my firm in the marketplace. I also believe that as a client, and I would be curious about your thoughts on this, the 3 most important considerations when engaging an external recruiter are 1) The ability to identify, attract & place the best talent, usually in the form of passive candidates, 2) The ability to place a candidate who stays with the company long term and 3) The ability to accomplish the first 2 items in a cost-effective manner.

Each client prioritizes these 3 factors in a different order, however this seems to cover the most important issues in my mind. As you know, external recruiters are evaluated, promoted and paid according to volume rather than quality or longevity of the placement. As I begin to build my firm and hire staff, my goal is to focus on quality metrics vs. volume metrics and it would be very helpful to have some benchmarks.

Have you seen any stats reflecting the "typical" tenure of financial professionals, regardless of how they were sourced?

Thanks again for the feedback and Happy Holidays!
Ken

[Simon Meth]

Hi Ken,

I have not seen any stats but will let you know if I do. I agree with the three evaluation criteria you list above. My take is that your point #1 is by far the most important. #2 is important but is only a factor if the agency candidates perform at a significantly different level to internally sourced candidates. I'm also sure that most clients don't pay much attention to this and certainly don't measure it. #3 is important but cost really is determined by the market.

One factor that you don't mention, is the amount of "noise" that agency recruiters produce for their corporate clients. Focus on making the internal client's life easier in everything you do and you'll have more clients than you can handle. Most agency folks don't do that. They come off being pushy, demanding, and manipulative. And they think that they are behaving in a way that works because their management often encourages this behavior. Work to understand this and you'll build a successful business.

Thanks,

Simon

[Ken Schmitt]

Simon,

You are right on with your comments. I agree that unfortunately, our industry tends to have a reputation for being pushy and self-serving. This, I believe, is caused by the few recruiters who are in it for the commission and nothing more. For them, and their managers, it is all about the volume of placements and the amount of money "on the board". In my mind, this positions recruiters as a commodity - everyone offering the same product with price being the only differentiator!

However, I would also point out that on a number of occasions, as I have presented my consultative approach to new clients, the response that I receive clearly indicates that the organization only cares about seeing a high volume of resumes, from multiple recruiters, at a price below market. This winds up feeding the "commodity" mentality even further. The only recruiters who opt to work with these types of clients are those that provide little or not additional insights other than what is on the resume!

This is why I choose to work only with the clients that are looking for a true external thought partner in developing and maintaining an effective strategy of managing human capital!

Thanks again, I always enjoy engaging in these types of discussions.
Ken

[Simon Meth]

Hi Again,

My take is that the majority of agency recruiters follow the "if you throw enough sh*! against the wall then some of it will stick" approach to the business. I choose not to work with that crowd. One of the challenges that I face as a corporate recruiter is that some of my hiring managers really don't care about that at all. In their world it makes sense to work with every agency because, they reason, they'll get more resumes that way. What they don't understand is that what they are really doing is reducing the interest of the quality agency recruiters in working with them and also are reducing the effectiveness of their corporate recruiter by loading them up with countless emails and phone calls with recruiters who don't add any value.

Thanks,

Simon

[Ken Schmitt]

Simon,

You are so right about this! It is exactly that mentality of "throwing everything at the wall..." that, in my opinion, gives the industry a bad name. I can also understand how it is difficult in your role trying to manage all of the additional calls & emails that come in from recruiters who only care about 1 thing: their commission!

There has to be a happy medium here. One that provides clients with the appropriate talent, at the appropriate time, with the appropriate skills, while at the same time providing the valuable external recruiters with enough feedback and interaction to allow them to fine tune their search.

It is definitely a work in progress and it is equally incumbent upon the external recruiters and the clients to support one another, rather than throwing up road blocks on both ends.

There are a number of clients that I work with, including ViaSat, AMN Healthcare, Cymer, PETCO Mor Furniture, BakBone Software, BD Biosciences, and a host of others, that are committed to making this relationship work. And it is these types of collaborative clients that I choose to send my best candidates to. And, inevitably, it is these same clients that hire strong talent that remain with the organization for many years.

Take care,
Ken