Rewarding Recruiters for Performance Pays Off

Rewarding Recruiters for Performance Pays Off

By Roy Maurer May 13, 2016
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Talent acquisition professionals with higher variable performance-based pay tend to deliver higher-quality shortlists, engage with candidates more often and fill requisitions more quickly, according to a new survey report.

About two-thirds (63 percent) of 998 recruiters receive performance-based pay, according to the survey conducted by London-based talent acquisition consultancy and services provider Alexander Mann Solutions and Dublin, Ireland-based training firm for recruiters Social Talent. Respondents comprised a mix of corporate and third-party recruiting professionals.

Performance-based pay can include bonuses, commissions and various merit-based benefits.

According to the survey, recruiters who received over 51 percent of their total remuneration in performance-based pay were more likely to:

  • Fill jobs faster (within 20-39 days).
  • Phone candidates.
  • Have higher quality shortlists.
  • Have a higher resume submission to interview percentage.
  • Work longer hours (46-55 hours per week).
  • Work independently or from home.

“Incentivizing your recruitment team to work more efficiently and effectively has real potential to pay off with better performance and, ultimately, deliver a higher-quality workforce,” said Darcy Wells, head of RPO solution design, Americas for Alexander Mann.

Recruiters working within the Europe, Middle East and Africa (EMEA) region (70 percent) and in the Asia-Pacific region (68 percent) are more likely to receive performance-related pay than those in the United States and Canada, according to the survey results. Just over half (52 percent) of respondents from the U.S. and Canada said they were paid based on their performance.

“It’s rare to find recruiter compensation packages that include significant variable performance-based pay in corporate recruiting jobs,” said Kara Yarnot, founder and president of Meritage Talent Solutions, based in Washington, D.C. “These types of compensation packages are more common with third-party recruitment agencies. Corporate recruiting departments have a higher need for teamwork—sharing of candidates and information among recruiters and cultivating relationships with hiring managers to understand business needs—than agency recruiting companies.”

Corporate recruiters have additional demands on their time that agency recruiters don’t typically have, Yarnot added, such as required company training, mentoring responsibilities and special projects like referral or military outreach programs.

“I have seen corporate recruiting departments implement team performance-based pay with success, but rarely have I seen individual incentives have a positive impact in the corporate environment,” she said.

Out of all those who said they do receive performance-related pay, 60 percent are primarily measured on the number of hires or placements made. The next three most popular measures were quality of hire, hiring manager satisfaction, and the number of offers delivered.

Sourcing Inefficiency

The survey also found that only 28 percent of the candidates who are initially identified in a typical search are contacted, with nearly three-fourths (72 percent) of search results irrelevant or inappropriate for the position in question. Out of the 28 percent contacted, 72 percent did not respond. Of those who did respond, only 27 percent made it to a shortlist. According to these results, the average recruiter would need to find 282 people in order to make one hire.

The results show that opportunity exists for recruiters to redefine their candidate engagement strategies to improve recruiting return on investment.

“We believe recruiters can engage more effectively with hiring managers to determine the exact skills and attributes they’re looking for in an ideal candidate,” Wells said. “So, instead of looking for a marketer with ‘strong writing skills,’ for example, drill down to specifics like ‘blogging experience’ or ‘SEO skills.’ That will narrow the top of the sourcing funnel and save time for recruiters downstream.”

Contacting Candidates

The methods that recruiters use to first contact and engage with leads makes a difference in response rates and, in turn, more or less successful hires and placements.

“While the profession continues to use more sophisticated techniques to find and reach candidates, the most effective recruiters are those who combine tech savvy with a personal touch in order to truly engage with those candidates,” Wells said.

Recruiters who pick up the phone to first engage with passive talent have the highest average response rates at 45 percent. However only 5 percent of recruitment professionals pick up the phone to try and contact potential candidates.

Most recruiters (81 percent) either send a LinkedIn InMail or add a passive candidate as a LinkedIn connection in order to first engage with him or her. Only 14 percent take the time to find an e-mail address and send a message, the survey found.

InMails were more successful in 2015 compared with the year before, with over 30 percent of candidates responding. “LinkedIn changed their InMailing rules soon after our last survey, penalizing those with low response rates, so it would appear that their strategy is working,” Wells said.

The top reasons why recruiters don’t use the phone more often include not having a phone number (47 percent), preferring to engage via InMail (26 percent) and not wanting to pressure the candidate (15 percent).

Two-thirds of respondents said they use instant messaging tools in the recruitment process, with more than half (55 percent) of recruiters using Skype and 25 percent using WhatsApp to contact and engage with candidates.

Roy Maurer is an online editor/manager for SHRM. Follow him @SHRMRoy

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