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Strategic Staffing Third Edition

Chapter 13

Staffing System

Evaluation and

Technology

Learning Objectives

After studying this chapter, you should be able to:

• Describe the effects staffing activities have on applicants,

new hires, and organizations.

• Explain the different types of staffing metrics and how each

is best used.

• Describe a balanced staffing scorecard.

• Explain how digital staffing dashboards can help managers

monitor and improve the staffing process.

• Describe how staffing technology can improve the

efficiency and effectiveness of the staffing function.

Strategic Staffing Outcomes

Direct and Indirect Costs

Direct costs: charges incurred as an immediate result of

some staffing activity (e.g., higher training costs, lower

productivity)

Indirect costs: not directly attributable to staffing activities

(e.g., lost business opportunities, lower morale)

Staffing System Evaluation

• Staffing evaluation: the analysis of a staffing system to

determine its performance and effectiveness.

• Evaluating a staffing system allows us to objectively identify

which staffing activities are related to business strategy execution

and company performance, assess how well different staffing

initiatives are working, and improve the staffing system based on

what is learned.

• Competitive advantage can be created through staffing by

identifying the staffing activities that drive business success and

strategy execution, evaluating them, and improving them.

• Measurement occurs at a single point in time, and isn’t as useful

as is tracking and making comparisons over time.

Key Performance Indicators (KPIs)

Key performance indicators: measurable factors critical to the

firm’s success and long- and short-term goals that can help

understand, track, and improve organizational performance and

the bottom line.

• KPIs are the outcomes against which the effectiveness of the staffing

system is evaluated.

To design effective KPIs, it is essential to understand what is

important to the business and what key business measures exist.

The KPIs that promote and lead to organizational success are

those best able to enhance strategy execution and organizational

performance, such as financial outcome measures (e.g., revenue

growth) and strategy execution and performance drivers (e.g.,

customer satisfaction, innovation, and globalization).

Leading and Lagging Indicators (1 of 2)

Lagging indicator: information that is available only after

staffing decisions have been made.

Leading indicator: information that precedes or predicts

staffing outcomes.

Some indicators can be both leading and lagging indicators.

• For example, while the availability of talent is generally thought of

as a leading indicator of the quality of hire (the larger the talent

pool, the more likely you are to hire more qualified people), it can

also be a lagging indicator of a company’s employer image.

Leading and Lagging Indicators (2 of 2)

Table 13-1 Leading and Lagging Staffing Indicators

Staffing Indicator Outcome(s)

Leading Indicators Blank

Employer image Application rates, applicant quality, new hire quality, staffing ROI

Applicant quality Time to fill, new hire quality, turnover, the satisfaction of hiring

managers, leadership skills in an organization, staffing ROI

Applicant quantity Ability to hire, quality of hire, time to fill, hiring manager

satisfaction

Lagging Indicators Blank

Employer image Poor hiring decisions, poor staffing process, poor recruiting

Turnover Poor hiring decisions, poor sourcing, poor recruiting

Job success Poor planning, sourcing, recruiting, and selection

Long- and Short-term Metrics

Short-term metrics help to evaluate the success of a staffing system in terms

of recruiting and new hire outcomes and include:

• Percentages of hires for each job or job family coming from each recruiting source

(e.g., college hiring, employee referrals, job fairs, newspaper advertisements,

Internet advertisements, etc.)

• Number of high-quality new hires coming from each recruiting source and recruiter

• Number of diverse hires coming from each recruiting source and recruiter

• Average time-to-start (by position, source, and recruiter)

• Average time-to-contribution (by position, source, and recruiter)

Long-term metrics help to evaluate the success of a staffing system in terms

of outcomes that take place some time after hire and include:

• Job success by recruiting source and by recruiter

• Employee tenure by recruiting source and by recruiter

• Promotion rates by recruiting source and by recruiter

Staffing Efficiency Metrics (1 of 3)

Staffing efficiency: the amount of resources used in the

staffing process.

• Hiring costs include sourcing, recruiting, screening, and hiring costs

including referral bonuses, travel expenses, advertisements, candidate

assessments, meals, transportation, and testing including drug tests

and background checks.

• Replacement costs include hiring costs as well as the productivity

loss while the position is unfilled. Reducing time-to-fill and improving

socialization and onboarding can reduce replacement costs.

Staffing Efficiency Metrics (2 of 3)

Staffing effectiveness: how well the staffing process meets

stakeholder needs and contributes to strategy execution and

organizational performance.

• Help answer questions such as, “Is the number and caliber of finalists

being sent to hiring managers meeting their needs?” “Is the hiring

experience and speed acceptable to candidates?”

Staffing Efficiency Metrics (3 of 3)

• Job success

• Quality of hire

• Retention rates

• Voluntary turnover rate of top performers

• Voluntary turnover rate of bottom performers

• Value of top performers

Return on Investment

• When using metrics and evaluating staffing activities, it can

be easy to focus on staffing efficiency and lose sight of

staffing effectiveness.

• A balance must be struck between staffing efficiency and

staffing effectiveness.

• ROI can be calculated for a firm’s investment in individual

staffing activities, such as the ROI of different recruiting

sources or assessment methods, or for the staffing system

as a whole.

Six Sigma (1 of 5)

• Six Sigma: a data-driven quality initiative and

methodology that uses statistical analysis to measure and

improve business processes and their outcomes to near

perfection

• Six Sigma can be used to improve a variety of staffing

outcomes, such as:

‒ Lowering turnover among high performers

‒ Improving applicant quality

‒ Improving new hire fit with corporate culture

‒ Reducing time-to-fill

‒ Increasing the return on the company’s staffing investment

Six Sigma (2 of 5)

• Six Sigma methodology begins with a process map that defines

and graphically maps out the process to be improved.

• The process map represents the entire process, and is helpful in

identifying important metrics for analysis.

• After identifying the source of any defects, an improvement

program is created to remove the cause of the defects.

• To improve the quality of a staffing process, each step of the

process must maximize the probability that the selected

candidate meets the hiring manager’s expectations by

maximizing the chances that unqualified candidates are

screened out at each step, and enhancing candidates’ interest

in the job and in the organization as an employer.

Six Sigma (3 of 5)

Six Sigma (4 of 5)

For existing internal processes, use DMAIC (Define,

Measure, Analyze, Improve, and Control)

• Define the problem: reduce unwanted turnover among high

performers.

• Measure: identify key measurements underlying turnover.

• Analyze: understand key factors and trends that create

turnover.

• Improve: identify and execute a plan to address those factors.

• Control: implement controls to lower turnover on an ongoing

basis.

Six Sigma (5 of 5)

To create new processes, use DMADV (Define, Measure,

Analyze, Design, and Verify)

• Define project goals and customer deliverables, such as

improved new-hire quality

• Measure: determine hiring manager needs

• Analyze the process of sourcing, recruiting, screening, and

making job offers

• Design the staffing process to screen out undesirable

candidates and maximize new-hire quality

• Verify the performance of the process and its ability to meet

hiring manager needs

Balanced Staffing Scorecard (1 of 3)

Balanced scorecard: a tool for managing employees’ performance

and for aligning all employees with key business objectives by

assigning financial and non-financial goals and monitoring and

assessing performance

Balanced scorecards help organizations to:

• Compare performance within the organization

• Track trend performance within the organization

• Benchmark the organization against other organizations

• Identify best performers in the company and its best practices

Balanced Staffing Scorecard (2 of 3)

• Balanced staffing scorecard: contains objectives, targets, and

initiatives for each activity that adds value to the staffing process.

• The company’s goals and strategies should guide scorecard

development, with most measures focusing on value creation and

staffing effectiveness and a smaller number addressing staffing

efficiency and cost control.

• The choice of scorecard criteria can be based on company strategy and

goals, anticipated challenges such as a tightening labor market or

changing workforce demographics, current problems such as difficulty

staffing key leadership positions, and practical reasons such as ease of

communication to hiring managers.

• When choosing what to include on a staffing scorecard, be sure to

consider the company’s talent philosophy, and HR strategy. Set clear

and consistent goals, and carefully balance cost, time, quality, and

customer satisfaction.

Balanced Staffing Scorecard (3 of 3)

Staffing Evaluation Process

Identify a problem area and assess how to measure and improve it.

The metrics you use shouldn’t be too complex or numerous to understand or

explain to others.

It is often a good idea to implement a staffing evaluation program incrementally,

rather than taking on the entire staffing system at once.

• Evaluate one component of the system at a time by calculating its impact on relevant KPIs

such as a division’s productivity, tenure, performance, labor costs, and promotions. For

example, a firm pursuing a cost-leadership strategy based on an operational excellence

competitive advantage might be very concerned about labor costs.

Evaluating the impact of employee turnover and new hire quality on labor costs

helps build the case that these factors are important.

• Involve other units like finance and operations to acquire needed information and data.

This process helps build your case that staffing activities influence important

organizational outcomes and can secure the buy-in needed to make staffing

improvements and increase the scope of the evaluation program.

Résumé Screening Software

• Screens résumés for certain words or phrases so that

recruiters do not have to look at every résumé.

• Saves recruiters a lot of time, and makes Internet recruiting

much more manageable for companies that receive

thousands of responses to a job posting.

• Relying too heavily on software can lead to overlooking

highly qualified candidates who do not match specific

criteria.

Applicant Tracking Systems

• Applicant tracking system: software that allows you to

maintain a database of both applicant and job information to

facilitate finding matches between openings and applicants.

• Allow human resources and line managers to oversee the

entire recruitment and staffing process, from mining

résumés to identifying qualified candidates to conducting

background checks and facilitating onboarding by tracking

completed tasks and activities and automatically sending

new hires relevant information.

• Reduce costs, speed up hiring process, and improve the

company’s ability to find people who fit its success profile.

Applicant Tracking System (ATS)

Human Resources Information

Systems (HRIS)

• Human resources information system: a system of

software and supporting computer hardware specifically

designed to store and process all HR information and keep

track of all employees and information about them

• Combine separate HR systems into a centralized database

that performs the majority of HR transactions.

• HRIS include reporting capabilities, and some systems are

able to track applicants before they become employees.

Company Web Site

• In addition to providing information about current job

openings, the careers site can also contain information

about the corporate culture and mission.

• Online applications are possible, and prescreening tests

can be administered.

• Thoughtfully developed careers sites can also result in more

effective interviews because applicants’ basic questions will

already have been answered by Web site content and poor

fits are more likely to have self-selected out after learning

more about the organization and job opportunity online.

Digital Staffing Dashboards

Digital staffing dashboards: interactive computer displays

of indicators of how the staffing function is meeting its goals

Well-crafted staffing dashboards help companies monitor and

manage their workforce and chart progress toward meeting

strategic and tactical staffing objectives.

Seven Tips for Creating Digital

Staffing Dashboard (1 of 2)

1. Identify drivers of staffing and business success.

2. Set specific goals. Each metric should have a target level or range that reflects a business

priority (e.g., hiring and retaining more top performers, promoting from within) or financial

return (e.g., reducing turnover saves money).

3. Prioritize. Dashboards are ineffective if they contain too much information. Identify which

metrics are key, and put them on the main dashboard page.

4. Identify how best to present the data. Bar charts, tables, pie charts, graphs, and even

speedometer-style displays are all possible. Test formats and warning colors with the people

who will be using it to identify what works best.

5. Assess user comprehension. Ensure that users are not misinterpreting the data and that

the communicated information is being quickly and clearly understood.

6. Consider including dynamic capabilities on the dashboard to allow for scenario planning

and growth projections.

7. Create data entry accountability. If data is not entered accurately or on time, the

dashboard will not be accurate. Assess and reward managers for maintaining the database.

Seven Tips for Creating Digital

Staffing Dashboard (2 of 2)

Technology Enables Evaluation

• By creating a database of applicant and employee information,

and automating many of the steps of the staffing process,

technology greatly facilitates the staffing evaluation process.

• When properly created and kept current and accurate, databases

enable the relatively fast generation of reports and analyses of

every step of the staffing process.

• Digital staffing dashboards can pull information directly from the

database to reflect real-time staffing information.

• Technology can also facilitate the administration of employee

surveys that can help evaluate the effectiveness of the staffing

system.

Discussion Questions (1 of 2)

1. What might prevent organizations from evaluating their

staffing systems, and what can be done to remove these

barriers?

2. In your opinion, what three metrics might a university use

to evaluate the effectiveness of its efforts to fill instructor

positions?

3. If your manager was reluctant to invest in an applicant

tracking system, how would you persuade him or her to

make the investment?

Discussion Questions (2 of 2)

4. As an applicant, how would you feel knowing that

technology was used to make an initial decision to screen

you out of the hiring process?

5. What information do you want to see when you visit the

careers section of a potential employer’s web site?

Develop Your Skills Exercise

In this chapter’s “Develop Your Skills” feature, we gave you

some tips for creating a digital staffing dashboard. Using this

information, create a dashboard for Osram Sylvania (featured

in this chapter’s opening vignette) reflecting the following

metrics. Use color coding to indicate whether or not a metric

is within the parameters the company desires.

Metrics:

• Top five staffing vendors

• Job applicant quantity

• New hires’ time-to-contribution rates by recruiting source

• Diversity by recruiting source

• Osram Sylvania’s staffing efficiency ratio

Opening Vignette Exercise

This chapter’s opening vignette illustrated how Osram

Sylvania used technology to improve its staffing system.

Reread the vignette, and answer the following questions:

• In what ways did technology improve the company’s staffing

function?

• Do you think it is appropriate for Osram Sylvania to rank-order

applicants based on their answers to the online prescreening

questions? Why or why not?

• If you were a hiring manager at Osram Sylvania, what metrics

would you most want to have available about your hires?

Chern’s Case Assignment

a) Create a digital staffing dashboard with the five most

important indicators of the overall staffing process.

b) Recommend various staffing technologies to enhance the

performance and efficiency of the staffing system.

c) Thoroughly explain your recommendations and persuade

the company to consider adopting them.

d) Write an executive summary of the entire set of

recommendations and place it at the front of the report.

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