HR has the ability to drive organizational performance through strategic talent acquisition processes. However, like the talent landscape, the HR function is not static – it is evolving daily. To make certain HR is maximizing their opportunities, many healthcare executives are taking a more active role in the evaluation of talent acquisition practices. Strategic talent acquisition is much more than just recruitment – it should encompass employer branding, attraction strategies, building talent pools and ultimately hiring (and retaining) top-quality talent.
Active evaluation of current practices provides the opportunity to enhance communication between HR and senior leadership, creates transparency into organizational performance and enables strategic decision making. For healthcare executives interested in cutting costs while continuing to acquire top talent, the following five questions can help create an open dialogue with HR about the measurement and performance of your talent acquisition function.
Cost-per-hire, calculated as the direct costs of recruitment divided by the number of hired individuals during a specific period of time, is often the primary indicator used by organizations to assess the effectiveness of recruitment processes. Direct costs typically include: recruitment team’s salary, wages and benefits, advertising and marketing costs, as well as the cost of recruiting via job boards. Using this limited lens, best practice for an organization’s direct cost-per-hire is approximately $1,500. Although cost-per-hire is a useful metric for benchmarking whether your recruitment function is under-resourced or operating at peak performance, solely calculating direct cost-per-hire ignores the full organizational cost of recruitment.
Healthcare leaders who want full transparency into their investments calculate both the direct and indirect costs of recruitment. Indirect costs account for recruitment costs spread across the rest of the organization, including: hiring manager investment in the recruitment process, increases in overtime and agency staffing, lost revenue due to vacant positions and cost of turnover – which is typically 1.5 times an original hire’s annual salary for replacement. Best practice for organizational cost-per-hire, which includes both direct and indirect costs, is around $3,000. Cost transparency throughout your organization ensures HR investments are reflective of the goals of the entire company.
There are a number of metrics that your organization should be tracking to ensure performance is meeting strategic expectations in addition to the financial needs of your organization. These include (but are not limited to) time-to-fill, candidate and hiring manager satisfaction, retention, source-of-hire and requisition aging.
If inquiries into analytics are met with anything less than a full scorecard indicating financial and operational performance, it may be wise to explore further. Performance may indeed be above average, but “good” today can be inadequate a few months down the road. By gaining insight into and staying up-to-date on real results, you can make more informed, strategic decisions that promote financial and operational health.
The communities you serve not only include your patients and their families but also prospective employees. Subsequently, a poor candidate experience will damage your brand and lead to patient dissatisfaction, which is directly tied to a disengaged workforce.
Industry best practices indicate hiring manager satisfaction rates of 93% and candidate satisfaction rates of 95%. Conducting satisfaction surveys, benchmarking against industry leaders and discussing strategies to improve hiring manager and new-hire engagement can help ensure each department has access to top-quality candidates – and that prospective candidates and current employees are engaged throughout the talent lifecycle. Additionally, satisfaction surveys reveal whether hiring managers are receiving the necessary recruitment support, enabling them to focus on overall employee performance.
Although an overflow of resumes for any given position can be interpreted as a healthy talent acquisition function, quantity is not quality and the costs of hiring the wrong person is substantial. One metric that can raise awareness into talent acquisition performance: retention.
A 90-day retention rate greater than 93% is considered best practice across the healthcare industry. If more than 10% of employees leave the organization within 90 days of being hired, there may be cause for concern. Additional areas to consider when evaluating “best fit” include how you identify and attract candidates, evaluations during interviews, cultural fit assessments and previous employment verification, among other pre-hire processes.
Quality of hire is essential. With reimbursements hinging on patient satisfaction, integrating HCAHPS criteria during the screening process can further highlight top-performing employees. But equally important is quickly onboarding talent, especially as hiring needs often arise without notice. You can ensure your organization is investing in the right talent acquisition strategies – and accomplishing time-to-fill best practices rates fewer than 45 days – by evaluating source-of-hire data.
To many, the validity of source data matters little once the individual is employed. However, you can accurately budget for sourcing when you know which channels attract high-performing employees and which screening strategies lead to these individuals being hired. With this data, leaders can eliminate investments in underperforming sources and make decisions based on productivity, retention and patient satisfaction.
In an era where talent is at a premium, healthcare leaders are finding it prudent to dig deeper into their organizations’ talent acquisition functions. In doing so, they ensure their hospitals and health systems are operating at peak performance. By leveraging the five questions explored above, you can engage HR leadership in meaningful conversation that may spark necessary change.