The Value of External Benchmarking

John Vlastelica recently wrote in ERE about the importance of putting external benchmarks for recruiting performance in context. He emphasizes that factors such as type of people hired, number of recruiters, compensation offered, and hiring manager engagement differ enough between companies to make external benchmarking not so helpful.

In defense of external benchmarking, two points:

First, many of the very differences John points out as factors that make external benchmarking less useful are drivers of recruiting performance that are within the control of the recruiting executive to change. Take “number of recruiters”: having enough recruiters to comfortably cover req load generally leads to better quality of hire and time to fill, among other metrics. And, the recruiting executive has authority over how to allocate his/her budget and should have the capability to influence others to increase that budget. When you ask why you don’t compare well to the external benchmark, and you find you have 80% of the recruiter headcount that others have (accounting for hiring type and volume), I wouldn’t label that discrepancy a difference that makes the external benchmark useless, but rather a potential underlying cause of your underperformance.

Second, and this may be unfairly broadening John’s definition of “external benchmarking,” qualitative benchmarking is almost always valuable. Seeing what the best companies do and applying the relevant elements of that practice to your organization is what has propelled the performance of many recruiting executives (and our business model) for years. In fact, I find recruiting executives tend to put too much “false” context around the practices of others (“They’re in a different industry,” “They have more HR support,” etc.), rather than appreciating the core elements of the practice that work across industry, recruiting structure, and most other differences you can name.

Thanks to John for calling us out as a valuable source of information for recruiting executives, and I do agree with his point when it comes to some benchmarks that executives commonly ask about—e.g., structure, cost per hire by industry rather than position type—ones that really do depend too intimately on organizational context. External benchmarking should be put in context, but not too much context as to demotivate accountability for change.