Searchlight – Rewarding Recruiters By Changing Their Measured Metrics With Kerry Wang

This is Recruiting Daley’s Recruiting Live podcast where we look at the strategies behind the world’s best talent acquisition teams. We talk recruiting, sourcing, and talent acquisition. Each week we take one over complicated topic and break it down so that your three year old can understand it. Make sense? Are you ready to take your game to the next level? You’re at the right spot. You’re now entering the mind of a hustler. Here’s your host, William Tincup.

Ladies and gentlemen, this is William Tincup, and you’re listening to the RecruitingDaily Podcast. Today we have Kerry Wang from Searchlight. And our topic today is rewarding recruiters by changing the metrics they’re measured on. Fantastic topic. I love Carrie. I love Searchlight. I just can’t wait to get into it. Carrie, would you do us a favor and introduce both yourself and Searchlight.

Of course. William, so great to be back on this podcast. Great to see you at HR Tech. I’m Kerry, I’m the CEO, co-founder of Searchlight. I would call myself a people geek. I’ve always been fascinated with what makes great teams work. I got my undergrad at org behavior. I got my master’s in computer science. So Searchlight is very much the marriage of my two passions. How do we add more science into the art of recruiting? A Searchlight is a predictive talent solution used by companies like Coinbase, Talkdesk, Udemy, Zapier.

(01:30)
It’s all about how do we help them become more predictive in the way that they are bringing in the right people to the organization and improving quality of hire.

Small firms that no one’s really heard of, this is really what I got. Let’s deal with the current metrics. I’m squarely gen X, so I grew up in a period where time to hire, time to fill, cost of hire, things like that. These metrics that lingering around, you’d like to kill them off. From your perspective, and your clients, things that you’ve seen, what are they being measured on currently? For the audience, let’s paint that picture.

Well, the first thing I’ll say is that recruiters are just so instrumental to the health of a business. Really instrumental to the growth of it where, if you think about it, a company is just a group of people aligned towards a common mission and recruiters are on the front lines helping bringing in the right people to make up that company. A lot of times, recruiters, they get into the space to be able to connect people to the right jobs of the right company. But when you go down to the metrics by which we measure them, a lot of times they’re at odds with this higher level goal of recruiting.

(02:51)
On the quantitative side, exactly what you said, the metrics are things like time to hire, time to fill, offer close rates, things like that. It’s very productivity driven, very time driven. On the qualitative side, we have things like hiring manager satisfaction, candidate experience, eNPS, and then retention and attrition. When they’re qualitative like that, they are hard to measure so there’s an over-emphasis on the first part, the quantitative side.

(03:24)
Now, I would argue that any time you want to get to a good outcome, you need paired metrics. So it’s all about how do we balance out the scales here? How do we still, yes, look at things like time to fill, but then look at things like the goodness that comes out of it the high level value, the quality of hire?

I love that. So let’s deal with quality of hire, because it was going to be one of the things I wanted to bring up. What’s your take? Because I think pretty much every time I talk to somebody, there’s a different working definition of quality of hire. Not sure we’ve got some standards around it, but what would you like for the standard to be for quality of hire?

Well, simply put, quality of hire is the impact that a new hire has for the organization. If you boil it down to it, the impact of a person is all about, well, what is their performance and what is their tenure? Quality of hire is very much how do you look at someone’s performance and retention in the organization.

(04:28)
But, when you apply that into the recruiting space, I think that it’s only fair to be able to hold recruiters towards the first six months of someone’s on the job. Because anytime after the first six months, well, there’s a lot confounding factors that would impact someone’s performance retention. So very much have to look at leading indicators of performance and retention in the first six months to be able to understand someone’s quality of hire as impacted by recruiting.

I 100% agree with you. I also think that one of the holy grails of recruiting is tying what you just said as a working definition of quality of hire, to source of hire. If we can figure out, “Okay, Janet’s done a wonderful job, we placed her for six months, she’s amazing, all star, great.” That clock stopped, if you will, “And then the manager can take it on all that stuff.”

(05:24)
But if we can go back to where we got Janet and find out, okay, Janet came from GitHub or whatever the bid is, where did she come from? And then, how do we now go get more Janets, if that makes sense. Do you do your clients or do you see that?

That makes so much sense. What you’re describing is a lot of what our customers are looking for and implementing with Searchlight, which is a feedback loop. It sounds so simple. Of course, if you are spending so much time, so much money bringing in people into your company, of course you want to know what’s working and what’s not and use that data to feedback into the hiring process to yes, look at where Janet came from, but also what are the attributes and skills of Janet that is making her successful?

That’s cool.

How do you become much more predictive at being able to find more Janets? I think it’s critical to not only look at where Janet came from, but also her skills and attributes because that’s how you can build a truly more objective and unbiased hiring process. You want to look at the universal building blocks that makes Janet successful so that you can open up your talent pools and find more of them for your company.

I want to go backwards to then go forward, and I’ll preface this by saying I despise software categories because I just think most people get mislabeled and misunderstood because these arcane little boxes. HR and recruiting budgets are building Excel so, Searchlight comes from somewhere, comes out of some budget on some line, some row and some column. So where do people tend to put you?

That is a very good question. I would actually say I completely agree with you, because in terms of being able to put us into a box, I think our customers are the best people to ask. Even last week when I was at HR Tech, I was talking to one of our customers and I said, “Well, what category would you as a customer put Searchlight in?” Yes, it comes out of her general people budget, but she said, “Searchlight’s a quality of higher solution. That is what I’m looking for.”

(07:55)
Where that even came from too is business leaders from the very top of the organization, from the board and the CEO are increasingly asking what is the quality of hire at our organization? It’s two major factors. One is how we got here? Which is that we’ve had a two to three year period of incredible growth, where many companies have hired super fast. So all of a sudden they’re looking at their company and saying, “We have now all these people, but how great are they?” That’s one question, what is the quality of the people that we’ve just brought it?

(08:33)
Then we also have these business leaders looking forward, and looking at this uncertain economic environment and thinking, “I actually don’t think that we can hire at nearly the same pace and speed of velocity as before. Now, every single new hire is even more critical to get right. So what is our quality of hire?” All of this has created just a cacophony of questions from the very top of the business saying, “Hey, Mr. Or Mrs. chief people officer,” or “Mr. Or Mrs. VP of talent, what is our quality of hire?” And now we have these people talent leaders asking, “Wait, where is my quality of higher solution? How do I improve that and measure that at my company so that I can address what the business needs?”

First time someone’s used cacophony on the podcast, which thank you so much for increasing the intelligence of the audience. This is going to be a ish loaded question but not meant to be, it’s your thoughts on comp, not staffing because that’s a different [inaudible 00:09:48] altogether. But on the corporate side, comp being tied in some way to quality of hire.

(09:56)
Just personally, pros and cons obviously, but what do you think about bonusing or having a part of their package where not only are they measured but they’re also rewarded based on quality of hire?

I absolutely think that recruiters should be rewarded on quality of hire. We know that a lot of times recruiters are rewarded on time to fill. The thing is, if you overindex on time to fill, then you’re forcing people to make really bad trade offs. You’re continually forcing them to just trade off quality for speed and that’s not good for everyone or for the business.

(10:38)
How do you actually bounce out the scales? Well, you should also reward based on the quality. I have heard time and time again, from our customers, that a lot of times the best hires are the ones that just take a little bit longer to get right. So why would you disincentivize that when a great hire can deliver 4 to 10X value to the business, than an average hire that may or may not work out.

I love it. I agree. It’s sometimes hard to implement. A lot of people think it’s a good idea. It’s just, “Okay, now how do we actually make it work?” The mechanics of it is what I think some people struggle with. You mentioned predictive earlier and I wanted to go back to that. again, you’re sitting on a massive amount of data and getting back to Janet and her skills, not only where you found Janet, but also the skills that comprise Janet, carried and gathered through all of her life experiences, et cetera, brought them to bear at the work six months in. Okay, we know the skills, we know we found them, et cetera. Because you mentioned predictive, but I want to make sure the audience keeps with of us in terms of what can that do? If done well, if we know those things, what can that do and turn on for them?

Essentially, once the skills and attributes that makes Janet successful at your unique company, well, that just becomes the blueprint or objective standard by which you’re hiring again for that role or a similar role. All of a sudden you’re no longer guessing or pulling a generic JD from online, opening a role. You can truly tailor your surge for the unique predictors that becomes part of your recruiting pitch, that becomes part of your interview scorecard, that also becomes part of your assessments that then can help you find another Janet much quicker and much more efficiently, which is good for the hiring manager, good for the candidate and good for the company.

Everybody wins there. Metrics is plural in the title of the show and we focus a lot on quality of hire. If we focus all of our energy there, that’s fine. But something that’s been [inaudible 00:13:09] at me for a year or so is response time. The things we learned in marketing, B2B marketing in particular, is how can we get back to people as fast, seconds, minutes, hours, that type of mentality but also in a highly personalized way?

(13:28)
I just want to get your take on, do you think response time or something like that, or thing are things that we should be looking at in terms of metrics?

I think that response times do absolutely impact whether or not the candidate will end up saying yes to the company and the offer. It’s shown there in the research that the faster that you can move someone through a process, the higher chance of they actually accept the offer.

(14:00)
But the trick that you also mentioned, William, is well, how do you balance off that speed with personalization? Because if you were to respond within seconds with a can message, but then you were to respond in a few hours with a more personalized message, actually it’s the personalization, even if it takes just a few hours more, that will lead to a better candidate experience, will lead to you getting more information and lead to ultimately a higher offer acceptance rate.

(14:32)
I think that there should be a piece in terms of responsive times like SLAs, but don’t over optimize for it or else you’re going to over optimize to zero and you’re going to end up just having a leaky bucket effect of yes, you’re getting a lot, you’re doing a lot of activities, but nothing’s coming out on the other side.

I love it. Other metrics, outside of quality of hire, that you’re seeing that are important to your clients. What are some of the spectrum of things that I would say, new metrics that are really becoming interesting to them?

There’s been one big topic that’s also been coming up, and it’s around hiring manager satisfaction. I really love that also coming up to the forefront because at the end of the day, hiring is a team sport. Unfortunately, we have recruiters that if a hire doesn’t work out, they get blamed. Where they’d be like, “Hey, it’s the recruiter that didn’t bring the right candidate in.” But that’s actually not true because it’s the hiring team that helped assess the candidate and it’s the hiring manager that ultimately made a decision. It is now setting up the person up for success.

(15:50)
So if someone doesn’t work out, there’s actually a variety of different variables that would’ve led them to not work out. Unfortunately, without anything other than looking at recruiters and how fast they’re working, the recruiters could get blamed, which is not what we want. So when we have this other bucket here, which is all of a sudden hiring managers, how engaged are they? How involved are they? How satisfied are they? That also becomes a way to really… First, give credit where credit is due and give ownership where ownership is due, that the hiring managers need to be involved and also engaged to make a successful hiring decision.

I love it. How do you see this playing out long term in terms of, do you see this full on Yelp or Glassdoor where everyone’s got ratings? Canada’s got ratings, recruiter has ratings, the hiring manager have ratings so there’s a more transparent process for everyone.

(16:52)
I love the emphasis on hiring managers and understanding their satisfaction, but I foresee that, “Okay, that’s great.” Because we’re identify the horrible hiring managers versus the ones that are really good at it. But I also think that, “Okay, what about recruiters? And also what about candidates?” I don’t want to lead the witness, but how do you see this playing out in the future?

I wouldn’t go as far as to say that all these ratings will be made public. But in the way it plays out is, I do see that companies should start looking more at their internal processes to saying, “How can we be better at hiring?” Rather than right now, most of the responsibility seems to be placed on the candidate, which is, “How do we just find good candidates?” It’s all about how do we actually create a reciprocity in the hiring process so that the companies are not just always looking after the great candidates, but also looking at their internal great processes, who are great recruiters, who are great hiring managers, how do we train and disseminate best practices across the organization so that we’re just elevating how hiring is done across the entire organization for the good of everyone.

I love it. With the two things that we’re talking about, quality of hire, hiring manager satisfaction, Do you foresee the future creating baselines so that people can understand where they are as an organization, but also maybe against the industry using metadata, et cetera, and be able to then say, “Okay, our metric is what we know, but how are we doing compared to others like us.”?

Searchlight already provides a baseline on things like quality of hire that then is broken down into, well, what are the great hire managers? Where are the great recruiters? We’re the great departments? And the factors that impact quality of hire. Absolutely, we’re finding that the value is not just how do we put this feedback loop on autopilot? It’s then, how do we create benchmarks so that as you improve, you have a direction of where to aim and you have some relativity in understanding where you are today versus the rest of the market?

(19:14)
Our dream is that overall with Searchlight or any changes to the way companies are managing how they hire the overall benchmark for high quality hiring goes up. Because if that happens, well, then as a whole, the right people are in the right roles, in the right company, a greater percentage of the time, which will lead to massive value for the world.

You can see that being split by company size, industry, maybe even maturities, all cool things that again, when you’re inside of a company and you’re doing your bit, you know what you know but you have no idea compared… You might be ahead, you might be doing amazing and you might be being leaned on by the executive team like, “We need to do more, faster, this, that.” And the other is like… Compared to companies of our size in our industry, geography, whatever the bit is, “Yeah, actually we’re killing it.” Or the opposite could also be true.

(20:15)
Yeah. Go ahead.

I would actually say the most interesting insights I actually are coming up are looking at departments within companies. So one is, what is the overall of the company against other companies? But actually we’re realizing is departments within a single company have very different quality of hire scores. This actually is what allows the head of people and talent and the recruiters to be much more thoughtful with their resources because no one has unlimited bandwidth, but they get to focus their time in saying, “Okay, this department is actually doing really well, but this other department isn’t. So let’s focus our time on helping the ones that aren’t doing as well.”

(20:57)
And because we’re now speaking a universal language of quality in business impact, which is what business leaders care about, this also leads to better business leader buy-in, in terms of having them saying, “Yeah, we should be spending more time on improving high end quality and we need to get our hiring managers on board to support recruiters in making this all happen.” So it actually galvanizes the entire company towards this common goal of finding recruiting.

Two questions left. One is the offer acceptance rate. I know it’s been around for a thousand years, but I’m really interested in this for some reason. It’s on my mind like, “If we’ve done this well and we’ve worked with a candidate all the way through the process…” Again, been very transparent, and communicative, and all of those things, “… why would that number be lower?” Again, I don’t want to make it the be all end-all, obviously metric.

(22:06)
I’m always blindsided by people talking to me like, “Well, yeah, [inaudible 00:22:09] but one in third. We have about 33%.” I’m like, “Why?” I don’t fundamentally understand that. I don’t want to make it to be of all, it’s obviously clearly not to be all end-all metric, but what’s your take on why that’s even lower than what it should be?

I think the offer acceptance rates being as low as they are is absolutely the negative consequence of this focus on velocity. There was this McKinsey study that came out that said, “At the end of the day, what people want is to feel like they’re valued and feel like they belong in a company.” That absolutely would impact whether or not someone accepts a role.

(22:59)
Let’s say that you are a candidate and you have recruiters who are just try to respond to you as fast as possible, trying to rush you through an interview process as fast as possible. And yes, the time to hire could be low, they’ve got you through that process in 10 days. But then, you as a candidate gey an offer and you’re like, “Wait a minute. I don’t feel like I’m understood.” Or “I don’t feel like I understand the company. I don’t know if I’ll belong here.” Of course the candidate will say, “I don’t know if I want to accept this offer.” This is where I would see that a better balance between speed and quality will improve offer acceptance rates.

Love it. Last thing, I should have asked you this earlier, but the usage of Searchlight, is it obviously heads of talent, heads of recruiting, or is it more nuanced into recruiting operations? Who actually uses the product?

We see ourselves being this critical link between the head of people, the head of talent, the head of talent ops, and also a really cool department we’re seeing come up increasingly, which is a head of talent insights.That also can link to L&D and business leaders that are also very invested in hiring. I would say this too, with recruiting and their metrics, when they’re overly focused on time to fill, it’s easy to just stay within your own silo. But the best recruiting organizations recognize that they have to break down those silos and connect their work, and their metrics, and their performance, to the rest of the business.

(24:46)
So the more that we can create this link from recruiting to the rest of the HR org, from L&D, ops and then up to the heads of people, that is where talent and recruiting can get a strategic sit at the table and they could be rewarded for the great work that they’re doing.

Drops mic, walks off stage. Kerry, thank you so much for being on the podcast.

Of course. Thanks for having me. This was a lot of fun.

Thanks for everyone listening to the RecruitingDaily Podcasts. Until next time.

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