Marty O’Neill’s latest book, The Power of an Internal Franchise shows you, the reader, how to lead, engage, inspire and empower the members of any organization to embrace that complete and total dedication to the success of their organization. Marty has laid out the argument with data and case studies, profiles and analysis. Then he has taken it a step further to offer tips and how-to’s to make that transition.
Marty O’Neill, is founder and CEO of Corsum Consulting, a firm focused on building enterprise value for mid market companies. Marty has been an operator and consultant in the technology services and software industries for 25 years. He has started technology based services companies, led two IT Services firms through successful acquisitions and ran a business unit for a Fortune 50 company.
He was a recent guest on my radio show. You can listen to our conversation at this link.
I asked him about some interesting financial metrics he encouraged corporate leaders to consider regularly. I asked him:
You listed 22 components a service company should have on its financial dashboard. Most of them seemed standard: EBITDA, Revenue, Overhead as percentage of sales, etc. But three caught my eye:
• Hires via referral
• Cost per hire
• Resumes in pipeline.
Why are they important?
And Marty answered:
Well, you know, if you think of a services company that there’s really two major functions of a service company. And they have to be aligned.
- Talent acquisition and talent growth.
- Business acquisition or business growth.
Those two rocket-engines of growth have to be aligned. And on this one, the side we’re talking about here is the talent acquisition and talent growth.
How do you bring them in at a cost-effective manner?
And it gets back to that whole thing of creating a workplace brand. When you’re hiring via employee referrals then that’s telling you that you’re internal brand is credible. You’ve been able to claim it because your employees are out there acting as recruiters or owners.
When your cost per hire starts to go down, when you’re no longer paying recruiters to convince people to come there then, again, it’s the same sort of alignment.
Back to that statement that you want to create a line-of-sight between what people do every day and the performance of the company. One of the things even the most junior person in a company can do is refer people in to the company. That lowers the costs per hire. Chances are they will have referred somebody who’s worked with them and they trust them and know they’re going to do a good job. So, they’re able to, the actions they do every day is able to impact the financial performance of the company.
Then the resume’s in the pipeline...they just have to know, again the alignment of the acquisition of the business and the development of talent and the acquisition of talent, they have to be aligned.
Think in terms of sine waves, right. One sine wave is the staff, adding staff to your company. the other sine wave is business development. In a perfect world, those two sine waves are aligned. Right?
The shift is one way or the other. You have opportunity costs where there are not enough people to do the work. Or you have too many people to do the work and you’re losing money.
So, a services company has to have that alignment. On the talent acquisition/development side these are three indicators that you should be able to share with everybody.
- How are we doing with referrals?
- How are we doing with keeping our costs per hire down?
- How many folks do have that want to come here? How many resumes in the pipeline?
And as I listened to his answer, one of his many great answers, I heard him answer for those same corporate executives:
What are metrics we can use to measure the success of our social media?
Think about it for a minute if it's not obvious. Social media agencies and gurus, go ahead and fire away.
Your company's use of social media reflects the conversations you inspire first within your organization. Those conversations in turn inspire your members to tout or celebrate or promote their workplace (operative word is their). Three of the key metrics you would use to measure the effectiveness of your social media then are:
• Hires via referral
• Cost per hire
• Resumes in pipeline
So. When you measure your results with social media...do your measure these three metrics? If you're not, you're probably wasting both your investment in social media and the potential of your most important resource: your people.
Want more from Mary O'Neill?
- Read his blog.
- Follow him on Twitter.
- Buy his books!
- Read the full transcript of this conversation here.
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