I met a new client this week who has did really well during the recession. And his business is doing well now – just not as well as some of his competitors. We looked at his management accounts and then at his Key Performance Indicators.

Get this – he had set minimum standards for each of his staff around sixteen KPIs. In the main they were meeting them – just not growing the business.

The problem with most recruiters’ KPIs is that they aren’t genuinely performance indicators. A KPI should be a reliable clue that profitable sales are on their way, plus whatever else is important to you, such as customer satisfaction scores.

But in lots of businesses KPIs are a legacy, and the link between them and actual performance has been lost

How many recruitment businesses are still measuring CVs sent, for example? Does that actually correlate to profitable sales in today’s market? Or does it actually encourage some really bad behaviour, like spraying CVs at a client and expecting them to do all the work? The very best recruiters aren’t sending CVs at all! They are booking their contractors in for working interviews.

Here’s another one: call times. I know business owners who demand a minimum number of hours or minutes a day. But there’s no reference to quality. Surely a more useful performance indicator would be what people get from their calls, such as leads, referrals, exclusive jobs and exclusive candidates?

Above all, my client had allowed his KPIs to breed. Starting with the ones that his old employer had used, he’s added a few more and set minimum standards against each. The result? Some of his team members were playing the system. Some were so focused on meeting these KPI requirements that they forgot that they were actually there to make profitable placements.

And all the recruiters in the business had the same standards. His trainees were expected to meet the same KPIs as those with 5 years’ experience.

We talked it through, and he recognised that more appropriate KPIs for his seniors would include exclusive jobs, referred/headhunted candidates and % fee. His trainees had no existing relationships, so we refocused on number of likely hiring managers qualified, numbers of job orders and number of interviews. And we cut back to just 4 key indicators for everyone.

So that’s it. Make sure your KPIs are Key: the ones that really correlate to success in this market. Make sure they fit the person. And make sure they don’t distract your people from making placements!

Alison Humphries is Owner/Director of Recruitment Leadership Ltd, a business specialising in strategy, exec performance and training in the recruitment sector. With almost 30 years of experience at board level, Alison is also a director of the Elite Recruitment Network and Chief Examiner for the REC. Contact her today by emailing Alison@recruitmentleadership.co.uk or calling 07720 677557.