Q&A with Shauna Geraghty, Head of Talent at Talkdesk
Shauna Geraghty, Head of Talent at Talkdesk, sat down with Daniil Karp, Director of Marketing at Teamable, to share how her team develops their KPI and metrics strategy. The full conversation can be found here: Planning for Success: Setting Your 2018 Recruiting Metrics and KPI Strategy.
Daniil Karp: Hi Shauna, thank you for speaking with me today. Let’s start with a little background. Tell me a little bit about Talkdesk.
Shauna Geraghty: Talkdesk is the world’s leading cloud based contact center platform. We’ve seen 10x year over year growth since we were founded in 2011 and we’ve seen it across customer acquisition, revenues and headcount. As an example of this headcount growth, since closing our Series A in mid-2015, we’ve grown from 30 employees to 300 employees, spread across three locations: San Francisco, Porto and Lisbon.
DK: When you look forward to the new year for Talkdesk, what challenges are you focused on?
SG:This year we have really aggressive headcount goals. We plan to stay on this hypergrowth trajectory by adding about 180 people to the team. The interesting thing about this is that about 100 of those people will be engineers and about 30 will be very senior hires at the director level or above.
These are aggressive goals, and we’ll accomplish them without the use of agencies and with a pretty green team; the average tenure on the talent team right now is less than a year. We’re also operating in two of the toughest talent markets – Silicon Valley and Europe.
DK: How did you lay the ground work for your talent metrics and KPI strategy at Talkdesk?
SG: We started off by creating a framework: the three pillars of talent. These are the three most important drivers that are influencing talent at Talkdesk. For us, it’s efficiency, effectiveness, and the candidate experience. If we aim optimize all three components, this will help us hire top talent.
DK: Let’s dive into these pillars. What is “efficiency” in the context of this process?
SG:Running a very standardized recruiting process allows us to run a very efficient organization and allows us to control for variables. This is important because then we can function in lockstep with all the other members of the recruiting process. We can also automate a lot of the redundant tasks that often come up within this process, and it helps to streamline our efforts across the organization.
For us, running an efficient organization is critical to our success and this goes back to how we operate as an organization – we do everything in house without leveraging agencies and we operate within a resource constrained model. So when the delta between our planned and actual hires widens, we only have a few levers to pull: 1) we work harder or more hours, 2) we increase efficiency or, 3) we de-prioritize certain reqs. We do not, however, have the ability to use an agency, add a tool to the stack or increase our Talent Team headcount.
The beauty of using a standardized process is that we have consistent funnel metrics across roles, which allows us to develop a more predictable capacity model. As a result, when discussing hiring priorities with our FP&A and executive teams, we can update expected start dates or de-prioritize recruiting for certain reqs based on our capacity model.
DK: How do you think about effectiveness when it comes to your recruiting process?
SG: The most important thing for us is that we bring in the highest quality talent that we can find for a role. We spend a lot of time and resources training the team on how to identify top talent and looking for individuals who are the best fit for the company and the role. We standardize all interview questions and ensure that these questions align with our success criteria that we define in our new position kickoff. All of this helps us make the most informed hiring decision and find the right candidate.
DK: What role does candidate experience play in in your strategy?
SG: At Talkdesk, it is so important that we provide each candidate with a world-class experience. It is one of our strategic advantages in a competitive market and helps us reduce candidate-initiated dropoff throughout the recruitment funnel.
Additionally, for each hire, we typically reject 199 candidates. We view the talent process as our opportunity to showcase our brand, our world-class employees and our product to some of the greatest talent in Silicon Valley and Europe. If they have a good experience interviewing with Talkdesk, these rejected candidates will go on to be our customers, brand advocates, business partners, referral sources and even return candidates.
Measuring the impact of these efforts is important so we can refine our approach and strive to continually improve how we interact with each candidate.
DK: For a team that is just starting to define their recruiting metrics and KPI strategy, would you recommend that they create the same pillars, and if not, do you have suggestions for additional pillars?
SG: My recommendation is to create pillars that help your team align with the goals that are most salient to them. So, if increasing diversity is top of mind, create a pillar around that. If reducing spend is critical, you can create a pillar called “Lean” for taking a lean approach. This is probably one of the more important steps in the process, and it helps teams approach this from a very strategic angle.
DK: This is obviously a very heavy Iift for any organization to put in place. What drove you and your team to put a process like this in place?
SG: An effective recruiting metrics and KPI strategy and framework helps the team and the company create alignment towards a shared goal. If we’re all moving towards optimizing our three pillars, it allows us to hire top talent. So creating that framework and a metrics strategy around the framework really helps to drive us forward in the same direction.
An effective metrics and KPI strategy also creates awareness of the talent team’s process, performance and priorities. It allows us to position ourselves as a strategic business partner to hiring managers. And it really helps facilitate workforce planning and drive company strategy.
DK: Buy-in from the executive team is paramount in most business endeavors, how does the Talkdesk talent team create business partnerships with key stakeholders in the organization?
SG: I ask each team member to spend a significant amount of time with the hiring managers. They are asked to truly understand their needs, learn what metrics are top of mind for them and define a communication cadence to ensure that we’re working in lockstep. We’re very mindful about how much time and effort we spend nurturing these relationships.
DK: Can you provide me with an example of a metric that meets an emergent need of the company?
Imagine that for a certain company, increasing diversity is important to them. They could actually build initiatives around this and track progress towards their goal of increasing diverse hires.
And let’s assume that one of their initiatives was to increase diversity at the top of the funnel through both outbound prospecting efforts and adjustment of their messaging to attract more diverse inbound candidates. The metrics that they could track are total diverse candidates at the top of the funnel and percentage of diverse candidates at the top of the funnel.
DK: How does the audience influence how you share metrics?
SG: It’s not enough to consider key stakeholders and core drivers – you should structure the data based on the needs of the audience. It’s great to know that hiring managers like to review our funnel metrics, but what’s even more important is to think about how they like to consume that data and the cadence at which they prefer to consume that data.
So to define our strategy, we create unique reports for unique stakeholders. For example, we meet with our executive team and our FP&A team every other week to define our headcount plan and goals and track progress towards those goals. In that meeting, I have a very specific report that I share with them and that’s not the same report as what I would share with a hiring manager.
DK: How do you track cost per hire and total savings?
SG: For cost per hire, we include all of the talent team’s salary within the hiring time period. We also include a 25% markup on the talent team salary, for the cost incurred to the business to have these folks on board. Finally, we include costs paid to software vendors and referral bonus payouts. So we sum all of that up and divide it by the number of hires and that gives us our cost per hire within that time period.
We decided to calculate total savings based on a real conversation I had with the executive team. They asked me, “Is it cheaper to do this in house or just to leverage an agency?” What I decided to do was approximate the cost of leveraging an agency for bringing all those new hires on during that certain time period. So let’s say we’re looking at it over a quarter: I would annualize the salaries of the new hires and multiply that number by twenty percent because recruiting agencies typically charge a 20% placement fee. That amount is the amount of money that we would have to pay the recruiting agency for bringing us all new hires within that time frame. So I would take this number, the total cost we would pay the agency during that time frame, and subtract the total cost that we calculated for cost per hire and that would give us the total savings to the organization. We always want to make sure it’s a positive number, and that will help keep us in business.
DK: Now you’ve shared with me in previous conversations that Talkdesk’s recruiting team measures something that you refer to as the “magic number,” can you tell me a little about it and what it tracks?
SG: The magic number is a metric that we created that multiplies a new hire’s quality score by their difficulty score.
The quality score is set by their manager or someone on the executive team. This is based on a scale of 1 – 5 with 1 being below team average and 5 being a top performer on the team or company. The difficulty score is assigned by myself and it has a scale from 1 – 10. I take into consideration the new hire’s level, the talent pool size and the recruiter’s involvement in the process.
Each new hire is assigned a magic number, and then within a certain time frame, we add up all the magic numbers of the new hires that the recruiter brought on board. So we actually track this every quarter, and each recruiters’ quarterly target is 100.
DK: Why create this new metric and this magic number? Why not just track something like time to hire or number of hires per month instead?
SG: We wanted to approximate the value of the recruiter to the company and to incentivize the right behavior. So for example, it’s not helpful for Talkdesk if a recruiter brings in someone below team average and they churn very quickly. On the other hand, it is very helpful to Talkdesk if a recruiter brings on a top performer to the team. We want to be able to both recognize and incentivize that behavior.
The best example I can give is that it would take us a very long time to find a high quality VP of Finance, but it wouldn’t take us as long to find a low quality VP of Finance. We want to take into consideration that difficulty component and the quality component when approximating the recruiter’s value to the organization.
DK: Once you assign a quality score to each new hire, do you do anything else with this data?
SG: Yes, after we assign quality scores to each new hire, we use that data to look at hire quality by source. We break this down by inbound, outbound, referral, external referral or internal promotion and we also break down inbound source by direct, Linkedin, Glassdoor, Indeed, AngelList and other – so that we can track the impact of our spend.
DK: Can you give me one example of why it would be important to track hire quality by source?
SG: At Talkdesk, we see that “referral” is the source with highest quality. From this data, we have worked to optimize our employee referral program and process. In fact, our recruiters and sourcers spend around 5 – 10 hours per week working with our current employees generating referrals and as a result 40 – 50% of our new hires each quarter come from referrals.
DK: Are there any other metrics that you track under effectiveness?
SG: At Talkdesk, we have four more metrics just in this one pillar: offer acceptance rate, employee retention, referrals and business outcome measures.
Offer acceptance rate: We calculate this as the percentage of written offers submitted to candidates that are accepted. We look at this number for each recruiter, hiring manager and role. We also aggregate rejection reasons and create action plans based on this data.
Employee retention: We consider employees who churn within 90 days to be a mishire. In fact, we claw back all the metrics associated with that new hire from the recruiter if they churn within that time frame. This helps us to incentivize bringing in top talent, instead of just pushing through a candidate that the recruiter or hiring team is uncertain about.
Referrals: Referrals bring us the highest quality candidates and new hires to Talkdesk. So we actually spend a significant amount of time generating employee referrals internally, and as a result we track this metric closely. We see 40% to 50% of our hires as generated from employee referrals.
Business outcome measures: We look at these metrics on an annual basis at a high level. We want to make sure that the new hires we’re bringing on are making an impact on the business and helping to improve these metrics.
DK: How helpful is having these particular metrics when you’re building the capacity model for the recruiting team?
SG: If we didn’t have this data, our capacity model would not be accurate. Additionally, the more we can adhere to our standardized recruiting process and the more our actual funnel looks like our ideal funnel, the more predictable our model. It’s helpful for the FP&A team, when they’re budget planning, to rely on us to provide them with that predictable model. It also allows us to advocate for additional resources when needed and serves as a reference point when we have to de-prioritize certain hires.
DK: How do you collect all of this data that you talked about and where do you store it?
SG: The beauty of running a standardized process is that the data in our ATS is relatively clean. It’s kind of a byproduct of that. So for most of these analyses, we actually either just pull the data directly from the reporting function that’s in our ATS, or what we’ll do is export the data into a CSV file and we’ll manually manipulate it and process it with Excel.
DK: What’s your advice for teams that want to define their own 2018 recruiting metrics and KPI strategies?
SG: Make a list of all the metrics you track over time, and ensure that your metrics are comprehensive or fill in gaps. You should also structure your dashboard and reporting cadence based on the needs of the business and key stakeholders. Then create a framework for your metrics and KPI strategy, and regularly reevaluate those metrics.
If you’d like to learn more about how Teamable can help you launch, optimize, and scale your employee referral program let’s connect! Schedule a time to speak with a sourcing and employee referral expert.
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