To compete, evolve, and remain relevant, today’s forward-thinking businesses always strive to improve the efficiency of their internal processes while measuring their success – and hiring talent is no exception.
According to ManpowerGroup, around 72.8% of companies are experiencing difficulties when trying to source skilled candidates, and 45% of employers are concerned about finding employees with the right talents for particular roles within the organization
Despite the fact that there’s a wealth of talented job-seekers out there, connecting with the best possible candidates proves to be an exceptional challenge for most of today’s organizations. Not only is it important to source the right talent for the job, but it’s also essential for your new recruits to fit into your internal culture, remaining motivated, happy, and engaged at all times. That’s where recruitment metrics come in.
Recruitment Metrices plays a crucial role while formulating your hiring strategy. It’s important that you have a solid backing to understand your end goal. Data (Recruitment Analytics) helps you do just that. There are many reports which are cruicial but we will boil it down to the most important ones which will help you hire faster
Recruitment analytics is a process of using data-driven metrics and insights to improve the sourcing of the best candidates for different roles within your organization that will help you cut costs and better understand factors that are influencing your hiring process.
By leveraging the power of recruitment analytics to your advantage you’ll be able to streamline your talent acquisition efforts in a number of key areas, including vacancy fill times, application reviews, talent screening and shortlisting, and hire value or accuracy – among many others.
1. Time to fill
Time to fill metrics promote stability within your organization. It measures the amount of time it would take to locate and hire a potential new employee. The process begins with a requisition being approved by a company and extends to the point when the candidate has completed the necessary background checks. Essentially, it gives managers the opportunity to understand how long it takes to fill a job position.
This is important because hiring employees can often be a lengthy process involving multiple steps. The most successful organizations want to take measures that will considerably reduce their HR KPI ‘time to fill’ figure while keeping a good quality of hire at the same time – otherwise, this is time wasted.
2. Time to hire
Time to hire represents the number of days between the moment a candidate is approached and the moment the candidate accepts the job. In other words, it measures the time it takes for someone to move through the hiring process once they’ve applied. Time to hire thus provides a solid indication of how the recruitment team is performing. This metric is also called ‘Time to Accept’.
3. Source of hire
How do you know where to look when hiring the best talent for your organization? Well, the smartest recruiters use the source of hire. Candidates are using lots of digital channels to research and find your company. So it only makes sense that the smartest recruiters use multiple channels, whether it’s LinkedIn, advertisements, and social networks.
How do you know which of these channels is the most effective? You visualize the sources of hire on your recruitment dashboard. It indicates information such as:
- The number of applicants that are originating from each source.
- Of all the applicants that came to the specific channel, how many were qualified?
With this metric, you can better understand your recruiting expenditures, and stop using channels that are not bringing in interested candidates, which will save you some money. Likewise, you can spend more money on the channels that are actually bringing your organization the most interested, qualified people who are looking to be a part of your company.
4. Cost per hire
Understanding how much money you are spending during the recruitment process can be a very efficient way to allocate spending. It’s important to look at all of your costs when hiring an employee so that you can learn where you can cut costs during the hiring process without affecting the candidate’s quality or experience level.
Here are some of the factors that the HR metric ‘cost per hire’ helps discover:
- Recruitment time costs
- Costs of managers and employees that are involved in the hiring process
- Administrative costs that are linked to the process of training and implementing new employees
The cost per hire recruitment metric is the total cost invested in hiring divided by the number of hires.
4. First-year attrition
First-year attrition is a key recruiting metric and also indicates hiring success. Candidates who leave in their first year of work fail to become fully productive and usually cost a lot of money. First-year attrition can be managed and unmanaged.
Managed attrition means that the contract is terminated by the employer. Unmanaged attrition means that they leave on their own accord. The former is often an indicator of bad first-year performance or bad fit with the team.
The second is often an indicator of unrealistic expectations which cause the candidate to quit. This could be due to a mismatch between the job description and the actual job, or the job and/or company has been oversold by the recruiter.
This metric can also be turned around as ‘candidate retention rate’.
5. Quality of hire
Quality of hire, often measured by someone’s performance rating, gives an indicator of first-year performance of a candidate. Candidates who receive high-performance ratings are indicative of hiring success while the opposite holds true for candidates with low-performance ratings. Quality of hire is the input for the Success Ratio. The success ratio divides the number of hires who perform well by the total number of candidates hired. A high success ratio means that most of the hired candidates perform well, however a low ratio means that you need to fine-tune your selection process!
6. Applicants per opening
Applicants per job opening or applicants per hire gauges the job’s popularity. A large number of applicants could indicate a high demand for jobs in that particular area or a job description that’s too broad.
The number of applicants per opening is not necessarily an indicator of the number of suitable candidates. By narrowing the job description and including a number of ‘hard’ criteria, the number of applicants can be reduced without reducing the number of suitable candidates.
7. Selection ratio
The selection ratio refers to the number of hired candidates compared to the total number of candidates. This ratio is also called the Submittals to Hire Ratio.
The selection ratio is very similar to the number of applicants per opening. When there’s a high number of candidates, the ratio approaches 0. The selection ratio provides information such as the value of different assessment and recruitment tools and can be used to estimate the utility of a given selection and recruitment system.
8. Offer acceptance rate
The offer acceptance rate compares the number of candidates who successfully accepted a job offer with the number of candidates who received an offer. A low rate is indicative of potential compensation problems. When these problems occur often for certain functions, the pay can be discussed earlier in the recruiting process in an effort to minimize the impact of a refused job offer. An example is by listing pay in the job opening or by asking for the candidate’s salary expectations.
9. Sourcing channel cost
You can also calculate the cost efficiency of your different sourcing channels by including ad spend, the amount of money spent on advertisement, on those platforms. By dividing the ad spend with the number of visitors who successfully applied through the job opening you measure the sourcing channel cost per hire.
10. Sourcing channel effectiveness
Sourcing channel effectiveness helps to measure the conversions per channel. By comparing the percentage of applications with the percentage of impressions of the positions, you can quickly judge the effectiveness of different channels. A simple way to do this is by using Google Analytics to track where the people who viewed the job opening on your website actually came from.
By setting ‘goals’, like the successful completion of an application form, this conversion rate can be made much more accurate. Maybe the people coming from LinkedIn and Twitter don’t apply, but the people coming in from Facebook do!