Businesses have been told time and again: You cannot manage what you cannot measure.
The same concept applies to recruitment. Finding the right people for the job doesn’t automatically equate to success, especially because the hiring process requires investment in terms of time, money and other company resources. Businesses should be able to collate and analyze data that will help them evaluate the different steps in their hiring process. This allows recruiters to improve the things that are not working, and iterate those that are.
While different companies have different hiring systems, there are certain industry standards that you should monitor when it comes to key hiring metrics. Here are six of them:
1. Hiring Sources and Channel Effectiveness
Decades ago, job postings were limited to the classified ads pages of newspapers. Today, job applicants use different avenues to find a job – online job boards, social media, traditional media ad placements, and referral programs just to name a few.
It’s important to track which of these sources are bringing in the most candidates for your company’s job openings, as well as which channels are converting the most. In fact, a recent survey revealed that this metric has been ranked #1 as the most important hiring metric that talent acquisition managers monitor.
Why is this metric important? First, it determines which source is bringing in the most applicants for your job opening. Second, it shows which ones are bringing in the best candidates for the job. For example, you might be getting a lot of applications from online job boards, but these applications may not be converting to actual hires. On the flipside, an internal employee referral program may not bring in as much applications, but converting at a much higher rate.
By knowing this key metric, you will know which source you should focus on and allocate your resources accordingly.
2. Candidate Experience
Word of mouth is powerful, especially online. Would you eat in a restaurant that has really low reviews or stay in a hotel that has been rated one-star by guests? Probably not.
Applying the same concept to recruitment, job seekers will not apply to join your company if previous applicants rated your hiring and onboarding process as poor.
Candidate experience is an often overlooked but it is an extremely important hiring metric. Job seekers who were dissatisfied with your process often take to online platforms such as Glassdoor to air their grievances. More than a PR nightmare, this will scare possible good hires from your company.
You can easily avoid this by asking applicants to fill out a survey at the end of your recruitment process. It will help you spot glaring problems in your system and reach out to dissatisfied applicants before they go public.
Time-to-hire measures the duration between the moment a job position becomes available in your company to the day a person gets hired for the job.
Why is this hiring metric important? A open position in your company is a gaping hole that’s leaking resources. An unfilled position means other resources are being diverted to fulfill this function before someone gets hired to do the role.
As such, it comes as no surprise that companies with strong hiring processes have a shorter time-to-hire. Statistically, it takes an average of 42 days to fill a vacancy, which is slow considering that the best candidates are off the market within 10 days.
Strive to streamline your hiring process to reduce your time-to-hire. However, make sure that it’s carefully thought out so you don’t sacrifice quality of hire because you were rushing to have someone onboard.
4. Cost per Hire
It’s pretty obvious: hiring requires money, so tracking how much your company is spending to acquire a new employee is a no-brainer.
This key hiring metric may be straightforward, but there are a number of costs that are usually missed when calculating cost per hire. For instance, ad placement expense, recruiter fees, hiring tools and technologies, and travel expenses are pretty obvious. However, there are certain expenses that are not as easily calculated. For example, you need to factor in how many hours hiring managers are spending for interviews and what’s the equivalent monetary value of their time.
Having a big recruitment budget is definitely an advantage, but there are several tried and tested ways to recruit that you can use if you’re on a tight budget.
5. Offer Acceptance Ratio
There’s probably nothing more heartbreaking for a recruiter than finding the right person for the job only to be turned down when it’s time to present the job offer. It happens every day, in small and big offices around the world.
Sometimes, this happens due to reasons out of your control, but closely monitoring your job offer acceptance ratio can determine whether there’s something wrong in your recruitment process.
It’s not surprising that the main reason applicants reject a job offer is due to compensation, but there are also other reasons such as a negative interview experience with the hiring manager, tedious hiring process, and unclear job expectations. Keep an eye out for these things to make sure you’re not spending time and money only to be rejected in the end.
6. Application Drop Off Rate
If 100 applicants started in your hiring funnel and only 10 finished the entire process, then you have a big problem. This is indicative that your hiring process takes too long to complete and candidates are giving up halfway through.
Try to identify specific choke points in your hiring funnel and address them. For instance, your initial application form should not take more than five minutes to complete.
Your end goal should be to get all the information you need from job seekers for you to make a decision without taking too much of their time.
Know Your Numbers, Improve Your Hiring Process
Talent recruitment is a vital part of any business. By monitoring the key hiring metrics outlined above, you can paint a clear picture on what you need to improve in your systems and processes, and take out the guesswork when it comes to evaluating the effectiveness of your recruitment.
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Which of the following key hiring metrics above are you already monitoring? Are you tracking other metrics that were not listed? Share in the comments section below.