If you’ve been reading our blog you’ll know we’ve covered employer branding, the employee value proposition, Google for Jobs, careers websites, social media – we might be little, but we’re big on helpful content. So, if you’ve been implementing at least some of all of this – you should be experiencing an upturn in your recruitment activity. But how effective has it all been? And, if the HR Director wants to know what the resourcing budget has produced, what are you going to report back? Yes, it’s time to get all analytical – but don’t be scared, it’ll be OK, trust me. In fact some of this is so simple you’ll wonder why you’ve not looked into recruitment metrics before.
A little word about measurement
Your recruitment budget is competing with the training budget, the health and safety budget, the HR IT budget, the Friday cake budget – there’s only so much available. If you can demonstrate the success or return on investment (ROI) on what you have spent it’ll make getting the same (or more) next year all the more likely. And that depends on how accurate you can be at measuring your recruitment effectiveness. What’s more, if you don’t know what’s working (or not) how can you be confident about your future strategy?
You know it makes sense. But, with so many ways of measuring so many different things, where do you start? We’ll show you what we think are the main ones – to measure the recruitment process itself and then post recruitment effectiveness and feedback. Start working with these and you’ll be a metrics star before you know it.
Key recruitment metrics – process
1. Time to hire. This can be a contentious issue in an organisation. A hiring manager wants a vacancy filled, how long will it take? Rush the process and you risk undermining quality and missing out on good candidates completely, take too long and you’ll not only frustrate the hiring manager but the candidate might lose interest too. Looking into time to hire can unravel issues that are holding up the process. The ads might have run quickly, but is someone sitting on CVs internally, is there a problem with assessment results taking to long? Are you in turn taking too long to respond to candidates? As you identify and address internal issues, the time to hire should come down.
Time to hire = average number of days from the start of the recruiting process to the signing of the employment contract
2. Sourcing channel effectiveness. This one is about quality, not quantity. In reality, who wants to wade through thousands of unsuitable applications when a shorter list of better qualified candidates can be generated? No one. This metric identifies which channels send you the most suitable and better quality hires. For example, if you receive 2000 applicants through social media and hire 20 candidates, that’s 1%. Alternatively, 20 hires from 500 referrals is 4% – that’s three times more effective and gives you an idea on where to invest budget and effort next time around.
Sourcing channel effectiveness = # of hires generated by a channel / number of applications generated by a channel
3. Sourcing channel cost. Effectiveness is one thing, but what about sourcing channel cost? You can calculate the cost efficiency of your different sourcing channels by including the amount of money spent on each channel – such as the advertisement or referral programme cost. By dividing the spend (per channel) with the number visitors who successfully applied through the vacancy you measure the sourcing channel cost per hire.
Sourcing channel cost = Spend per channel / number of successful applicants per channel
4. Applicant completion rate. You’ve attracted their interest and got them this far – but will they complete the application process? A low applicant completion rate suggests something is putting candidates off. Is the form on your website or ATS too long and repetitive for the role, is it asking for too much personal information? Perhaps the form is not loading properly, risking data loss which would frustrate a candidate who’d be unlikely to enter it all again. If rates suddenly drop something is probably amiss and needs investigation – and your first point of contact should be the candidates.
Application completion rate = number of submitted applications / total number of applications started
5. Applicants per hire. Applicants per hire is the ratio of how many applications are considered for each actual hire. It’s a sign of how hard it can be to recruit for certain positions and can vary widely from role to role – so calculate it for each type of position you fill. This metric shows whether you are effectively sourcing applicants, and should it be low you’ll need to explore what else could be done to widen the net. Are there different approaches or is the campaign message misfiring?
Applicants per hire = number of applicants for a position / number of hires for that same position
6. Offer acceptance rate. This metric can help you spot where there may be issues that deter candidates from accepting your offers. It compares the number of candidates that accepted a job offer with the number to whom an offer was made. A low rate indicates problems – a low remuneration rate perhaps or issues around benefits or flexible working arrangements.
Offer acceptance rate = number of offers accepted / number of offers
7. Cost per hire. The ‘show me the money’ metric. What does it actually cost to get the candidates on board? You can go for a broad approach and look at all candidates across the year or focus on a particular campaign. The objective is to work out how much you spent on each new hire. To do this effectively you’ll need to consider not only the external recruitment campaign costs and any recruiter fees or ATS software costs – you should also include internal costs – such as the cost of your resourcing team and the cost of building your careers website and creative work on your employer brand.
Cost per hire = (total internal costs + total external costs) / total number of hires
Key recruitment metrics – post recruitment satisfaction
8. First year retention or attrition. Successful recruitment is about more than accepting a role – a lot more. It take a few months for a new recruit to become productive so, if they then leave within the first year the whole exercise will be costly with little return. Of course there are always some candidates that just don’t work out and their departure may be managed by the employer. But those that leave of their own accord when they are a perfect fit suggest problems may exist. They might have had unrealistic expectations – or feel that the opportunity was over-sold, they may not like the reality of the organisation or there may be an issue with line management.
Interpreting this can can be seen two ways. Positive – your retention rate. Negative – your attrition rate.
Retention = the number of employees still in post after 12 months / total number of new hires over 12 months
Attrition = the the number leaving a post within 12 month / total number of new hires over 12 months
9. Candidate experience satisfaction. A lot has been written about the candidate experience over the past few years and with good reason. Candidates have opinions and they talk about their experiences good and bad, and particularly the bad, often via their social network. Bad experiences can damage employer brand reputation, hampering future recruitment exercises. So tracking candidates views about the recruitment experience – for successful and unsuccessful candidates alike, can detect whether expectations set during the recruitment process met the reality. And offering the opportunity to give feedback may even improve their perception of the experience.
There’s no formula for measuring candidate experience and satisfaction – but you can create a short online survey using SurveyMonkey, asking for their views on the application experience. There are also third party feedback services you can use such as Mystery Applicant.
10. Hiring manager satisfaction. How your internal customers feel about the recruitment service they receive is an equally important metric. Positive feedback would indicate a successful recruitment exercise. Positive hiring manager satisfaction also suggests that they are satisfied with the quality of candidate within their function – this in turn is likely to engage the new employee and lead to better retention which, as we know, suggests a successful hire.
Feedback can be gained face to face or by an anonymous survey. Hiring managers tend to be forthcoming when they are not happy so finding out what they think are the positives is worth capturing too, along with being seen to care about the service being delivered from the resourcing team.
So there are lots of ways to demonstrate how good a job you’re doing. But from my experience the best place to start is to simply ask … ‘what information do you need?’ Chances are whoever is interested in the data you’re providing is after something pretty specific. Something they can sumarise quickly and efficiently, and put into a format that their manager needs it. So never assume what information people need, just know that if you’re ever asked the question, ‘just how effective is our recruitment process’ that you have at least ten data sets available to you.
We’ll help you keep track
We are That Little Agency, we help employers tell their story and we do this by developing award-winning employer brands and careers websites. All designed to help you deliver measurable results. If you feel that you’d like some help, support or even a little chat around defining your employer value proposition, developing your employer brand or any aspect of your talent attraction strategy just drop us a line. After all, much of our best work has started with a cup of tea and a biscuit.