Recruitment Metrics: The Key to Effective Recruitment Strategy
To save costs, improve efficiency, and drive big-picture results, a remote recruitment process must have a clear and well-tested strategy in place. The lack of such a strategy will result in a waste of time, and resources and compromise the long-term goals of a company.
Recruitment metrics allow organizations to devise such a strategy. These metrics determine the efficacy of a recruitment process. The key to deriving a good ROI is following these metrics and learning to capitalize on them effectively.
Just to give you a picture, HR costs make up about 28% of a company’s operating expenditures. That is a huge cost at stake, and if HR doesn’t perform well in terms of recruitment, that is a great loss for the company.
Learning to leverage these recruitment metrics effectively can ensure better employee retention, employee satisfaction, company growth, and reduced recruitment costs.
Therefore, in this guide, we will tell you about some of the most important recruitment metrics and how to capitalize on them to create a robust recruitment strategy.
Source of Hire
Source of hire (SoH) is one of the most important metrics to consider. People in charge of the remote recruitment process must take great interest in the sources which attract new hires. Consistently analyzing sources of hire will enable recruiters to learn about the sources that provide them with the best candidates.
To capitalize on the source of hire, employers can use in-depth web analytics, surveys, and Applicant Tracking System (ATS) to figure out how they perform over various platforms such as social media, company websites, sourcing agencies, job boards, and the company’s career page.
Once they have that data, they can rule out sources that aren’t deriving any useful results. Sources of hire usually involve costs such as advertising and marketing campaigns to attract employees. Figuring out poorly performing sources will save money and help an organization secure better candidates with better retention (more on that in a bit).
Time To Hire
Time to Hire is the time it takes when a candidate is approached till the time he accepts the offer. Simply put, it is the time taken by a candidate to move through the hiring pipeline and land the job. It is a great indicator of a recruitment system’s performance.
The longer the time to hire, the higher the chances of candidates dropping out of the recruitment process altogether and getting snatched up by recruiters with shorter TTHs. In this economy, it is all a game of speed and efficiency, and candidates don’t wait around when they get a better or similar offer in another organization.
To make this metric work for your recruitment process, make sure that it is speedy and effective. If too many clients are dropping out after the hiring process, your time to hire is slow. Break down different steps in the recruitment process and focus on them individually to figure out which areas need improvement.
Offer Acceptance Rate
When an offer is made to successful candidates, some of them accept, while some decline. A company with a low acceptance rate may have issues like poor reputation, low compensation, and less competitive benefits offered to the candidates.
Offer acceptance rate = (no. of candidates who accepted the offer/ total offers extended) X 100
A low offer acceptance rate may also reveal such issues where you might need to work alongside the finance department to make the positions more attractive in the eyes of shortlisted candidates. Moreover, if your time to hire is low, the offer acceptance rate will consequently be below. Make sure that in combination with the acceptance rate, other metrics are also performing well to create an efficient recruitment strategy.
Cost Per Hire
Cost per hire means the money that is spent to fill a vacant position. It is one of the most important recruitment metrics, and taking care of it can result in a high ROI recruitment strategy. Cost Per Hire considers all kinds of costs involved, such as money paid to advertise jobs (job boards, social media, etc.), attending job fairs, and referrals. Moreover, the time spent on hiring and training the recruitment team is also, in a way, a part of the Cost Per Hire metric.
Cost Per Hire = Total Hiring Cost/ no. of Hires
An organization can reduce CPH and make the recruitment process more efficient by hiring well-trained recruiters, keeping up with best recruitment practices, and making the recruitment process a smooth one for the candidates. A low Cost Per Hire can lead to a better-informed recruitment budget and improved overall quality of the hired candidates.
First Year Attrition
Attrition, in simple words, is the quality of retention. First-year attrition means the number of hired candidates who stayed with the company throughout the first year. With this metric, organizations and employers determine the level of satisfaction of their candidates.
If a company has good first-year attrition, it saves a lot of time, energy, and money in the future. If the candidates keep dropping out in the first year of hiring, a company will have to start the recruitment process all over. It means more costs, more time, and more resources. If the cycle keeps repeating itself, it is not good for the company in the long run.
If your company is facing low first-year attrition, it can mean a few things. For starters, it might be possible that the job description doesn’t match the requirements and nature of the work in the actual job. Secondly, it could indicate that you need better training practices for your new remote hires to turn them into an effective workforce. Thirdly, it could also mean that the working environment is not suitable for the candidates, and they’d rather work somewhere else.
Figuring out the reasons for low first-year attrition rates and taking concrete steps to address those issues can result in the company’s growth and save a fortune.
Statistically speaking, 70% of hiring managers believe that accurate recruitment metrics are vital in determining a well-performing recruitment strategy. Various recruitment metrics go into making such a strategy. But the five metrics mentioned above are usually the most important ones.
So, use these metrics to your advantage and leverage them to improve employee satisfaction and the long-term growth of the organization.
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Originally published at Upsatck.co on Feb 14, 2022, by Joanna Blomfield.