How do you know if your recruiting team is doing a good job? The answer is more complicated than you’d think.
Consistently convincing top talent to work for your organization is one sure sign your team is on the right track, but there are other ways to measure success, too.
Here are five talent acquisition metrics useful for measuring your team’s performance:
1. Time to Fill
While it’s usually not a good idea to rush the hiring process, taking too long to fill needed positions may be a clue improvement is needed.
Time to fill (defined as the number of days it takes to fill a position) is a standard metric that typically varies depending on industry and position. Still, averages across industries can be helpful when evaluating your team’s efficiency. A recent article announced time to fill as 68 days—the highest since 2010.
Bonus Takeaway: Beating the average will increase your chances of nabbing the best and brightest from your competitors.
2. Short Term Turnover
High turnover in the first year of employment is a huge red flag that your recruiting process may need some attention, and it matters little whether the turnover is voluntary or involuntary. Both types indicate fit mis-matches that would have been better avoided.
Data indicates that employees paid on an hourly basis are nearly twice as likely to leave a job within the first year as are employees paid on a salary basis and that every fours hours cut from an employee’s schedule increases the likelihood he or she will leave by 5%. However, this is not to suggest that salaried employees don’t quit jobs within the first year. They do.
Bonus Takeaway: Smart pre-hiring processes (which include reference checks) and rigorous onboarding can significantly cut down on first-year turnover.
3. Cost Per Hire
If money were no object, a company could quickly hire the best talent in the world. However, that’s not how recruiting works in the real world.
In the real world, companies have real budgets and real concerns about the cost of hiring, which include expenses such as sourcing cost, agency fees, employee referral fees, travel costs, relocation costs, and in-house recruiter compensation. Cost per hire is related to time to fill, as longer times to fill tend to be more costly a well.
Bonus Takeaway: Unlike some other aspects of HR, cost per hire is easily quantifiable, and if managed well, a good opportunity for HR to show its efficiency.
4. Offer-Acceptance Rate
The percent of job offers accepted (versus those declined) says much about your team’s effectiveness. While it’s true that candidates will sometimes refuse an offer for reasons outside of your team’s control (such as a strong counter offer from a current employer), other times a refusal is a direct result of a cultural, compensation, or job duties mismatch that could have been detected with more thorough hiring practices.
Bonus Takeaway: Increase your offer acceptance rate by carefully assessing the candidate’s motivation for seeking a new job as well as his or her expectations regarding wages, job scope, and job culture early in the hiring process.
5. Quality of Hire
Whereas cost per hire may be one of the most straightforward HR metrics, quality of hire may be one of the most nebulous. Still, everyone’s talking about it. The Society for Human Resource Management calls quality of hire the “holy grail of recruiting”.
Much like beauty, quality of hire is in the eye of the beholder and varies from organization to organization depending on leadership priorities. As a result, the formula for calculating quality of hire also varies and can include other metrics, such as turnover, performance reviews, hiring manager satisfaction or instead focus on performance and/or engagement level.
Bonus Takeaway: Organizational differences aside, a solid evaluation process that drives performance is a core component of any quality of hire equation. Without it, the metric is virtually meaningless.
Hiring decisions affect every aspect of the business, making it important to apply solid metrics to talent acquisition efforts. If you can only take three metrics start with quality of hire, time to fill and offer to acceptance rate, as your team often does not control your cost.