The COVID-19 pandemic has created a lot of uncertainty, chaos, and obstacles for employers across most industries. It’s hard to find candidates, it’s hard to keep them, and it’s so hard to meet staffing needs that employers in industries like retail, healthcare, supply chain and restaurants are raising starting wages, offering interview or sign-on bonuses, and even reducing the number of hours of operation to ensure they can meet customer needs.
Because many employers are turning to contingent or contract workers and staffing agencies to meet hiring needs, staffing revenue in the United States is expected to grow by 16% this year to reach a record total of $157.4 billion, according to the “U.S. Staffing Industry Forecast: September 2021 Update” report released this month by Staffing Industry Analysts (SIA). This is up from 12% growth estimated in their April forecast.
In the same report, SIA said that staffing revenue fell by 11% in 2020 as the pandemic shut down businesses. According to the report, “all segments of the industry will see double-digit growth this year, in many cases as part of a V-shaped bounce back from declines experienced in 2020. Growth is also being driven by rising pay rates, particularly in the industrial and travel nurse segments.”
The American Staffing Association (ASA) also reports that staffing jobs increased 26.6% year-to-year, averaged over the four weeks ending 9/12/2021. New starts were up 2.2% on average, with half (47%) of staffing companies reporting gains in new assignments week-to-week.
What does this mean for staffing agencies? They must become more data-centric in order to accurately measure, report on and optimize key staffing recruitment metrics to meet increased demand.
Top Staffing Agency Recruitment Metrics
Delivery metrics that are broken down by speed, quality and coverage are going to be the best method of determining an agency’s effectiveness. These are the same metrics that in-house recruiting teams are hyper-focused on right now, and staffing agencies have a great opportunity in the current marketplace to help employers fill a talent gap. If it can be measured, it can be improved and scalability is key for both employer and agency hiring.
The metrics to focus on will be based on the services you offer, such as screening candidates, providing job descriptions and guidance, handling payroll, monitoring job performance, and sourcing contract placements to offer the best candidates from a wide pool of candidates. Depending on your staffing organization type, you also might consider traditional sales performance metrics like call time and number of calls per day.
This abbreviated list highlights the minimum staffing metrics that will keep agency margins high, improve performance and help your agency scale recruitment in order to fill a surge of requisitions.
Time to hire
The number of days between a candidate’s application and when they accept the job. This measures how long it takes for a candidate to move through your hiring process, and this one is crucial in a highly competitive talent marketplace.
Time to fill
Similar to time to hire, this measures time for the entire hiring process, from job requisition to job acceptance. This would be considered an agency performance metric.
Candidate to hire ratio
This is the ratio of the number of applicants applying for a position to the number of people hired for that position. This metric is directly related to your candidate outreach and using targeted methodologies like programmatic advertising is an easy way to improve it.
Submittal to hire ratio
This is an efficiency metric and is a ratio of candidates submitted to hires made. A low submittal to hire ratio means that you are submitting fewer resumes and making more placements, saving your time as well as your client’s time.
Fall off rate
In short, fall-offs are no-shows, or the number of candidates that accept an offer, but don’t show up for their first day of work without notice. Because of the churn in the talent marketplace post-COVID, this is happening a lot and it’s a huge source of frustration for employers.
Offer acceptance rate
This is the percentage of offers that are accepted in a certain time period. For example, if your agency makes 10 job offers in a month, and six people accept, the offer acceptance rate for the month would be 60 percent. If this percentage is low, it can help identify weaknesses in your recruitment strategy.
After cost, these are the benchmarks employers typically want to know when selecting a staffing agency. Improvement in any of these areas can help your agency stand out from your competitors in a crowded, rebounding, high-growth marketplace.