In the current talent marketplace, you may be working with a smaller team or a smaller budget, so finding ways to do more with less is key to streamlining your hiring processes. In the talent acquisition lifecycle, your hiring efforts must be robust in order to drive results. This means that scaling back can be difficult, but it is an opportunity to really dive into your processes, methods, and metrics to find out what can work to drive the most effectiveness and scalability in your recruiting and hiring process.
Your recruitment metrics can give you a lot of insight into areas in which you can apply automation and technology that allows you to speed up specific areas within your hiring process. Here, we’ll cover the top five metrics that can help you streamline and improve your talent acquisition.
1)Source of hire. Calculate this metric by dividing your recruiting source yield by the number of applicants from the recruiting source. Use this metric to determine which sources, job boards or websites are most effective for hiring for your business. Depending on the type of ATS you use, it should record the application source a candidate entered your pipeline from through automated tracking. Create a report to view the distribution of candidates and hires among different sources. You can also collect this data via candidate surveys or using a drop down self-selection menu as part of the application although these two are not as reliable because the candidate is providing the data. Source of hire shows what percentage of your overall hires entered your pipeline from each recruiting channel or source (e.g. job boards, referrals, direct sourcing). This information can help you allocate your recruiting budget more effectively and direct more resources to the most valuable channels.
Note that there are two ways to quantify source of hire. As defined above, you’re measuring the number of candidates that originate from different job boards and other recruiting sources. The second is by cost per source.
Related article: How to measure source of hire in recruitment marketing.
2) Cost per source is a secondary metric to source of hire. In order to calculate cost per source, you’ll identify the amount spent on each channel for candidate outreach, the return on this budget, and the number of hires made by each channel divided by the amount spent.
3)Time to fill is the time it takes from a hiring manager submitting the request for a new hire to the time the job offer is accepted by a qualified applicant. The faster the speed of hire, the shorter the time to fill. If time to fill is a challenge, recruiting teams can break down the average time to fill by varying stages from application, qualifying, final interviews and first date. Recruiting teams can try to uncover where hiring bottlenecks exist by breaking down the information even further by department, division or hiring manager.
4)Cost per hire is the average amount of money you spent on making a hire. SHRM's formula for cost per hire is the sum of all recruiting costs divided by the number of hires in a specific time period. This metric is useful when you are creating or tracking your recruiting budget and providing reports to company leadership. It’s also the broadest metric you’ll track, and spans all stages of the hiring lifecycle. Looking at all processes that impact cost per hire, you can optimize future recruitment strategies to bring this cost down by improving other metrics, like time to fill, as well as reducing time spent on efforts that show a smaller return, such as in your source of hire.
5) Turnover by source. This metric is tracked through your turnover rate primary metric; the difference is that turnover is tracked over a longer period of time and is segmented by source of hire. For example, if your overall turnover rates are increasing and you’re trying to identify why this might be happening, tracking turnover by source can help. If you segment your new hires by the source of hire and calculate turnover rate for each channel, you can then identify the channel that is not performing as well as the others with regards to new hire retention.
With the acquisition of talent being one of the most critical functions in the company, improving upon it is not just a good idea, it’s essential. Using deep metrics to help improve upon how well your hiring process performs can save thousands of dollars on each employee that you hire, and help you and your team set up more efficient strategies for future hiring campaigns.