As with most things, data has helped transform global recruitment efforts. Without data, new hires would vanish into the ether without us being able to measure their long-term value. Two years ago, the UK recruitment industry was worth an eye-popping £35.7 billion. Without metrics, we would only have a vague sense of where all that money is going.
However, one side-effect of being bitten by the data bug is a grim case of ‘analysis paralysis.’ Decision-makers can be overwhelmed by the sheer volume of information, so much so that they can’t settle on a course of action. It’s the equivalent of going to a restaurant and being given a menu that makes The Iliad look like The Very Hungry Caterpillar. We must also be wary of ‘vanity metrics’, which look impressive on paper but serve very little strategic purpose.
Fortunately, there’s a solution to these problems - choosing a clear set of recruitment metrics that allow you to judge the value of your efforts. With a critical eye and a little guidance, you’ll be able to use data to your advantage whilst still being able to see the wood through the trees. Here’s our pick of recruitment metrics that matter.
There’s a reason why managers can be such sticklers for staff retention. Staff turnover is a hole in the pocket of many organisations. Studies have shown that every time an employee is replaced it can cost an average of six to nine months' salary. Multiply that by a company’s average turnover rate and you’ve got quite a princely sum. If there are issues with retention, usually it’s due to not making the right hiring decisions.
Quality of Hire
The quality of hire metric shows how well job recruiters and hiring managers are placing candidates. According to a study conducted by Ideal, 40% of talent acquisition leaders say that quality of hire is their top priority. Despite this, the same study concluded that approximately two-thirds of recruiting leaders don’t have the time or resources to effectively measure quality of hire. With that in mind, here is how we can go about measuring quality of hire:
Performance reviews are somewhat subjective, but a little bit of creative thinking can help turn them into an actionable dataset. For example, consider assigning a numerical value to individual performance, breaking the role down into constituent parts like ‘time-management’, ‘client relationships’, and ‘technical skill’. If you’ve hired a group of tens, everybody’s a winner. However, if three turns out to be the magic number it’s worth revising your recruitment strategy. Either way, leave some space for your employee to communicate how they’d like to improve going forward.
How long does it take new hires to reach full productivity? We’re sure you’ll hire some people that hit the ground running and others who have a few teething issues. Regardless, the time it takes them to get up to full speed can indicate the quality of hire. Often, those who are trailing behind either aren’t willing, aren’t motivated or aren’t placed in the right role.
Yes, we just mentioned retention but it’s important! Factoring retention into performance reviews and ramp-up time provides a pretty accurate assessment of your recruitment efforts. Think of metrics like a cocktail - the measures are great on their own but even more potent when combined. In 2016, Compensation Force compiled statistics on the average turnover rate for a range of industries. Here are a few examples:
- All industries: 17.8%
- Banking and finance: 18.1%
- Healthcare: 19.9%
- Hospitality: 28.6%
- Insurance: 12.2%
Understanding how your brand compares to the average in your industry will help you form accurate and attainable benchmarks for retention.
Source of Hire
In your bid to attract top talent, you might be spreading your resources across a multitude of channels. While each channel seems affordable, when combined, the costs can add up. Therefore, if some aren’t bringing home the bacon then it’s time to trim the fat. The problem is that if you aren’t properly tracking source of hire then you won’t know where to start. Once you start recording the source of hire, you can cross-reference it with all your other metrics. Soon you’ll get an accurate picture of where the top performers are coming from. Concentrating your efforts on these sources is sure to maximise return on investment.
Want another winning combo? Keep track of how many qualified candidates apply for each vacancy. Match this with your source of hire metric and you’ve got an excellent benchmark for future job postings.
We’ve known for some time that recruitment is a two-way street. It’s not just about an eager candidate hoping to impress the powers that be. The best of the best are often in high demand. Therefore, not only must you have an enticing employer value proposition, but your recruitment process needs to be ship-shape. This has been proven by statistics compiled by Jobsoid:
- 60% of candidates say that timely communication is important to their final decision
- 80% say a single negative experience can cause them to decline a job offer
To help gather relevant data, follow up with candidates post-interview asking them to rate their experience throughout the application process. Much like performance reviews, assigning a numerical value will help you easily quantify candidate experience.
Performance in Pre-Hire Assessments
While pre-hire assessments are highly effective, they should be regularly revisited to ensure their efficacy. For instance, hiring managers can look at which questions or tests yield the most divisive answers. If there is no performance gap between candidates, the test isn’t informing decision making and therefore has no strategic value. In a similar fashion to the source of hire metric, assessment results can be compared to the quality of hire and retention metrics. If high-scoring candidates aren’t lasting in their new roles, then it’s time to revisit the assessment criteria.
There you have it, a summary of the most important recruitment metrics. Now you may be chomping at the bit to start gathering, assembling, and scrutinising data. However, if you’re not careful, you could end up creating a byzantine spreadsheet that gives you a headache just looking at it. The easiest way of measuring metrics like quality of hire and diversity is through an applicant tracking system like Applied. If you'd like to find out more about how we automate tracking and reporting, feel free to request a demo, or check out our resources to get an idea of how we see the future of hiring.