If it can be measured, it can be improved, and that goes for recruiting as well as any other business process. But what should you be measuring in your recruiting process? There are a lot of moving parts in the recruiting process. What recruiting metrics should you use? Do you measure time to hire? Quality of hire? Diversity? How do you decide?
Recruiting expert and HR thought-leader Dr. John Sullivan says don’t do what most recruiting leaders do and simply rely on the recruiting metrics churned out by your ATS or enterprise software provider. He says using common recruiting metrics won’t give you what executives really want to know, which is the real cost of the business impact of recruiting. He also advises against using all historical recruiting metrics that just tell the story of what happened last year, not what’s going on now, when it counts.
If you concentrate on the following high impact recruiting metrics, you’ll have no problem explaining the value in your recruiting process.
Quality of Hire
Sullivan calls quality of hire the most important of all recruiting metrics because it measures actual performance of the candidates you’ve hired. It’s actually a performance measure designed to demonstrate how new hires perform compared to the average employee. It should be used to analyze recruiting sources, tools, and recruiters and is calculated from performance appraisal scores of new hires at six and 12 months on the job compared to average employees’ performance scores. Customer service ratings, 360° scores, error rates, and bonus percentages can also be a part of the quality of hire equation.
Calculate the dollar impact of quality hires with average percentage of new hires’ improvement multiplied by your organization’s average revenue per employee multiplied by the number of new hires.
Project Delays and Missed Strategic Opportunities
Using recruiting metrics that measure projects delayed and strategic opportunities missed because of poor recruiting helps recruiters and executives understand another real impact of recruiting on business outcomes. This is accomplished by surveying project managers regularly to find out if projects have been affected by recruiting gaps, counting the number of project delays and missed strategic opportunities and the costs of the delays due to needed personnel that weren’t hired.
Key Position Vacancies
Many key jobs that go without an active employee have damaging impacts on business performance, directly reducing corporate revenues. Key position vacancies metric involve counting how many days key jobs have gone unfilled and comparing it to a time period when the key positions were occupied and what revenue was brought in then to understand the true loss. This metric helps create urgency and garner recruiting resources.
Offer Acceptance Rate
Knowing what percentage of candidates are lost at the offer stage helps recruiters and employers understand weaknesses in their recruiting processes if there’s a weak closing or if they’re not meeting competitive salaries in the area. This is an important metric to use to avoid wasting recruiting resources only to lose candidates at the end and having to start over, causing delays and extended vacancies.
Common recruiting metrics in an automated process are just a starting point in analyzing your recruiting process. They may not even be very relevant to your business’s particular business needs. You should be using recruiting metrics that are measuring the business impact of recruiting processes for continuous improvement, alignment with business strategies and goals, and ensure you are focusing recruiting resources on the right things to improve hiring results.
Andrew Greenberg’s roots in recruiting date back to 1996. He has experience both on the agency-side and corporate-side of the staffing business, with a focus in the financial services space at companies like Bloomberg and UBS. He also has core experience with information technology staffing, and has worked for major software companies such as SAP Business Objects and IBM/Informix Software. To get in touch with Andrew, you can reach him by email or by phone at (800) 797-6160.