If you can’t measure it, you can’t manage it. If you cannot measure the effectiveness of your recruitment process, you cannot manage the human resource department. And, without the proper functioning of the HR department, your business can’t achieve success. According to a survey by PwC, on average HR costs make up 28% of the total operating expenses of a company. That’s why it becomes essential for HR departments to measure important metrics and demonstrate their return on investment.
Being a provider of recruitment services to small and big companies, Perito understands the importance of recruiting functions in an organization. As 2020 has begun, we would like to help you refresh your hiring strategies by including the recruitment metrics that matter the most this year.
Important Recruitment Metrics of 2020
Recruitment metrics are the standard measurement of how you hire candidates for your organization. These metrics will tell you where your recruiters are doing well and where they need to make improvements.
It is the total number of days when a job request is sent by a team manager and an offer is given to the selected candidate. Measuring this metric helps you to determine how long your recruiter takes to fill a vacancy.
According to a survey, it takes 41 days to fill a vacancy. With increasing talent shortage and changing technologies, the pressure on recruiters to reduce time to hire is increasing. Recruiters can improve the recruiting process and reduce time to hire by taking recruitment services from Perito. As a leading recruitment consultant in India, we can help you streamline the job posting, screening, interviewing, and final selection process. However, you can follow these tips to make offers to candidates faster than your competitors.
- Automate your job postings
- Use social media promotion for vacancies
- Rediscover previous candidates for current requisitions
- Use auto-email and auto-text to contact candidates
- Hire recruitment consultants for screening and reference checking
It is the average amount of money your company spends on hiring one candidate. A recent survey by the Society of Human Resource Management (SHRM) revealed that the cost-per-hire is more than $4,000. So if your company takes a longer time to hire, the cost-per-hire would increase accordingly. Moreover, some roles and industries do take more time to fill a position; so they need to find ways to decrease time to fill in order to decrease cost for hiring a candidate.
So what are the expenses that you need to make on recruiting? Here is a list of recruiting expenses every company has to bear:
- Job boards fees
- Candidate assessment costs
- Background checks
- External recruiter expenses
- Employer branding and advertising
- Website’s career page costs
- Salaries of internal recruiters
- Other admin expenses
Calculating cost-per-hire is essential for determining the cost-effectiveness of your recruitment efforts. If it is higher than the average industry standard, your HR department and management can work together to optimize recruiting strategies, make budget planning, and hire more candidates with less money.
QUALITY OF HIRES
Quality of hire is the most important measuring metric for a recruiting team. 40% of recruitment services providers and HR managers rank the quality of hire as their top priority. Because hiring a qualified and talented candidate would mean better team performance, higher productivity, and greater profits for your organization. It’s a big deal!
How to calculate Quality of Hire
(Job Performance% + Employee’s Full Productivity% + Employee Engagement% + Cultural Fit%) / N
N = number of indicators
How to get an idea about the quality of your hire before making a hire
Poor hiring decisions can cost you thousands of dollars. A study suggests that a bad hire could cost an organization more than $50,000. Many studies have concluded that 50% of new hires are unsuccessful after 18 months. So calculating the quality of hire after making a bad hire would be no use for your organization. As it is said, prevention is better than cure. It is better to get an idea about your quality of hire before you even hire a candidate. And, here’s how to do it.
- Your finalized candidate has received counter offers
- Ask them if they got counter offers from your top competitors
- Your top employees know them because of their good work
- They’re not available for hire for a long time
- They’ve received multiple awards in their previous companies
- Your recruiting services company know the candidate if they’re good
- If you create candidate persona profiles, this finalized candidate fit it well
82% of recruiters believe that measuring the effectiveness of sourcing channels will be very useful in the future. Analyzing this recruitment metric would tell you which channels are yielding the best results for your organization. Remember, different industries and businesses will have different channels that are effective for their respective organizations.
If your company works with a recruitment consultant and is getting a maximum number of quality candidates through their external recruiters, your HR department should focus it efforts on nurturing this recruitment channel. Instead of wasting time and efforts on channels that are not paying off, your recruiters should work closely with your recruitment firm to make better hiring decisions. Some of the other high-performing sources of hiring are LinkedIn, employee referrals, and job boards.
CONVERSION RATE OR OFFER ACCEPTANCE RATE
Conversion rate is a comparison of the offers made by your company to the number of offers accepted by candidates. It is calculated as below:
(Conversion rate or Offer acceptance rate = Number of offers accepted / Number of offers made)
If you get a lower conversion rate, this means your offer is not competitive. Your competitors are providing better offers to potential candidates, maybe in terms of salary, benefits, incentives, or perks.
The first way to understand why candidates are rejecting your offers is to ask them what their salary expectation is. You could even ask them if they have anything to enquire about your organization. If the salary is not the issue, you could work on other terms like flexible working, better engagement opportunities, free transport or food, and even work from home options.
2020 has just begun and it’s time for a change for your organization if you’re looking to improve your hiring process and recruitment strategy. If you are not measuring the above recruitment metrics yet, it’s time to do now.
If you have measurable recruitment goals, accurate data, and an experienced recruitment services provider, you will make the best hires in less time and money. Contact Perito, a reliable and experienced recruitment firm, to discuss your hiring needs. We are here to help you!