Evaluating your hiring strategy with a data-driven approach will allow you to have a better understanding of what is working and not working in your hiring strategy. There are many different metrics that can be used, but here are a few that are essential:
There are a large number of choices for sourcing candidates and it’s important find out which ones are the most effective for your purposes. Identifying the most cost-effective sources of talent ensures that your recruitment dollars are being invested wisely. All of your applicants need to be coded in a way that identifies the candidate source. This coded information should be accessible in your applicant tracking system. Where did the candidate hear about your job opening? LinkedIn, Employee Referral, Facebook, Indeed etc. Knowing the number of unqualified candidates from a specific source is also helpful, as these candidates also take time and resources to process. It is also important to document the sources of your final four or five candidates.
Cost Per Qualified Candidate = Total Source Cost / Number of Qualified Candidates Obtained
Time to fill is the number of days between the initial job posting and the date the position is filled. This metric tells you about the speed that qualified candidates move through your hiring process. Most talented people are off the market in about 15 days. If your time to fill is much longer than this, you may be losing talent to competitors.
Time to Fill = date hired – initial job posting date
Cost per hire tells you the average amount of money your company spends on a new hire. It includes all the costs related to recruitment and selection. To calculate the cost per hire you need to sum all internal and external hiring costs per year and divide them by the total number of hires made. Below are examples of internal and external costs:
Cost Per Hire = Total Internal Costs + Total External Costs / Total New Hires
Quality of hire measures the value a new hire brings to your company. Hiring quality employees results in less turnover, more productivity and greater overall success for the company. Job Performance indicators should be identified for each position. For example, Average Sales Per Month could be used for a new hire in sales. Tenure tracking is the total number of months the new hire remains in the position. Ramp-up time is the total number of months that a new hire takes to reach full productivity in their role. The Hiring Manager’s satisfaction ratings of the competencies, performance and overall fit of the new hire. Employee engagement level is a quantifiable measurement of the extent to which a new hire feels passionate about their job, feels committed to the organization, and puts discretionary effort into their work.
This metric is essential to evaluate your hiring strategy’s effectiveness. The percentage of job offers accepted is a good indicator of how well your hiring process and strategy are working.
Offer Acceptance Rate = Total Offers Made / Total Offers Accepted
HireSmart provides Recruitment and Staffing Solutions USA for a variety of businesses throughout the USA.