Understanding the Metrics Behind Your Talent Acquisition Strategy
Many companies and recruiters out there already reap the benefits of building insights from their recruitment metrics, but many more still don’t know what story their recruitment data is telling because they aren’t collecting any.
For whatever reason, whether they’re new on the block, haven’t been made aware of the benefits, or just feel like they don’t have the time or resources, they’re missing out on a deeper understanding of their process which could lead to critical pain points, implementing process improvements to save time and money, and lead to better quality hires.
As Carly Fiorina, former executive and president of Hewlett-Packard Co, once stated, “The goal is to transform data into information, and information into insight.”
So what metrics are you tracking in your own process? Don’t know what to track? Let’s start with the basics; There are two key metrics that every company should know about their recruitment process: Cost Per Hire and Time to Fill.
Cost Per Hire
Cost Per Hire or CPH is the most common data point measured in the recruitment cycle. Most companies based this measurement only on the initial cost of the hire, including expenditures such as:
- Administrative Costs
- Recruiter Costs
- Travel and Relocation Expenses
- Agency Fees (Search Firms)
- Job Posting Fees
- Advertising Fees
- Referral Fees
- Technology Costs (ATS, Saas, HRIS, etc.)
There are two ways to determine CPH. You can add all of the costs associated with a single hire to determine how much you spent, or what most companies prefer to do is to add the total spent over a given period of time and to divide the costs by the number of people hired and obtain the average cost per hire.
We’ll get into some additional metrics below that some people feel should now be included in the CPH analysis to get to a truer number, but knowing what you’re spending to get a person into your company can help drive the business case for process improvements and can be paired with other data to gain critical insights into the process.
So do you know how much you’re paying per hire? Have you been too afraid to calculate it? If you haven’t calculated it, write down your estimate and then see how close your perceived cost is to the actual cost. Sometimes you may be surprised by the hidden expenses, like the cost of your time, that you don’t think about.
Time to Fill
Speaking of time, Time to Fill, also referred to as TTF or T2F, is the second critical data point most companies track. This is exactly as it sounds, how long it takes to fill an open position.
It’s very easy to measure: take the date the position came open and the date it was filled, the number of days between the two points is your time to fill. Many companies, again, take the average number of days for the same position over a given period of time.
This measurement is a productivity measurement. The data tells you how efficiently your output is drawing in a new hire. Average times to fill used to run around 30-45 days, but for many companies have now risen to 90-120 days.
Every day a position goes unfilled is a strain on resources and to the business as a whole. Make sure you are spending your recruitment efforts on items that are a good return on your investment and lead to quality hires.
Aside from Cost Per Hire and Time to Fill, many people would argue that the next critical data point is the Source of Hire.
Source of Hire
Knowing where your hires come from is an extremely important data point. It can become rather clouded with all the different sources out there and many social media outlets and job postings leading to your company webpage or an applicant portal.
You can try to capture this data when an applicant applies for a job, but sometimes even candidates can be confused by the question (as simple as it sounds) of where did you find the job, especially if you don’t have alternative options, or they will often pick the first in the list. It can help to have someone in the interview process or in a orientation meeting after the hire is made to inquire further about this information and double check it to see where they initially found out about the job and their path to apply for the job.
Once you start collecting this data, you can begin to see patterns and trends which show where the majority of your hires are coming from, and you can adjust your advertising and posting methods accordingly to suit your needs.
Perhaps you will find with certain positions that what you thought is not actually the reality for how job seekers are finding out about the roles. Sometimes it will call for changing your strategy or looking at non-traditional or even old methods of sourcing candidates.
We’ll cover additional metrics and data to tell your recruitment story in What Story is Your Recruitment Data Telling- Part 2.