Understanding the Metrics behind Your Talent Acquisition Strategy
This post is continued from What Story is Your Recruitment Data Telling? – Part 1.
While Cost per Hire and Time to Fill are the big two metrics you should know, and Source of Hire is a huge step in refining your process, there are several other metrics that can be extremely useful to understanding your talent acquisition cycle and what story you are pitching to your leadership on what you’re doing well and where everyone can improve.
Referral Rates are often lumped into Source of Hire data, but some people like to track this information separately. Referral rates are the percentage of hires that are generated from (you guessed it) referrals. Studies show that referrals make better long term hires, and they also reduce your big two metrics, Cost Per Hire and Time to Fill.
Overtime you can also break down this information into where your best referrals are coming and how to improve your referrals coming in through the use of incentive programs or raising general awareness.
Quality of Hire
Quality of Hire is usually calculated at several points in time after the new hire has been on the job. Many companies like to look at this at the 3 month, 6 month, and 1 year time frames. Quality of Hire can be determined by comparing the hire’s performance and productivity against that of their peers, but most importantly should be measured by standards of quality determined before the hire is ever actually made. A simple survey or summation of employee reviews can help track Quality of Hire over time.
Benchmarking this data can be key to reducing employee turnover and gaining perspective into who is successful in a particular position and who is not, so that recruiters and hiring managers can refine their job descriptions and hiring process over time to get to a better quality hire.
After all, a bad hire will cost a company more money and time in the long run as well as cause the recruitment cycle to have to repeat to fill the position. Quality should always be of the utmost importance in weighing decisions in your hiring process and an added bonus, quality of hire also has a direct correlation to the metric below: Manager Satisfaction.
Manager Satisfaction is another self explanatory metric. You want to see what percentage of your hiring managers and managers are satisfied with your recruitment process as well as the hires being made. Managers are essentially the customers of the recruitment process whether internal or external and if they don’t like a process, it can cause conflict or even give rise to managers going outside of the process to bring in hires.
But, while managers are your “customers” sometimes this can also lead to seeing problems in the recruitment cycle where change management or re-coaching needs to be done on their end to effectively improve the process as a whole. Everyone needs to be reminded that at the end of the day, it’s about what’s best for the business as a whole to continue operating effectively.
Many companies might be solely focused on the internal process to fill jobs, but collecting data points around Candidate Satisfaction through the recruitment process can be important not only to retaining quality applicants throughout the recruitment cycle, but also because of its impact on the company’s brand positioning and employment branding to continue to attract talent and new customers.
By leveraging improvements to the candidate experience, you can take preventative measures to reduce the number of candidates who might withdraw their application or decline offers due to a poor experience and improve the overall number of applicants you are attracting to each position.
Some companies only choose to survey the hires they make, but it can also be useful to look at the experience of candidates who were not selected and those that decline an offer of employment to see if there are areas of improvement.
Tracking Retention and Turnover rates may seem like indirect data, but they can have a significant impact on your recruitment cycle. Understanding your turnover rates will help determine potential future hires needed (which can be beneficial to Pipeline Development below) that you will need to source candidates for.
Additionally, understanding why some hires stay and others are leaving can be beneficial in making changes to the business to retain employees–perhaps there is a difficult manager that runs off great employees or the wrong skill sets are being identified for positions that have needs not originally recognized. Learning to recognize trends in this data can help the recruitment team to be a stronger business partner with management in other areas of the business.
Usually when you have reoccurring requisitions, you often have more qualified candidates apply than positions open at any given time. Additionally, many candidates apply even when there are no available opportunities. Keeping these candidate/recruiter relationships warm for the next round of hiring can save time and money in the process for filling future openings.
As long as you as you are aware of the pipeline leads, you can avoid wasting valuable resources going through the motions of the recruitment process as well as make predictions as to when you will need to allocate those resources to keep building the pipeline when it thins out. Managing these records can often be easier with the aid of an Applicant Tracking System, CRM tool, or other software.
A newer tracked data point trending is what some people are coining ‘Velocity.’ Velocity is defined by how rapidly the recruitment cycle moves from place to place or person to person. In basic terms, you are breaking down your Time to Fill by each stage in the process to understand where there are problem areas or bottlenecks.
Sometimes it may be a particular team member holding up the process, miss communication between departments, or even not having anyone accountable for results at certain stages, that is hindering your process. You can’t always rely on the main numbers to be fully aware of what narrative your recruitment process is telling, sometimes it takes a deeper look.
You may have additional data that you track in your process (and if so, please share what you find is important) or these data points may have given you thoughts about what you should be tracking in your own recruitment process. The important thing about all of the metrics you look at is that they should be predictive and actionable. You should be able to gain insights to put in place process improvements, and analysis of the data should give indications to what you can expect in the future from the process and any changes implemented.
But don’t feel like you have to wait for a year to go by to start analyzing your data to see what kind of story your metrics are telling or to start implementing change.
To quote Charles Babbage (British Mathematician and Inventor, 1791-1871), “Errors using inadequate data are much less than those using no data at all.”
Any insights you can begin to gain to build your business case will be for the better. So start looking at and tracking your data now to encourage better results in your Talent Acquisition strategy, and tell a better story about your recruitment process for the future.