Most recruiters, and even recruiting firms, believe that their role ends once they hire a suitable candidate – failing to tap a number of opportunities that can be driven by analyzing the data collected during the recruitment process. Ideally, recruiters should dig into post-hire data, to streamline the recruitment process by improving the quality of resumes they receive and thereby reducing the time spent on screening and interviewing misfit candidates. In this blog post, we discuss five key metrics that recruiters must analyze to optimize recruitments.
1. Applicant to Hire Ratio
The applicant to hire ratio is a key metric that indicates the ratio of number of applications for a particular job position to the number of hiring made for that position. Let’s understand this with an example. If 100 applicants have to be screened to fill four positions, the applicant to hire ratio will be 100 to 4, or 25:1. The metric is important as it helps recruiters decide how challenging it will be to fill a position, and how aggressive they must be with their headhunt.
2. Average Time to Fill
The average time to fill a particular position is a measure of the time taken from the day that position is open to the time it takes to be closed. The lower the average time, the better. A higher average time is also an indication of how important the position is, and therefore, companies must have a strategy to minimize the exit of the people in such roles. In addition, they should have an aggressive plan to fill such positions as soon as possible.
3. Cost Per Hire
The cost per hire, as the name suggests, is the average cost of the resources invested in hiring a candidate. The costs associated include advertising costs, the cost of the recruiter handling the screening process and other recruitment related tasks, the cost of the interviewer(s), and lastly, the cost of any support staff or third-party involved in processes such as background check and pre-employment assessment. In addition, there are other costs, such as travel expenses, relocation costs, and employee referral bonuses.
4. Offer Acceptance Rate
The offer acceptance rate is the percentage of candidates who accept your offer. If the offer acceptance rate is lower than the industry standards, it is a red flag. In such cases, the company needs to analyze and find out the roadblock that’s chasing away potential employees. The reasons may vary. Common thought-changers include salary, the experience during the recruitment process, the feedback from company’s past and present employees, and of course, online reviews.
5. Submission to Hire Ratio (SHR)
SHR is the ratio of the total number of candidates submitted by in-house recruiters or third-party recruiting firms and the number of candidates who get hired. For instance, if two recruitment firms, A and B, submit 10 candidate resumes, and the reviewers selects two candidates from A’s list and five from B’s, the SHR for A will be 5:1, whereas B will have a much healthier ratio of 2:1. Needless to elaborate, the lower the SHR, the better.
When it comes to optimizing your company’s recruitment process, in addition to focusing on the metrics discussed, it is also important to have a post-interview survey to determine the areas of improvement in your overall hiring process. You can use a quick-email survey to ask the interviewed candidates about their experience and how they would rate your company as a potential employer. Ask the candidates open ended questions and encourage them to give their feedback to help you improve the recruitment process. If all this is too much of work, simply hire a competent recruiting firm that can understand and deliver on your requirements.