We’re well into 2021 and hopefully it’s a year to be ramping back up. So let’s take a step back, and get refocused on what’s important to measure for success.
Companies are investing heavily in talent acquisition. The average cost to hire is still north of $4,000. Multiply that times the number of hires, and the number grows pretty quickly. To be sure recruiting investments are paying off, it’s critical to measure and track key metrics, otherwise known as KPIs (key performance indicators). Below are 10 that are especially important. If you aren’t measuring them already, be sure to build them into your 2021 plan.
Source of hire: This is an important metric for employers that attract new employees using many different recruitment channels. Source of hire tracks how effective your recruiting channels are by comparing them to each other. Typical sources to measure include your career site, social media channels, third-party job boards, and career fairs — but don’t forget to include referrals in your evaluation. Employee referrals are among the most effective (and cost-effective) ways to bring in top talent. For tips on building a successful referral program, check out this webinar from our Summer to Evolve series.
Source of application: Closely related to source of hire, source of applications provides insight into how many applicants are coming through each different channel. This could be important data for budget planning in 2021, as it allows you to determine how many applicants a particular source is producing. This lets you to focus your resources on the sources that provide the most applicants.
Time-to-fill: This refers to the time elapsed between when a job opening is posted and when it is filled. While some jobs are inherently more difficult to fill than others, this data point provides insight into how quickly your company screens applicants, how efficiently you evaluate and interview candidates, and how responsive you are throughout the hiring process — all of which contribute to a positive candidate experience. What’s more, measuring time-to-fill can help you understand the real cost of filling a role, since productivity and revenue can both suffer the longer a job remains open.
Number of applications per requisition. To help understand the effectiveness of your sourcing activities, you should measure how many new applications they generate. Notice we didn’t say new applicants. The reason for focusing on applications rather than applicants is that you want to incent sourcers to tap into your existing talent base for open positions, which probably includes a number of people who have applied for roles in the past. Measuring new applicants only would fail to account for this rich source of future hires.
Candidate conversion rate: This metric provides valuable insight into your apply process by comparing the number of candidates who begin an application vs. those who actually complete and submit the application. A lower conversion rate may indicate that your apply process is too cumbersome. Your apply process can show how candidate engagement levels vary during the application process and help you pinpoint the areas where potential hires get bogged down. Check out this blog post for more tips to help improve your process.
Quality of hire: This is one of the most important metrics to get right for many companies, but it’s also among the most difficult to accurately measure. Quality–of –hire (QOH) is, roughly, the value a new person brings to the organization. There is no one-size-fits all method of measuring QOH, but typical methods include retention rate, hiring manager satisfaction, and performance ratings. Some systems also take into account the new hire’s ramp-up time and cultural fit. Whichever method you use, QOH is often called the Holy Grail of recruiting metrics, so it shouldn’t be overlooked.
Onboarding: Talent acquisition doesn’t end with an accepted job offer. 20% of churn happens within the first 45 days, which means starting the talent search all over again. An effective, comprehensive onboarding process can help to set new employees up for success, make them feel welcome, and ensure they’ve got the proper training to do their job. Your ATS can help you measure the impact of onboarding efforts, including metrics like time to onboard, completion rate, and more.
Diversity and inclusion: Building a diverse, inclusive, and welcoming workforce is more important than ever. And while there’s no single metric that can be used to measure success in this area, it’s important to set goals around your diversity hiring efforts and monitor your progress. Jobvite’s Diversity & Inclusion Pack offers a unique combination of technology and services to help you attract and engage diverse job seekers, reduce unconscious bias, and measure the effectiveness of your D&I initiatives.
Internal mobility: Giving employees an opportunity to grow within your company is a win-win. For employers, it turns your workforce into a robust talent pipeline and greatly reduces the cost of hiring. For employees, it creates an incentive to stay with your company for the long-term. Creating an effective internal mobility program takes more than good intentions, and few companies do a great job with it. Check out our tips from The Summer to Evolve for help.
Employee retention: While there’s no guarantee that every long-term employee is happy and engaged, this metric provides a sense of employee satisfaction over time. Your retention rate is simply the percentage of employees who remain on staff throughout a given time period. (The inverse calculation provides your turnover rate.) Calculating retention over different time periods can provide some interesting insights — for example, if you find a significant drop-off in retention at the three-year mark, it’s probably worth investigating why.
You may also want to look at the relationship between some of these metrics. For example, time-to-fill is important because your organization can’t function if open roles aren’t filled efficiently. But there’s a limit. If you rush through the process and end up hiring the wrong person, your quality of hire will suffer — and replacing those bad hires will cost the company much more in the long run.
Tracking, calculating, and reporting on metrics like these is critical to talent management success — but it does require some commitment and effort. If all of this seems a little daunting, it might be time to re-evaluate your ATS and CRM technology. A robust solution like Jobvite can help to ensure that you always know where you stand in relation to your talent acquisition goals.