Measuring your hiring performance is key to evaluating the impact of your current recruitment processes.
Using valuable metrics will not only highlight areas that require attention and improvement, but they’ll also highlight what processes are working, allowing you to allocate your time and budget effectively.
However, measuring your hiring performance can be tricky and many companies put off tracking metrics entirely. According to Deloitte, 71% of companies recognise people analytics as a valuable tool for performance, however, only 9% correctly identify the metrics that will drive performance, and just 15% of companies found their reporting results to be highly accurate.
If your company is smaller, you may think it’s not worthwhile tracking metrics since you don’t have a large headcount, however, this doesn’t have to be the case. We’ve put together a list of the three most useful metrics that companies big and small can easily track to provide you with insightful data on your hiring.
Time to hire refers to the amount of time taken from the initial job opening to onboarding. It is an extremely useful metric to track as it enables your team to identify whether your hiring process is either too slow or too fast which may be costing you time, money and candidates!
According to a Linkedin Global Survey, time to hire can take anywhere between several days to four months.
Having vacancies open for prolonged periods of time or prolonged screening cycles can waste valuable time on administrative tasks. Knowing when your hiring is too slow will enable you to adjust your hiring process to be more efficient.
Longer than normal hiring times are also a cause of poor candidate experience and candidate drop off. LinkedIn found that an untimely hiring process, with poor communication, gives candidates a negative opinion of your company and 83% of candidates say that a negative interview experience would make them not want to take the job.
Slow hiring also gives your competition time to swoop in and secure candidates you took too long to hire.
Some tips to reduce your time-to-hire:
- Use smart questions to remove unqualified candidates
- Use A.I. to pre-screen your candidates
- Hold hiring manager reviews to improve collaboration
- Use automated email templates to provide feedback
- Use smart software for real-time interview scheduling
Likewise recognising when your hiring too fast can highlight other possible issues with your hiring process. If your hiring process is faster than average, you may not be screening your candidates adequately. Not only can this lead to poor candidate experience, but it may be costing your company money by making bad hires.
If there is high turnover or issues within teams, review the time spent hiring those employees. If there is a correlation between fast hiring and under-performing teams it may be beneficial to slow down your hiring process by adding additional screening. This is a great opportunity to add additional steps that may improve the candidate experience. Unilever added gamification to their hiring process by inviting candidates to play a short series of mini-games upon applying. Unilever unveiled this as an instrument to eliminate bias, assess candidate ability and at the same time cultivate a positive candidate experience.
To examine how your time to hire compares with other players in your industry you can check the global and industry benchmarks. However, keep in mind that every role is different with some needing a longer or shorter time to hire than others. For a more accurate figure, research the average time to hire for each business function. Reports like Jobvite’s 2018 Recruiting Benchmark Report provide helpful insights on hiring benchmarks including how to improve collaboration between hiring managers and recruiters for better hiring.
Sourcing channel refers to where exactly your hires are coming from. If you are advertising your job openings on a variety of job boards, social media channels and your careers page, it can be challenging to determine where your best candidates are coming from. Tracking this metric will highlight where each candidate has entered your recruiting pipeline, enabling you to better allocate time and resources to the channels that work best and adjust your approach to using channels that aren’t performing or even experiment with other sources.
Many recruiting software's, such as an ATS, have built-in reporting features that can help you to define which channels are bringing in not only the most applications but the most qualified candidates too.
You may find that depending on the characteristics of the job, certain positions may perform best on specific channels. This will give you clarity when it comes to choosing advertising channels and may remove the costs of using premium job boards or recruiters.
ROI of Hire
For a long time, tracking 'cost of hire' was a standard metric. However, by only tracking how much your hire cost you, you are completely ignoring the value that the employee brings to your company. The Brookings Institute reports that 85% of companies assets exist in the form of intangibles - including your employees.
When a role is open, the goal is to fill this position with a quality candidate. By tracking the cost of hire, you risk putting cost over quality. Instead, tracking the ROI (return on investment) of your hire is a much more valuable metric. Like any other business purchase, hiring employees is an investment in your company and over time your employees will bring more value to your company than the initial cost of hire.
ROI is harder to measure than cost of hire, but Employee Lifetime Value (ELTV) is a tool that can be used to help you determine the ROI of an employee. To calculate ELTV divide your companies average yearly revenue by the number of employees and multiply by the average tenure of an employee at your company.
To maximise your employee ROI, consider improving your retention rates. To do this, focus on boosting employee morale by investing in employee training, growth and development opportunities as well as encouraging an open company culture.
Happy employees are more likely to be loyal to your company, in fact, 47% of employees are actively looking for a new position because they are unhappy. Likewise, the University of Warwick found that happy employees are between 12 and 20 percent more productive too. By introducing new ways to keep your employees happy you will not only avoid the cost of replacing an employee but you’ll boost their lifetime value due to productivity and length of tenure.
Looking for better reporting analytics? BidRecruit offers real-time analytics provides insights on CV source and time-to-hire, allowing you to make informed and cost-effective hiring decisions, saving you up to 78% of recruitment costs and also reducing time-to-hire by 50%.
By saving as much as €2,000 per new hire, you can increase your ROI and spend more time and money on the things that really matter: your current and future employees.