Attracting the best people into a business is one of the biggest challenges facing many companies, however, while most employers understand the need for an effective talent acquisition process to attract and hire the right people, many haven’t developed a way for evaluating its effectiveness.
If companies fail to measure the success of their recruitment strategy, they will waste time and money recruiting people with the wrong skills and attitudes, but not understand why.
As we move through the COVID-19 pandemic it is going to be essential to have the right people in roles to ensure the business can recover quickly.
According to Gartner one of the top three priorities for HR leaders in 2021 is to build critical skills and competencies. Other data from Gartner TalentNeuron™ shows that the total number of skills required for a single job is increasing by 10% year over year, and one-third of the skills present in an average 2017 job posting won’t be needed by 2021.
Here are seven metrics, which can give businesses deep insight into the performance and impact of their talent acquisition process:
1. Time to hire
This is the number of days between the start of the recruitment process and the moment a candidate gets hired. Most talented people are off the market in 10 days, so having a shorter process gives companies a better chance at attracting and hiring top talent.
To optimize the time to hire, companies need to break down the hiring process and measure how much time it took to move candidates from one stage to another.
2. Cost per Hire
Companies need to understand the money they are spending to make a new hire including all costs related to recruitment, such as the purchase of equipment, onboarding, administration, and benefits. It can vary enormously depending on the company’s size, the seniority of the position, and the number of recruitment channels used.
There are many strategies companies can use to reduce their cost per hire and optimize the recruitment process such as building a talent pipeline; allowing employee referrals; using social media to create a strong employer brand, and using an ATS to streamline and expedite the recruitment process.
3. Qualified Candidates per Opening
A “qualified candidate” is anyone who passes the application screening process and moves to the next stage of the recruitment process. This metric is more meaningful than the number of applicants, as it shows recruiters how good the candidates they are attracting are. This is an important metric because if a company is attracting unsuitable candidates, they will not fill a position but can set new strategies to attract better candidates.
This refers to the performance of the channels, job boards, or social media platforms where jobs are advertised. Companies need to understand which channels work best. To calculate this, candidates need to be tagged according to the acquisition source when they submit their application or to where the recruiter found the profile (LinkedIn, Employee referral, Internal, Facebook, Indeed, etc). Understanding the most effective source of talent ensures the best ROI on time and investment spent on recruiting.
5. Quality of Hire
Quality of hire is at the top of the list of useful performance KPIs for most companies, as it measures the value new hires bring to a company. Hiring quality employees means less turnover, more productivity, better culture, and greater overall success for the company.
As quality is quite hard to evaluate, some quantifiable recruitment metrics can be used, such as new hire performance metrics such as sales targets or achieving good customer satisfaction ratings, turnover and retention metrics, hiring manager satisfaction ratings, or the percentage of new hires promoted within a certain time frame.
Improving the quality of hire requires alignment with leadership to define the factors that make a quality hire and to set the strategies that will help hire the right people.
6. Offer-Acceptance Rate
The percentage of job offers accepted is a good indicator of how well the hiring practices are working. Although candidates can decline a job offer due to external reasons (counteroffer from a current employer, etc.), they can also refuse the company’s offer due to reasons related to the company culture, unattractive compensation, or job duties mismatch which could have been detected and managed by the recruitment team. It can be useful to send out a survey to candidates about their specific reasons behind their refusal.
7. Satisfaction Rate
Although this metric often gets ignored, satisfaction ratings allow companies to understand how candidates are experiencing the hiring process. To measure it, companies can survey candidates and new recruits. It is essential to understand what may be causing high numbers of interview cancellations, no shows, or high turnover rates in new hires.
Build a survey that is easy and quick to answer, focusing only on key satisfaction aspects regarding the recruitment process, to get more answers. Also, do not forget to protect the candidates’ privacy.
Evaluating a talent acquisition strategy with a data-driven approach will give companies a more holistic view of how talent acquisition is impacting the business strategy and how they can improve it so that they can consistently attract and hire the best talent.
By Nicolas Speeckaert, co-founder and director of skeeled.