In last month’s blog post on Part 1 about KPI’s, we covered five crucial recruiting metrics that will help take your HR team to the next level. In addition to those five, however, we’ve compiled a few more that will allow you to be smarter about where you are focusing your recruiting efforts and judge the effectiveness of those efforts.
Qualified Applicants per Requisition
Qualified applicants per requisition is a good indicator of the effectiveness of your sourcing channels. It takes into account not simply the total number of applicants for a position, but, more specifically, the number of qualified applicants. One source may produce hundreds of applications, but perhaps only ten of the applicants actually made it beyond the screening questions or the minimum requirements, while a different source may produce only a few applicants, but a higher percentage of them become qualified candidates.
Once you know which sources provide the greater percentage of qualified applicants, you can focus your energy and resources on these channels. This saves companies from wasting time or money on expensive job boards when perhaps they receive their best candidates from employee referrals or social media sites.
The way that you determine what a qualified applicant means will vary based on the specific requirements that you establish for each requisition, but it is important to establish an average over all requisitions for a specific time period. The metrics to pay attention to are the number of total applicants, the number screened in, the number hired, the ratio of screened in to applied, and finally the percentage of the total hires from each source. Ultimately, qualified applicants are the only ones that matter and the ones that you will want to keep in contact with for future opportunities.
Today, with technology changing and systems being put in place to help with Big Data, and the ability to monitor every aspect of the recruiting process, companies now have the ability to monitor and measure recruiter efficiency.
Recruiter efficiency takes into account several metrics, but really comes down to how effective a recruiter is at finding the most qualified candidate in the shortest amount of time, and ensuring that they are someone who will not only accept the company’s offer, but will become a valuable asset to that company.
This metric is very obviously tied to the bottom line, and thus becomes a highly scrutinized metric all the way up to the executive level. The level of recruiter efficiency can be directly tied to the cost of hire for any given position, and thus to the overall performance of a company’s recruiting strategy.
The following factors should be considered to determine one recruiter’s efficiency versus another’s:
Open requisitions assigned to them
Requisitions on hold
Requisitions in approval
Average days to fill
A successful recruiter will know the best sources for each requisition, will be able to realistically portray the company’s needs, and provide the organization with employees that will become top performers and contribute to a high retention rate.
Cost per Hire
For most companies, everything still comes down to the bottom line, which is why “Cost of Hire” remains one of the most important metrics to track in HR’s recruiting efforts. It is crucial to know exactly how much it is costing your organization to hire each position, and where you may be losing money. HR needs to be able to show executives cost-effectiveness when it comes to a recruiting strategy.
It is not uncommon to hear that the cost of hiring someone is more expensive than a full year’s salary for that position, and there are many articles that back up this claim (How much does it cost companies to lose employees?, The Cost Of Hiring A New Employee, You make $70k but cost your boss $88k, etc.). While not all of the costs are related directly to recruiting a new hire, there are many recruiting decisions that impact the overall cost. That is why it is crucial to know exactly how much it is costing your organization to hire each position, and where you may be losing money.
Cost of hire takes into account factors, which of course will vary based on the position being hired for.
Knowing what to measure and when to measure it helps define your HR team as a crucial addition to the company’s success. Gone are the days of simply posting job opportunities on your company website, and hoping for the best. Building a strategy, being smarter about where you are finding candidates, and knowing how effective your recruiters are will determine the future of your organization’s talent. When it comes to recruiting, there are dozens of metrics that you could report on, but we have picked out just the top five most commonly used to focus on in Part 1 of this post, with another five coming in Part 2.
1 – Time to Start
Time to Start refers to the amount of time it takes to bring a new hire on board from the moment that you first publicize the open position.
It is important to distinguish that this means the time until a new hire’s first day on the job, not the day they accept the offer. This is probably the most important recruiting metric to focus on as it relies on the efficiency of the recruiters and the sourcing channels used, but also determines the success of your overall recruiting strategy. Job vacancies within an organization can mean a loss of productivity until that position is filled, so the longer the time to hire, the longer your organization is lacking in that area.
Of course, the time to fill is going to vary based on the job level and perhaps the skill set that is required. As time goes on, however, HR should be able to determine an average time frame across all positions and work towards reducing that time.
2 – Retention Rate
Employee retention is an important metric for many reasons. Not only does it show how successful your recruiting efforts are in finding qualified candidates, but is also a great indicator of the overall health of an organization. For now, we will focus on what the retention rate can tell us about recruiting efforts.
If your organization has a hard time retaining people for longer than a year after their hire date, you may be hiring the wrong type of candidate. Once you have determined the cost per hire for each position, it’s no wonder that the retention rate is such an important metric. Your company could be bleeding money with this unnecessary turnover. The cost of replacing an employee can be upwards of two times their salary! (Article from the Center for American Progress)
So, as with any problem, the first step is to identify whether or not your organization has a reasonable retention rate based on your industry’s standards as this can vary widely by industry.
Then, rather than trying to look at retention rates for all positions across all levels of the organization, it will be more insightful to analyze by sections. For example, you can look at the turnover rate for a specific role. If one role is causing turnover every year, maybe you need to take a look at the responsibilities of that role. Are there unrealistic expectations or unattainable goals? Another way to look at the data is turnover by pay grade or even by department. In this way, you can determine if the retention problem is company-wide, if it’s in a certain department because of a bad manager, etc.
Ultimately, measuring the retention rate will allow you to pinpoint whether or not the issue is a recruiting one. To quote an article from Forbes, “The best recruitment strategy is a solid retention strategy and this has to start at the top.”
3 – Applicant Satisfaction
While related to the employee retention rate, it is important to look at applicant satisfaction on its own to ensure that your recruiting efforts are placing applicants into positions where they feel they can grow and excel.
The best way to measure this is simply to have a standardized new hire survey, and then use performance reviews as another chance for employees to express how satisfied or dissatisfied they are with their job. Surveys can include questions on the hiring process, on-boarding, and overall job satisfaction. These metrics will help you determine how positive an applicant’s experience is from the moment a recruiter reaches out to them. This allows a company to take a step back and look at their processes from an outsider’s perspective, and shed some light on how they are portraying their organization to applicants versus what they experience when they are hired.
In today’s social world, this firsthand experience and testimonial is as important to a company’s reputation and messaging as any other marketing effort. The real goal is highlighting where a change needs to occur internally.
Is there an opportunity for more training for not just the interview process, but the competencies of employees? Is there a reason for employee dissatisfaction with the company that can be fixed to help retain top talent? It may be as simple as the job descriptions need to be revised. But it may be the job, the role, or the company direction that may need to be refocused, clarified or redirected. These are just some of the insights that can be gained by using applicant satisfaction company’s self-reflection.
4 – Sourcing Channel
Sourcing channel or source of hire simply refers to the efficacy of the different job boards or media a company uses to publicize its current job openings. The reason for tracking this metric is simple – there are hundreds of options for sourcing candidates, but depending on your industry or your specific organization, certain sources will prove to be more effective or provide higher quality candidates than others.
Talk about sourcing channels comes up often when thinking about Big Data – gathering the information above, you are able to combine this data to see the big picture and support your sourcing choices. As noted by David Bernstein on HR.com, “Big Data analysis also enables the employer to measure the effectiveness of their recruitment campaigns in real time and make necessary adjustments—sooner rather than later—to improve performance.” Not only do we need to take a look at what we’ve done in the past that worked, but what are we doing now that isn’t working? And how might we shift our resources towards more effective sources?
5 – Quality of Hire
It will take some time to determine the quality of a new hire, but the longer the employee is at the company, the easier it will be to establish. This should take into account not only performance ratings, but also their potential. Over time, you will be able to see a trend in their performance reviews, and determine their overall worth to the organization. This metric can then be linked to the sourcing channels to help determine where the highest quality candidates originated from, as well as the time to hire so recruiters can get a sense of how long it takes to find the right candidate.
The formula for Quality of Hire should be comprised of recruitment-focused quality measures and post-hire contribution / performance quality. The factors that contribute the data for each side of this metric can differ from one organization to the next. Deltek’s Quality of Hire report plots recruitment efficacy and directly correlates this to post-hire performance appraisal scores.
Quality of hire may sound rather subjective and difficult to determine, but nevertheless is one of the most important metrics. Because the cost per hire and retention rate are constantly scrutinized, it is important to find quality hires that are going to stay with your company for a long time, thus diminishing the need for another costly hire down the road.
Because of its organizational impact, quality of hire is a more important metric to track than time to fill or cost per hire.
For more recruiting KPIs, keep an eye out for Part 2 of this blog post coming soon!
You may also find our Top 10 Recruiting Metrics Cheat Sheet to be helpful in your efforts to streamline your recruiting plans in 2017.
Every human, animal, plant and nowadays even some machines have the ability to learn. So what is learning? Learning is the act of acquiring new, or modifying and reinforcing existing, knowledge, behaviors, skills, values, or preferences and may involve synthesizing different types of information. Researchers disagree on the attention span of a human. According to Statistics Brain, some think that most healthy teenagers and adults are unable to sustain attention on one thing for more than about 20 minutes at a time, although they can choose repeatedly to re-focus on the same thing, however, others disagree and state that a human attention span is as short as 8 seconds which is less than a goldfish.
Different people have different learning capabilities and pace. There are different learning methods. Some people learn better visually. Visual learning is a style in which a learner utilizes graphs, charts, maps and diagrams. Others learn better auditory. Auditory learning is a learning style in which a person learns through listening. An auditory learner depends on hearing and speaking as a main way of learning. So what are the best methods to keep employees/students engaged during the learning period?
1) Use their devices: Use traditionally known distracting devices as educational devices. This keeps them more excited making sure you keep it an engaging session and not a lecturing one.
2) Gamify your classroom: Use games as a source of learning and quizzing your employees’/students’ knowledge. This makes the learning process more exciting and engaging for all parties.
3) Learning ownership: Empower employees and give them ownership of their learning so they understand how important what they’re doing is.
4) Explain to them the bigger picture: Show them why it is important to take care of the intellectual health and what there is in it for them.
5) Be enthusiastic: Be positive, funny and active. Speak their language. If employees/students see you as a human being who is on their side and trying to help them, they’ll look at what you’re saying through a different lens and are more likely to actually pay attention.
6) Incentives: Give employees/students incentives to take a class and if successfully passing they would receive an award that can be either monetary or for example tickets etc.
7) Experience/opinion sharing: Discuss different topics. Take employees/students opinions. Allow a conversation/ ideas’ sharing session. Maybe even a competitive game session through splitting them into groups. This improves team work skills and which could motivate some employees/learners to stand out among their peers. This keeps the learner more engaged and excited throughout the learning session.
There are different learning methods that you can use to suite different learner types. However referring to the points above visual and auditory combined methods create the best learning methods which also leads us to emphasize on the importance of communication and interaction between the different parties to ensure the best learning outcomes. This might differ from one culture to another. So which of the above do you think is a suitable learning method for your organization?