Avoiding a hiring mistake and trying to retain the best talent takes more effort than one might think.
The competition for the best talent is increasing and agencies are faced with more hiring challenges.
Though, having a strong recruitment staff and program that keeps track of the metrics listed below will help pinpoint the main problem in the recruiting process.
Here are 9 recruiting metrics to keep track of:
1. Cost per Hire
Recruitment Costs / (Compensation + Benefits) = Cost Per Hire
Recruitment costs will include the cost to post on job boards, reviewing applications, screening candidates, interviewing, and contracts with recruiters.
According to a study done by the U.C. Berkeley Institute for Research on Labor and Employment, the cost to hire or replace an employee averages about $4,000 across establishments. The cost of hiring a professional or managerial employee is about $7,000. Recruiting new hires is particularly important to The Overture Group staff, especially when so many companies make common hiring mistakes, which can cost a significant amount of time and money.
Using our four-phase approach, the recruiting staff at The Overture Group performs a comprehensive process to ensure we’re hiring and placing only the best talent, without the apprehension of making a hiring mistake.
2. Time to Hire
Number of Days Open Position X Number of Candidates Hired = Time to Hire
The time it takes to hire is just as important at the cost because after all, time is money. According to a WSJ article, the average time that it takes to fill a position is taking even longer than it did back in 2009. U.S. employers are now taking, on average, 25 working days to fill vacant positions.
The fear employers have from a faltering economy has caused the hiring process to slow down with strict hiring criteria.
3. Sourcing Channel
Keeping track of where your best employees were sourced from is another great measurement to identify. Though there is not a set formula for this metric, you can cross check the cost to hire with the turnover rate and tenure by the source.
The channel that seems to be the most productive and promising will be the best recruiting source to allocate your budget to.
4. Recruitment Yield Ratio
(Number of Candidates Who Advance to Next Round X Total Number of Candidates Interviewing in the Round) X 100 = Recruitment Yield
The recruitment yield ratio is very important to our highly skilled recruiting staff because it helps us understand whether our recruitment process is efficient. Tracking each step of the interview and hiring process will in turn provide valuable information to which sources of candidates is producing a high yield ratio.
5. Offer/Acceptance Rate
How many candidates who were given an offer, resulted in accepting the job offer? Perhaps the candidate realized something about the company and caused them to lose interest or the recruiting process took longer than expected.
Learning more about how effective your recruiting process is will help your company discover what is attracting talent and what is holding people back from accepting the job offer.
Number of Employees Who Exit Per Year X Average Number of Employees that Year = Turnover
According to CompData Surveys, the turnover rate for all industries combined was 15% in 2013. Some industries experienced higher turnover than others and it’s important to calculate the turnover rate on a quarterly and yearly basis.
7. Turnover Costs
Cost of Separation + Cost of Vacancy + Replacement Cost + Training = Turnover Costs
Investing time and money on hiring and retaining the right people will definitely benefit a company in the long run, especially when the turnover costs are so high.
It’s certainly not cheap to have an employee walk out the door and the cost of replacing an employee can be anywhere from 25% to 250% of the person’s annual salary.
8. Retention Rates
(Number of Employees Who Stayed / Number of Employees at Beginning of Period) X 100 = Retention Rate
How stable is your staff? Tracking the number of employees who stay versus the employees who leave can help your company see a bigger picture. Perhaps dividing the high performing workers from the low performers can help you understand who is leaving and for what reason.
Number of Months Each Employee has been with the Organization / Number of Current Employees
Finally, knowing how long employees typically stay within your organization will provide valuable insight to select only employees who perform at a higher level or in a specific department.
Learning the various measurements that go into recruiting and hiring is beneficial in know how well your recruitment program is performing. If you see higher turnover rate and hiring costs shooting through the roof, then allocate those recruiting efforts to a highly skilled staffing agency to reduce the time and cost of filling vacant positions.
Measurement formulas provided by HubSpot.