In September 2015, Rob McIntosh of ERE Media put together a phenomenal, comprehensive list of 19 trackable recruitment metrics. He explains that prior to the composition of this list, "you could find millions of results by searching for most of the basic recruiting metrics, but try finding out the actual formulas of how these metrics are made up, and there are few to no results, or they are hidden and not published."
But for most, his list is too comprehensive. Two months after the list's publication, John Sullivan (also of ERE Media), hit the nail on the head with his article "The 6 Strategic Recruiting Metrics That Executives Want To See."
One year later, this is still an important distinction to make: there are many recruiting metrics that can be useful in some scenarios, but far fewer that are necessary in all- particularly as tech continues to influence recruiting standards.
Here are seven recruitment metrics you should take the extra effort to track in 2017:
1. Time to Fill
Time to Fill is the time it takes to identify a candidate and fill an open position in an organization. Tracking Time to Fill is imperative because it directly impacts your ability to onboard the most lucrative talent. Consider these statistics:
- The average time to hire is 42 days. (sources differ between 27-68 days, the point is - too long!)
- The best candidates are off the market in 10 days.
For the enterprising talent acquisition team, this is a tremendous opportunity. With the proper application of artificial intelligence, an international hospitality chain took their hiring time from 42 to 6 days.
With a hiring time of 42 days, imagine how many of the best candidates selected employment at other organizations. Now, not only are they acquiring the best employees for their organization, they are avoiding the opportunity cost of missing out on top talent.
2) Time in Workflow Step
This step is significant for the very reason it shouldn't be. Time in Workflow Step describes the time a candidate spends in each step as determined by the ATS. Examples of workflow steps include phone screens, submissions to the hiring manager, and interviews.
Something is amiss if you are tracking things to this level. While this metric is useful for identifying bottlenecks, chances are all your steps are too long if you are able to determine the minutiae of each.
3) Quality of Hire
Quality of Hire (also known as First Year Quality), is the percentage of candidates submitted by recruiters who are accepted for employment plus the percentage of these that do not leave, divided by two. The resulting metric indicates the effectiveness of the recruiting team in identifying quality, loyal talent. It represents the distinction between more candidates and the best candidates. Mark Newman analyzed this distinction at the 2016 Digital Disruption Conference.
"The reality is that the average job opening has over 250 applicants, yet less than six people are actually considered. Do you think we're going to solve any problems if we take that number from 250 to 400?" - Mark Newman
This is a metric that matters tremendously to business stakeholders. If recruiters are submitting low-quality talent, hiring managers are wasting valuable time and resources filtering through them.
So how can this metric be improved? On the surface it seems like something that can only be fixed retroactively, either by altering the recruiting team or changing the way candidates are submitted.
In years past, this assumption would be correct. But with artificial intelligence (AI), HireVue is able to build models based on the performance data of top performers- and feed this back into the initial recruitment assessment.
4) Offer Acceptance Rate
This metric is a straightforward comparison between the number of candidates given a job offer and the number that accept- and its implications are far from simple. If your organization has an industry-low Offer Acceptance Rate, it is likely your offers are not competitive enough.
But the implications of a low Offer Acceptance Rate don't stop with lackluster 401k matching. If it comes to light that certain demographics are not accepting otherwise lucrative offers, there may be a systemic problem with your talent pipeline that makes these groups uncomfortable with your workplace.
5) Application Drop Off Rate
Application Drop Off Rate is the percentage of applicants who start but do not complete the application process. Improving this metric not only creates a better candidate experience, it gives your organization better access to top talent.
The traditional job application takes over 30 minutes to complete, is not optimized for mobile, and requires extraneous information many job seekers are uncomfortable giving out. The best candidates know they are the best, and will not put up with a bloated application.
6) Candidate Satisfaction
Bottom-line observers are starting to notice the importance of Candidate Satisfaction (measured by survey during the hiring process) as we continue the march toward social media's ascendancy.
An unsatisfied candidate is no longer a voiceless unknown who will complain about their experience to a couple friends at dinner. In the 21st century, an unsatisfied candidate is an enraged Twitter account, an antagonistic Facebook page, and a hostile Instagram profile. Your company's reputation among customers is no longer distinct from your reputation as an employer.
Virgin Media learned this lesson the hard way. In their first-ever "Rejected Candidate Survey," they uncovered that 18% of their candidates were customers- and 33% of these had such an atrocious experience they switched to a competitor. The revenue lost from these lost customers was estimated to be around $5 million dollars, the same amount they spent on hiring.
But building a strong candidate satisfaction does more than ameliorate losses- it also has the potential to drive revenue. By offering free hotel stays for veterans seeking jobs, Hilton International added $135 million to its bottom line. It turns out their applicants enjoyed their free stay so much they paid to extend it!
7) Cost to Acquire
Cost to Acquire is a metric that measures the average cost to fill a position, from candidate attraction to onboarding. In large organizations, cost to acquire has measurable impact on the bottom line. In smaller organizations, it can make or break the yearly budget.
As organizations spread their nets wider and wider in order to reach as many of the best candidates as possible, the average cost of acquiring each candidate is rising. Companies are cutting these costs wherever they can, but too often these cuts come at a steep price: potentially missing out on top talent. Can a compromise be reached?
Goldman Sachs says yes. By replacing their campus recruitment strategy with first round video interviewing, they are able to parse more applications than ever before. No longer restricted by Ivy League recruiters, they are able to receive applications from top talent across the nation- all while cutting their cost to acquire.