ROI for New Hires
Hiring is only the first part of recruitment. Once an employee is onboard, you must consider the time it takes to be fully productive. The hiring process is only the beginning. You also want to track when employees provide notice and the turnover rates to keep your team engaged and avoid negative attrition.
The ROI of an employee is the time between total productivity to their last day. It all begins with talent acquisition and hiring right the first time, which can be enhanced by tracking several metrics to better understand qualified candidates' motivations, values, and sources.
Consider the following recruitment metrics for hiring.
Quality of Hire
A key metric, but one challenging to assess, is the quality of hire. The success rates of a new employee can fluctuate and may not seem to follow any pattern between individuals and the quality of hire measures pre- and post-hire data.
Making the process more challenging, there may not be one uniform way to calculate the quality of hire. Suggestions include asking hiring managers and new employees about their fit in the role. Then the score is averaged to determine if they are a match.
Measuring the candidate experience is no longer optional. Even without an offer, you must determine how each candidate experienced your hiring process. This is critical to improving recruitment to continue attracting top talent without developing a reputation as a problematic company.
Assess the candidate's experience beginning with the application. Ask directly at each stage, from applying and interviewing to receiving an offer. You can also monitor for reviews on job boards and social media.
When you make an offer, how often does your top candidate accept it? If you see that individuals are deciding to pass on the offer for any reason, you may need to review your hiring expectations and shift gears.
Measure how many candidates accept your offer and why they decline if they do. This can show you a pattern you can possibly correct if you repeatedly see the same information.
Time to Hire
The time to hire is considered a critical measurement. Still, the number can vary greatly depending on your company and the types of positions, how difficult it was to source candidates, and if your organization experiences a hiring freeze or other approval processes. However, it will become a key indicator for the success of your recruitment program.
This spreadsheet from SHRM can help you track the correct information. You'll need to know when someone entered your pipeline and when they accepted an offer.
Recruiting Source or Channel
Deeper into the art and science of recruitment, the next critical metric to track is the recruiting source. Where do you find the majority of your candidates? Where have your most successful hires come from? What kinds of sources are you utilizing to find potential candidates? Are the channels diverse?
Recruiting sources go beyond job postings, including social media, networking, referral programs, and more. Track this by recording each candidate's source at the beginning of their application process.
Application Completion Rate
Did you know 92% of candidates do not complete online job applications? There is a significant disconnect between what companies expect and what talent is willing to provide. Your online application process should track the abandonment rate and completions. By doing this, you can know where the process breaks down. You may be losing the most qualified talent through your online approach.
Your software should be sophisticated enough to provide data on abandoned applications and completed results.
For recruiters, there is also the metric of fill rate. On average, how many jobs do you fill per week or month? Then look at requisitions in the queue that have gone unfilled in that time. Can you fill them all or only some of them?
It's critical to look at the overall fill rate to determine why some jobs haven't been matched to candidates. It could point to a solvable problem.
Applicants Per Hire
You should also track how many applicants you have per each hire. This measures you're entire recruitment funnel for one specific job. How many people apply for a single position? Since you can only hire one candidate, you should track what it might take to drill down to that individual.
The process may be too broad if you average too many applicants before you find the right fit. Or vice versa.
The conversion rate is a more detailed look at your funnel. It starts with the application rate and the number of candidates you contacted. From there, you look at screened candidates who attend the interviews. Then you'll measure the offer and acceptance rates.
Cost Per Hire
Cost is a necessary component of the hiring process. Companies investing in recruitment must fully understand their return on investment or ROI. You can calculate the ROI of recruiting by looking at the average cost per hire. This includes everything from the initial job posting through the entire screening process.
Time in Each Process Step
Along with the conversation rate and cost per hire, you should measure how long each person is in each process step. Analyzing this time frame will give you an idea if there is a bottleneck in the funnel that leaves people wondering about the next phase.
You can make changes to avoid losing out on great candidates who aren't getting enough feedback.
Recruitment isn't over when a job is accepted. You also want to know the retention rate of individuals placed through the recruiting funnel. How many new hires will make it past 90 days or into their first year?
Take a close look at retention and compare it to your policies to improve the employee experience.
Diversity, equity, inclusion, and belonging are no longer optional metrics to track. What are your diversity initiatives for hiring, and how do you meet your goals? By measuring the diversity of candidates, you can see where unconscious bias might affect the outcome between screening and interviewing or making offers.
Here are more tools for measuring the diversity of your candidate pool.
While many people don't want to focus on the negative, there is wisdom in understanding the adverse impact of your hiring policies to avoid applicant and employee dissatisfaction in the future. Employment practices that can appear neutral can be problematic. You want to measure everything through hiring, training, and performance reviews.
Use of Applicant Tracking System
It seems farfetched that you need to track the tool you use to track your metrics but hear us out. Calculating the use of your ATS will help you see the ROI of the system itself. It will be necessary to budget or train as you see if your recruiters are getting the most out of the toll they're using.
Your Partner in Data
Every data point you measure relates to time, money, and how you invest in every hire. Metrics will help you determine areas where you might struggle with recruitment and how to improve. You can also review your continued investment in recruiting technology to make the experience easier for you and your candidates.
You don't have to go it alone. Investing in the right software gives you the structure and framework to manage talent and what you have to offer. Using a system to help you track and hire top talent is the first step in the process.
With more competition for top talent, it pays for companies to consider all their advantages and the use of tools to assist in the quest to find talent. HireHive helps busy people hire great people. You can post jobs, streamline your online application process, improve the candidate experience, and tap into vast global networks by having your entire recruitment process in one place.
Set up a free trial account today. Contact HireHive to learn more.