Most human resources professionals worth their salt know the importance of recruiting metrics in improving the hiring process.
Gathering the right data about your prospective hires can vastly increase your efficiency in filtering for the best candidates for the job. However, while three-fourths of HR professionals know the value of talent analytics whether they have a plan in place or not, this report finds that less than a fourth of companies use them at all. Those that do may not even be tracking the right recruiting metrics!
The purpose of tracking recruiting metrics is to gather and analyze data that can help the HR professional tie in their recruiting process with stated business goals. The proper analysis can show the recruiter what is working, what needs improvement, and what needs to be eliminated in the hiring process.
It is therefore important to choose just a few metrics among the multitudes to attain your goals. Using the shotgun technique in tracking metrics may net you a significant amount of data that will not be at all relevant in making good hiring decisions, so you have just wasted your time.
That said, some metrics are always going to be important no matter whatever the business goals happen to be. Here are 8 important recruiting metrics you must track today.
1. New Hire Progress
Assessing the quality of your hiring process will become evident when you track the progress of your new hires. Basically, you want to know how many of your hires within a certain period leave the company, at what point, and why.
To track this, you need to establish a set of milestones you expect each hire to achieve from day one. These milestones can serve as metrics to measure the new hire’s progress. Poor progress may indicate improper hiring practices, or it may indicate a problem with training and/or staff onboarding. It may even indicate that the milestones are too aggressive and/or are not realistic.
Remember to account for time of year, the quality of your current trainers, and the level of work demanded (which may change on a weekly/monthly basis).
2. Internal Promotions Vs External Hires
Are your current employees working their way up the ladder, or are you hiring from outside? If your external hires are high and your internal promotions are low, it may indicate a very poor internal attitude and atmosphere. If your employees are not being encouraged to progress, they are probably stagnating and are likely to be under-motivated.
3. Work Experience Requirements
Do you make a point of requiring candidates to have work experience? It is of course safer and more cost-effective to hire someone you don’t have to train from scratch, especially for certain key roles.
However, work experience is not always necessary, and experienced workers tend to ask for a higher salary. On the other hand, you may be paying workers with no experience a lower wage, but you still have to invest money and time in training them. Of course, such employees are more likely to be highly motivated and develop a sense of loyalty to the company. The only way to know if your work experience requirement is justified is to measure experience versus performance.
Track if the level of experience of new hires has an impact on their performance, and in what manner. You will then be able to find the sweet spot of work experience (and salary level) for specific job roles.
4. Repeat Hire Rate For The Same Jobs
If you are repeatedly replacing staff members because you have a high turnover rate for certain jobs, then it may be time to start investing more time and money into that area to lower the turnover rate and therefore reduce the repeat hire rate where you keep hiring different people for the same job over and over again.
Repeatedly hiring people for the same job because of a high turnover rate is a big problem, and you need to address it by either improving working conditions or by offering bonuses. If the job wears people down after a while, then turn one full-time job into two part-time jobs and split the pressure of the job.
5. Offer Acceptance Rate
You spend a lot of time and effort in getting people to apply for your open positions, filtering qualified ones, interviewing, and finally you get to the offer stage, and they don’t accept. You have to track if this happens more often than not, and if it does, to find out if it is because your offer package is below-industry standards, or other factors come into play such as location or family obligations.
The offer acceptance rate is pretty easy to determine. Simply divide the number of acceptances by the number of offers, and multiply that by 100%. Anything lower than 58% when recruiting new graduates may indicate a problem with your talent acquisition plan.
One problem may be the high minimum wage requirement, which makes making an offer that even new graduates will accept more difficult. For many companies, the minimum wage gives them very little margin for training costs when they take on low-paid but under-experienced employees to make them productive and high performing (high paid) employees. The alternative is to make a higher offer to attract already competent employees.
However, if you work in an industry that legally permits you to hire employees at a low cost, you have a little more wiggle room. Track the employment and success rate of each candidate, and determine if paying low for an inexperienced worker will be worth the investment. You can then put more energy and effort into recruiting low-cost employees and putting them into intensive training programs.
6. Number of Applicants
It may indicate the quality of your recruiting, but it may also indicate a high demand for jobs in your industry. Higher numbers of applicants may help justify a wage cut for current employees so you may hire more people, or you may wish to start offering applicants that were turned down a different-but-less-desirable job instead of re-advertising for the less desirable job.
7. Age of Applicants
It is generally a waste of time to track demographic information for your candidates when analyzing your talent acquisition plan, unless the role has an inherently specific requirement, i.e. gender-specific jobs. However, it may be worth recording the age of applicants simply to (and for no other reason than) see how the job market is changing. Changes in age trends may indicate looming trends in your business.
For example, if you mostly gain applications from people in their teens, but now you are only receiving applicants from people in their 30s, there may have been a cultural or educational change that is choking off your younger applicants where only people from the previous generation still want to work for you. College essays scholaradvisor often reports shifts in college curricula that discourages students from certain job sectors.
8. The Retention Rate
If your retention rate is bad, then your HR department may need to rethink its management strategies. For example, employees may be starting work with unrealistic expectations that are not being correctly dispelled by the HR department, which should happen during the onboarding process. Poor employee retention rates will cost you epic amounts of money if you are not careful.
Many companies offer trial periods of three weeks to three months for this reason. If you opt for a trial period, then seriously slash your HR department’s budget and streamline their process so you may offset the loss you incur with these trials.
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About the author:
Stacey Marone is a writer and a journalist focused on convincing people they can achieve almost everything they aim for. Personal motivation is an incredible driving force that not all of us understand. Her goal is to help people recognize their own potential. You can follow her on Twitter.