In amidst today’s digital disruption, many companies are forced to completely change their recruiting strategy in order to find ideal candidates. Historically, companies had the privilege of throwing a job ad somewhere and a huge flock of candidates would apply. However, with technology getting into the mix, numerous job opportunities have become visually abundant which exacerbates the industry applicant balances. Industries that received few applicants receive fewer, and industries that received large candidate pools, now receive overflowing amounts.
Due to these large shifts fewer progression industries need to completely overhaul their recruiting strategy and utilize more active sales strategies in order to find ideal candidates. Adding to this difficulty, in order to find those ideal candidates according to Fortune, they are only on the market for 10 days. Companies need to act candidates fast and efficiently in order to acquire a talented workforce.
This post will cover a few vital metrics that anyone looking for talent should focus on. This is more of a beginners guide, but nevertheless, should be proactively looked over with a fine-tooth comb. By watching these metrics, your organization will be taking a small step into building your ideal workplace.
KEY METRIC 1: TOP OF THE FUNNEL CANDIDATES
In the recruiting process, you need to view recruiting as a sales funnel. The ‘top of the funnel’ metric is the number of resumes you receive for a particular position. Many companies might not track this, but in order to attract ideal candidate companies need to ensure they are positioning their job offer correctly and are addressing it through volume.
If recruiters don’t track this metric and instead, look solely at candidates that pass the first round interview. However, they might not be getting enough applicants in the higher part of the funnel. While working with a police firm in middle America, they expressed their struggle on finding quality candidates. They erroneously concluded that officers lacked proper training which influenced the drop in officer performance. However, the problem resided further up the funneling process – top of the funnel because the officers weren’t getting the same number of quality candidates. Turns out they were getting 80% fewer candidates than they received 10 years ago for the same position. If the organization tracked this stat, they would immediately notice their bottom of the funnel problem stemmed from the top.
Top of the Funnel Candidates = Number of Applicants (online ads, internal referrals),
KEY METRIC 2: TIME TO FILL
With top candidates disappearing from the market in under 2 weeks, companies need to take a proactive approach to speed up in the hiring process. Unfortunately, organizations in the government sector can take anywhere up to 106 days to hire a new candidate while private can take anywhere from 12 (construction) to 49 (health care) days.
To add to this complexity, ideal candidates usually receive several offers when they reenter the job market. During this period, companies often give a specific amount of time for a candidate to make a decision on accepting the offer. Sometimes it’s a few days, other times it can be a few weeks. Unfortunately, many candidates don’t interview with various companies at the same time requiring competing companies to accelerate their interview process
Time to Fill = Duration between the first contact to job offer signing.
KEY METRIC 3: NUMBER OF QUALIFIED CANDIDATES
In order to effectively determine if a recruiting method is valid, recruiters must look at the number of qualified candidates they have in the pipeline. Essentially, deriving which sources are delivering the candidates you actually want. Note, this rate can be alarming low. Very often for certain positions like software engineering, the number of candidates that pass the first round interview can be as low as 20%.
But how do you figure out if the source is appropriate? Let’s say you have 1 qualified candidate coming from Monster while you have 50 coming through LinkedIn. Would it be worth shelling out $500/month for some of Monster’s services? It all comes down to key metric 5 and 6 to determine if the source is worth using. If you pay $500/month for a service and that relates to a job hire each time, you should probably keep it.
Number of Qualified Candidates = Number of candidates who pass the first round interview / Number of candidates that applied.
KEY METRIC 4: NUMBER OF JOB AD SHARES
Out of the six metrics, this one is probably the least commonly talked about. One of the powerful aspects of the internet is that there are people out there and if they are incentivized correctly, could find the candidate for you.
Tucker Maxx, a multiple-time New York Times bestseller author and the founder of Scribe Writing, has successful written job ads that receive numerous shares. Part of the process was incentivizing shares by adding a finder’s fee on the job ad. From simply adding that part, he received over 50 shares and receive an order of magnitude improvement in job applicants.
Why do companies actively hire recruiting agencies instead of leveraging their social media networks for a good hire? To be honest, I am not completely sure, but I am sure they will soon. It’s only a matter of time.
KEY METRIC 5: COST PER HIRE
If you don’t know this statistic, you won’t be able to determine if your efforts are effective. This metric involves would involve calculating all expenses to acquire a candidate. This stat is the cornerstone to determining: which platform should be used, which job ad is performing the best and should the company hire a specific agency. Knowing this stat makes everything easier.
Cost Per Hire = Sum of All-Encompassing Fees (job ads, recruiting agencies)
KEY METRIC 6: QUALITY OF HIRE BY SOURCE
In the pursuit of finding out which source has the best return of investment, recruiters need to look into the quality of each source they utilize. In recruiting strategies, just like sales, companies usually invest in several different strategies in order to achieve some results. However, it’s financially dangerous to leave multiple assets unanalyzed. Recruiters need to actively look at which sources are producing the best-qualified candidates in order to ensure that their recruiting budget is getting the best return of investment they can.
Quality of Hire By Source = (qualified hires for source 1..n) / total number candidates
Jeff Butler Internationally respected speaker and consultant, Jeff Butler helps bridge generational gaps between Millennials and companies looking for their talent and patronage. Butler has quickly built his reputation as a memorable presenter with tangible solutions for attracting, retaining, and engaging Millennials as employees and customers. Within just the past three years, he has spoken at two TEDx events and multiple Fortune 500 companies such as Google, Amazon, and LinkedIn.