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Recruitment Metrics

    Mithlesh Dhar

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    Recruitment Metrics
    It is important to understand that when we are talking about data-driven recruitment programs, we need to have recruitment metrics in place. Therefore, before going for recruitments, have your metrics in place so that it becomes easy for you to focus on recruitments and not on measurement criteria.

    What is Recruitment Metrics?
    Recruitment Metrics are the measurements, that are used to track hiring success to optimize the process of hiring for the organization. 

    When we use these metrics properly, it helps to check the process of recruitment and also if we are hiring the right candidate for the right post. 

    When we hire the right candidates, then there is less wastage of the company's funds with regards to recruitment and training. Even one bad hire can result in dropping of overall profitability of the department to 40%, and it takes more expense to train that employee. Hence, recruitment metrics play important role in the overall profitability of the organization.

    Some of the recruitment metrics are as follows;

    1. Time to Fill a Vacant Position:
    Time to Fill a Vacant Position refers to the number of days from publishing a job post to hiring a potential employee. Usually, it is calculated when a department manager raises a recruitment requisition.

    This recruitment metric gives an idea of how efficient recruiters are for hiring, and how much time it takes to fill different kinds of positions, which can also be used to plan for a position that might arise in between the financial year.

    2. Time to Hire Candidate:
    This represents the number of days from approaching a candidate to a candidate accepting the job offer. This gives a good idea of how the recruitment team is performing and it is often called Time to Accept.

    This indicates how efficient the recruitment team is in providing candidates proper information and good incentives to join the organization.

    Sometimes, a shorter time to hire can also result in below-average candidates for a particular position, therefore, the proper distinction between time to hire position-wise should be there.

    Also, it might depend on the level that you are hiring for. For Example, if you are hiring for a position that requires only one interview, then its time to hire will be less as compared to a management position that might require you to take evaluations and then some interview rounds.

    3. Source of Candidates:
    This is again one of the important recruitment metrics, which tells about the efficiency of a source of candidates for a particular job opening.

    There can be scenarios where we get better Management Trainees from campus placements and better line managers through online job portals like Naukri, etc. Also, when we want to hire for management positions, we usually do it using LinkedIn. 

    The above scenarios are hypothetical and there can be different scenarios as per organizations, and these metrics help us in understanding, which source of the candidate is better for us, both economically and timely.

    4. First-Year Attrition:
    First-Year Attrition shows if a hire is good or was a misfit. These may be managed or unmanaged. Managed in the sense that there was a contract between the company and the candidate and it is completed within 6 months, but unmanaged might include the candidates that were misfit in the team, and hence resulted in the attrition.

    Also, unmanaged first-year attritions are usually because of unrealistic expectations of either party, because of which the attrition occurred in the first place.

    5. Quality of New Hires:
    The quality of New Hires is measured by the first-year performance of the new hires. This gives an idea about the overall quality of new hires by the recruitment team. This is because there is a need for capable employees in the organization, and more than talent, attitude is important, which requires new hires to be ready for learning opportunities.

    As the quality of new hires depends upon their performance, hence one goes through the resume and interview processes more diligently before hiring a candidate.

    Low first-year performance ratings are indicative of bad hires. 

    6. Hiring Manager Satisfaction:
    This is one of the most overlooked criteria to analyze recruitment efficiency. This is because if the hiring manager is satisfied with the candidate, usually the candidate performs well when hired.

    Also, hiring manager satisfaction shows that candidate is a good fit in the team.

    7. Job Satisfaction of Candidate:
    If a candidate after hiring is satisfied with the work, that indicates that he or she is working on a job profile that is up to their knowledge and their qualification.

    This also ensures that the candidate makes fewer mistakes and hence his or her work will also be as per standards. Therefore, it results in the overall profitability of the organization.

    8. Selection Ratio:
    The selection ratio refers to the number of hired candidates compared to the total number of candidates. 

    Selection ratio = No. of hired candidates/Total No. of candidates

    When there is a high number of candidates, the ratio approaches 0 (zero). This gives an idea about the value of a selection tool to filter out candidates, and also what is the overall utility of the recruitment system.

    This can be used to get an idea of which positions need what kind of evaluation systems. If some positions have a selection ratio of 30%, that means only 3 to 4 potential candidates can help us in filling the requirement, but in some cases, there might be a requirement of filtering systems as the number of candidates will be higher.

    9. Cost Per Hire:
    The cost per hire recruitment metric is the total cost invested in hiring divided by the number of hires.

    Cost Per Hire = Total Recruitment Cost/Total No. of Hires 

    or

    Cost Per Hire = Total Internal Cost +Total External Cost/Total No. of Hires

    Cost per hire consists of multiple cost structures which can be divided by internal and external costs. By quantifying all of them, you can calculate the total recruitment cost.

    Total Recruitment Cost
    External Cost Internal Cost
    Advertising Cost Time Spent by Recruiter = (avg. wages * hours spent)
    Agency Fees Time Spent by Manager = (avg. wages * hours spent)
    Candidate Expenses New Hire Onboarding Time = (avg. wages * hours spent)
    New Hire Training Costs Lost Productivity
    Other External Costs Other Internal Costs

    10. Offer Acceptance Rate:
    The offer acceptance rate compares the number of candidates who successfully accepted a job offer with the number of candidates who received an offer. 

    A low rate is indicative of potential compensation problems. This can be avoided by discussing the pay scale with the candidate before starting the interview process to help save time.

    Offer Acceptance Rate = No. of offers accepted/No. of offers made

    11. Percentage of Open Positions:
    The percentage of open positions means that there are some vacant positions in the organization. A higher percentage of open positions means that there has a good number of openings in an organization.

    Percentage of Open Positions = Total No. of Open Positions/Total No. of Positions in the Organization

    If the percentage of open positions remains high for a longer duration, there might be some issues concerning employer branding and compensation. Or it might also show that there are not so many positions required as there are in the organization.

    For that, we can also merge some hierarchy in the organization after proper discussion. This will reduce the organization's manpower cost as well.

    12. Application Completion Rate:
    Application Completion Rate is also important as most of the time HR's don't have all the required data of employees, which causes them to coordinate more often with other departments.

    For example, most often employees have queries about PF, ESIC, and other Insurance related things that they ask the HR Team. It has been observed that several organizations still now keep this information with Accounts Team and not with HR, because of which HR has to coordinate unnecessarily with the Accounts team.

    These things could be avoided and also time could be saved by ensuring that all information about employees is in one place in one database with the HR Team.

    15. Sourcing Channel Cost:
    You can also check the cost efficiency of your different sourcing channels by including ad spend, the amount of money spent on advertisement, on that platform. By dividing ad spend by the number of visitors who successfully applied through the job opening you measure the sourcing channel cost per hire.

    Sourcing Channel Cost = Ad spend per platform/No. of successful applicants per platform

    This is to be kept in mind that one platform might be better for one type of position and another platform might be better for another kind of job opening, therefore, when we are checking the sourcing channel, we should check for similar jobs.

    16. Employer Branding Index:
    This one is again one of the most overlooked recruitment metrics. This is because as a recruiter, we are the face of the organization, and many candidates are our potential customers as well.

    Therefore, one needs to understand that we have a proper way of analyzing the employer branding index. This is most of the time done using "Sentiment Analysis" using Text Analysis tools, like RStudio, or Python, etc.

    References;
    1. Recruitment Metrics