Good and Bad Recruitment Metrics
When I talk with people working in HR about the metrics they utilise to measure recruitment-related actions, various metrics are mentioned. I believe they can be divided into two categories: good and bad recruitment metrics. Only the former enable the analysis of the effectiveness of recruitment-related actions and their optimisation. Let me explain you why you might be using bad recruitment metrics.
First a short explanation. Bad, or what I call limited utility metrics are what I call all recruitment metrics which enable us to present what has happened, has already occurred, but do not allow to plan what will occur or affect the result of the undertaken actions. Please look at this great iconography which explains the difference between reporting and analytics, prepared by my personal guru, Josh Bersin of Deloitte:
Limited utility recruitment metrics.
1. Time needed to find an employee: the so-called time to fill
Time to fill is measured in various companies in different ways. Most often as the number of days which passes between notifying HR about the employee requisition and concluding a cooperation agreement with the employee. It is also sometimes defined as the number of days passing until the moment of commencing work by the new employee. It is worth making sure if everyone in the company understands the definition the same (and I would strongly encourage using the first of the provided definitions).
What is the reason for the limited utility of this metric?
The metric contains only “informative” value. We can tell, based on historical data, “how many days on average it takes to acquire an employee for the position in the X department” (it is definitely worth calculating the value of the metric for separate departments, and in case of large companies, even for separate teams). It is one thing to look for a candidate for a customer service department, quite another to look for a candidate for a programming development department. This metric enables us to (informatively) relay to the persons requesting the recruitment how much time it may take to find the employee they seek. That’s it. Not a metric liked by HR. Often the value of the metric is 40 to 60 days. That’s a lot, and according to a number of recruitment experts, it is probable that you won’t succeed in lowering that value. It’s not worth it. If someone aimed to do that, it could turn out that it would negatively affect the quality of recruitment. But more about that later.
Related: Key HR metrics to measure
2. Number of applications for a given position
The number of applications for a given positions are the basic metric of the “effectiveness” of recruitment-related actions in a large number of HR departments. It suggests that: “the more, the better”. Absolutely not. When I hear that “the main aim of a recruitment team responsible for acquiring candidates for an internship program is to acquire 3000 student applications” (in a very large, well-known retail chain), I can’t believe my ears. Why is it not worth focusing on this metric? It says nothing about the results of the HR work: it is no rocket science to acquire 100 CVs from people that you will never invite for an interview. However, it does not convey the effectiveness of a given recruitment source asit is better to have 5 candidates from a source from which we will invite two persons for an interview and employ one, than 35 people from a source from which we will invite 7 persons and employ none. There are instances where it is a way for both parties to delude themselves (the company acquires 300 applications, the recruiter takes on average 20 seconds to familiarise themselves with each CV, glances through the first 30, gives up on the rest, and the candidates apply without meeting the basic criteria, because: “who knows, maybe they’ll call”).
3. Employment cost
Employment cost is a metric which has to be measured as it enables to plan the costs of expected recruitments. However, it should not be part of the so-called key performance indicators. It allows to show, e.g. how expensive a given recruitment source is, which does not necessarily mean that the source is “weak”, if we analyse the effectiveness of the given source (understood as not the number of acquired CVs, but of employed candidates).
Recruitment metrics which are more than reporting
These are the metrics enabling to plan actions which have a chance to affect the results that the HR department/team will achieve in the future.
1. Number of competent candidates
A recruitment metric worth using in place of the popular “number of applications.” It means the number of candidates who meet our requirements regarding a given position. In other words, it is the number of candidates we invite to participate in the first stage of recruitment, be it phone screening, a direct meeting or an invitation to complete a test. Why is it worth using this metric? If we calculate it on the basis of the so far conducted recruitment processes, we know how many competent candidates we need to recruit in order to employ a great employee. In other words, we know how intensive our efforts should be at the start of the recruitment process to fulfil the expectations of the business. As, if the metric amounts to about 15 to 20 candidates (depending on the department, based on the clients taking advantage of the ATS offered by Greenhouse), then we know that it will take a lot of work to acquire this number of candidates.
2.Effectiveness of recruitment sources
Effectiveness of recruitment sources is not precisely a metric, but a set of recruitment metrics. Because it is not possible to evaluate the effectiveness of recruitment sources based on the number of applications provided by a given source. It is possible to evaluate it based on:
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- the number of competent candidates,
- the percentage of offers accepted by candidates from a given source,
- the percentage of cases of extending employment following the trial period.
Only then do we know how good a given recruitment source really is.
3.Results of the Candidate Experience study
In other words, the results of the study of the candidates who applied at the company at which you work.
It is possible to conduct such a study by asking two questions and measuring the so-called Net Promotor Score indicator (the inclination of the candidates to recommend applying at a given company). The most important value of such a study is the continuous feedback from the candidates regarding which elements of the recruitment process are valued by them and are worth maintaining. It may be that, e.g., it is worth publishing photos on Instagram, as they show people the work atmosphere and it is no longer necessary to mention in advertisements that you offer “nice atmosphere.” You can also learn from the candidates which elements of the recruitment process are worth changing. Maybe the time between the individual recruitment stages is too long, maybe the candidates really need feedback, the possibility of meeting future colleagues, or maybe some of the questions asked during the interview are perceived as irritating and are worth forgoing. This is a metric which really enables to measure our progress, shows the percentage of people who are strongly inclined to recommend applying at your company, even if a job was not offered to them. It is also a great source of information regarding which aspects of the recruitment process are worth improving (finally it’s not necessary to come up with those, as the candidates become a source of information for us).
And which metrics do you use in recruitment? Which of them do you “like” and why? I am searching for bold people who will share their experience. Just write in comments or at [email protected]