Metrics can be a powerful tool, delivering the hard truth about company results, discovering important trends, and revealing unknown pain points.
Historically speaking, trying to tie metrics around people management practices can present big challenges for many traditional HR departments. Measuring the “fuzzier” components of a business is something most organizations are still spinning their wheels trying to understand. Despite the widespread knowledge that a robust people analytics investment is now a business must, the majority of organizations are not playing to win with their HR analytics. According to the Deloitte 2017 Global Human Capital Trends Report, and a Bersin by Deloitte study, 71% of organizations recognize people analytics as a high priority, while only 9% understand which of those KPIs drive performance, and only 15% of organizations rate their reporting of data as highly accurate.
While people analytics are being used to solve a wide range of business challenges, the area that data is currently influencing the most is Talent Acquisition. Let’s take a look at 5 metrics to keep in mind when building out your recruitment strategies!
1. Time to Fill: Time to fill refers to the time at which a job requisition becomes open, to the time the job requisition is closed (the entire time it takes to hire a candidate!) The average Time to Fill rate is 36 days, according to the 2017 Talent Acquisition Benchmark Report by SHRM. This is an important metric, as spending too long in the recruiting phase will cost you time, money, and good candidates!
Take a look at the length of your recruitment process and measure the time to hire from start to end. Can you spot any inefficiencies? Are there unnecessary steps, interviews, and hurdles getting in the way of closing strong candidates?
2. Referral Rate: The Referral Rate indicates how many people are referring their contacts to jobs within the organization. If someone is taking the time to refer a contact, it’s for a good reason! Chances are it will be a good fit, says Frances Wilk, Head of Talent Acquisition at Breather. Most organizations believe that referrals deliver the highest quality candidates, with 51% of organizations reporting referrals as their top channel of recruiting, reported by the Deloitte 2017 Global Human Capital Trends Report.
Employee referrals remain to be the cheapest, fastest, and the most efficient way to hire. Consider boosting your employee referral program, as a small investment there could yield generous returns!
3. Cost per Hire: This refers to all costs associated with filling a position and can include recruiter fees, advertising, referral fees, etc. Understanding how much the Costs per Hire helps leaders with budget allocation, and creates benchmarks for future planning. According to the 2017 Talent Acquisition Benchmark Report by SHRM report, the average cost per hire is $4,425!
When considering your recruitment strategy and cost per hire, “hold your recruiting vendors accountable on matching or beating your cost per hire” says Rivas.
4. Source per Hire: This metric measures where hires are coming from. Understanding the source where each candidate has entered the talent pipeline is important in carving out your recruitment strategy and allocating time and resources to different channels.
Are you directing more resources to your most valuable channel? Are you adjusting your efforts in areas that are lagging? Define what your “sources” are, define how they will be measured, and stay consistent, says Bika.
5. Turnover Rate: This looks at the rate which people are leaving the organization (voluntary or involuntary). According to the SHRM Customized Human Capital Benchmarking Report, the average industry annual standard for turnover is 18%. When looking at the return on investment with your high potential employees, understanding where on their career trajectory they typically leave the organization can give you insights as to when you should engage them with efforts to retain them.
Get a better understanding of your turnover rate and see how you’re doing in comparison to other companies or departments. What insights can you gain about your potential leadership style, workload, roles and responsibilities associated with the job, or opportunities for growth based on this number?
Strong analytics begin with good, clean data. While it’s important to have a clear understanding of your numbers, it will be for nothing without thoughtful execution on translating information into action. Remember, when it comes to data, the proof is always in the pudding!
Stacy Pollack is a Learning Specialist with an MA in educational technology. She is passionate about building leadership programs that engage and contribute to the success of her organization. She loves to share her perspective on job hunting, career building, and networking for success. Connect with her on LinkedIn or Twitter.