We live in a data-driven world. Yet, many organizations still rely on their gut feeling and instincts when it comes to hiring. This creates risks and bias and can ultimately be expensive for organizations which make the wrong decisions.
But in a data-driven world, there seems to be so much more data. So, which data metrics are the most important?
At Singapore-based recruitment company PageUp, head of customer insights and market research Rebecca Skilbeck has come up with a report to answer this question.
First of all, there is the issue of maturity. “How mature is your organization’s analytics?” asked Skilbeck.
“Most organizations sit at the descriptive stage, where they can capture data and provide information on what is happening in their recruitment activities. But they can’t say why it’s happening.”
More mature organizations, she said are either diagnostic – understanding "why" things happened – while the most advanced are predictive and can shape their HR strategies accordingly.
In this context, here are Skilbeck’s five most important HR metrics.
1. Offer Acceptance Rate
Formula: The number of offers accepted divided by the number of offers made and then multiplied by 100.
Tracking this rate can save an organization time and budget.
“Each candidate that turns down a job offer costs your organization money,” said Skilbeck.
High-performing organizations average with a 99% acceptance rate each year, while the industry benchmark is at 94%.
Organizations that are below the benchmark need to ask themselves if they are employers of choice, whether their compensation is competitive, or are there issues with their recruitment process.
2. Applicant to Hire Rate
Formula: The total number of hires divided by the total number of applications then multiplied by 100.
Skilbeck said this metric tells “an important story about the effectiveness of your job listings.”
“We all want a rich pool of applicants to select from, but none of us wants to wade through more applications than necessary,” she said.
“Tracking applicant to hire rate can show whether job ads are reaching and engaging the right audience.”
PageUp estimates the average hire rate is 4%, meaning that it takes 25 applications to secure one successful hire.
3. Candidates to Hire Rate
Formula: The total number of hires divided by the total number of candidates, multiplied by 100.
A high candidate to hire rate can cost an organization hundreds of thousands of dollars in recruitment fees and negatively impact employer brand. Candidates refer to everyone that has applied for a role, regardless of whether they are a good match.
"As you move further down the recruitment funnel, non-suitable applicants are screened out, leaving candidates that match the role requirements and have the experience, skills, and behaviors that indicate they may be a good fit for the organization,” said Skilbeck.
Out of this pool, PageUp research showed that an average of 9% successfully land jobs. It means that nine candidates out of 100 are hired and 91 are unsuccessful.
These figures vary across industries. For higher education, the rate is 19%, while in retail the average is 9% and finance is 10%.
4. Sourcing Channel effectiveness
Formula: The total number of applications via channel divided by the total number of hires by channel multiplied by 100.
This metric tells an organization which channels are working and which ones need to be reconsidered. Changing tactics based on this can deliver significant savings.
“Understanding the most effective source of talent for your organization ensures the best ROI on time and investment spent on recruiting,” said Skilbeck.
“Knowing this information helps you create targeted, results-driven recruitment campaigns.”
PageUp research has found that 26% of applications and 17% of hires come through a company’s own careers website.
Employee referrals are more effective. Even though it only leads to 3% of applications, they account for 9% of overall hires.
“This means that employee referral is 4.3 times more effective in finding suitable hires than a company’s careers website,” said Skilbeck.
Mobile Application and Time to Apply Rates
Formula: Mobile application rate is the number of applications submitted via a mobile device, divided by the total number of applications submitted and multiplied by 100.
Formula: Time to apply is the time it takes to complete and submit the application form.
These two are separate metrics, but they work together to tell a story that might otherwise be overlooked.
Organizations are expected to deliver a consumer-grade experience with seamless connectivity to a talent pool, which is increasingly using smartphones to apply for positions.
In the past year, PageUp says 19% of job applications were submitted through mobile devices, up from 15% at the end of 2017.
“PageUp research has also found there is a correlation between abandoned job applications and applications made on a mobile device,” said Skilbeck.
“As the application form lengthens, the number of incomplete applications via mobile devices increases. If you're looking to optimize your mobile recruitment approaches, make it simple and easy for job seekers to apply on-the-go. Consider allowing candidates to attach their resume or autofill applications from their social media profiles."