5 Must-Measure Talent Acquisition & HR Metrics [Guide]July 23, 2015
“Numbers don’t lie” is a phrase many of us have heard at some point during our lives. As an internal audit accountant in a previous role, I said it all the time. And now, as a professional in the HR space, it remains just as relevant.
I’m a bit partial to numbers; I enjoy analyzing metrics and exploring the story they tell. With access to historical data and the ability to track and analyze current metrics, I can clearly identify inconsistencies in a sourcing strategy, breakdowns in a recruitment process and weaknesses in a candidate pool.
There are too many recruiting metrics to count, and you don’t need to be tracking all of them anyway. The key is to customize which recruitment metrics are most important to your CHRO. Key recruiting metrics should be established at the inception of a new project. However, if you’re not currently tracking recruitment metrics, start somewhere. Identify the important metrics, implement a process to measure them regularly and benchmark them against industry standards.
Below are five must-measure HR metrics:
Service-level agreements (SLAs):
SLAs are imperative when recruitment services are outsourced because they establish a mutual commitment between the client and the service provider. Successful recruiting is a two-way street between the hiring manager and the recruiter and requires the full cooperation and buy-in from both sides. An effective SLA establishes measurable agreements such as time in which to start submitting candidates after a requisition is open, the number of candidates that will be submitted in a specified amount of time, time that will pass between when candidates are submitted and when they are scheduled for face-to-face interviews and the amount of time in total that candidates can be “in process.” Even if your recruitment services aren’t outsourced, define these measurements with your in-house recruitment team to keep all parties accountable for a successful program.
Minimum number of recruiter interviews:
This key performance indicator (KPI) is derived via good ol’ math! It involves using historical data (or industry data if it’s a new project) to establish estimates on candidate outreach, recruiter phone screens, recruiter submits, hiring manager interviews, second interviews, offers extended, offers accepted and actual starts. Using this data, work backwards to determine the number of recruiter interviews or screens that must take place to get you to the number of hires you’re targeting. This is important to ensure the volume necessary to reach your goals is flowing through.
Timelines that affect certain recruiting goals, such as training class dates, busy seasons for divisions or business units, SLA time constraints and anticipated growth in headcount, for example, must be identified and outlined. Recruitment KPIs will have to be adjusted accordingly to meet the increased (or decreased) demand within the timelines.
A new project can be more challenging to benchmark in the beginning. You must gather industry data or data from other projects similar in size and scope in order to build benchmarks. If you have historical data, use it to benchmark the impact of the newly implemented recruitment strategy. Determine from that data what constitutes a movement toward reaching your organizational goals through the talent acquisition program.
Other relevant metrics:
Every project is different as is every business, so each will have different KPIs that should be measured. The most important step in effectively measuring recruitment metrics is defining which KPIs have the greatest impact on your business. Leave a little room for flexibility in what recruiting metrics to track and measure because as you progress through a project, you’ll likely discover some measurables that will become significantly more important than you (or your CHRO) expected them to be at the onset.
Let’s construct an example of how managing metrics can help plan out resources and set talent acquisition goals. During the initial project launch, an organization projects that it would make 900 hires in the course of a 12-month period. With three full-time recruiters and one sourcing partner, as well as industry and historical data, let’s compile the numbers to gain insight on conversion rates around phone screens to submitted applicants, submitted applicants to interviews, interviews to offers and offers to starts. Other factors, such as rescind rates due to background and/or drug screen programs, must be considered as well (but we’ll leave that for another blog!).
My research told me that we were looking at about a 2-to-1 conversion rate on screens to submits, but what if hiring managers were moving forward to the interview stage with almost all of our submits? The interview-to-offer ratio was going to run about 4-to-1 and the offer-to-start ratio would run about 2-to-1.
In order to plan out and analyze the productivity capabilities of the recruitment team, I would calculate the following metrics equations:
900 hires in one year by three recruiters equals 300 hires per year per recruiter.
To get those 300 hires: With a 2-to-1 offer-to-start ratio, each recruiter must make two offers for every start and therefore make 600 offers over the course of the year.
To get those 600 offers: With a 4-to-1 interview-to-offer ratio and a 1-to-1 submit-to-interview ratio, each recruiter must conduct four interviews for every submit and therefore conduct 2,400 interviews and submit 2,400 candidates over the course of the year.
To get those 2,400 submits: With a 2-to-1 screen-to-submit/interview ratio, each recruiter must conduct two screens for every submit and therefore conduct 4,800 screens over the course of the year.
Then I need to understand if 4,800 screens per year per recruiter is feasible so I do the following:
I assume 52 working weeks in the year, and therefore 4,800 divided by 52 weeks equals 93 screens per week per recruiter.
If the average screen takes 30 minutes to complete including notes and each recruiter must conduct 93 screens per week, this tells us each recruiter would have to conduct screens for 46.5 hours per week.
It becomes apparent that each recruiter would need to conduct screening for more than 45 hours a week to be able to hit the goal of 300 hires for the 12-month period. This does not take into account time for any other talent acquisition tasks. In this case, I would add a recruiter to level the load and give each recruiter more time back in their day to creatively source and proactively network.
Having a solid understanding of what recruiting metrics can tell you will create a foundation on which your team can build its goals, chart its improvements and measure its success. Having goals that are “pie in the sky” are frustrating and don’t motivate your team to achieve. Using talent acquisition metrics to define what you are doing right, what you can improve upon and what you can realistically expect will help you manage your team more efficiently and professionally. It will also help you functionalize your recruitment strategy to optimize what your talent acquisition department contributes to your bottom line. Remember, numbers don’t lie!
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