If you’re serious about improving something, you need to measure it. To track its progress over time. To see it change. Understand why it changed. And if it was a good result, do it again!
This time out we’re going to look at what to measure in your recruitment process. It won’t be the same for everyone, but it will likely come back to three key metrics:
The three are interlinked - and often at odds with each other. So while you may be able to optimise for two, it could be at the expense of the third.
We’ll look at the different ways you can measure each of them. What other data will help you to better understand your recruitment process. Then deciding where to focus.
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Before you start listing out all the things to measure, it’s worth stopping to think about what you want to achieve. And who will be reviewing the results.
If you’ll be sharing them with senior management or the board, you’ll need to use metrics that are easy to understand. Ones that people outside recruitment can relate to. And most importantly, that are memorable.
For a number of reasons, it’s best to use three metrics. So pick the three that matter the most. Like quality, speed and cost.
Sarah Wilson, Head of People at SmartRecruiters, shares how they measure recruitment quality, speed and spend. She also talks about the challenges they’ve had, and what they’ve focused on. The metrics they’re using are:
Let’s be honest - there’s no good way to measure candidate quality. It’s too subjective. The best you can hope for is an approximation. A proxy. Or a leading indicator.
But that doesn’t mean you can’t get meaningful insights.
Once you know which employees worked out well, you can learn how they found you. Why they applied. And how they were selected.
In addition to asking the hiring manager and employee how happy they are with their choice (see above), you can also measure:
Retention isn’t a clean measurement. Over time, many things other than how good the candidate is can impact whether they stay.
To minimise this, you may want to review retention at a fixed time, say 12 or 18 months. At that time just measure if the employee is still with the company. A simple yes or no. Then see what percentage of employees didn’t make it to that point.
Depending on the role, performance can also be tricky unless there is a clear measure of job performance. Like sales made. Or customer satisfaction scores.
Whatever method you choose, make sure you’re consistent so you can compare results over time.
This article provides an overview of what quality of hire is. Why you should measure it. Ways you can measure it. And how to collect the data.
Unfortunately there is no standard way to calculate quality. So it provides a number of different methods, along with ways to get the data you need to make a meaningful analysis.
How quickly you can hire can be crucial for popular jobs. You need to make a decision and get your offer out before your competitors do.
So in measuring speed, you may want to segment it by job types and avoid using an average of all jobs. On a side note, be wary of averages - they can be misleading.
There are many ways to measure the speed of a recruitment process. While reviewing a number of them, this article recommends two:
As you can tell from the title, the author isn’t keen on time to fill. Mainly this is when it is an average of all positions in a company. Instead, it suggests ‘speed to hire’ - the total time a candidate spends in the recruitment funnel, from initial sourcing to accepting an offer - is more meaningful.
All businesses are focused on costs. So cost data should be pretty easy to come by.
The challenge is in how to present it. Because optimising solely for cost can impact the quality of people you employee. Which can result in losing more in revenues than you gain in cost savings.
Broadly, recruiting costs can be put into two buckets; internal and external. Internal being your in-house team. External covering marketing, agency fees, assessments, software, etc.
Reporting total recruitment costs as a percentage of new hires’ first year salaries can be a helpful metric. Most people are familiar with agency fees. Which makes it an easy metric to understand and compare.
One word of warning - comparing this result with typical agency fees is not a fair comparison.
Think of the extreme case where you outsource all hiring to agencies. You incur the agency fees (external costs), but you will still need an in-house team. Someone will need to arrange interviews, prepare offers, manage the agency contracts… These internal costs should be added to the agency fees for a fair comparison.
This article includes a few of the common cost metrics and how to calculate them. It also warns against focusing only on costs. Or any other single metric for that matter.
Even when focusing on three key metrics it’s worth collecting a bit of extra information. As not all jobs are the same, it helps to be able to treat them differently.
Picking segments may rely a bit on intuition. You probably know what some of the main drivers are. Like whether certain jobs are supply or demand driven. Or if the nature of the work (contract, permanent, project based) impacts your process.
It’s also important to measure the diversity of your candidates. But it can be difficult to get the data you need without asking for it - and most people won’t be comfortable providing it with their application.
A practical approach may be to use what you have. Often you can have a guess at someone’s gender from their job application. And you’ll know more about someone after you meet them for an interview.
So maybe use this data when you can. Then track it through your recruitment process and monitor things like:
Once you’ve decided on your top level metrics, you need to measure them. Use these first results as a benchmark. Then decide on your priorities and what to focus on.
Remember, your top level metrics like quality, speed and cost won’t give you the full picture. You’ll need additional data to understand how to push those metrics in the right direction. Three areas to consider are:
With any measure you use, it’s important to understand the root cause of the problem. For example, if not many people that view your job ad apply, is that because it’s a bad job ad, or the application process is too difficult?
An excellent way of getting to the root cause of a problem is using the 5 whys. If you’re unfamiliar with it, check out this article.
That’s all for the moment. See you next time! And remember, if you like this newsletter you can share it with your friends and colleagues using this link!