Effective hiring is critical for a smooth-running company, especially in challenging times like those we faced in 2020. As we say “ta-ta” to a tough year for many and prepare to hopefully enjoy a few “Ta-da!” moments in 2021, it is important to take a look at the metrics that matter in making the best hires. The way to know ensure what you are currently doing is working and make necessary adjustments to assure you of success in the years that follow is by creating real clarity around critical metrics, or Key Performance Indicators (KPIs).
Today marks the Festival Of Enormous Changes At The Last Minute, so it seems appropriate to ponder any tweaks you may need to make for 2021 when thinking about the critical importance of getting hiring right. Stay on top of these six important hiring measurements. They give you essential insight into what is working and what could use improvement in your hiring process so that you don’t have to change…again.
Candidate Quality Ratio
This metric is also called the ratio of qualified applicants to total applicants. Tracking this ratio lets you monitor how many candidates you spend time on in the recruiting process that are actually a good fit for your team.
It ties directly to those chosen for an interview. According to experts, the goal is to get a minimum of three-quarters of your candidates selected for an interview. If your rate is less, it indicates those chosen for you to review are not measuring up to your needs and expectations, not those of your hiring team.
For hiring managers, this translates into you becoming the “quality metric” for your hiring practice. Work to train and empower your recruiting team to be the “quality metric” of all candidates submitted. If the candidates you are seeing do not measure up to your expectations, spend some time re-calibrating with your team.
Set clear expectations, and more importantly, establish an uncompromising standard for your minimum criteria. The better this metric gets, the more efficient your time is spent as a hiring manager in the hiring process.
Time to Fill
The industry-accepted calculation for this metric is: Time to Fill = Total Number of Days Job Is Available and Unfilled. At Cerca Talent+, because our focus is to find the right candidate as soon as possible, we measure this in two distinct ways.
Candidate Sourcing Time
It makes a major difference in a company’s efficiency when the time to fill a job, from starting a job requisition to hiring a qualified candidate, is short. The standard, according to Recruiter.com, is 10 to 14 days for presenting a qualified slate of 3 candidates. The experts recommend tracking how long it takes to present a slate of three qualified candidates and how many slates are assembled.
For difficult roles in Clinical Research or Clinical Diagnostics, the areas in which Cerca Talent+ specializes, you might find the 10 to 14-day window is consistently too short of a time frame. This is especially true in some highly technical environments. Continue to track this metric to see how your organization manages different areas of your business and decide on a time frame that best fits your hiring standards.
Candidate Processing Time
The processing time refers to how long it takes from introduction of the candidate who is ultimately hired to the time when they finally accept the position. Many will say processing time is the time it takes from approval for hiring a candidate to the actual time they begin working in the new position, yet measuring in this way includes too many variables and does not provide a reliably stable statistic that can be managed. According to ERE Media, a variety of circumstances add to this time period. For example, if the new hire needs to relocate, it can add weeks to the process.
Depending on the industry, the average Candidate Processing Time KPI can range from 14 to 63 days. A slow Candidate Processing Time can harm an organization in several ways. Obviously, slow Candidate Processing Time rates impact a company’s productivity and revenue. But what many recruiters don’t know is that bad Candidate Processing Time rates also affect your company’s brand and, more importantly, the quality of your hires (QoH).
A slow Candidate Processing Time could also impact hire quality. Your best candidates will drop out of an application process if they feel that it doesn’t respect their skills or time. This is also one of the best talent acquisition metrics because of how it can help you optimize your application process. For instance, if you notice that candidates begin an application but few finish it, consider what information you’re asking for, or how many steps are involved.
If candidates drop out halfway through your assessment, it may be time to review its length, accuracy, and redundancy. Hence, the Candidate Processing Time KPI is one of the top recruiting KPIs to keep your eyes on—especially if you’re trying to increase recruitment efficiency.
While you’re busy initiating phone screens and scheduling interviews, your competition could be giving your ideal candidate(s) an offer.
Make this a simple metric that can allow for gains in efficiency and effectiveness in the actual interviewing process. Measure this retrospectively with each hired candidate and work to improve your interviewing process. This makes for a better candidate experience and can even improve the quality of hire, when done correctly.
Quality of Hire
According to research done by the Aberdeen Group, the most critical hiring metric is Quality of Hire. While this measure can be difficult to assess without some subjective bias, finding a systematic way to do this at your company based on the desired profile for new employees can reveal the deepest insights about your recruiting process.
Your Quality of Hire (QoH) metric could be based on the first two years of performance reviews, or for commercial teams, it could be a calculation based on their performance to goal. For a long term QoH metric, one could look at the number of promotions a new employee receives over a one, two- or three-year time period. Some recruiting coordinators include a highly nuanced combination of turnover rates, job performance, team fit, and employee retention and engagement.
At a minimum, measure the quality of your hires through performance and retention data and how well recruits fit with the company culture. If recruiters and hiring managers are pulling in what look like great hires who leave within the first six months, it’s possible that they’re screening for the wrong traits and aren’t surfacing the best candidates.
Measuring quality of hire can help recruiters and human resources determine and increase their talent attraction performance. Quality of hire can also help everyone in the hiring process determine where to find their best candidates.
For instance, determine whether your best hires come from social media, online job boards, or word of mouth references. Determining the talent acquisition metrics can reveal what kinds of candidates become your strongest performers, and what screening methods surfaced them.
According to the Recruitment Metrics and Performance Benchmark Report done by Staffing.org, there are definite benefits from frequently measuring the quality of those hired. The more often it is done, the happier managers are with the quality, and teams measured in this way will outperform peer groups.
Cost of Hire
A bad hire is expensive. According to a Harris poll, over 40% of people responding said it was more than $25,000, and a full 25% said it was more than $50,000. I was recently speaking with a client whose finance team conducted a sensitivity to turn over study for sales which indicated the cost of a mis-hire was in excess of $800,000.
Clearly, the cost of hire is an important metric! Investing well in the effort up front is essential, especially within leadership roles or for all elements of commercial teams, where this number can skyrocket due to lost revenue or mismanagement of revenue generating personnel.
This metric should include:
- Sign-on bonuses
- Advertising fees
- Employee referral bonuses
- Employee relocation costs
- Third party recruiter fees
- Recruiter salary and benefits
- Lost revenue for open territories
- Travel expenses for applicants and staff
- Lost revenue from mismanaged employees or customers
The candidate experience encompasses the entire hiring process. It includes how candidates discover a position, develops interest, applies, interviews, and either receives an offer or a rejection. A poor candidate experience could decimate recruitment efficiency. For instance, if your candidate indicates a slow screening or application process, it can directly affect your company’s reputation.
Additionally, if candidates don’t feel they are able to accurately demonstrate their abilities, or an impersonal tone from the recruiting team, it can negatively impact their experience. Hence, candidate experiences are crucial talent acquisition metrics to get right.
The consequences of a poor candidate experience go beyond simply losing great candidates. According to the Talent Board, 41% of Candidates who gave their experience the lowest rating said they would take their business elsewhere. These candidates also report being less likely to recommend positions to their own networks, narrowing your total pool of applicants.
Why does it matter for 2021? Because your organization most likely tracks candidate experiences through surveys to gauge Net Promoter Score. It is becoming one of the most important talent acquisition KPIs and top recruiting KPIs, especially when you begin to consider the importance of creating a valuable talent brand and how that ties to your overall corporate image. It is crucial that all involved in the hiring process do their part to ensure an optimal NPS.
Companies with the highest NPS scores suggest implementing a survey after each step in the hiring process to maintain best practices. Assessing after each step not only creates a more holistic view of the candidate experience but helps identify specific bottlenecks in recruiting.
Tracking these six+ metrics will help any organization, large or small. Combined, they shine a bright light on your hiring practices to reveal just how effective your talent acquisition efforts are. When you know the numbers, you can pinpoint where change needs to happen, speeding up improvements to your efforts of bringing the best possible talent to your team.
At Cerca Talent+, we are professionals working with professionals to attract Top Talent that Provides Peak Performance. If you are a leader looking to expand your team with well-rounded professionals who are focused on delivering work in which they take pride, and you can be proud of, every day, then we would be privileged to help you in the process.
Having been pros ourselves in the fields where we focus, we know the ins and outs of the companies, the business and the customers. If you lead a team and are looking for talent who understands that constant and continuous improvement create continuous customer preference, we are here to help you become limitless.
With Cerca Talent+, you will discover the dramatic effects of the disciplined, daily practice that delivers the very best possible talent with whom you can develop the kind of great reputation that will lead your company to Exceed Expectations. We will ensure you reach indeterminate growth by expanding your team with professionals who are focused on delivering work they love and who embrace the growth.
Reach out, today, to Scott Rivers at firstname.lastname@example.org.
Scott Rivers is the Managing Director of Cerca Talent+, a talent agency for the Diagnostic and Life Science Industries. Scott’s recruiting experience extends into the areas of Diagnostics, Life Sciences, Oncology and Genetics. His team manages recruitment for all levels within the commercial area of these businesses.
As a leader who has worked at all levels of commercial, medical sales and global marketing, Scott is an intense professional who works with organizations to fine tune talent branding. If you are a leader looking to expand your team with professionals who are focused on delivering work in which they take pride, and you can be proud of, every day, then Scott would be privileged to help you in the process. Having been a professional in the fields where you focus, Scott knows the ins and outs of the companies, the business and the customers you are working to come alongside.
Cerca Talent+ is a full-service Executive Search Firm with a strategic focus in the areas of Clinical Diagnostics, Molecular Diagnostics and Oncology, Genomic and Genetic Medicine. Our clients choose to work with Cerca because of our deep understanding of the industries we serve. They continue to work with us based on our extensive market knowledge, vast connections and quality of results.
That’s a good match for any company. Partner with the group that can talk shop and gain rapport with the pros who will lead your business into the future. Email Scott Rivers today at email@example.com, or call direct at 201-594-2101, and we will begin the process of finding you Allstars that help you set records.