By Tom Gizzi, Talent Acquisition Solution Executive for balanceTRAK
Some days it seems as if the HR tech industry is growing exponentially. The number of tools HR teams have at their disposal is nearly infinite, and many of them can help create a more muscular, streamlined recruiting process.
But even as we live through a technological golden age for recruiting, I’ve noticed something confounding. Although we have amazing new tools, recruiters are still relying on an outdated metric to gauge their results: time-to-fill.
Time-to-fill tells you how many days on a calendar it took you to fill a position, but that number includes too much noise to be helpful. You need something that eliminates in-house variables —like requisitioning—that don’t have anything to do with the actual recruitment process.
There are so many more quality-based metrics we can use that take full advantage of the software our organizations have been investing in. Here are the four most important metrics you should be considering when it comes to getting the best ROI from your shiny new recruiting tools.
Cost Per Hire
Since we’re talking ROI, let’s start with the money.
Cost per hire is a surefire way to make sure your talent acquisition process and team are off to a good start. Figuring it out is simple. Just take your external and internal costs and divide by the number of hires you made.
Although your costs may fluctuate for different positions, having a hard number helps you determine where you can best target your money for recruiting, and there is plenty of data available to compare yourself with other organizations in your market.
Time to Hire
Time to hire is different from time to fill. Essentially, time to hire measures the amount of time between when you first make contact with a candidate and the moment they are hired.
Measuring this is simple. The clock starts the moment you post the job and runs through when you make an offer, when the candidate accepts, and the day the employee starts.
The reason I prefer time to hire over time to fill is that time to hire eliminates the noise of factors like requisitioning and focuses solely on the recruiting process. While you should examine your requisition process, there are simply too many variables in time to fill to produce actionable data.
Time to hire isolates data from the recruiting process. It offers a more meaningful measurement and can help you shed light on potential bottlenecks or inefficiencies.
It’s cheaper to hire candidates through a pre-existing pipeline. So, how’s your talent community doing? How many of your interns stick around? Who is sitting in your ATS waiting to get called about a job they are perfect for?
These are all valid questions when it comes to conversion rate. But the other thing I like about conversion rate is that it’s a recruiting metric that can also measure employee engagement. Examining your internship program’s conversion rate can reveal all sorts of places where your intern experience can be improved. Maybe you need to beef up recruitment marketing for your talent community.
It’s a great way to see if you’re getting the ROI you need from your talent pipelines, and get a pulse for the level of engagement in some parts of your organization.
Quality of Hire
When it comes to recruiting, there’s no metric more important than quality of hire.
Of course, “quality” is a subjective word. I might watch the Baltimore Ravens and think that Lamar Jackson is a quality quarterback; you might watch the game with me and wonder if I’ve lost my mind.
Figuring out what quality of hire looks like for you will take a bit of work, and the exact methodology I suggest might not apply completely to your business. But regardless, you need to choose metrics that are quantifiable. Here’s a simple formula to get you going:
Job Performance Score + Ramp-up Time + Engagement Score + Cultural Add
Divide these by four—or however many metrics you are using—to get a basic quality of hire score.
Additionally, you may want to consider grading the quality of a hire at different benchmarks, whether that’s 90 days, 120 days, or one year.
Regardless of your exact methodology, make sure you involve stakeholders throughout your organization as you determine exactly what quality of hire looks like for you. Just remember: The best talent always wins.
About the Author
Tom Gizzi is the National Talent Acquisition Solution Executive to lead the strategy, execution, and revenue growth of Berkshire’s talent acquisition technology solution, balanceTRAK. With over 25 years of recruiting experience, Tom has significant workforce solution experience driving large scale global and national talent acquisition solutions and managed services partnerships.
As an active member of HROA, ATAP, and HCI, Tom’s rich recruiting background includes RPO, MSP, VMS, ATS, BPO and SaaS strategic client solutions to drive client business outcomes on both regional and national levels. Tom has cultivated strategic client solutions for market leaders such as Adecco, Pontoon, ManpowerGroup Solutions, Aon Hewitt, Advantage Resourcing, and is a proven leader in talent acquisition solutions.