Conventional wisdom: You can’t manage what you don’t measure.
More than just a business world cliché, there’s plenty of evidence that measured performance does lead to a more effective organization in areas as diverse as sales, manufacturing, professional services, and recruiting.
Many organizations use metrics to understand how their sourcing and recruiting processes are working, and where there is room for improvement. But are sourcing professionals and recruiting managers measuring the right things?
Most recruiting organizations measure internal metrics such as cost per hire, time to fill, and the recruiter’s requisition load. Agencies measure candidates presented, sendouts, placements, calls made, revenue, and the relevant ratios. While these offer valuable insights, they don’t measure the activity that impacts the business of recruiting – the ability to outmaneuver the competition and get the right talent in the door.
So what information should you be looking at to inform your sourcing and recruiting processes?
Candidate Response Rate
Tracking candidates’ response rates can help you understand if your messages are relevant, resonant, and targeted. Look at the number of responses (positive or negative) divided by the number of messages sent to understand not just the message relevance, but if the delivery method is appropriate. For example, do candidates respond well to email or do they prefer to be contacted by phone?
A true candidate response rate should tie the actual response back to the outbound message (as responses will be received a while after the messages were sent). In addition to overall response rate, positive response rate should be tracked to help determine which channels deliver the best outcomes.
Getting communication right can increase the number of candidates that respond and foster deeper relationships. Even if they’re not the right fit for the role you’re currently recruiting for, you can gather more data on them to determine if they’re qualified for other job orders you have or expect.
Time Per Candidate Response
Analyze the amount of time spent sourcing a position divided by the number of candidates who respond (positively or negatively). This allows you to compare message channels, message customization and other variables to determine the most effective combination. The right mix will almost certainly vary from industry to industry and by the seniority of the position involved, so test early – and often.
Applicant Quality by Lead Source
By understanding which sources produce the highest-quality candidates, you can better allot your time in the future on individuals who best align with your client’s needs. Applicant quality by lead source is a measurement of the percentage of applicants by source that advance through various stages of the hiring process. This measurement can help determine not just which sources return the highest caliber candidates, but also which sources yield poor quality leads.
By assessing the percentage of hires that come from a particular source and connecting it to performance metrics, you may discover that some recruiting channels that appear to be beneficial might have hidden shortcomings. For example, if a source producing the greatest number of hires also produces the most falloffs or who leave within the first year (if you can get this information), you may wish to reevaluate that hiring source.
Opportunity Cost Per Days Not Hired
This is most relevant for employers, but it’s a metric agency recruiters and sourcers should know and understand. Every day a position remains vacant can result in lost revenue, low productivity, and under performance for your client. For example, if a salesperson is expected to contribute $1,000 per day in revenue, the opportunity cost of not filling that position is at least $1,000 per day. This is harder to quantify for positions that don’t have as direct an impact on revenue as sales, but this metric can reveal flaws in the recruiting process that result in slow or low-quality hiring.
The vacancy-day calculation involves counting the number of vacant position days in key jobs and then comparing it to a predetermined standard. Because of the loss of corporate performance and revenue, immediate action can minimize further detrimental impact.
Another familiar business adage is “I know 50 percent of my marketing budget is wasted – I just don’t know which 50 percent.” Measurement of the metrics that matter – even if they are somewhat off the beaten path – can answer that question for recruiting professionals and produce game-changing boosts in recruiting and sourcing effectiveness.