A core functional area of human resources is talent acquisition, but many experts maintain that HR professionals aren't very good at it.If you’re one of those HR professionals who doesn’t always get credit where credit is due—or even if you’re not—one way to improve or maintain your reputation is to keep track of how well your company’s hiring efforts have panned out.
To do that, you’ll need to crunch some numbers and analyze some data. However, you won’t have to reinvent the wheel to do it. As for all processes you can always make them Faster - Cheaper - Better.
Those should be the sources of your 3 key hiring success metrics:
Time to Fill - Faster
We’ve all heard that time is money, and when there’s work to be done and no one to do it, the opportunity costs as well as the disruption to productivity and innovation can be significant.Longer times to fill can indicate procedural or managerial inefficiencies, below-market compensation or benefits, or talent trends (such as skills shortages) to watch.
Time to fill can vary by industry and position, but according to a 2015 study by Indeed.com, there is a 30-day “tipping point.” If a position is not filled in the first 30 days, there’s a 57% chance it will stay open for three months or more. Other studies indicate that time to fill has been increasing in the past year or so.
The formula for time to fill is:
Number of Days from Job Requisition Open to Job Offer Acceptance/Total Number of Hires
Cost Per Hire - Cheaper
Cost per hire, measures the hard cash costs associated with hiring. These costs include job posting fees, agency fees, relocation expenses, reference checks, drug tests, and signing bonuses as well as recruiting staff/hiring manager wages and benefits. Costs typically do not include post-hire expenses such as wages and benefits for the new employee.In 2012, staffing agency Dice reported the average cost per hire for all U.S. employers as $3,479.00. In 2015, research from Bersin by Deloitte reported the average as $4,000.00.
The formula for cost to fill is:
(Internal Costs + External Costs)/Total Number of Hires
Quality of Hire - Better
Some have debated whether having good employees—rather than great employees—is good enough, but regardless, quality matters.Managerial and what is often referred as pivotal talent in particular is key to an organization’s long and short-term health and productivity, not to mention the mental and physical health of its employees.
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So how do you tell when you’ve picked a winner? Unlike time to fill or cost per hire, quality can be hard to measure. According to one estimate, 46% of new hires fail within 18 months.There are ways to make it simpler too, see our report for more information.
But let’s not forget that the target is to be better, like this article from Inc. magazine, Lou Adler suggests that predicting quality of hire should be the goal more so than measuring it afterward.
Adler says top talent:
• Exceeds Expectations
• Works Well With the Team
• Fits the Culture
• Works Well With the Hiring Manager
• Gets Things Done Without Making Excuses
• Deals With Change Without Complaining (Too Much)
• Figures Out new Ways to Solve Job-Related problems
• Creates Good Plans and Deliver the Results
• Coaches and Develop Others
360-degree feedback is one way to determine how your talent measures up to Adler’s list.
Metrics Matter
HR professionals are often unfairly criticized for insisting that some things simply can’t be measured, when in fact they can’t.Hiring success isn’t one of those things, however. That’s why time to fill, cost per hire, and quality of hire are standard hiring success metrics every HR manager should know and start measure.
What hiring metrics have you used in the past to measure success?
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