Imagine if your organisation didn’t keep track of its financial data – what its income and expenses were? How could it possibly survive?
And yet, many NFP organisations don’t track basic data about their recruitment process. And that could be almost as bad.
Tracking and assessing your organisation’s recruitment metrics – and feeding them back to improve your processes – is essential to measure the impact and efficiency of your recruitment processes.
And knowing the health of your organisation’s recruitment process allows you to define and report both successes and shortcomings, as well as being able to compare it to sector benchmarks.
It needn’t be difficult – in fact, you may already be gathering this data every time you advertise a job.
These five basic measures are a great place to start for any organisation wanting to analyse recruitment metrics:
1. Number of applicants
Let’s be clear: receiving lots of applications for a job opening isn’t necessarily a good thing.
In fact, receiving too many job applications could just mean you have a poorly written position description or you’re advertising on a site that’s giving you lots of ‘spam’ applications (not naming any names!).
Either way, sorting through all those applications could be wasting a huge amount of your time and money.
On the other hand, too few applicants could be a sign of a talent shortage, an overly complex application process, or, again, that you’re using the wrong avenues for posting jobs.
The value of tracking the number of applicants for your job is to be able to compare against similar roles you’ve advertised in the past.
For instance, if you usually get 50 applications for a disability support worker role, but suddenly you’re only getting 15, that’s probably a sign you need to review your job ad, PD and application process.
2. Candidate source
Do you know where your successful hires come from? What about your shortlisted candidates?
Whether they come from an internal move, a referral, or an external jobs website (we can recommend a great one!), it’s incredibly valuable to know exactly where people are finding out about your job vacancies.
Knowing your main source(s) of candidates can tell you where you should be focusing your time and money in future – and where you can stop wasting them. It will also highlight how the various sources compare for advertising different roles.
Ultimately, you want to find out not only which sources provide the most applications, but which ones attract the highest quality applicants for each role – and focus your efforts on the latter.
Collecting this data shouldn’t be hard. Some easy ways are to include a standard question in all interviews, or to ask applicants as part of an online application process.
How much is your organisation spending on the acquisition of each new staff member?
The cost-per-hire metric shows the entire cost of each recruitment your organisation undertakes.
You can calculate your organisation’s cost-per-hire by adding up the total cost of a year of:
- All the staff hours spent doing recruiting – whether by HR staff or managers
- The costs of hiring any recruiters;
- Job ad costs; and
- Any recruitment technology costs.
Then, divide that figure by the number of positions for which you hired during that year.
According to a recent report from the US Society of Human Resource Managers, the cost-per-hire for organisations with fewer than 1,000 staff is around US$3,079. Larger organisations with a workforce of more than 1,000 spend closer to US$4,285. Statistics for Australia are harder to come by.
Understanding how much you spend on each new hire can help you decide how much you should be spending. With that information, you can then adjust your strategy and determine if you’re overspending – or if you should be investing more into your recruitment process.
4. Time to hire
The search for a new staff member costs your organisation – from the moment the need to hire someone is identified until well into the new hire’s first few months on the job. So keeping your time to hire as short as possible is usually a good idea.
According to recent research, the average time to hire for Australian employers has blown out to 68 days in 2015, from just 26 days in 2010.
That may mean recruiting is becoming a more thorough process, but it also means that most organisations are leaving roles unfilled while they search for new staff.
The longer it takes to fill a position, the more it’s likely to cost your organisation. It’s a fine balance: a long hiring process might cause you to lose out on the high performers you’re no doubt seeking to attract, while too hasty a turnaround might lead to hiring the wrong person for the job.
Having a better understanding of the time to hire metric means you’ll be better able to gauge if you’re spending too much time on getting the right candidate – or, indeed, if you need to do a little more digging.
Employee turnover is the rate at which your organisation loses staff. A high turnover rate for any organisation is not only very costly, but also a red flag that something is wrong with either your recruitment processes (hiring the wrong people), your organisational culture, or the support and training provided to specific staff members.
Equally, a turnover rate too low can be an issue. Bringing in new staff with new ideas is a vital part of most successful organisations, and if the majority of your staff have been working with you for decades, that will hinder new staff being employed.
Only by calculating your turnover rate can you work out whether you have a healthy rate, or if you should be changing your recruitment processes to hire staff who will be more committed to your work and stay with you longer.
As a benchmark, turnover rates for NFP organisations in Victoria were last measured at an average of 16 percent, compared to an average of 13 percent in the private sector.
Looking at the right metrics can give you a clear snapshot of the health and effectiveness of your organisation’s recruiting and hiring process. After all, you can only improve what you can measure.
This post is based on article originally published by Business Insider.
Does your organisation measure recruitment metrics? Which ones do you find most useful? We’d love to hear from you in the comments below!