Many, many people don’t like math. Some of those people are recruiters by trade. But what about metrics? Recruiting metrics involve math, but are they assigned the same disdain?
Well, math for math’s sake does little to generate excitement. However, math for the sake of making more money could very well raise a few eyebrows. And that’s exactly what focusing on recruitment metrics can do for a search agency.
As always, let’s begin with a definition.
What are recruiting metrics?
Recruiting metrics are a variety of measurements used to track the identification, recruitment, and hiring of candidates for the purpose of analyzing and evaluating the effectiveness of the process involved so that improvements can be made. Human Resources personnel, in-house recruiters, and third-party recruiters all use recruiting metrics to various degrees.
It’s important to note that for the purposes of this blog post, we’ll be addressing third-p arty recruiters. It’s not that we have anything against HR personnel or in-house recruiters. In fact, both of those groups can cull useful information from this post. However, our focus will be on third-party agency owners who want to track their firm’s recruiter metrics, no matter how many different clients that recruiting business may have.
Recruiting metrics that matter
Now of course, some recruitment data is more important than other data. Not all data is equally important. If that was the case, then none of it would truly be important. (When everybody is special, then nobody is special. Same philosophy.)
While it’s true that tracking recruiting metrics does involve the preferences of the firm owner, there is a general rule that can be applied. That rule is this: the recruiting metrics to track are the ones that will help your firm to make more placements and collect more placement fees over time. Those metrics might vary from agency to agency. That doesn’t matter. What does matter is that the recruitment metrics and analytics that each firm owner chooses results in the desired result:
- More placements and more billings over time.
- Best recruiting metrics for the basics
Industry trainer Jon Bartos has placed recruiting metrics into two categories: quantity metrics and quality metrics. Quantity metrics refer to volume, or the amount of activity that you generate on your recruiting desk. Quality metrics, on the other hand, refer to how effective you are. You could generate a lot of activity, but little effectiveness. On the other hand, you could be highly effective despite a low volume of activity.
Ideally, you want to generate high levels of both volume and effectiveness.
Recruiter performance metrics to measure quantity
However, when it comes to the best recruiting metrics for the basics, quantity metrics are a good place to start. That’s because a recruiter can more easily affect volume as opposed to effectiveness. They can increase their call count to 100 calls in a single day. However, it would be tremendously difficult to increase the effectiveness of those calls by 50% in a single day.
According to Bartos, Market Connect Hours is the single most important quantity metric. This metric is defined as the time on the phone with the people who have the power to get you closer to a placement. So in essence, those people would be hiring decision makers and top passive candidates.
There are other quantity metrics, as well, all of which can be easily tracked and analyzed. They include the following:
- New Market Presentations
- New Candidate Presentations
- Number of Job Orders
- Employer Presentations
- Send Outs
In essence, anything that you do on your recruiting desk can be measured in volume. If it can be measured in volume, then it can be a quantity metric. And there is no quantity metric more important than that of Market Connect Hours.
Recruiter performance metrics to measure effectiveness
Now that we’ve addressed quantity, let’s address quantity. According to Bartos, there are five key quality recruiter performance metrics:
- Dollars Earned Per Market Connect Hour
- Job Order to Placement Ratio
- Employer Presentation to Send Out Ratio
- New Market Presentation to Employer Presentation Ratio
- First Time Send Out to Placement Ratio
Just like there is quantity metric that is most important, there is also a quality metric that is most important. That metric is First Time Send Out to Placement Ratio (FTSP). The FTSP ratio is also called the Sendouts Per Hire ratio.
You can send a lot of promising candidates to your clients, but that doesn’t matter unless they get hired. This is a perfect illustration of comparing quantity metrics to quality metrics. One hundred sendouts in a month is a great quantity metric. Making zero placements as a result of those 100 sendouts is a terrible quality metric. In other words, you have plenty of quantity and no quality. You need both to be successful in the recruiting profession.
To find your FTSP or Sendouts Per Hire, divide the total sendouts by the total hires.
Sendouts per hire = total sendouts / total hires
For example, last year you had 255 sendouts and 36 hires.
255 sendouts /36 hires = 7 sendouts per hire
This ratio measures the quality of two important factors:
The quality of the search assignments or job orders
The quality of the candidates involved with those search assignments or job orders
The formula is a very simple one: the lower your ratio, the higher your earnings. If your ratio is too high, then you’re suffering from bad job orders, bad candidates, or both.
More recruitment metrics and analytics dealing with quality
In addition to the ones listed above, there are some other quality recruiting metrics that are vital to a search consultant’s desk. They involve the following:
- Time factors
- Source factors
- Response rate
- Conversion rate
We’ll explore each of these metrics one at a time, discussing their importance in terms of increased production, which leads to increased billings.
Recruiting analytics for time factors
As any recruiter or sales person knows, “Time kills all deals.” And why make a placement later when you can make one now and receive the placement check sooner? In this case, the recruiting metric is Time to Fill. In other words, the average number of days that it takes to successfully place a candidate in an open job order.
To find your time to fill for a specific job, calculate the total number of days the job is open and unfilled. Start with the day you receive the job order and end on the day your candidate starts the job.
Time to fill = Total days the job is open
For example, you were given a job order for a sales person. Starting from the day you receive the job order, it takes 36 days for your candidate to start the position. The total time to fill is 36 days.
To find your average time to fill across all jobs, you need to add together the total days it took to fill all your jobs. Then divide that number by the total number of jobs.
Average time to fill = Total days to fill for all jobs / Total number of jobs
Let’s say you had four job orders for different sales positions. To fill the positions, it took you 36 days, 38 days, 40 days, and 50 days. To find the average time to fill, add together the times to fill the jobs (164 days). Then divide the total by the number of jobs (164/4=41). By doing this, you’ll see that the average time for you to fill these sales positions was 41 days.
When you know the average time to fill a job, you can also see trends over time. For example, if the average time to fill positions gets larger over time, you should look for issues that are increasing this recruiting metric. Once you identify the root problem, you can eliminate it.
As you cut out time wasters and reduce your average time to fill, you can make your clients more satisfied.
Recruitment analytics for source factors
Do you know where your most successful, hired candidates come from? A recruitment analysis of your candidate sourcing strategy could help increase your effectiveness and help you bill more. This recruiting metric is called Source of Hire.
To figure out the source of hire, divide your hired candidates up by where you originally sourced them from.
Let’s say you placed eight candidates in 90 days. Of those eight placements, you determine that four candidates came from LinkedIn, three came from a Google resume search, and one was a referral.
By looking at the source of hire, you can decide how to divide your time better when looking for potential candidates. In the example, most of the hired candidates came from LinkedIn. This tells you that you might want to spend more time using LinkedIn for recruiting.
Also, looking at the source of hire can tell you if you’re spending too much time on a source. For example, you might spend a large portion of time sourcing candidates from a certain job board, but those candidates are rarely hired. You should reconsider the amount of time you spend on that job board, or look into a new job posting service.
Recruiting metrics examples: Response Rate
You reach out to candidates through phone calls, emails, and social media recruiting messages. But, are your efforts producing results? Are people responding to you?
You need to measure your Response Rate to find out.
Analyzing your response rate will probably be most beneficial if you break up your outreach into categories. For example, you could have categories for email, phone, social media, and whatever other contact methods you use.
To find the response rate, divide the number of responses you do by the number of outreaches. Then multiply that number by 100 to calculate a percentage.
Response rate = (total responses / total outreach attempts) X 100
Let’s pretend you make 80 phone calls in a day. Out of those, you have conversations with 30 people. Based on those numbers, you can calculate the response rate for that day.
(30 responses / 80 total calls) X 100 = 37.5% response rate
You don’t have to limit your recruiting metrics to a day-by-day basis. You can calculate an average for a larger amount of time.
For example, you sent 7,000 emails to potential candidates in the first quarter. Out of those, you received 2,200 responses. You can find the email response rate for the quarter.
(2,200 responses / 7,000 emails) X 100 = 31.4% response rate
By analyzing your response rate, you can figure out what outreach methods work the best for you. And by tracking the rate over time, you can learn how altering your outreach methods improves or hurts your response rate.
If you’re looking for an immediate way to improve some of your outreach methods, try out a new cold calling script for recruitment. Proven scripts from industry experts could be just what your recruiting strategy needs.
Recruitment metrics examples: Passive Candidate Conversion Rate
Recruiting passive candidates successfully is the “bread and butter” of any recruitment agency. These are candidates who match your job opening, but are not actively searching for a job. You should find your passive candidate conversion rate to determine how successful you are at recruiting passive candidates.
To get your passive candidate conversion rate, divide the number of passive candidates you reach out to by the number you convert into interested candidates. Multiply the result by 100 to get a percentage.
Passive candidate conversion rate = (interested candidates / contacted passive candidates) X 100
Let’s say you reached out to 600 passive candidates in a month. Out of those, you convinced 250 to become interested in an open position.
(250 interested candidates / 600 passive candidates) X 100 = 41.7% conversion rate
When you look at passive candidate recruiting analytics, you can determine how good you are at converting passive candidates. As the percentage fluctuates over time, you can discover what works best to convert passive candidates.
Recruiting funnel metrics
So how do you use all of these metrics? In a logical order, of course. Like any other sales process, the recruiting process is a funnel. The top of the funnel is big, and then it gets progressively smaller as you go down. You start with a big database of candidates for recruitment, and then you end up with just one candidate.
This where recruiting funnel metrics enter the picture. There are three main steps involved, which are as follows:
- Identify the stages of your agency’s recruiting funnel
- Identify the metrics that make the most sense for your agency to track
- Prioritize your recruiting metrics in order, from those at the top of the funnel to those at the bottom of the funnel
As we’ve discussed, there are two types of recruiter metrics: quantity metrics and quality metrics. As you might have already guessed, quantity metrics are located at the top of the funnel. Conversely, quality metrics are located at the bottom of the funnel. That’s because as you travel down the funnel, quality becomes more important and quantity becomes less important. You can even develop a recruitment process flowchart to visualize each step of the funnel.
Now that you’ve identified the funnel stages and the metrics involved, you can create a recruiting metrics template and/or a recruiting metrics spreadsheet.
Recruiting metrics template
This is useful for agency owners, who can assemble a template and then distribute it to their recruiters. Along with distributing the template, though, owners should also communicate two other important things:
- Directions regarding how the metrics will be tracked
- A clear set of expectations regarding each of the recruiting metrics
Recruiters should know which metrics should be tracked, how they should be tracked, and how their metrics will be evaluated. If possible, also communicate what steps will be taken if expectations are not met. As a firm owner, you must “inspect what you expect.” Failure to do so means missed goals, less production, and fewer billings.
Recruiting metrics spreadsheet
This is exactly what the name denotes—a spreadsheet. (In truth, you’re probably dealing with a combination of spreadsheets.) This spreadsheet should contain all of your important recruiting metrics, both top of the funnel (quantity) and bottom of the funnel (quality).
If you’re proficient with the Excel software, it should just be a matter of inputting numbers on a daily basis. The formulas will take care of the rest. The goal is to not only track production in terms of quantity metrics, but also calculate quality metrics in real time. In this manner, a recruiter can track, measure, and evaluate their activity and performance daily, weekly, and monthly. And of course, a firm owner can do the same with the members of their team.
Recruitment data analysis
So what should you do with all of this information? A few years ago, the word Big Data was all the rage. That term referred to companies’ efforts to amass huge amounts of information about consumers—their demographics, their spending habits, where they spent their time on the Internet, etc. They wanted this information so they could make better decisions regarding how to spending their time and marketing dollars.
The same philosophy applies to recruiting metrics and specifically to recruitment data analysis. The ultimate goal is to amass information that will allow you to make decisions regarding how to spend your time and money. However, in order to amass this information, you must track and measure all pertinent metrics throughout the recruiting funnel, both quantity metrics and quality metrics.
The reason? A breakdown at any point along the way can derail the whole process. It’s akin to springing a microscopic leak in a rubber raft. You have trouble finding the leak, but the raft is still losing air. Unless you’re methodically tracking the recruiting metrics that matter the most for your agency, your placement process will continue to slowly lose air. There is no one magic recruiting metric. There are several key metrics that in combination contribute to recruiters’ individual success and a firm’s overall success.
Recruitment metrics best practices
Not all recruiting firms track the same metrics. Not all recruiting firms analyze the same metrics. However, that’s not what’s important. That’s because not all recruiting firms are the same. They have different recruiters with different business models who like to run their desks in different ways. Recruitment metrics are not “cookie cutter” in nature.
So when you’re talking recruitment best practices, there are two metrics that you should absolutely track. Those are the two that Bartos identified earlier, one of which is a quantity metric and one of which is a quality metric.
Market Connect Hours—The time on the phone with the people who have the power to get you closer to a placement (hiring decision makers and top passive candidates).
First Time Send Out to Placement Ratio (FTSP) or Sendouts Per Hire—This is an indication of the quality of the candidates that you’re sending out to hiring managers.
These two recruiting metrics are crucial starting points. But after that? As a firm owner, you have complete freedom in regards to which metrics you track and which ones you don’t. However, it’s important to include both quantity and quality metrics. Form your recruiting funnel. Create a metrics template. Create a metrics spreadsheet. Then track, measure, and analyze on a daily, weekly, and monthly basis.
As they say (whoever “they” are), you can’t improve what you don’t measure. And through the effective use of recruiting metrics, you can measure everything that’s important to you as a recruiter and as a firm owner.
— — —
(Editor’s note: Kaylee Riley contributed to the writing of this blog post.)