Those of us who work in the recruitment arena fully understand the importance of measuring what we do. Typically, our objectives are to ensure the best return on investment, enhance the quality of hires, diminish turnover and improve customer service. Unfortunately, what happens all too often is a desire to measure too much. This results in information overload and a drawer full of reports (or overloaded computer files) that never get looked at, let alone acted upon.
The key to success is to start small and to understand what metrics matter most to your particular organization. Given any system constraints, understanding what can be reliably measured in your organization is important. In addition, time must be allocated to review and interpret the metrics with key stakeholders. The following recruitment metric formulas will establish a solid foundation and ideally provide meaningful information to you and your stakeholders.
||Number of days between date of position posted to date job offer accepted or new employee started working.||Based on 5-day or 7-day work week, depending on what your organization deems appropriate.|
Time-to-Fill, Hard-to-Fill Positions
||Same as above but for select group of positions.||Pre-determine what titles your organization considers to be "hard-to- fill" positions.|
|Overall Cost Per Hire||Add the following fees and expenses: advertising, agency, employee referral bonus, travel, relocation and professional recruitment staff salary and benefits. Divide this total into the number of new hires.||Use headcount for number of new hires. Typically, employee benefits are approximately 25% of individual's salary. This should not include internal promotions or transfers.|
|Cost Per Hire, Hard-to-Fill Positions||Same as above but for select group of positions. Divide the number of hard- to-fill positions into total recruitment fees and expenses.||Must predetermine what titles are considered to be" hard-to-fill".|
|Overall Vacancy Rate||Divide the budgeted FTE's into the total number of vacant positions, also based on FTE's.||Critical that you define what is "vacant". Is it an approved vacant position or are all vacant budgeted positions regardless of reason why? Do you consider "on hold"? positions? Do you consider LOA's? You decide and stay consistent.|
|Vacancy Rate Hard-to-Fill||Divide the total number of budgeted hard-to-fill positions into the total number of vacant budgeted hard-to-fill positions.||Again, predetermine how your organization defines what is "vacant".|
|Overall Turnover Rate||Divide the FTE number of employees who separated into the average number FTE number employed during a defined period of time.||Use all separations including voluntary and involuntary departures. Can also isolate voluntary terminations from involuntary terminations to further define two distinct first year turnover calculations.|
|Turnover Rate First Year of Employment||Divide total number of employee FTE's that separated from organization during a 12- month period into average number of employees (FTE's) during the same 12-month period.||Use all separations including voluntary and involuntary. Can also isolate voluntary terminations from involuntary terminations to further define two distinct first year turnover calculations.|
- Define your own organizational terms before you embark on creating a metrics dashboard. What is a vacancy? How are involuntary and voluntary separations defined? What is considered a budgeted position?
- To make your metrics meaningful it's essential that you collaborate with finance and those who manage position control to ensure your data and assumptions are correct.
- Your metric results are dependant on ensuring the data entry is accurate and consistent. Discuss your needs and objectives with those who enter the data.
- Consistency is critical. Once you define your terms, do not change the interpretation of your terms midway unless your original assumptions were wrong. If you need to course correct — make sure it is noted on your dashboard reports and clear to those who view your reports.
- You can do any of these calculations from a variety of perspectives. For example, focus on a specific department or a specific job classification. Typically, overall metrics are best to establish an organizational baseline but not informative in regard to isolating potential problem areas.
- The real value of recruitment metrics are the trends that emerge over time. Proceed cautiously when making interpretations. Try to gather relevant stakeholders to help frame the potential problem and solution.
- There are a wide range of recruitment metrics. These metrics are a good foundation to start with and it's important to keep it simple. The main objective is to provide the information that your organization wants and needs and, most importantly, is accurate.