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Real metrics to benchmark talent acquisition
In many respects, it makes a great deal of sense for Talent Acquisition specialists, not just HR leaders, to play a more significant role in strategy. After all many celebrated high-growth companies are adopting a holistic approach towards attracting and retaining top talent.
As opposed to the traditional, transactional nature of hiring, modern-day recruitment is now being given greater value, quickly establishing itself as a central function of entire organisations.
But in order to truly convince executive teams that this is the right way forward, you will need to identify real metrics with which to benchmark talent acquisition (TA).
Measuring your activity ensures that goals can be set and met with accuracy and efficiency. You can also look to objectively review value, costs, quality, time, and reputation.
“As recruiters, we can download the data we need, manipulate in a way to show leading indicators for clients and hiring managers. That puts everyone in a better position to make sure we’re getting the best talent,” notes Adam Ward, Recruiting Manager at Pinterest.
Time to Hire
The problem with your typical ‘time to hire’ measurement is that its a reactive strategy, which relies on looking backwards to make a future decision. Although it may speed up the process, ‘time to hire’ does little to maximise the likelihood of attracting top quality talent.
So, instead of measuring the elapsed time, starting with the submission of the job requisition and ending with an accepted offer, focus more on forecasting. Recruitment should be an ongoing process, which is embedded into company culture through talent communities and better employer branding.
By establishing strong relationships with passive and active candidates, time to hire becomes a much more proactive metric, which offers greater benefit to all.
Engage to Close
This evaluates the efficacy of your organisation’s hiring process, helping you make evidence-based decisions on a candidate. As a result, you can see whether the interview process brings in meaningful and relevant information.
‘Engage to Close’ should look at both the quantitate, such as how long a candidate spends in each recruiting stage, and the qualitative, like interview discrepancies.
“At Disqus, we’ve implemented a systemised interview plan that helps us move candidates quickly through the pipeline and keep turnaround time low. If our process is slowing down at a particular stage, or with a particular interviewer, it is easy to identify and correct,” reveals Helen Laroche, Data-Driven Recruiter at Disqus.
With a structured interview process, you can measure ‘conversion rates’ at each stage of the funnel, to identify where candidates drop out and why.
At Thumbtack, Head of Staffing Marissa Huang says that by tracking stage conversions, she can identify coaching opportunities for her hiring teams. She explains:
“If conversion rates are too high at a late stage, we can drill into interviewer feedback to see if the candidates truly met the expected criteria, and coach interviewers who are being too lenient.”
Rather than determining the quality of a source based on the number of candidates who applied from it, many companies are turning their attention to the quality of candidates instead.
Also, looking at ‘cost per hire’ across each source, allows you to discover the value you get from each one. In turn, this can better inform decisions on adding, reducing, or removing budget from your source choices.
This data can then be sent to the executive team. If you can show that one platform generates higher-quality candidates than another, they will be more likely to inject additional investment.
Quality of Hire
If your business calculates Customer Lifetime Value (CLV) to measure the productivity of customer acquisition efforts, why can’t you calculate Employee Lifetime Value (ELV) too, which links recruiting to performance metrics?
By knowing ELV, the executive team will implicitly understand the value of acquiring a top performer, which also has a direct impact on the company’s revenue stream and bottom line.
For example, Google has found that hiring a top-performing employee results in 300 times more productivity and business impact compared with hiring an average-performing employee.
Churn rates are something every business has to deal with. It can be higher for certain organisations and industries, but that doesn’t mean you can associate the idea of attrition with factors outside of your control.
Although many elements contribute to churn rates, the talent acquisition function has an opportunity to effect the likelihood of longevity.
This includes carrying out thorough requirement gathering from the hiring manager, sticking to the agreed candidate experience, and sourcing those who will be motivated by, interested in, and excited about the role. You can draw a direct correlation between longevity and quality of hire too.
Conclusion – The changing face of talent acquisition
Talent acquisition is now a strategic exercise that is embedded into many organisations. It’s being used to optimise the recruiting process to improve quality of hire.
When it comes to KPIs, these must now be aligned with the bigger picture to help make smarter, evidence-based decisions regarding finance, as well as recruitment.
Food for thought
The talent function should also include effective onboarding and consistent staff engagement, as this will lead to long-term value from your hiring efforts.
Talent Heroes is a people business. We’re contracted by clients to work in house, attracting and hiring an unlimited number of staff, for an all inclusive monthly fee.