A lot has been studied and written about the metrics and measurement of recruiting people. But most often this means measuring the effectiveness of the sourcing process and not the other parts of hiring.
As we built Talentron, we had the luxury of just being able to focus on the interview and evaluation parts. In our research, we have the privilege of talking to hundreds of professionals about hiring, using behavioral interview questions, and interview evaluation forms. In the course of our discussions inevitably all sorts of numbers, measures, and metrics have been discussed.
In these discussions, we learned the concerns that hiring managers and talent acquisition professionals have about their hiring process.
These were some of the questions that kept appearing.
- Are we getting better at knowing which candidates to interview?
- Are we getting more efficient interviewing candidates before an offer is generated? Asked differently, are we interviewing the appropriate number of candidates before we extend and offer?
- Are we too quick to pull the trigger, or do we want to see too many candidates?
- Are we having a problem getting candidates to accept our offer?
- Why do candidates accept our offer over someone else’s?
It would seem to make sense that any metrics captured about the interviewing process should help to answer these questions.
This list of measurements may seem obvious for many of you who live and breathe interviewing and interviewing metrics, but for everyone else we have compiled a list of the most common and confusing ones. Where appropriate we also attempted to explain the metric and what you might have to do to measure it.
#1 Metric — Screened Candidates to Face-to-Face Interviews
With this metric you are attempting to understand the quality of candidates being referred for interviews.
This is an important measurement in maintaining the quality of candidates being interviewed. In some cases this first screen is done by the talent acquisition team and other cases there is an additional screening done by a member of the hiring team.
In either event, the cost savings can be quite substantial in terms of time saved by the interviewing team not interviewing marginal candidates who should have been screened out.
To understand the process behind this metric, a few definitions are necessary. This process usually begins with a decision to make the first contact with the candidate. A member of the talent acquisition team often does this screening interview, usually on the telephone. Typically after the screening interview, they report back to the hiring manager on the results from the interviews and a decision is made about which ones to move forward for face-to-face interviews or further screening.
The next definition that needs clarification is that of a face-to-face interview. By this, we mean an interview with any member of the hiring team or any member of it will equal a face-to-face Interview. This does not necessarily mean that it must be a physical face-to-face interview. It could be a virtual face-to-face Interview. For the sake of our measurement, the number of interview meetings a candidate is in does not matter; each candidate receives a maximum of one face-to-face interview.
With these two definitions in place, a metric could now be displayed in the form of a ratio, such as 3:1.
In this example, we are doing one face-to-face interview for every three screening interviews. That proportion should improve or get smaller over time especially in a situation with repetitive hiring. The lower the ratio, the more targeted is your candidate pool with less time being spent in needless interviews with candidates who are not a fit.
#2 Metric — Face-to-Face Candidates Interviewed to Offers Extended
With this metric you are attempting to understand the quality of candidates being interviewed by a hiring team.
In addition to the quality of candidates being interviewed, this metric might also identify an area that is impacting the employer brand and hiring results. That would be the issue of a team or hiring manager who is unwilling to pull the trigger on hiring decisions. As the ratio of face-to-face interviews to offers extended increases, more people are being interviewed without an offer being extended. Depending upon the reason for this increasing rate it can cause frustration for the hiring team, the hiring manager, not to mention all of the candidates. This last group ultimately impacts your employer brand as they tell their friends and neighbors of their interviewing experience.
As the ratio of face-to-face interviews to offers extended decreases, the opposite may be true. In that situation, hiring teams and hiring managers might be too anxious to hire resulting in panic hires. A panic hire will most often lead to a bad hire.
We have already clarified the definition of a face-to-face interview. If you are using the first metric mentioned, you will be capturing this number already.
The next definition needed for this metric will be the number of offers extended. This does not include trial closes to judge a candidate’s interest in the position or any other type of verbal offer. By offers extended, we mean those candidates to whom an approved written offer was sent, including internal transfers.
With these two definitions in place, a metric could be displayed in the form of a ratio, such as 7:1.
In this example, we would be interviewing seven candidates before extending one job offer. The lower the ratio, the higher the quality of candidates and less time that is being spent in the hiring process.
#3 Metric — Offers Extended to Offers Accepted
With this metric you are attempting to understand the competitiveness of your job offers.
Ideally, this ratio should be 1:1, for every offer extended that would be one offer accepted. However this is not an ideal world so a ratio of 1:1 is not realistic. As the ratio of offers extended to offers accepted increases, there may be a problem to examine.
We have already clarified the definition of an offer extended to include those candidates to whom an approved written offer was sent. If you are using the second metric mentioned, you will already be capturing this number. If not, given the paper trail that exists with most offers, this is a relatively easy number to determine. Remember to include internal transfers in a number of offers extended. The definition required for this metric will be the number offers accepted, including internal transfers. Typically this is defined in most companies as the candidate started working on their date of hire. However, this can vary from the candidate returning a signed offer letter all the way to the candidate has been employed with the company for 90 days.
Pick the same definition in the process for all of your measurements and stick with it. For example, don’t start by defining the accepted offer as the employee “showed up at new employee orientation” and then change it later to “the employee has been here for 30 days.”
Once you have these two definitions in place, a metric could be displayed in the form of a ratio, such as 2:1.
In this example, we would be extending two job offers for every one job offer accepted. The higher this ratio, the less competitive your offers are.
#4 Metric — Reasons Offers are Being Accepted
With this metric you are attempting to gain insight into the competitiveness of your offers by examining the reasons candidates accepted your offers.
This will help you to understand your employer brand. This metric and the information gathered assists us to gain insight into how potential employees on the market view your company. These insights should be shared widely with hiring teams and managers so that they know how to position and sell the company to potential employees.
Because the reasons for an individual accepting a job offer will vary quite a bit, have a limited number of reasons. The analysis of the information will be much more difficult if you do not limit the reasons. The definitions needed for this metric will be to agree on a few, rather generic reasons why candidates accept an offer. This information is most often known by or can be gathered with the help of the talent acquisition team.
Here is a sample list of reasons that our research has revealed about why candidates accept offers. You may find others depending upon your situation.
- Salary
- Benefits
- Location
- Career Progression
- Work Location Flexibility
- Company Image/Brand
- Other
With these definitions in place, the information can be displayed in a pie chart in terms of percentages.
#5 Metric — Reasons Offers are Being Rejected
With this metric you are attempting to gain insight into the competitiveness of your offers by examining the reasons candidates rejected your offers.
Because the reasons for an individual rejecting a job offer will vary quite a bit from person-to-person, understand the patterns of information. Taking this information and turning it into actionable tasks is the next step.
From here use the 80-20 rule and focus on the highly leveraged reasons for rejection. If you fix the things that occur most often, this will have the biggest return on your efforts in improving your overall offer acceptance ratio.
Start at the beginning of the process with the first screen of the candidate. In this screen, contextual questions should be covered making sure that it is understood what it will take to have a competitive offer. It could have something to do with your interview experience.
Because the reasons for an individual rejecting a job offer will also vary quite a bit, have a limited number of reasons. The definitions needed for this metric will be to agree on a few, rather generic reasons why candidates reject an offer. Again this information is also most often known by or can be gathered by the talent acquisition team.
Here is a sample list of reasons that our research has revealed about why candidates reject offers. You may find others depending upon your situation.
- Salary
- Benefits
- Location
- Overqualified
- Career Progression
- Work Location Flexibility
- Company Image/Brand
- Happy with Current Employer
- Other
With these definitions in place, the information can be displayed in a pie chart in terms of percentages.
The Takeaway
Good metrics aren’t the only thing to consider in hiring people; they’re simply about running the business as effectively as possible. Nor do sound metrics have to be complicated. By consistently capturing a small amount of information during your interviewing process, a lot can be learned.
With the acquisition of talent being one of the most expensive and critical functions in the company, improving upon it is not just a good idea, it’s essential. Improving upon how well your team is interviewing can save thousands of dollars on each employee that you hire.
Ultimately, I think Steve Jobs was right: Recruiting and hiring is and should be a manager’s most important responsibility. Hire great people and your work becomes simpler. But it is not as simple as wishing it were so. In all honesty, in the early days of Apple, we did not measure all of the metrics that I mentioned. However, I can only imagine if we had, how much better we could have been hiring.
Those things that get measured can get improved upon, so start improving your interviewing and hiring with these five key metrics today.
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