How do you know if your recruiting strategy is about to fail?
A collaborative blog post with Kim Benedict.
Before the holidays, we were talking to a manager who was bemoaning their workload. On top of everything else, they were conducting candidate screening interviews because they had four open positions and their internal HR team was too busy to get the screening interviews done. Kudos to the manager for picking up the slack—but as a CEO, is this how you want to run your company?
In our last post, we asked: Would you run your sales process like you run recruiting? We are in a talent war. Tech CEOs know this, yet most lack metrics to understand whether their recruiting process is working well, about to fail, or already on life-support.
No CEO runs their business by periodically looking at their financial results to see how they performed. Instead they use forward-looking metrics and trends such as size of their sales pipeline, average time to close a deal, average deal size, and the trends underlying these metrics to predict their future financial performance.
The same goes for recruiting. If you aren’t already tracking, measuring, and diagnosing your future recruitment success, here are six metrics to get you started.
1. Is your time-to-hire more than 52 days?
52 days is the average time-to-hire, and that metric hasn’t changed much over the past ten years. Obviously there will be outliers (such as an average of more than 250 days to hire a sales rep in San Francisco), but this 52-day benchmark provides a good diagnostic to understand whether your recruiting team and hiring managers are executing well.
2. Are 90% of the applicants for any open position unqualified for the job?
This metric is the ratio of applicants rejected prior to screening interviews divided by the total number of candidates who have applied. Beyond the obvious waste of time in filtering, a too-large applicant pool makes it difficult to pick the best fit candidates. Hiring managers should spend 20-30% of their week recruiting, but not on filtering applicants. This time is best used on networking, generating referrals, having ‘coffee’ conversations with passive prospects to build future talent pipelines, and of course interviewing only the most qualified (short-listed) candidates. If you can’t map these tasks to your hiring managers’ activities, you have a problem.
3. Are less than 20% of your hires coming from employee referrals?
If less than 20% of your hires come from referrals, then you may not be tapping into the best talent pool. Multiple studies show that employee referrals are better quality candidates, take less time to hire and are happier and more productive than other sources of hire.
4. Do you interview more than ten short-listed candidates for any role?
A 10:1 ratio is very generous. Ideally five short-listed candidates should yield a good hire if your process is working. This metric is calculated from the ratio of candidates hired to the total number of applicants that pass the screening interviews and are recommended for further interviews by hiring managers. Interviewing more than ten short-listed candidates either means that your recruiters and hiring managers aren’t aligned on the job requirements, or that they can’t tell the candidate a compelling story about the position and why they should want it. It could also mean that you are mostly interviewing active job seekers and not searching out enough passive candidates (which are often the stronger candidate). Five short-listed candidates or fewer per hire is a good metric.
5. Are 20% or more of your job offers declined?
If more than 20% of the offers you extend are declined, you’ll never be able to keep pace with your growth. This may indicate that your compensation and benefits package is not competitive, or reveal that the candidate experience during the interview process is turning off short-listed candidates. Bad reviews on sites such as Glassdoor, especially recent ones that go unaddressed, can also have a big impact in the eleventh hour.
6. Is your Glassdoor score higher or lower than 3.1?
If your score is lower than the state average of 3.1 (according to Bersin by Deloitte) your company will raise a red flag in the candidate’s mind. A higher score, coupled with authentic, positive, and engaging employee comments, can mean the difference between a passive candidate rejecting or accepting your request to talk. Current stats show that approximately 67% of candidates use Glassdoor as part of their decision making process, and on average a candidate will use up to 14 different pieces of online information to assist in deciding whether to accept an offer with your company.
If you like our benchmarks, feel free to use them in your business. If your metrics aren’t measuring up, our next post will tell you what you can do to change the game.
Kim Benedict Peter Smith
CEO / Co-Founder, Managing Partner,
TalentMinded Inc The Meaford Group Inc