Excerpt: When it comes to measuring the performance of your recruitment agency, there are a few key factors to consider. But don’t worry, we’re here to help. This article will outline how to measure your recruitment agency’s performance and provide you with a few tips to get you started.
As recruitment agencies compete over declining talent pools, you as a business leader must stay on top of your game to land the most sought-after, game-changing hires. To do this, you’ll need to employ a multifaceted recruitment strategy that incorporates both traditional and innovative methods.
Measuring the performance of your recruitment agency is important to ensure that you are getting the most out of your partnership. There are a few key ways to measure recruitment agency performance, which are outlined in this blog post.
Measuring attrition rates is an easy way to evaluate recruiting agency performance. It allows you to determine how well your agency finds candidates that are a good fit for your open roles. You do this by calculating the average number of days it takes to fill a role and dividing it by the average number of days it takes candidates to accept an offer.
The closer this number gets to zero, the better because this indicates that your recruitment agency is filling roles faster than their competitors, giving you a competitive advantage in the marketplace.
When calculating cost per hire, it’s important to consider all the expenses associated with recruiting an eligible candidate.
This includes advertising and referral fees and the cost of attending job fairs. The average cost per hire depends on the industry, role, and labour market. Keeping track of this key performance indicator can avoid unnecessary spending and ensure predictable recruitment costs.
There are a few different risk analysis metrics to help you gauge the quality of candidates and the success rate of your recruitment efforts. These include:
- Job placement rate, based on the number of new hires who were placed on their first day of work
- Candidate screening rate, based on the number of candidates who passed all pre-screening processes
- Post-placement support is determined by how long employees remain in the job compared to industry averages
Measuring these key performance indicators allows you to evaluate your recruitment agency holistically and, ultimately, give you a better sense of whether they’re providing value to your business.
The rate of offer acceptance is a key metric for any organization looking to measure the success of its recruitment process.
By tracking the offer acceptance rate, you can get a sense of how many people are accepting your job offers. Of course, not everyone who receives an offer will accept, but you should note if most candidates turn down your offer.
It could mean that your company has a bad reputation in the global recruitment network or that your recruitment process has a few gaps that need to be addressed.
In either case, your offer acceptance rate will give you a clear indication of the health of your recruitment process.
Using an email verifier tool will help you increase your rate of offer acceptance rate to some extent. You’ll end up sending the right emails to the right candidates, leading to better engagement rate.
The closing rate is calculated by taking the number of jobs offers received and dividing it by the number requested.
The closer this number gets to zero, the better because that means you’re getting more applicants with each job opening. As an agency, you can also use this metric to assess your competitors’ performance.
The adverse impact has a negative connotation in the world of recruitment networking. However, before we delve deeper into how you can measure this KPI, let’s explore what it means.
You probably think your recruitment practices are fair because you don’t consciously discriminate against candidates. On top of that, you take great measures to ensure each potential hire gets equal opportunities.
You may be unintentionally biased towards a group of people, handing the other group the short end of the straw. This is an adverse impact on recruitment.
There are a few ways to measure adverse impact. The most common is the four-fifths rule, which states that if a protected group of people (such as women or minorities) is underrepresented, the recruitment process should be adjusted until the group’s representation reaches four-fifths of the population.
The lifetime value is an important metric to consider when making decisions about whom to hire.
This number reflects how much value a candidate will bring to your company. It’s important to measure the turnover rate to get an accurate idea of how much value a particular candidate brings to your organization.
Candidates who are more likely to stay with you for a longer period are more valuable than those who are not.
The average employee referral is more valuable than an external candidate to a business. A study by the University of Michigan has shown that there are substantial cost savings if the employee’s friend stays with the company for at least a year.
Any adverse impact is minor or nonexistent. In addition, companies with effective referral programs have been shown to hire people with higher work quality who stay longer and perform better.
The percentage of open positions compared to the total number of positions can be applied to specific departments or the entire organisation.
A high percentage can indicate high demand (for example, due to fast growth) or low labour market supply. For example, if a company has 500 open positions and a total of 1,000 positions, the percentage of open positions is 50%.
This may be due to high demand for the company’s products or services or because the company is unable to find qualified candidates.
Alternatively, if a company has 100 open positions and a total of 1,000 positions, the percentage of open positions is 10%. Again, this may be due to a lack of qualified candidates in the labour market.
A recruitment funnel is an important tool for measuring the effectiveness of your recruiting process. By tracking the number of candidates who flow through each step of the funnel, you can determine the yield ratio for each step.
This provides valuable information about your recruitment process and can help you improve it.
The recruitment funnel consists of four steps:
- Identifying potential candidates
- attracting them to your company
- assessing their qualifications,
- and hiring them.
You can track the number of candidates who flow through each step of the funnel by using various methods, such as surveys, interviews, or data from your HR software. This information can help you to determine the effectiveness of your recruiting process and make necessary changes.
Sourcing channel effectiveness measures how many potential candidates are viewing job postings through a given channel and how many of those viewers are applying for the job.
The percentage of applications received from a given channel can be compared to the percentage of impressions received to get a general idea of how effective that channel is for recruiting candidates.
Sourcing channel cost is the money spent on a given channel to generate leads. This can be calculated by dividing the ad spend on a particular platform by the number of applicants who came through that channel.
This gives you an idea of how much it costs to generate a lead through a given channel.
The cost of getting to Optimum Productivity Level (OPL) is the total cost involved in getting someone up to speed. This includes things like onboarding cost, training cost, the cost of supervisors and co-workers involved in on-the-job training, and more.
Usually, a percentage of the employee’s salary is also included in this calculation until they hit 100% OPL.
One factor to consider when trying to reach OPL is the cost of training. This cost can be high, but it is important to ensure that employees are fully trained and productive as soon as possible.
Some companies choose to hire external trainers, while others have in-house trainers. Either way, the cost of training should be considered when calculating OPL cost.
Pro tip: Create a graph to map all of this data for future reference.
In order to make the most effective use of recruiting software, it is important to first measure your recruitment metrics.
This will help you identify any “black holes” in your hiring process, and then you can use the software to correct these deficiencies. The online recruitment software can provide you with detailed reports and graphs that give you a deep insight into your existing recruitment process.
This software might include an Applicant Tracking System or Candidate relationship management software.
The reason for this shift is that businesses have realised that to streamline the hiring process, they need to use software to help them. With this information, you can make changes that will improve the efficiency and effectiveness of your recruitment efforts.
By using these key performance indicators, you’ll be able to gain a holistic view of your recruitment agency’s performance and identify areas for improvement. It will also provide you with all important information that will help guide your decision-making and ultimately make your partnership a winning one.
The importance of recruiting software should not be underestimated. It’s a tool that helps you ensure the smooth and efficient running of your recruitment processes, making it an extremely valuable asset to any company.
To make the most effective use of your recruitment software, you need to know how you’re currently tracking your metrics.
By measuring how well your processes work and comparing these against the metrics provided by your recruitment software, you will be able to identify areas for improvement.
This means that rather than using a case-by-case analysis approach, you can use recruitment software to get a more “holistic” view of what is going on in the process.