Talent Acquisition Metrics - The story of future [With Tips on What to Measure]

Ask 100 folks to list the primary things HR does, and hardly any of them will talk about HR Analytics or Recruitment Analytics. What's funny is that at least 90 of them will speak about Talent Acquisition. This responsibility of the HR team is so well known that at times a good number of people feel as if it is the only one activity that the HR team does.

Since the advent of a company's concept coming into the picture, HRs have been tasked with bringing new folks into the company.

Yet, the famous phrase "HR doesn't get a seat at the table" holds for a majority of the firms. This comes as a bit of an irony, considering that HRs have been providing firms with their most important assets, people.

 

But why is it? Who gets a seat at the table?

1. IT team irrespective of the sector today gets a sure shot seat

2. Marketing gets a seat, so does Operations

3. Sales will surely get a seat and so will the Product team for they are the closest to the market

4. Finance team not just gets the seat, but gets a much higher say in it as well.

So, how does this get decided? Here's the thing:

1. Sales, Products and Marketing bring in new customers (read 'Money')

 

2. Operations and Finance control the firm's assets and expenses and thus is tasked to save money

 

3. IT meanwhile can do either of the two depending upon the sector the firm is in

 

Have you noticed the pattern yet? The reason that other departments get a say (or as we call it 'a seat at the table'), is because they either contribute towards the top line of the firm or towards the bottom line of the firm. HR, however, more often than not fails to realise that it does both.

If measured correctly, the sheer power of what HR analytics can bring to the table is nothing short of a game-changer! Recruitment analytics in itself has the potential to turn each stage of every recruitment into actionable insights and make recruiting decisions better and faster.

But out of dozens of metrics available on this, which ones should you focus on?

 

5 metrics your talent acquisition team should track

Here are the top 5 analytics-driven metrics your talent acquisition team should track to make HR the front runner in being the newest addition to the next board meeting.

 

1. Time to hire clubbed with offer to joining ratio

Generating an offer takes time. There are loads of steps in the process:

 

1. Screening the candidate

2. Aligning interviews with the business team and HR

3. Assigning psychometric test to a candidate

4. Salary negotiation

5. Document checking

6. Final offer release

Amidst coordinating all of this, you face practical challenges like IT issues and platforms being unresponsive at times. Now imagine if at the end of all of these, 5 out of 10 candidates did not join the company, all that the talent acquisition team would have done is wasted time of their own guys as well as business leaders.

While tracking a conventional time to hire is a usual metric for the HR team, it however doesn't take into account the fact that 'Time is money'. Thus, a combination of time to hire with offer to joining rate is one of the most under-rated metrics for the Talent Acquisition team. While a high acceptance rate (say above 90%) indicates a good match between the requirements of a company and a candidate, a low acceptance rate opens up analysis on the reasons for candidates dropping out.

 

Pro Tip:

For best use of recruitment analytics, calculate the average time taken by each resource (business leader, HR, IT support team) to evaluate a particular position. Map it to the average CTC of those resources to arrive at the time-cost of the position. Add to it, the cost of each test being assigned and you'll arrive at the offer acceptance cost.

 

 2. Cost to hire

Ask any HR guy about the messages they mostly get on LinkedIn. They'll tell you that it is from the manpower supplying companies/agencies. While there are several benefits that an RPO (Recruitment Process Outsourcing) firm brings, there is still a cost attached to each guy you hire via them. Typically, it ranges between 7%-10%. This is one of the biggest reasons why employee referrals are termed as the best source of hiring. Not to mention that as per a Careerbuilder Research, 82% of employers think that employee referrals have a better ROI than any other sourcing channel.

Pro Tip:

1. Track the cost to hire for each recruiter to know where the chunk of talent acquisition money is going.

2. It will be a good idea to set up a proactive referral campaign in your firm.

 

 3. Quality of hire

Employee’s performance, manager's satisfaction and company tenure. Track these and you'll get to know the quality of hire. Why is it important? You get to understand the effectiveness of your recruiting strategies and methods.

Essentially, you would get two direct long term benefits:

1. Your talent acquisition team will need to hire lesser people

2. Your firm will reach better sales figures (or a better product or higher outputs of whichever department you are hiring for)

Pro Tip:

Track the output or productivity of the department before you start measuring the quality of hire. Once you start measuring the quality of hire, track those same outputs again every quarter. Your quality of hire benefit will essentially be the difference between initial and final outputs.

 

4. Recruitment funnel effectiveness

Recruitment is a funnelling process that begins with a job opening and ends with a candidate being onboard. When you measure the effectiveness of various steps in this funnelling process, you obtain a yield ratio for each step in between. With an answer to that, you would get to know if a particular step is being too hard for the candidates or if a particular manager is being too harsh and rejecting the candidates.

Thus, you need to regularly analyze the yield ratio of every step of your funnelling process. Every time the yield ratio of a stage drops there are bound to be hidden flaws in it.

Pro Tip:

Find and resolve the flaws at any stage as quickly as you can as that will in turn improve your time to hire, thus reducing the costs.

5. Time to productivity

How long does it take to get people to be productive? Maybe the resources you have hired are taking several months to come to a point where they are contributing fully to the organisation.

As per research by Oxford Economics, the average time a new employee takes to attain their optimum productivity is 28 weeks. While these are generic numbers as the employees from the same industry will take less and an employee from outside or a previously unemployed person will take much more.

Pro Tip:

Track the time to productivity for the concerned department before you start hiring for it. Then track the same once every quarter. If you can reduce the time to productivity from say 30-31 weeks to 25-26 weeks via effective hiring, you would have essentially saved one month's salary of those resources; eventually bettering the bottom line of the company.

Wrap up

A great strategy could be to create a dedicated talent acquisition scorecard. One which comprises all the recruiters of the firm and creates an internal challenge among them. The only point to note here is that these metrics need to be driven with a framework of recruitment analytics in mind to put forth the actual benefits and not just the implied ones.

While many more metrics can be used to improve the performance of the talent acquisition team, when it comes to placing your TA strategy in the grand scheme of things, the idea should always be to track those numbers which can scream monetary profits on their own. And remind people that HR is not a support function. Handled carefully it can be the one function that creates the most value for your bottom-line while providing resources that uplift the top line.