Marit Alaväli: What should be measured in recruitment and why? My recommendations

The effectiveness of the recruitment process directly influences the company’s results, writes Marit Alaväli, founder and CEO of Recrur, the first Estonian recruitment software company.

It’s very common for companies and organisations to measure activities that directly influence their goals – sales, marketing, production volume, financial results etc. HR activities, however, are still considered to be support services in many companies, and their importance in achieving the company’s goals is unfortunately not yet fully understood.

According to a Recrur survey, only 32% of Baltic companies have set metrics they consider essential for streamlining the recruitment process. This is why it’s not common to collect and measure crucial data during recruitment, which is the very first stage of employment. It’s true, however, that companies are moving in this direction, and there are some great examples of companies that are constantly improving and streamlining their recruitment process.

What should you measure and why?

It all starts with the company’s goals and strategy. Once the target and goals are in place, you can set recruitment goals, develop recruitment strategies and plans and thus determine your metrics.

We often hear that HR employees don’t know how many times a year their company recruits, which recruitment channels are the best for the specific company and role, or how long it takes on average to fill a position. It’s certainly possible to get by without such data, but if the company has set ambitious goals to grow or expand, it’s critical to determine what works in recruitment and what doesn’t, as well as what needs to be improved. First and foremost, it’s useful for recruiters themselves to understand how to do their job better and more efficiently.

Every department, including recruitment, is connected in achieving their goals. For example, in a manufacturing company, it’s essential to have the right person with the right skills working the production line at the right time. If recruitment is chaotic and not measured regularly, it’s very difficult to predict how much time should be set aside to hire someone new or which channels to invest in. This has a direct effect on the company and its results.

How do you pick the right metrics?

Every company and department has unique characteristics – the recruitment of employees is no exception. What other companies measure may not be valuable to your recruitment team.

These questions should be considered when setting your metrics:

  • What issue in the recruitment process are you trying to address?
  • What are the company’s unique characteristics that could impact the recruitment process?
  • Why does this information matter to us? Are these just numbers or would collecting and analysing the data allow us to draw important conclusions in order to make the recruitment process and the company’s operations more efficient?
  • Should we also look at the overall quality of recruitment activities by analysing information like candidate feedback?

Here are some important and universal metrics:

1. Number of candidates vs. the number of qualified candidates

It’s very common to measure the number of people applying for a position. However, it is useful to be one step ahead and also measure how many of them match the profile.

2. The amount of time it takes to fill a position

On average, it takes 42 days to fill a position. However, that number is not set in stone, and it heavily depends upon the situation on the labour market and the sector, as well as the position’s requirements. The starting point is either when the need for a new employee arises or when the recruitment process starts, while the end point is when the contract is signed. Measuring the length of this period provides useful input on how much time you need when filling a similar position in the future. This helps both recruiters and HR managers to better plan their activities.

3. Efficient channels for filling a position

It is often the case that a job advertisement has been posted, but recruiters complain that they’re not getting any applications or enough suitable candidates. My first recommendation is to take a look at the channels being used and think about whether there are other channels that could be utilised. Next, you should measure which channel brings in candidates and which brings in candidates qualified for the position. This gives you an opportunity to take a critical look at which channels are worth investing in and vice versa. For example: in addition to job portals, you could post job ads on your company’s career page and social media channels.

4. First contact with the candidate

In a rapidly changing world, it’s very important to contact candidates quickly. People who are actively applying are most likely also actively looking for a new job. Although the current difficult economic situation should mean a wealth of candidates, there are still only a few who will actually meet expectations. Measuring the time from receiving the application to first contact allows you to evaluate both the state of the labour market and whether you should react more quickly in the future.

5. The time it takes for candidates to advance from one recruitment stage to another

If your recruitment process tends to be protracted, it would be a good idea to analyse how long certain recruitment stages take and to adjust the process as needed. It is imperative to avoid losing good candidates due to an overly long recruitment process.

6. The number of candidates that advance from one recruitment stage to another

Earlier, I mentioned the importance of analysing the time it takes to advance, but I would also recommend analysing how many candidates make it to the following stages and which stage has the highest drop-out rate. Again, you should always think about the reasons behind the numbers. For example, if only a few pass the homework stage, you should consider whether the exercise was reasonable and not too time-consuming.

A common error that candidates have regularly brought up is recruiters asking them to come up with a vision, only to be rejected, and then disappointed when the company still uses their best ideas. For this reason, many have decided not to do homework assignments. Another reason is that the assignment is so time-consuming that the candidate simply can’t finish it, or lacks sufficient motivation to do so.

7. The cost of filling a position

While the previous points have related more to time and conversion rates, there is no getting around the fundamental question of money. Every recruitment is an expense or, to put a more positive spin on it, an investment. The cost of recruitment includes the recruiter’s working hours and the time the manager or managers spend on conducting interviews, along with the expense of putting together and posting the job ad on job portals etc. In order to add up all the costs, I suggest reviewing the recruitment process step by step and writing down the cost of each stage.

8. Candidate feedback

Recruitment is a collaborative process encompassing three parties – recruiters, managers and candidates. While the previous metrics focused on the company’s perspective, candidates and their feedback should never be left out of the equation.

The more the candidates are involved in the process, the greater their trust in the company. When the recruitment process is over, you should ask all the candidates for feedback. If possible. I recommend using the NPS (net promoter score) method and random phone interviews.

As mentioned earlier, you should always look at the numbers and try to find the meaning behind them. Involving candidates in the improvement stage increases their trust in the company, and good candidates who ended up not being hired this time or who chose another employer for whatever reason will apply again in the future.

In conclusion, the start of the new year is precisely the right time to make sure your organisation has all the right metrics in place to evaluate the recruitment process. And if it doesn’t, you should establish them and take the right step towards more efficient recruitment.

Do not hesitate to contact me if you want to know how the Recrur recruitment software leverages metrics to help give your company a competitive edge.

Marit Alaväli
Recrur recruitment software CEO and founder

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