Are You Filling Your Team with the Best People? Use These KPI’s
Recruiting professionals for long-term positions at your company is all about following the right strategy for hiring. You don’t need to be the largest company or have the most resources to attract the best people to your team. With the right allocation of your time and energy, any business can attract and create the right team.
Pay attention to important Key Performance Indicators (KPI’s) in your hiring process if you are ready to identify, attract and recruit the very best people.
Why Should CEO’s Care About Recruiting?
CEO’s should care about recruiting because it impacts all areas of sales, operations, and profitability. The Work Institute’s 2017 Retention Report found that the cost of replacing an employee is, on average, 33% of a worker’s annual salary. However, this cost does not factor in the cost of lost productivity for activities such as training a new hire, conducting the interview process, and lost knowledge.
According to the 17th Annual Global CEO Survey released by PwC, 93% of CEO’s believe their strategy to attract and retain talent needs to be updated. CEO’s don’t need to feel this way when the talent does exist in the market, all one needs is to learn how to connect the dots in the recruiting and hiring process.
The Purpose of KPI’s
Just like you track your supply chain costs, you also need to check your recruitment strategies. Connecting with potential employees is one step in the process, but retaining them for the long-term should be the ultimate goal. By investing time and resources into tracking, you can identify weaknesses. If you target your weak points and improve the process, your team will grow strong.
KPI’s To Attract and Retain Your Talent
Once you’re committed to tracking KPI’s, you must narrow your options to the most reliable stats. Four KPI’s to keep an eye on are:
- Time-to-Hire: The time taken to hire a replacement allows recruiters and key decision makers to find a replacement is directly linked to how recruitment works.
- Source of Hire: Track the source of a hire, especially through an analytics system, to see if advertising traffic is working.
- Offer Acceptance Rate: The indicator of acceptance rate shows exactly how effective your process is. Low acceptance rates might reveal a disconnect in the recruitment process.
- Candidate Satisfaction: Just as you want a candidate to make a good impression on you, you also owe them a good interview experience. Track candidate satisfaction to effectively track first impressions.
The average time taken to hire a replacement allows you to build a recruiting strategy and learn about your average hiring cycle. This refers specifically to the timeframe between the application date and the date which the candidate starts working. A slow time to hire portrays your company as disorganized, not prepared, and unable to manage a growing team.
Time-to-Hire is also an indicator of your reputation within the industry. Well-respected organizations have a lower time-to-hire because candidates are constantly applying, and resumes piling up in the “potentials” stack. (Remember, all customers are potential candidates).
Source of Hire
Also referred to as your candidate pipeline, the source of hire shows exactly where you are sourcing your candidates. Whether you are spending money with a third-party organization, posting on job sites, or any other form of recruitment, the return on investment needs to be tracked. This metric helps you figure out hiring plans, work in waves with team member hiring cycles, and streamline your resources along the way.
A company does not need to be large to track the source of hire. Even if your system is a bit more informal with a simple question like, “How did you hear about us?”, you can track originating sources.
Offer Acceptance Rate
Offer acceptance should always remain high to indicate that you are offering the job to candidates that are interested. If you submit a large number of offers which go unanswered, this reveals a detachment in the interview process.
Are you describing the job properly? Are you being transparent with your questions? Do you think interviews are being conducted by the right people at your business? Examine your application process, salaries, and benefits if acceptance rates are too low.
McKinsey found that it would be possible to add $2.7 trillion to the global GDP by the year 2025 if workers were better matched with jobs. Yet, the division of the labor force is getting worse as jobs get more specialized and education fails to keep up with the demand. This is where candidate satisfaction comes in.
If team members, managers, and supervisors are pleased with the performance and placement of candidates, it benefits all parties. The candidate experience includes satisfaction, both that of the candidate in his or her job as well as internal satisfaction with the employee.
The Talent Pool Is Changing
Have you noticed any changes in your workforce within the last decade? The talent pool is changing as younger professionals enter the workplace and Baby Boomers start to retire. As of 2017, Millennials make up more of the workforce than any other group. These young adults have new expectations for their jobs, including a bigger focus on work-life balance and fringe benefits of the job. Fortune.com reports that “research shows [Millennials] are attracted to employers whose brands they admire as consumers.”
Stay Ahead with Recruitment Tracking
Are the people on your team the right professionals for the job? Do you proactively reach out to the best candidates in your industry? Without a solid recruitment process with clear review methods via KPI’s, you are playing the odds building a winning team. Track KPI’s like time to hire, time to fill, the source of hire, offer acceptance rate, and candidate satisfaction to attract the best talent. The time and energy will pay off in your bottom line.