Must-have recruitment metric #4: New hire performance by lead source
Why you need it: This metric tells you not only whether your new employees are getting up to speed effectively, but by referencing lead source, it enables you to cycle back into your recruiting efforts so that you know where your best people come from. This allows you to consistently fine-tune and improve your sourcing and selection efforts to build overall quality of talent in the organization.
How to get it: To calculate this metric, you need the following data elements:
1.Make sure you record the source of the application for successful candidates as part of their employee record
2.Count the total number of people with less than 12 months of service
•These people should be grouped by the last performance rating they received
•They should also be grouped by the hiring lead source through which they came to the organization
3.Of this group, count the number of people who are not considered low performers
•Performance scales vary so low performance needs to be defined by the organization. For example, on a traditional 5 point performance scale scores 1 and 2 are considered low performance
4.Divide the number of people who are not low performers by the total number of people from steps 1 and 2 above
Red flags to act on: The primary goal of every recruiting function should be to improve the quality of talent in the organization, whilst managing the price that is paid for this talent. New hire performance is something that needs to be tracked over time and action needs to be taken when the trend turns negative. For example, if your new hire performance starts to drop, then you need to review your whole talent pipeline to determine whether candidate quality is dropping or whether onboarding and ramp-up processes are not delivering like they should. That’s why this metric is so valuable: it reveals what is really impacting overall talent quality.
Must-have recruitment metric #5: Vacancy rate
Why you need it: Finance may like vacant positions, as it looks like a cost saving, but in reality having too many open positions can lead to all sorts of repercussions: higher overtime costs, stress (which can lead to absences), as well as mistakes and customer impacts. Therefore, it is important to track how many positions are vacant and for how long. Tracking vacant positions also allows you to determine how well your recruitment process is functioning. If the recruitment team is not landing good new hires fast enough, then your organization will be negatively impacted by the absence of people who do the work.
How to get it: To calculate this metric, follow these steps:
1.Count the current number of open positions (positions which have hiring activity underway)
2.Count the number of employees (headcount) at the beginning and end of the period
•This allows you to calculate average headcount
3.Divide the number of open positions by the headcount plus the number of open positions
•This gives you vacancy rate as a percentage of your total possible workforce.
Red flags to act on: Every organization runs with a certain amount of vacancy. The dynamics of your industry, geography, etc. will determine what is a good number for your organization. But in any case, if the vacancy rate is increasing, then you need to take action.
This is where the other metrics on the list play their part. Are we getting enough qualified applicants? If the answer is no, then you need to review your sourcing strategies. Are people accepting offers? If the answer is no, then you need to review the competitiveness of your roles in the market. Are we keeping people longer than 3 months? If the answer is no, then you need to review your selection and onboarding processes.
Looking at the big picture
Rarely in the dynamic environment of talent and people does one metric tell the whole story. With the combination of metrics detailed above you will be properly informed about the effectiveness of your hiring processes and able to respond to deliver the right people, at the right time, to the right place at the right price.
To learn more about how to take an analytical approach to recruitment and other critical areas of focus for HR, download this free white paper: The Datafication of HR: Graduating from Metrics to Analytics.
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Author: Ian Cook