We have discussed in the past how the hiring process fundamentally hasn't changed since the end of World War II: Analyze the job, figure out where the job fits in the org chart and how much it pays, market the job and then screen the applicants.
And for all of that time, most non-entry-level positions are filled via referrals or in-house promotion.
However, times have radically changed for hiring, especially with the onset of the pandemic.
If we look at the latest census data, it shows that mostly passive candidates - that means people that weren't even actively looking for jobs, started the majority of new jobs.
40% of companies have responded to increasing their passive candidate flow by outsourcing recruiting functions to overseas search firms.
For the 60% of companies still doing recruiting in-house, hiring managers can be stranded on an island of their own if they can't get access to the the department managers they need to hire for in order to properly assess the job and create a job description to attract both active and passive job seekers.
The real issue is that about 70% of companies do not have ways to measure whether their hiring efforts are successful.
So in that vein, here are metrics you can use to measure your hiring process to make sure you are successful:
1. How many jobs did you launch in a year?
2. How many hires did you make? Divide this number by #1 to determine your job fill percentage. For the explanations, we will use a real HireMojo client's numbers to illustrate.
So if your company launched 23 jobs to be filled, and 7 hires were made, that is a fill rate of 30%.
3. How much did you spend on your ATS, external search agencies and job board postings/job marketing? Total this and then divide by #2 to determine what your CPH - or Cost Per Hire is.
So in this example, the company paid $5369 for the year and made 7 hires, resulting in a CPH of $767. (this is mainly because job marketing is included in HireMojo's pricing)
The national average CPH according to SHRM is currently over $4,425.00
So in this scenario, HireMojo was able to save this company over $25,606 in a year versus the national hiring average.
This is a simple method for those companies/programs that have no measurements to get started.
Want to go deeper and start considering costs of internal teams into the metrics as well to determine a true CPH?
This recruiting cost calculator will help you do just that.
So using these metrics: jobs launched, hires made, job fill rate and Cost Per Hire (CPH), are the essential building blocks to measure whether your hiring program is successful, getting better or worse over time.