Q5. Evaluating the Recruitment Process

recruitment process

On average 25% of new hires leave their company within the first year of coming on board. If this is happening in your organisation there may be some alarm bells ringing about the effectiveness of your recruitment process.

New hire turnover is not rare for organisations today, especially in a highly turbulent and competitive marketplace. However, when organisations start to lose their top quality candidates to competitors early in their tenure it is a possible sign that something serious is going wrong.

Organisational effectiveness depends on the performance of a company’s human capital. To reduce the risk of employees taking flight organisations need to evaluate their recruitment strategy.

A comprehensive evaluation of recruitment strategy allows organisations to identify internal capability and gaps, employee commitment levels and the corresponding cost effectiveness of that strategy. It provides a basis for improving the recruitment process for future use.

Before companies can evaluate their recruitment strategy they first need to set the criteria against which it will be measured. Without setting criteria to measure against organisations will struggle to know how effective their recruitment strategy is.

There are several metrics that organisations can use to evaluate their recruitment process. These include:

  • Cost per hire
  • Applicant volume
  • Time to fill
  • Quality of hire
  • Human capital ROI
  • Tenure
  • Hiring manger and employee attitudes
  • Turnover costs
  • Career path ratio and more…

Organisations can use some or all of the metrics to measure against depending on their needs and the driving focus behind recruitment strategy. Four common metrics include:

Cost Per Hire - (Advertising costs + Consultancy Fees + Total Interview Costs/ Total Hires)

Cost per hire measures how much a company is spending on hiring individuals. It helps organisations to understand how much they are currently spending and if they are using enough resources.

It measures the effectiveness of recruitment efforts and helps organisations to understand how much they are spending per hire and which recruiting sources are working the best. Once the total cost per hire is known organisation can then plan and set a budget for the future.

Time to Fill – (Total Days to Fill/ Total Hires)

Time to fill analyses the average time it takes to fill a vacancy and uses this to measure the efficiency of the recruitment process.

The rationale here is that vacant positions cost money and the faster a position is filled the better the organisation is being served.

Quality of Hire - (Average performance score of headcount within 0-1 years of services/Average performance rating of total headcount [exc. temp staff])

Tracking performance of new hires against other employees in similar positions, quality of hire helps to set performance benchmarks and measures the return on investment. Reviewing performance also identifies training needs and development pathways for employees.

Turnover

The biggest indicator that the recruitment strategy is failing is high turnover of new hires.Turnover can be measured in two ways:

1.Voluntary - (Total Voluntary Separations [exc. temp staff] within 0-1 years of service/ Total Headcount [exc. temp staff])

2. Poor Quality Hire Rates- (Total Separation [exc. temp staff] with less than 1 years of Service/Total New hires [exc. temp staff] within 1 year)

When employees leave within their first year can point to poor hiring decisions. Such voluntary turnover rates could also be an indicator that an organisation is lacking in benefits, support, career development opportunities and more. To stay competitive organisations should implement robust onboarding programs to reduce turnover rates.

Evaluating your recruitment strategy can sometimes be difficult and time consuming. However, understanding which methods are delivering results helps pinpoint the policies and recruitment strategies to adopt in order to secure and retain high performing candidates.

 

Photo by hans s

About Manisha Raju

Manisha holds a BBS in Marketing with a Masters of Commerce in Human Resources and Industrial Relations. Since joining Adroit she has been working, often exhaustively, to deliver robust outplacement and workforce planning programs, while researching topical issues for our website and newsletter articles. To hear more from Manisha, go to www.adroitpeople.com.au.

Comments

  1. Wiafe Kodua says:

    This is a masterpiece.I really enjoyed reading it.Keep it up.Hope to hear from you.

  2. James mbugua says:

    this is splendid and adds to our knowledge. thank you greatly.

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