1. How to use benchmarks in your hiring process
‘How to use benchmarks’ is the first chapter of Learn, the fifth book of The Hiring Playbooks, 5 ebooks that will turn all your hires into wins. Created by the Homerun team.
This chapter will help you make consistent improvements in your hiring process, take action based on data and justify changes. You’ll also be able to understand your progress and create a basis for evaluating your hiring process.
Setting benchmarks for your hiring process can be one of the most
effective ways to ensure that you’re constantly improving. They help
you identify where you’re doing well, and where you need to make
changes. Not only that, it’s nice to know how you’re performing
compared to other companies. But benchmarks are only helpful if you
focus on the right ones. Fortunately we’re going to show you exactly
which these are.
By the way, if you’re a smaller company, you might want to skip this
part. Having said that, you never know what might be useful, so carry on
reading by all means. After all, knowledge is power.
What makes a benchmark effective?
The secret to using benchmarks effectively is to keep them:
• Measurable. Homerun makes it easy to track your time-to-hire
by providing a clear overview of every part of the hiring process,
from the first job post going online to the contract being signed.
• Actionable. You can have all of the data in the world, but it won’t
help you one bit if you can’t use it to make positive change.
• Relevant. When implementing benchmarks, make sure that
they’re relevant to your specific goals.
• Simple. If you use too many benchmarks, or the ones that you use
are overly complicated, then they’ll become a time-suck and a
hassle.
Willem van Roosmalen, co-founder Homerun:
“There are so many parts to the hiring process that
it’s hard to know what went right or wrong. Setting benchmarks is
essential to eliminating these mistakes.”
What benchmarks should you use?
There are many different benchmarks to choose from, some useful,
some not so much. Therefore it’s vital to choose the ones make sense
for your company’s hiring needs.
Quality, speed, and cost are the industry standards, but we also
recommend including benchmarks that provide insights about
your candidate conversion rate. If you select benchmarks from
each category then you’ll have a holistic approach, which is always
something worth having.
Here are a few of the best benchmarks that you can use to gauge your
success in each category:
Quality
• Quality of applications — the percentage of quality applications
received per job. This is typically measured by looking at how
many applicants make it through to the first round of interviews,
but in cases where a large number of impressive applications are
received, it’s better to use a rating system.
• Quality of candidates — the percentage of qualified candidates
who were seriously considered for the job. This is typically
measured by looking at how many applicants make it to the
final round of interviews, but once again, in cases where a large
number of impressive candidates are interviewed, rating systems
work better.
• Quality of hire — this is the most valuable performance
indicator. Most companies measure quality of hire by looking
at a combination of feedback methodology (such as new hire
evaluations, hiring manager satisfaction, and employee surveys),
long-term methodology (like employee retention and 360-degree
feedback about productivity, culture fit, and engagement.
Speed
• Time to Fill / Time to Hire — This is an extremely controversial
metric because the emphasis it places on speed can hurt
quality of hire. As you’re no doubt aware by this point, hiring
great people takes time! To make time-to-fill more useful, we
recommend breaking it down into components:
• Time to Job Post — the time it takes from deciding you need a new
team member to publishing a job post.
• From Job Post to Slate — the time it takes from publishing a job
post to rounding up enough qualified candidates to hold your first
round of interviews. (HR Examiner defines ‘slate’ as 6 qualified
candidates.)
• Time from Slate to Hire — the time it takes from identifying the
qualified candidates to deciding who to hire.
• Time from Hire to Fill — the time it takes from the candidate
accepting an offer to their first day on the job.
Cost
• Cost per Hire — CPH measures the costs of sourcing, recruiting,
and staffing activities to fill an open position. It is presented as a
ratio of the total amount spent (both externally and internally) to
the total number of people hired in a specified time period. CPH is
best used as an internal benchmark.
• Recruiting Cost Ratio — RCR measures the amount spent per hire
and provides insights about the difference in costs from position
to position, how staffing efficiency varies from department to
department, and how to budget for future staffing endeavours
from position to position.
Conversion
• Career Site Conversions — The percentage of people who visit
your site who either apply for your jobs, or join your talent pool/
sign up to be notified of new job openings.
• Candidates to Applicants — The percentage of candidates/job
seekers who decide to apply for one of your jobs. This one’s a bit
hard to measure and will never be exact, but by tracking views/
engagement on social media, click-through rates on job boards,
and traffic to your career site, you can get close enough.
• Offers Accepted — The percentage of candidates who accept
a job offer.You can track this, and much more (from where the
candidate found the post to the amount of visits each post
received) with Homerun’s analytics data.
Find your data, or start tracking
After you’ve selected the benchmarks that you want to track, you’ll
need to start the actual tracking. The good news is that all good
recruitment software will track this data for you. However, if that’s not
an option, then you’ll have to find the data yourself.
The only way to do this is by wading into your spreadsheets and looking
back through your hiring related emails to make estimates about the
benchmarks you wish to track. After this, record your results in a new
spreadsheet so that they’re easy to find when you do future reviews.
If that all sounds like too much work, then we’re ready and waiting at
Homerun to take this time-consuming task off your hands.
What do I do next?
Put your benchmarks to work by implementing a structured evaluation
process for your recruiting efforts in the next article How to evaluate
your hiring process with purpose.
All Images by Studio Spass.
