Save time and money by tracking recruiting source quality

Great candidates could be hiding anywhere, so most recruiters and hiring managers cast their nets far and wide by investing money and effort into a variety of recruiting sources. It’s not unusual for a comprehensive recruiting strategy to include some or all of the following: multiple job board listings, a dedicated hiring page on the company website, social media promotion, external agencies, hiring fairs, and employee referral programs.

The price of all these different recruitment methods can add up quickly. It costs an average of $300 per month to advertise a single position for 30 days on one of the major job boards. When you consider that the average time-to-hire is 42 days, and that most companies post job openings on more than one job board, the costs can start to skyrocket. It’s very possible to spend a small fortune on job boards that may not even be sending you quality future hires.

You also may be investing a lot of time into vetting candidates. The average job posting attracts around 250 resumes, which can be time-consuming and labor-intensive to sort through. If you’re lucky, you may find a handful of really great candidates, and if you’re unlucky, you could spend hours fruitlessly going through subpar applications.

Optimize your hiring process to help you save time and money by measuring the quality of the various recruitment sources you employ and redistributing your time and monetary resources based on your findings. Calculating recruiting source quality can help cut costs on ineffective recruiting sources, lower your cost per hire and reduce your time to hire by making sure your job listing gets in front of the right eyes faster.

Why source quality matters

At first glance, the number of applications a source generates seems like it would be a good measure of that source’s effectiveness. The source got your job listing in front of a lot of job seekers, and people responded positively by filling out an application. But volume of applicants is only telling half the story. More resumes might mean more candidates to choose from, but if the prospects are low quality, it might just mean more work.

What you really need to know is which sources send you the best quality candidates. As an example, imagine that advertising your job openings on social media generates 1000 applications a year, while your employee referral program generates 500. At first, it may seem that social media is a more effective source — it sent you twice as many applications as the referrals program did.

But were they any good? A greater volume of applications is not inherently better if they’re from unsuitable candidates and you have to spend a lot of time wading through a pile of unqualified candidates to find a good one. For that reason, the number of applications is just a vanity metric; it might look good on paper, but more applications don't necessarily drive the desired outcome of a quality hire.

Track your applicant to hire ratio, not just your number of applications

Instead, we need to evaluate the quality of the sourcing channel, based on how many candidates from that channel eventually receive an offer. Studies show that the number of interviews and the number of hires generated from a recruitment source are the most important measures in determining its quality.

When you instead calculate the source quality based on the number of hires that resulted from each channel, you may see that 1% of the candidates who applied via social media were ultimately hired, compared to 4% of the candidates who were referred by other employees. While social media may generate twice as many applicants, referrals lead to far more hires, making them a much more effective recruitment method.

How to calculate source quality

You can discover your source quality very easily by calculating the ratio of applicants who came from a source and were eventually hired, versus the total amount of applications from that source.

If you have an applicant tracking system (ATS), it can easily pull the referral data you need to calculate this metric (some ATS’ will even calculate it for you). Otherwise, collect the data manually by adding a question to your application that asks candidates how they found out about the job.

Start by defining what a “source” is. This can be done very broadly by creating categories like: job boards, referrals, social media, etc. Alternatively, define the categories very narrowly: Monsters.com, Indeed, LinkedIn, etc. It’s a good idea to calculate source quality both ways, to give yourself a broad overview of where new hires come from, as well as a more detailed breakdown of which individual sites generate hires.

After you’ve defined your sources, divide the number of applicants who were hired through that source by the total number of applicants who applied via that source. Multiply that number by 100% to get a percentage of the amount of applicants who were hired from that source.

Source quality

This same data can be used to calculate source of hire, which is another useful metric for evaluating source quality. Source of hire tells you the percentage of hires that entered your hiring pipeline from each source. Use it to compare sources and identify where most of your hires come from.

Source quality

Leveraging the results

Once you’ve calculated quality for each source you utilize to recruit, use the results to improve your recruitment process, save money, and reduce time to hire.

Redirect your resources

Your hiring department probably has a set amount of money to spend on recruiting new hires each year. Use source quality data to determine how to allocate your resources in your yearly budget.

You may wish to increase the amount of money you invest in really fruitful channels, to hopefully increase their value even more. For example, if employee referrals generate a lot of hires, it might be worthwhile to create a formalized referral program, including referral bonuses, to encourage more employees to recommend great candidates.

Or, if a channel is giving less-than-stellar results, you may want to trim your budget by diverting resources away from it. If a particular hiring board sends you lots of applicants but none of them are worth hiring, it may be time to stop posting on that job board altogether.

Alternatively, you could try reinvesting your efforts into flailing channels by experiment with different ways to boost their effectiveness. For example, you could try rewriting your job postings for certain sites, adjusting the copy on your website’s job’s page, or retooling your social media strategy.

Predict future performance

Source quality can be a helpful metric for predicting future performance around filling roles. Knowing how each source performs historically can help you forecast the time and resources you need to fill a role, and can potentially help you create a long-term strategy. If you have a role you need to fill very quickly, for example, you might promote it heavily on your most effective channels.

Refine your process

Refine your recruiting process and get even more value out of your sourcing channels by practicing proactive sourcing. Instead of passively hoping candidates will find your job openings, figure out where the best candidates are, and put your efforts towards connecting with them. As you weed out ineffective sources, cultivate new ones such as different social media channels, niche job posting sites, and reaching out to passive candidates via their blogs or portfolio sites.

Other considerations when tracking recruiting source quality

As you use source quality data to plan out your recruitment marketing budgets and strategies, remember that there are other factors to consider when selecting which sources to pursue. Job hunting is not always a linear process, and sources can be interdependent. A candidate might learn about your company on one platform, be won over by information on another, then finally apply via a third.

Metrics should be only one component of your source evaluation process. In addition to quantitative data, make sure you are collecting qualitative data by speaking to candidates and new hires about their journey to applying with your company. By learning about their experiences, you will get a better idea not just of which sources send people your way, but what inspires candidates to want to join your company.

About Hire by Google

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