5 Tips to Maximize Recruiting ROI

Every company wants to ensure that new hires contribute to the bottom line. As hiring budgets get cut everywhere, the pressure is higher than ever on recruiting managers to demonstrate the kind of ROI that recruiting programs are expected to deliver. 

The fact is, recruiting top talent is always a good investment. High-performing employees are up to eight times more productive, and early-career candidates, in particular, tend to have longer tenures while performing comparably to senior employees. Being diligent about tracking and analyzing metrics related to recruitment efficiency and outcomes can help you:

• Make the case for a bigger hiring budget
• Demonstrate exactly which parts of the recruiting strategy are working, and why
• Make specific improvements to attract and retain the kind of talent your company needs most

Let’s talk about how you can make this happen. 

Recruiting metrics you should be measuring right now

 
Recruiters use several metrics to assess the impact of their recruitment strategies. The most popular ones tend to be easy to grasp conceptually and easy to measure. These are the metrics we recommend following.

Cost-per-hire 

This measures the cost of bringing a candidate onto your team. It includes all costs related to talent sourcing, screening, and recruiting, including: 

• The cost of publishing an open role on a job board 
• The cost of platforms to conduct candidate assessments or manage communications 
• Recruitment agency fees 
• Internal staffing resources 

Offer acceptance rate 

This measures the percentage of job offers issued that get accepted. It’s measured as the ratio of the number of offers accepted to the number of offers made. Low offer acceptance rates could indicate problems at the later stages of the recruitment process—most commonly around salary negotiations. 

Time-to-hire

This measures how long it takes to complete hiring a candidate - from when they apply for the job to when they accept the offer. Most companies are keen to keep this as low as possible, and studies show that top-performing companies tend to have 50% lower time-to-hire than their competitors. 

Employee lifetime value (ELTV) 

ELTV measures net employee value to a company for the whole of an employee’s tenure. It considers the total of actions and interactions during that tenure, including activities that directly contribute to ROI as well as intangible contributions like pleasant behavior or attention to detail. It’s a concrete way to measure how useful an employee will be over time—and, by extension, how much investment the company should make in retaining and training them. 

Other Metrics

There are several recruiting metrics that can give recruiters a more nuanced perspective on their hiring strategy. These include:

• First-year attrition: This measures the number of new hires who quit during their first year as a ratio to your total turnover for that year.
• Applicants per opening: This measures the number of applicants who apply for each open job. A high number could indicate that the role is a popular one. However, it could also indicate a job description that’s too general.
• Sourcing channel effectiveness: This measures how many applications each of the company’s recruitment channels are bringing in, as well as the conversion rate for each.
• Candidate job satisfaction: This measures how satisfied the hired candidate is with their job. It’s a good way to evaluate whether the expectations set during the hiring process match what the candidate is actually experiencing.

Investing in tailored recruiting CRMs like Gem or Greenhouse helps to measure these metrics accurately and evaluate them in the broader context of how the end-to-end recruitment life cycle works. 

5 tactics to maximize your recruiting ROI 

Today, 87% of recruiters state that talent acquisition has become a more strategic function over the last year. Strategies to boost recruiting ROI typically focus on one or more of the following:

• Equipping the employee to move from fresh recruit to fully contributing member as soon as possible 
• Giving employees consistent opportunities to learn and grow 
• Ensuring that employee's tenure with the company is as long as possible 

The following best practices will help you do this. 

1. Cultivate an employee-first employer brand

To attract quality candidates more likely to accept offers and stick along for the ride,  you need to demonstrate that you’re an employer your prospective hires would want to work for. This calls for an employee-first approach to all your branding and outreach activities, from website content to social media.

For example, people tend to view generic statements about “life at work” with skepticism. Fortunately, there are alternatives—such as passing the mic directly to your employees for their input. CodePath’s employer partner Salesforce, for example, has accounts on all major social networks devoted to connecting students with open opportunities at the company. It includes user-generated content from current Salesforce interns, tips on the recruitment process, fun memes about life at Salesforce, and more.