When employers are faced with an open requisition, they have a decision to make – is this job business-critical, one that needs to be filled fast, and one that might need some extra recruiting bandwidth to fill?
In cases where one or more of the answers to these questions are yes – you might send the job to search.
There’s one problem – direct hire recruiting is a pricey decision.
Recruiting and talent acquisition leaders need to be able to prove that it’s is the best decision, and provides a return on investment (ROI) that’s worth it for their organization.
Calculating the ROI of direct hire recruiting efforts is the best way to make sure you’re not throwing money away on agency relationships that aren’t worth it, and to show leadership you’re making the best hiring decisions.
So you’re spending a lot, probably millions of dollars sending jobs to search. How do you know the exact positive impact that this number has had on your organization?
While there is no on-size-fits-all algorithm (yet – see the latest on people analytics) to calculate this, there are many hard numbers that you can use to get a better idea of whether or not you’re seeing a real return on investment from your agency use.
How many candidates were submitted, and how many did you interview?
This is a pretty simple ratio to calculate – the number of candidates submitted by an agency versus the number you actually found interesting enough to interview.
The higher the interview success rate, the better the agency in question is hitting the mark.
If you’re calculating your interview success rate for all of your agencies, you can compare the interview success rate to see how it stacks up to other sourcing channels like social media, employee referrals and job boards.
How long did it take you to get to that first interview?
Time to interview is one of the most crucial recruiting metrics out there. Moving the process along as quickly as possible is key in keeping candidates engaged throughout the hiring process.
Calculating this metric could be a reflection of a few things:
- The quality of the agency – the time to interview could be longer because the agency isn’t doing a good job gaining the availability of the candidate and communicating between both parties.
- The quality of the candidate – candidates may be flaking on interviews, and you may be receiving resumes of candidates who aren’t really interested in the position you’re offering.
- The quality of your internal processes – you might be taking too long to review and phone screen your candidates internally, causing them to dip off the radar.
Which job categories are you sending to search the most often?
Take stock of all of the open requisitions you’ve sent to search in the past year to determine any trends you might have.
Are you sending jobs to search for a certain industry, job title, or experience level more often than others?
Job categories that are being sent to search a higher percentage of the time than others will provide you with some insight – you could be sending these jobs to search more often because they’re harder jobs to fill, or maybe you’ve stumbled upon an agency gem for a particular position or industry that always delivers and places quality candidates.
Through which agencies are you spending the most?
This is probably the trickiest metric to collect and calculate if you’re not already using some sort of tracking software to do so.
Collect all of the information you need to determine exactly how much you’ve spent on direct hire agencies this year.
If you need help – check out our Recruiting Leader Data Toolkit (which exists to help you do just that).