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You’ve found your ideal candidate and can’t wait for them to accept your job offer. It’d be great if everyone agreed to join your team, but that doesn’t always happen. Keeping track of your offers accepted is simple and can help companies assess their ability to entice the best candidates. It shows how effective a company’s talent acquisition strategy is. What is the definition of offer acceptance rate?
Here’s the formula to calculate offer acceptance rate: In this formula, you should only include final official offers to external candidates. Offers made informally or in different stages of the process don’t usually count towards this metric. This metric has some flexibility. It’s usually calculated annually but you can also calculate it more frequently if, for example, you’ve had a busy recruiting month. Also, you could calculate job acceptance rate per recruiter, hiring manager or department. As with every recruiting metric, numbers can be suspect. A 40 percent average offer acceptance rate shows that something is definitely wrong with your talent acquisition strategies. Hopefully, not many companies suffer from this affliction. Even an acceptance rate close to 100 percent could look odd, unless you’re Google or another prestigious company. Generally, companies aim high with this recruiting metric. An offer acceptance rate above 90 percent can indicate that there’s a good match between a company’s requirements and selected candidates’ expectations. This high offer to acceptance ratio could be the result of good communication, reasonable and competitive offers and good candidate experience. Speed up executive sign-off and get candidate signatures faster with Workable offer letters, templates, approval workflows and built-in e-signatures. Try our offer letters How to achieve high offer acceptance ratesA good way to tackle low acceptance rates (or preserve high ones) is to understand why candidates turned you down. Here are a few examples:
Some reasons, like personal restrictions, are outside your control. Other reasons, like company culture and leadership, aren’t just one person’s responsibility and can be difficult to fix. But, for other reasons, there are remedies. Generally, you need to answer four questions: 1. Are my job offers competitive?Benchmarking can help with this. By knowing your competition and their job offer acceptance rates, you can draw conclusions about whether they make better offers than you (and what these offers are). Along with competitive analysis, you can also find help in aggregated salary data from sources like Glassdoor and Payscale. (Our salary profiles also provide detailed information about salary ranges for various HR positions.) 2. Do I screen candidates correctly?To answer this question, you may have to rethink your entire screening process. It’s important not to spend time interviewing or extending offers to candidates who aren’t really interested or available. Adding effective screening calls to your process can help. Also, it’d be a good idea to ask interview questions about how much candidates know about your company and the position they’re interviewing for. Their answers can tell you whether they’re serious about your job. You can also encourage candidates to share any concerns or questions during interviews. What they share can indicate what matters to them and whether they’re really considering working at your company. 3. Am I communicating with candidates?Honesty will go a long way. Candidates want to know the good elements of a job offer. This makes sense; especially if candidates are looking for reasons to leave their current jobs. But, a job offer letter is often not enough to communicate important details. Recruiters and hiring managers can tell candidates what they need to know during interviews, when they’ll explain company culture, career opportunities and their company’s expectations. Communicating any negative points is also important. Candidates need to know any drawbacks to make an informed choice. If, for example, you expect people to work extensive overtime, it’s best to tell them ahead of time. If you accidentally misrepresent things, or are unclear, candidates will be less inclined to accept your job offer. 4. Do I treat candidates well?Treating candidates well is very important. It’s key to building your employer brand. Positive candidate experience is also the first step towards persuading the best candidates to accept your job offer. If there are unnecessary delays during the process or if interviewers make mistakes, candidates will be less likely to accept an offer. Or worse, they might accept an offer because they need the job, and then they’ll likely turn into disgruntled employees. Use complementary recruiting metricsHere are some metrics that can be used alongside offer acceptance rates:
Hiring managers should strive to maintain an interview-to-offer ratio of 3:1 or better. The average is about 4, but this can vary depending on the position and company culture. How do you calculate the acceptance rate?The easiest way to calculate your offer acceptance rate is by dividing the number of accepted job offers by all offered during that same time period. What time of day are job offers usually?The typical time for making job offers is the afternoon or close to the end of the day.
Updated February 2022 Recruiting metrics are an essential part of data-driven hiring and recruitment. However, if you would keep track of every recruiting metric you could find on the web, you’d have no time left to do actual recruiting! In this article, we’ll list the 21 most important ones for you. Contents What are recruiting metrics?Recruiting metrics are measurements used to track hiring success and optimize the process of hiring candidates for an organization. When used correctly, these metrics help evaluate the recruiting process and whether the company is hiring the right people. Additionally, they provide you with data that will allow you to make improvements to your recruitment process. They are an integral part of a data-driven recruitment funnel, which you can explore in-depth in our Talent Acquisition Certificate Program. Making the right recruiting decisions is important. This image (from Greenhouse) shows the employee’s lifetime value as the sum of all the HR decisions made about that employee. Using this image, we can see that hiring someone who is more suited for the job has the potential to create an enormous return on investment (ROI). This is why recruiting the right people is so important. Whether you’re starting off by measuring recruitment data or fine-tuning your recruiting metrics, this list will give you a great overview. Now that we’ve set the stage, let’s look at the 21 most relevant recruiting metrics. This refers to the number of calendar days it takes to find and hire a new candidate, often measured by the number of days between approving a job requisition and the candidate accepting your offer. Several factors can influence time to fill, such as supply and demand ratios for specific jobs as well as the speed at which the recruitment department operates. It’s a great metric for business planning and offers a realistic view for the manager to assess the time it will take to attract and hire a replacement for a departing employee. In the learning bite below, we explain the Time to Fill metric in even more detail.
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Talent Acquisition 2. Time to hireTime to hire represents the number of days between the moment a candidate applies or is approached and the moment the candidate accepts the job. In other words, it measures the time it takes for someone to move through the hiring process once they’ve applied. Time to hire thus provides a solid indication of how the recruitment team is performing. This metric is also called ‘Time to Accept’. A shorter time to hire often enables you to hire better candidates, preventing the best candidates from being snatched up by a company that does have a short time to hire. It also impacts your candidate experience as nobody likes a recruiting process that takes a long time. You’ll be able to see where the bottlenecks are in your hiring process and you can work to remove them. For example, the data might show you that there is a long time between resume screening and the phone interview. This can be an issue of scheduling, which recruiting teams can solve by implementing automated scheduling programs. This metric is heavily influenced by your recruitment funnel. If you are hiring for jobs that have a relatively straight-forward recruitment process of one interview, the time to hire will be shorter than when you have a phone intake, assessment day, and three rounds of interviews. For that reason, you should be a little bit careful when interpreting the time to hire benchmark we included below. Tracking the sources which attract new hires to your organization is one of the most popular recruiting metrics. This metric also helps to keep track of the effectiveness of different recruiting channels. A few examples are job boards, the company’s career page, social media, and sourcing agencies. Having a clear understanding of which channel works and which doesn’t, you’ll be able to double down on the channels that are bringing you the most ROI and decrease spending on those that aren’t. For example, if you see that most of your successful hires are not coming from LinkedIn but your internal job board, then that’s the channel that you want to be focusing on. First-year attrition or first-year/new hire turnover is a key recruiting metric and also indicates hiring success. Candidates who leave in their first year of work fail to become fully productive and usually cost a lot of money. First-year attrition can be managed and unmanaged. Managed attrition means that the contract is terminated by the employer. Unmanaged attrition means that they leave on their own accord (this is also referred to as voluntary turnover). The former is often an indicator of bad first-year performance or bad fit with the team.
Planning out your HR career path is key to achieving your professional & personal goals. Map your own HR Career path with our new tool. Get StartedThe second is often an indicator of unrealistic expectations which cause the candidate to quit. This could be due to a mismatch between the job description and the actual job, or the job and/or company has been oversold by the recruiter. This metric can also be turned around as ‘candidate retention rate’. 5. Quality of hireQuality of hire, often measured by someone’s performance rating, gives an indicator of first-year performance of a candidate. Candidates who receive high-performance ratings are indicative of hiring success while the opposite holds true for candidates with low-performance ratings. Low first-year performance ratings are indicative of bad hires. A single bad hire can cost a company tens of thousands of dollars in both direct and indirect costs. To read more about how to assess these costs, check out our article on HR costing. When combined with the channel through which the candidate was sourced, you can measure sourcing channel quality (see recruiting metric no. 17). Quality of hire is one of the most common, but also most complex recruiting metrics, as you can measure it in multiple ways. You can get an overview in our detailed guide. Quality of hire is the input for the Success Ratio. The success ratio divides the number of hires who perform well by the total number of candidates hired. A high success ratio means that most of the hired candidates perform well, however a low ratio means that you need to fine-tune your selection process! The success ratio is used as input for recruitment utility analysis. This analysis enables you to calculate an ROI for different selection instruments. 6. Hiring Manager satisfactionIn line with quality of hire, hiring manager satisfaction is another recruiting metric that is indicative of a successful recruiting process. When the hiring manager is satisfied with the new employees in their team, the candidate is likely to perform well and fit well in the team. In other words, the candidate is more likely to be a successful hire. Candidate job satisfaction is an excellent way to track whether the expectations set during the recruiting procedure match reality. A low candidate job satisfaction highlights mismanagement of expectations or incomplete job descriptions. A low score can be better managed by providing a realistic job preview. This helps to present both the positive and negative aspects of the job to potential candidates, thus creating a more realistic view. 8. Applicants per openingApplicants per job opening or applicants per hire gauges the job’s popularity. A large number of applicants could indicate a high demand for jobs in that particular area or a job description that’s too broad. The number of applicants per opening is not necessarily an indicator of the number of qualified candidates. By narrowing the job description and including a number of ‘hard’ criteria, the number of applicants can be reduced without reducing the number of suitable candidates. You can also focus more on sourcing from channels that have brought qualified candidates in the past. 9. Selection ratioThe selection ratio refers to the number of hired candidates compared to the total number of candidates. This ratio is also called the Submittals to Hire Ratio. The selection ratio is very similar to the number of applicants per opening. When there’s a high number of candidates, the ratio approaches 0. The selection ratio provides information such as the value of different assessment and recruitment tools and can be used to estimate the utility of a given selection and recruitment system. To calculate the utility of these tools, take a look at this article by Sturman (2003) on the ROI of selection tools. 10. Cost per hireThe cost per hire recruitment metric is the total cost invested in hiring divided by the number of hires. Cost per hire consists of multiple cost structures which can be divided by internal and external cost. Internal costs include compliance cost, administrative costs, training & development, and hiring manager costs. External costs would be background checks, sourcing expenses, travel expenses, or marketing costs. By quantifying all of them you can calculate the total recruitment cost. When we talk about recruiting metrics, candidate experience shouldn’t be overlooked. Candidate experience is the way that job seekers perceive an employer’s recruitment and onboarding process, and is often measured using a candidate experience survey. This survey uses Net Promoter Score and helps to identify key components of the experience that can be improved. Keep in mind that you can measure candidate experience in different stages of the recruitment process. And don’t rule out unsuccessful candidates. You should measure them along with the ones you’ve ended up hiring to get a more accurate picture of the state of your candidate experience. 12. Offer acceptance rateThe offer acceptance rate compares the number of candidates who successfully accepted a job offer with the number of candidates who received an offer. A low rate is indicative of potential compensation problems. When these problems occur often for certain functions, the pay can be discussed earlier in the recruiting process in an effort to minimize the impact of a refused job offer. An example is by listing pay in the job opening or by asking for the candidate’s salary expectations. The % of open positions compared to the total number of positions can be applied to specific departments or to the entire organization even. A high percentage of open positions in a specific department can mean those positions are in high demand (for example, due to fast growth). It can also mean that there’s currently a low supply of workers in the market for those positions. This metric can offer you insights into the current trends and changes happening in the labor market, which can be valuable when you’re building your talent acquisition strategy. This is a talent acquisition metric that shows how many candidates who started a job application finished it. You can also measure the other way around as “Applicant drop-off rate”, ie. the share of candidates who did not finish the application. Application completion rate is especially interesting for organizations with elaborate online recruiting systems. Many large corporate firms require candidates to manually input their entire CV in their systems before they can apply for a job. Drop-off in this process is indicative of problems, e.g. web browser incompatibility with the application system, or a non-user-friendly interface. A simple way to check for any issues that might happen during your application process is to test it out yourself. This will help you understand where your applicants might struggle with and how you can improve it. This recruiting metric fits well with our number 15. 15. Recruitment funnel effectivenessRecruitment process can be seen as a funnel which begins with sourcing and ends with a signed contract. By measuring the effectiveness of all the different steps in the funnel, you can specify a yield ratio per step.
The recruiting funnel has changed a lot over the last few years due to advances in HR tech. The first few steps are often atomized: software helps to automatically screen CVs and select the best fits. Some companies opt to go for video interviews to change submittals and even first interviews. In other words: expect this funnel to change over time. 16. Sourcing channel effectivenessSourcing channel effectiveness helps measure the number of potential candidates each of your recruitment channels are bringing in, and the conversion rate. By comparing the percentage of applications with the percentage of impressions of the job postings, you can quickly judge the effectiveness of different channels. A simple way to do this is by using Google Analytics to track where the people who viewed the job opening on your website actually came from. By setting ‘goals’, like the successful completion of an application form, this conversion rate can be made much more accurate. Maybe the people coming from LinkedIn and Twitter don’t apply, but the people coming in from Facebook do! 17. Sourcing channel costYou can also calculate the cost efficiency of your different sourcing channels by including ad spend, the amount of money spent on advertisement, on those platforms. By dividing the ad spend by the number of visitors who successfully applied through the job opening you measure the sourcing channel cost per hire. The cost of getting to Optimum Productivity Level (OPL) is the total cost involved in getting someone up to speed. This includes things like onboarding cost, training cost, the cost of supervisors and co-workers involved in on-the-job training, and more. Usually, a percentage of the employee’s salary is also included in this calculation, until they hit 100% OPL. On top of this metric, there is also the “logistical” cost of replacing an employee. These are also called the cost per hire. Research by Oxford Economics (2014) lists OPL cost in retail at £ 16,240 (approx. $ 20,200), in media £ 21,633 ($ 27,000), and in legal £ 35,307 ($ 44,000). 19. Time to productivityTime to productivity, or time to Optimum Productivity Level, measures how long it takes to get people up to speed and productive. It is the time between the first day of hiring and the point where the employee fully contributes to the organization. According to the same research by Oxford Economics, the average time a new employee takes to reach their OPL is 28 weeks. Employees from within the same industry usually take less, while employees from outside the industry take significant longer (32 weeks). University graduates (40 weeks), school leavers (53 weeks) and unemployed (52 weeks) take the longest time. Adverse impact is the negative effect biased and unfair employment practices have on members of protected groups. These practices can include hiring, learning and development, promotion, transfer, and performance appraisals. Tracking this metric is the key to ensure that your HR practices and activities can contribute to building a more diverse and inclusive workforce, that you have a fair hiring process, and that you comply with (local) legislation. The four-fifths rule is a useful tool to determine whether or not there is adverse impact in your selection process and other employment practices. According to this metric, the selection rate of protected groups — which include race, sex, age (40 and over), religion, disability status, and veteran status — should be 80% or more of the selection rate of non-protected groups to avoid adverse impact against the former. For example, if 7% of female job candidates and 19% of male candidates are moved to the interview stage, you can divide 7 by 19 to get the impact ratio of 37%. This is less than 80%, which means that female candidates are adversely impacted in this case. 21. Recruiter performance metricsJust like how it’s important to track the performance of your recruitment channels or process, you also need to measure how well your recruiters are doing. You can do this through various metrics, most of them focusing on the channel that your recruiters use to communicate with candidates, which is email. For example, you can look at email open rate, which is the percentage of sent emails that candidates opened. The response rate is also a good metric to look at, which measures the percentage of emails that candidates reply to. Another metric is the conversion rate, which is the percentage of emails that lead to interviews. These 21 recruiting metrics form the basis of recruitment analytics. And how do you know what the results mean? You can set internal recruiting metrics benchmarks and track your progress, and/or compare your results to industry benchmarks. If you want to read more about different organizational metrics, check out our articles on the 21 employee performance metrics or 14 HR metrics. To learn more about this specific topic, we recommend our Talent Acquisition Certificate Program, which has a full course on Recruitment Metrics & Analytics! |
What recruitment selection metric focuses on the number of applicants who accepted the job divided by the number who were offered the job?
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