Hiring is expensive, but just how expensive is it? Knowing exactly how much your hiring efforts cost isn’t just important for budgeting purposes – it also provides a benchmark you can use to work towards lowering your overall costs. One way to evaluate hiring expenses in a more digestible way is by breaking it out into the cost per hire – the average amount of money spent to make a single hire.
Every year, a new pool of potential stand-out employees graduates from colleges across the country, and like many other businesses, your company is probably looking to hire a few of them.
All companies, regardless of size, want to recruit top-notch candidates for their open positions. But it can be tough to contend with larger companies who enjoy a sizable hiring advantage over small businesses and startups. After all, bigger businesses have the resources to easily offer hefty salaries, career advancement opportunities, enticing benefits and perks, and beautiful, centrally-located offices.
There are a ton of different metrics you can use to track hiring success. We’ve written about a number of them in the past, and many of them are very clearly tied to hiring, such as time to hire and employee turnover. But hiring decisions have far reaching effects into just about every facet of an organization because they directly impact how well your employees ultimately perform. As a result, when evaluating the success of the hiring process, it’s important to take into account some metrics that aren’t typically thought of as traditional “hiring metrics.” And when it comes to evaluating how successful your company is at hiring salespeople in particular, sales revenue is an incredibly powerful metric to use as a proxy for hiring success.
Culture fit is one of those terms that gets tossed around a lot as a key factor to consider when hiring the best employees for your team. The problem with “culture fit,” however, is that it’s not entirely clear what the term means. Work cultures are incredibly complex – there’s no easy way to measure what type of work culture your company has, just as there’s no easy way to measure how a particular person might fit into that culture based on their personality.
Graduation season is upon us, welcoming the latest batch of college graduates to the workforce. The job search process is notoriously difficult for recent grads because they’re often competing against more seasoned and experienced applicants. Similarly, the hiring process can be a challenge for employers who are interested in hiring for entry level roles because it can be hard to identify which applicants have the most potential, especially when these applicants don’t have much experience on their resumes.
Hiring can be incredibly time-consuming. Writing a great job description, reading through applications, administering assessments, scheduling and conducting multiple rounds of interviews, calling references – these activities quickly add up. The excess time spent on hiring translates directly into greater costs. And not just hiring costs but also the costs associated with leaving a vacant position open for an extended period of time, especially if it’s a key position in your organization.
Over the last few years, companies are struggling more and more to find well-qualified job applicants to fill their open positions. The challenge stems partly from the fact that the US unemployment rate is at a relative low, leading to greater competition over talent. And this trend shows no signs of slowing down – a recent survey from Indeed found that 61% of employers expected to hire more people in 2018 than the previous year.
Employee performance is one of the most important metrics for success, especially when evaluating the effectiveness of your hiring process. With every hire you make, your goal is to select the candidate who is the most likely to succeed in their role. In order to evaluate how well your hiring process is achieving that goal, it’s important to have a process in place to measure employee performance once they get hired. These metrics can then inform the tactics you use to improve that metric.
A company’s hiring success can be measured using a wide variety of metrics. In an earlier blog post, we outlined some of the key hiring metrics that employers should track in order to stay on top of the success of their hiring initiatives. Many of these hiring metrics are obvious, like time-to-hire and employee turnover. But another key metric that we’ve found to be a direct reflection of the hiring process is the rate at which new employees successfully complete training.