A company’s offer acceptance rate is a fairly simple metric – it essentially provides an indication of how likely a candidate is to accept an employment offer. In a sense, it can be a proxy for the success of your recruitment process. Many companies don’t necessarily track this metric rigorously, mostly because you can often get an intuitive sense of whether or not your organization’s offer acceptance ratio is good or bad. However, if you start to feel that the offer acceptance rate is on the low side, that is the perfect time to start tracking it so that when you do make positive changes to your hiring process, you can quantitatively measure how the offer acceptance rate improves over time.
How to Measure Offer Acceptance Rates
The calculation for an offer acceptance rate is straightforward. Just take the number of accepted job offers divided by the total number of job offers given within a period of time.
Taken as a percentage, this rate represents the percent chance that someone will accept a job offer from your company. For example, if you extend 10 offers within a given year, and 7 candidates accept those offers, your offer acceptance rate would equal 70%. Typically, the higher this number is, the better.
How to Improve Offer Acceptance Rates
Offer acceptance rates are affected by a wide variety of factors, so when it comes to improving them, there are a number of potential places to start:
1. Compensation Packages
One common reason a candidate might turn down an employment offer from your company is if they received a better offer from another company. From a candidate’s perspective, there are a lot of elements that might make one offer better than another. Some of the obvious ones include the salary itself, health benefits, and vacation time, but other elements, like the management team or the physical location of the office, may also be a deciding factor. Some of these factors are easy to alter in order to win over a particular candidate, but others are less so. However, if your offer acceptance rate is on the low side, you may want to start reevaluating whether your compensation packages align with industry standards or if they are a high enough to win over the top candidates.
2. Time to Hire
A candidate might also opt to accept an offer from a different company if that company simply makes an offer first. Candidates who are unemployed or are eager to jump into a new role as soon as possible are particularly sensitive to an overly lengthy hiring process. Consider tightening up your general hiring process so that when you find the right candidate, your organization can move quickly enough to make that offer first. One way to become more efficient is by adopting technology that takes some of the manual elements out of the hiring process, enabling you to get to the decision stage faster.
3. Employer Branding
It’s a candidate’s market, which is why employer branding is more important than ever. Employer branding is responsible for the candidate’s perception of your organization as a place to work, and unfortunately, a great compensation package may not always make up for a negative employer brand. There are a lot of ways to improve your employer brand over time, from improving your candidate experience to cultivating a more positive work environment. Gradually incorporating these strategies can go a long way to making your job offers more enticing to incoming candidates.
4. Identifying the Right “Fit”
Another reason your candidates might be turning down offers is that the role isn’t really a great fit for them. If you are routinely offering jobs to candidates who aren’t right for the job, the problem may come down to the tactics you’re using to filter and assess candidates. There are a variety of ways to improve this part of the hiring process. You could start by revisiting your interview tactics to see where the disconnect is. Adopting structured interviews, for example, is a great way to compare candidates more objectively, helping you reduce some of the unavoidable bias that comes into any hiring decision. Pre-employment tests, such as personality and cognitive aptitude tests, are another powerful way to identify job fit before you hire because they are highly predictive of a candidate’s ability to succeed in a particular role. Incorporating these assessments into the hiring process helps you make more informed hiring decisions with the knowledge that the candidate has the necessary skills and abilities for the job at hand.