Attracting the right employees is essential to the success of every life science organisation, yours included. However, putting together a recruitment strategy that achieves best results can be bothersome and time-consuming because the processes are not always properly understood and aligned.
Hiring metrics can make talent attraction and retention easier by enabling hiring managers to evaluate the company’s recruitment strategy and resources accordingly. The most commonly used metrics emphasise process efficiency and cost, but the impact and value of new hires are just as important. So what hiring metrics should you focus on to gauge the success of your hiring and onboarding process?
Below is an overview of 9 metrics to focus on in your life science recruitment strategy. They should be used to improve and complement the recruitment process, but make sure that ‘paralysis by analysis’ does not set foot. Focusing too many resources in analytics can detract from the task at hand: finding the very best people to ensure the organisation/function/department meets and exceeds its objectives.
Time-to-hire is the number of days that pass between the date a candidate is approached and the day they accept the job offer. This metric measures how long it takes for an applicant to progress through the hiring process after their application is received or they are introduced to the company.
In other words, how much time passes between the advertising of the job vacancy and the successful candidate’s start date? Organisations with a solid talent management system typically have faster hiring times, although there are times when the market lacks a sufficient talent pool.
The average time-to-hire is 42 days. Think about the opportunity that this represents. With the proper recruitment strategy, you could potentially hire a top candidate in less than 14 days, while other organisations are still trying to make up their minds. Not only are you getting the right people on board faster, which reduces cost-of-hire, but the offer acceptance rate will go up, as prime candidates will have less time to be interviewed for other roles.
2. Sourcing channel
One of the most popular hiring metrics is determining which sources attract new hires to your company. Was it a certain job board? The company’s social media platforms? It’s career page? An executive search agency? Smart employers expose themselves to as wide a talent pool as possible by using multiple resources. This may include:
- Job boards (both general and industry-specific).
- Company-controlled outlets like social media, a LinkedIn ad, and a careers page on the corporate website.
- Reaching out to potential candidates directly.
Every time you post a job vacancy, collect the following information:
- How many applicants responded to each source.
- How many of these applicants were qualified for the position.
- Which source drew the most shortlisted applicants.
- How the successful applicant initially heard about the vacancy.
Enter these metrics into a spreadsheet to get an to see how effective each channel is at attracting quality, qualified talent. Your organisation will save time and capital because ineffective channels can be shut down and their resources allocated to platforms that yield the best results.
Candidate retention rate is one of the strongest hiring metrics for measuring hiring success. Candidates who leave before their one-year employment anniversary rarely achieve a productivity level that justifies the investment in recruiting them. The result can be a loss of tens of thousands of pounds from your budget for senior-level hires.
There are two forms of first-year retention:
- Managed, meaning that the employer terminates the contract. This usually happens when the employee is not a good fit or performs poorly during their first year.
- Unmanaged, meaning that the employee quits This could be due to a disparity between the job description and the reality or unrealistic expectations on both sides.
The formula for calculating retention is:
the company during a given time period / Number of new hires at the start of the time period x 100.
The cost of losing a new hire can be as high as four times their yearly salary, a significant sum of money for senior hires. To get an accurate idea of how large the problem is, take a cross-sectioned perspective. Start by determining the turnover rate for a specific role in your company. Then compare it to the turnover rate across individual departments and pay grades.
If you analyse this hiring metric every three to six months, you can spot and address trends that could be damaging your budget as well as the company’s ability to retain the right talent.
4. Open vacancies vs positions filled
It’s important to run a comparison between the number of vacancies and the number of positions that have recently been filled. A good talent acquisition process means that the vacancies to filled positions ratio will be low. If it’s high, company productivity is affected because the duties specified in the open positions have to be assumed by someone else in the interim. Although it may take longer to fill senior and more specialised roles, entry and mid-level positions should not remain vacant for weeks and even months. This ratio can be tracked quarterly or monthly. Be sure to run comparisons across functions and pay grades to see which areas are especially problematic, with the goal of minimising open vacancies.
5. Recruitment funnel effectiveness
Recruitment is essentially a funnel that starts with candidate sourcing and ends with a signed employment contract. By examining the effectiveness of each step, you can uncover some invaluable hiring metrics that give you insights into the efficiency of your company’s recruiting funnel. Here are some real-world recruitment funnel examples:
- 12:1 (600 people apply, 50 CVs are screened)
- 5:1 (Out of 50 screened CVs, 10 are sent to your company’s hiring manager)
- 2:1 (10 CV submissions result in 5 acceptances by the hiring manager)
- 5:3: (5 first interviews result in 3 second and final interviews)
- 3:1: (3 final interviews result in one job offer)
- 1:1 (1 job offer to 1 candidate)
Thanks to advances in hiring technologies, the first few steps can be automated. Specially designed software screens CVs for suitability and select those that fit the company’s hiring goals. If too much time is being spent in any pre-hiring step of the funnel, investigate software options that may be streamline this time-intensive task.
6. Quality of Hire
Quality of hire is a good indication of a candidate’s first-year performance. Those with a high-performance ranking represent hiring success while low-performance rankings signify the opposite. Remember that a single bad hire can cost your company tens of thousands of pounds in both direct (salary, benefits etc) and indirect costs (HR/Talent Aquisition fees, training, etc).
Also known as First Year Quality, quality of hire refers to the percentage of applicants hired plus the percentage of those who remain with the company, divided by two.
This hiring metric measures the effectiveness of your company’s hiring managers and HR team (as well as any appointed executive search firms) in sourcing quality talent, and can be applied across multiple functions and pay grades. Since the goal is to improve quality of hire, this metric can be used to eliminate recruitment sources that submit low-quality talent.
7. Offer Acceptance rate
Offer acceptance rate is a simple calculation that compares the number of applicants who accepted a job offer with those who received a job offer but rejected it.
For example, if you offer a job to 10 candidates and 4 of them accept, your offer acceptance rate is 40%. A low rate could suggest that candidates believe the salary and benefits to be insufficient. If you notice that this problem arises frequently with certain positions, consider discussing pay rate earlier in the recruitment funnel to limit the financial impact of a declined job offer. If the situation extends across different functions and pay grades, there may be something going on during the recruitment process that makes candidates uncomfortable with your organisation.
Offer acceptance rates of 90% and up are indicative of a good match between a company’s requirements and a selected applicant’s expectations. You can improve your company’s acceptance rate by reviewing salary data to ensure that your offers are competitive and screening candidates to ensure that their expectations match what you offer.
A diverse workforce is the sign of an equal opportunity employer and can make your life science organisation appealing to job candidates from graduates through to executives.
But not everyone gets it right. In May 2014, Google admitted that it had a problem when numbers showed that over 90% of its employees were white or Asian and only 30% were female.
Your company should review its ethnicity and gender ratios often, in order to detect any evolving inequalities or imbalances before they become a serious problem.
How to implement your metrics
With company stability and prosperity at stake, more organisations are paying attention to their hiring metrics and demonstrate healthy ROI. By adopting a data-based approach to your life science recruitment strategy, you can refine the recruitment process, hire better candidates more quickly, and retain them. Available tools for this process include:
- Excel or Google spreadsheets
Once the metrics being tracked are entered into the system, run reports monthly or quarterly and update after every candidate placement.
Hiring metrics are part of an actionable improvement process designed to help your organisation benefit from the best and brightest talent. When you need your recruiting funnel to support candidate engagement and retention, careful analysis of your metrics can allow you to identify and focus on the ones that are most important to hiring success..
For more hiring advice tailored to hiring managers in the life science industry…
- Read 7 Employee Well-Being Hacks That Boost Productivity.
- View our executive search solutions to see how we can help you grow your team and your business.
* Fraser Dove International is a specialist executive search firm operating exclusively in the Life Science industry. Passionate about people, we take pride in helping exceptional life science organisations source the talent they need to design, manufacture and distribute life-changing drugs, treatments and devices which transform and save patient lives.