Assessing Recruitment Conversion Rates Can Lead to Better Hires

Digging into your organization's recruitment conversion data will help you make better decisions, cut costs and improve efficiency.

It's important that talent acquisition leaders measure not only the overall hiring process, but also each step of that process, said Nora Burns, a Denver-based hiring consultant and founder of HR-Undercover, an advisory practice for which she has "mystery shopped" employers' hiring processes. "Ideally, this information is broken down by candidate source category, as well as geographic location, and potentially home office versus field office or other unique organizational traits."

Once you have the basic metrics in place, "then you can start comparing yourself to others and

identify problem areas, make adjustments and ultimately create a continuous improvement process that will get you closer to best-in-class [status]," said Ronen Shetelboim, director of demand generation and marketing operations for Jobvite, a full-cycle recruitment software company based in San Francisco.

[SHRM members-only how-to guide: Benchmarking Human Capital Metrics]

The main stages of the recruitment funnel, a common visualization of the hiring process, often include:

• The attraction stage, when potential applicants enter the funnel through a careers site, job advertisement or referral.
  
• The application stage, when candidates apply for a role.
  
• The screening stage, including initial phone screens and substantive interviews.
  
• The offer stage, when a candidate is chosen for a role.
  
• The offer acceptance stage, which finalizes the hiring process.
  

"Understanding the recruiting funnel through each step allows HR professionals to tweak and adjust the system bit by bit, and removes the temptation to overhaul a system which may be 90 percent effective and simply needs some tinkering," Burns said.  

Recruiting Benchmarks

Jobvite analyzed its database of 69 million job seekers and 15 million applications from 2016 to aggregate the most common metrics recruiters use to assess their organization's recruitment funnel.

The conversion rate of careers site visitors to applicants was 8.6 percent in 2016, down from 11 percent in 2015. Check your own attraction conversion rate—if it's greater than 8.6 percent, your employment brand and recruitment marketing efforts are strong.

"Attention spans are dwindling—capturing and keeping the attention of applicants means upping your game on careers sites," Burns said. "Some of the best careers sites I've visited bring the organization to life, not only with content that keeps the reader engaged in learning about the organization and position, but also informative videos that highlight the unique personality of the company, the diversity of the team and values that are in play." 

She added that when measuring the conversion rate of careers site visitors to applicants, it's important to consider the suitability of the applicant—a higher applicant to visitor ratio is not necessarily a good thing.

"The goal is the right applicant, for the right position, at the right time," she said.

Improving the company's attraction to application rate should also include working toward a better candidate experience. Shetelboim recommended that HR review how long it takes someone to apply for a position, whether or not applications can be shorter, and if application sites are mobile-optimized.

The average number of applications per open requisition dropped to 52 in 2016, down from 59 in 2015. However, the average number of applications had increased from 32 since 2010, correlating positively with the health of the economy.

"One key consideration for front-line positions is allowing people an alternate method of applying than via a lengthy online application," Burns said. "Remember economic considerations when determining the path of entry into your recruitment funnel, for example, retail locations with application kiosks, or even paper applications that can be scanned into the system, allowing for [applicants] without easy access to home computers to enter your pipeline."  

Jobvite found that the conversion rate from applications to interviews was 15 percent (or about 1 in 6 applicants) in 2016, up from 12 percent (or 1 in 8 applicants) the previous year.

"Our theory here is simple: The increase in application to interview rate is aligned with the

decrease in applicants per open position," Shetelboim said. "With a decreased candidate flow comes higher application to interview rates."

Twenty percent of interviews led to offers in 2016, up from 17 percent in 2015. If your interview-to-offer rate is greater than 20 percent, you're either being very selective about who to interview or don't have a lot of candidates to interview.

Burns advised organizations lacking candidates to interview to stop and assess the earlier steps of their recruitment funnel to figure out where the majority of candidates are falling out of the process. "Dependent on the results of the assessment, re-evaluate the basis for elimination. Have you built a false competency into the process?" she asked.

Effective phone or video screens are the solution to too many candidates being interviewed per offer, she said. "All too often organizations are so eager to start interviewing that they go straight to the in-person interview, or have a low-quality phone screen. Conducting more effective and conversational phone interviews would result in less wasted time, which helps both the organization and the candidate."

Finally, you've settled on the ideal person for the role, but do they want to work for you? 

The conversion rate for offers accepted was 83 percent in 2016, down from 89 percent the previous year. In the last eight years, this number stayed relatively steady at around 89 percent, Shetelboim said. "The 6 percent decrease we saw in 2016 simply means that candidates are more likely to reject job offers."