To truly build a high-performance sourcing department, analytics must be employed to determine how a sourcing team is performing and how to make improvements. According to analytics guru Bruce Schwan, the Senior Manager of Talent Acquisition Deployment and Analytics at Adventist Health System, “analytics is the ultimate determination on measurable performance and ways to improve that performance.” Without the application of analytics, a sourcing team will never become great.
Determining What Analytics to Report On
The following sourcing metrics are recommended to report on and measure, as they will indicate how sourcing is performing: ROI of sourcing tools, contact to interest ratio, hours to submission ratio, and direct-sourced submissions to interview ratio. Below, you will find more detailed information on each of these areas.
For additional SourceCon approved metrics, visit our benchmarking section.
ROI of Sourcing Tools
Sourcing tools can be quite expensive and making investments in the right tools can make or break a sourcing team. It is paramount that every sourcing department takes inventory of where their hires come from and the cost per hire of every direct source hire. This information is powerful as it will tell you where to invest or divest. Sometimes, the analytics can be surprising. For example, a source may generate hires but the cost per hire of that source may be more than an agency fee.
According to Schwan, the ROI on a great tool should be under $1,000 per hire. If it is an average tool, the ROI is under $2,000 per hire and anything over $3,000 per hire, is a poor performing tool that you should divest from. The best and most accurate way to collect the source of a sourced hire is to track source tags in a CRM. If a sourcing team does not have a CRM, then an SLA should be created that specifies that sourcers manually track the sources of their hires.
Collecting ROI is very simple; just calculate the cost of a tool divided by how many direct-sourced hires you have from that source. For example, if a tool costs $100,000 and you have 200 hires then your ROI equation would look like this: 100,000 ÷ 200 = $500 cost per hire.
Contact to Interest Ratio
This metric measures how many contacts it takes to get a candidate interested in the role you are sourcing for. This important stat will show how successful a sourcer’s solicitation communication is with the candidates through calls, emails, inmails, and texts. The industry average, according to Schwan, for contact to interest ratio is 25%. So if a sourcer contacts 100 candidates, 25 should be interested in the role. One way to improve this statistic is for sourcers to enhance the method and volume of their communication with potential candidates.
Hours to Submission Ratio
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This metric calculates how many hours it takes for a sourcer to get a submission. This metric is important, as it lets a sourcer know if they are working too many hours to get a submission. This stat changes from industry to industry, but the industry average to get a submission for hard to fill roles is eight hours, according to leading recruitment analytical expert David Szary of Lean Human Capital.
For this stat, the sourcer calculates how many submissions they get in the core sourcing hours worked over a month’s period. For example, if a sourcer worked 160 hours and only 100 of those hours were spent sourcing, then the sourcer would only input 100 hours into the equation. The core sourcing hours worked (100) would then be divided by the sourcer’s submissions for that month. The final equation would look like: 100 core sourcing hours worked 25 monthly submissions = 4 hours worked to get a submission.
Direct Sourced Submissions to Interview Ratio
This metric determines how many direct-sourced submitted candidates it takes to get an interview. The metric can give an indication of the quality of the submission. The industry average according to Schwan is 75%. If a sourcer fails to get at least 75% of submitted candidates to the interview stage; it is recommended that a sourcer look at the quality of the submissions. Some suggestions to help improve this statistic include doing more in depth intakes with hiring managers to better understand their needs and developing stronger relationships with hiring managers and recruiters in order to sell them on candidates.
This is part 2 in the series on how to build a high-performance sourcing department. Please see the link to see part 1. The next installment in this series will focus on Training in Building a High-Performance Sourcing Department.