A few weeks ago, a recruiter new to the business asked what a great interview to hire ratio would be.
The interview to hire ratio is a staffing metric that reports the number of interviews required to make one placement. This employment metric can be a useful indicator of process quality, a recruiter’s understanding of job briefs and candidate quality. This is a common staffing metric that should not be overlooked for all recruitment companies. In my experience as a human resources consultant, I worked with 100’s of staffing companies that seemed to focus on the hire aspect more then the interview. In my day-to-day dealings with companies, the vendors who tracked the interview-to-hire ratio seemed to place more candidates. Not only did they provide good candidates, but also they focused on how they can improve and build a stronger relationship with the client. So do you track your interview-to-hire ratio? If so, how can you benchmark to get a sense of relativity of your performance? How can you improve your staffing processes to improve your efficiency?
When it comes to benchmarks I think a lot depends on your particular employment niche. That is the type of job that you are hiring for, the level job and so forth. For example, the interview to hire ratio in a recruitment agency placing entry-level jobs would drastically differ from an executive search company. And just the same, the I/H ratio would differ in depending on the job industry such as IT vs. Clerical. Having said this, I have found that a good rule of thumb when looking at the I/H ratio is the rule of 3 or 4. Many recruiters that I have spoken to, validate this rule. The rule of 3 or 4 means basically that you would need to interview 3 to 4 applicants to make one placement. If your I/H ratio is greater than 4 to 1, then I think you may want to consider investigating what is driving this number. Drivers could include overly picky and indecisive hiring managers, hiring managers not understanding the job specs and so forth. Your staffing metrics can even be impacted your client’s policies. For example, if your client limits your candidate submissions, this can drastically impact your employment metrics. In fact, the cause for a high I/H ratio can be caused at any point along the hiring process. It is easy to lose sight of the importance of internal relativity when we focus on external benchmarks. So when it comes to your I/H ratio, ask yourself what is reasonable, excellent and awesome for your staffing company. Again, if you just hired a bunch of junior recruiters it may be expected that they don’t hit home runs with every swing.
Okay, so you will try and be less obsessed with “keeping up with the Jone’s”. You will focus on staffing metrics that makes sense for you. So what are some of the things you can do to improve your staffing efficiency, productivity and quality as measured by your I/H ratio? Well there are many and perhaps we can cover in subsequent posts, but in my experience the number one culprit for a high I/H ratio:
Understanding The Job Specs.
I mentioned above that a lack of understanding of the job specs could cause a high I/H ratio. How often have you sent what you think are star candidates to your client and the hiring manger turns them all down. When this happens, often the reason can be traced back to a lack of understanding of the original job requirements or candidate profiles. Hey, we have all misunderstood the hiring manager’s requirements at least once in our careers so don’t beat yourself up over this. This is because often the employers themselves don’t know what the job requires and what kind of candidate they are looking for. Especially in jobs with low turnover (union environment, senior jobs, etc). This is where some quality time in the consultative process with the hiring manager pays big dividends. Learn how to ask the right questions and simply listen. Don’t be afraid to use silence to prompt a response.
Discipline in Candidate Screening and Submission
The second common reason for an inflated interview to hire ratio is what I like to call the “throw a name in the hat” recruiting method. As the HR guy who used to work with over 150 staffing providers, I have met my fair share of agencies that will toss a name in the hat each time a job requisition is sent out whether the candidate is qualified or not. The thought here is it is a numbers approach, the more candidates I submit, the better my chances, it can’t hurt to try. Well in fact taking this approach of submitting less than ideal candidates can hurt but that is for another post. The good news here is you can easily prevent this from happening in your staffing office by simply paying attention to your I/O ratio (see how this ties nicely to the theme?) and looking at how your recruiters are screening and submitting candidates. Careful screening and preparation of submissions are the hallmarks to quality staffing. While this may be hold hat for you, you may be surprised to learn how many companies employ recruiters that do not know how to interview. I have met many recruiters who don’t even know what a behavioral interview questions! (Now this may not be as much of a problem if HR is not conducting the interview. But if HR is conducting the interview, then this makes me wonder how they can possibly prepare their candidates to handle HR’s interview if they don’t know how HR conducts their interviews and how they evaluate.)
So when it comes to your I/O ratio and how to interpret it. Put the number in context of your business, clients, industry, and so forth. Like many HR metrics the value is not only in the absolute value but the relative value. How are you doing compared to last month, last year, and are there any trends? Are these trends positive or negative? In essence, learn to tell which direction the wind is blowing. By asking these types of questions in your inquiry, and focusing on the basics you will get the most out of this fundamental staffing metric.
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