Understanding: Candidates per hire

NOTE: Our Understanding series digs deeper into common recruiting metrics: how to calculate your metrics, compare them to the competition, and use them to drive business outcomes. Look for a new Understanding guide next month!

Whether you're an experienced, data-driven recruiter or just looking into hiring metrics for the first time, Candidates per hire is one of your most important KPIs! Knowing your organization's candidates per hire ratio helps you forecast your hiring process, hit your headcount goals on time, and identify whether you're running an efficient pipeline.

In this article, we'll cover:

  1. How to calculate candidates per hire
  2. How to compare your numbers to the industry average
  3. How to use your metrics to drive business outcomes
  4. What's next

How to calculate candidates per hire

NOTE: Only super admins and admins have access to company-wide data. Recruiters and hiring managers have access to Lever's job posting dashboards, which offer the same data, broken down for a specific role. No matter your level of access, we'll show you how to use candidates per hire to hit your goals. Learn more about reporting access here.

We recommend that you begin by calculating your overall candidates per hire ratio, then calculate that ratio by origin, team and role. Each version of your candidates per hire ratio can be used to evaluate the efficiency of your pipeline in different ways.

A. Calculating overall candidates per hire for your organization (admins only)

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Begin in your Candidate stats report under the 'Explore' tab. On the right side of the screen, adjust the date range to your preferred range. 

To find your overall candidates per hire ratio, simply divide the total number of candidates in your pipeline by the number of hires made during this time. "All candidates" includes everyone who was active in your pipeline during this date range, including candidates who have been moved to the archive. In the example above:

2667 candidates ÷ 38 hires = 70.2 candidates per hire

B. Calculating overall candidates per hire by origin (admins only)

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Begin in your Candidate stats report under the 'by origin' tab.On the left side of the screen, make sure you've selected "All in Stage". On the right side of the screen, adjust the date range to your preferred range.

To find your candidates per hire ratio for each origin, simply divide the "ALL" number of candidates for each origin by the corresponding number of hires made for that origin. In the example above:

43 internal candidates ÷ 4 hires = 10.75 candidates per hire

C. Calculating overall candidates per hire by team (admins only)

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Begin in your Candidate stats report under the 'by team' tab. On the right side of the screen, adjust the date range to your preferred range.

To find your candidates per hire ratio for each origin, simply divide the "ALL" number of candidates for each origin by the corresponding number of hires made for that origin. In the example above:

378 Customer Success candidates ÷ 12 hires = 31.5 candidates per hire

D. Calculating overall candidates per hire by job posting (admins and hiring managers)

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Begin in the job posting dashboard for any job posting to which you have access. Scroll down to the "Pipeline predictions" category to find your candidate per hire ratio for that specific roll.

E. Calculating candidates per hire by origin by job posting (admins and hiring managers)

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Begin in the job posting dashboard for any job posting to which you have access. At the top of the screen, you'll see a summary of the origin of the applicants for that role.

Scroll down to the "Candidate demographics" category. Toggle back and forth between between 'All' candidates and 'Hired' candidates. In the example above, you can see that sourced candidates made up slightly less than 50% of the applicants - but all of the hires!

How to compare your numbers to the industry average

Knowing your own numbers is half the battle! Now it's time to see how you compare to other companies of your size, or other companies in your industry. Lever's newly updated 2019 Benchmarks Report breaks down recruiting metrics by company size, by department/team and by role, so you can always understand how you're faring against your competitors.

For example, if you're a company with 214 employees, you'd find the following statistics relevant:

For companies sized 101-500 employees:

  • Overall candidates per hire: 74 candidates (p. 34)
  • Sourced candidates per hire: 34 candidates (p. 34)
  • Applied candidates per hire: 119 candidates (p. 34)
  • Candidates per hire for engineering roles: 113 candidates (p. 36)
  • Candidates per hire for customer service roles: 34 candidates (p. 36)

How to use your metrics to drive business outcomes

Once you've identified your own organization's candidates per hire ratio > by origin compare those metrics to those in Lever's Benchmarks report (page 34). Are your ratios higher or lower than those of other companies your size? Based on your results, use the suggestions below to drive your desired business outcomes.

TIP: We recommend you look at your "origin" metrics first, in order to identify any larger patterns affecting your entire organization's recruiting process. Then dig deeper by team, role, etc to identify any unique areas of opportunity.

Which business outcome are you trying to solve for?

Too many candidates per hire

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Custom questions help underqualified candidates self-select out of the application process.

Time spent reviewing low-quality candidates who go straight to your archive is time that could be spent wooing qualified candidates or working on other important tasks.

Identify which origin has your highest candidate to hire ratio (see example B). Depending on which origin is overwhelming your team, we have a few suggestions to consider:

Applicant

Sourced

  • Start holding kickoff meetings between your sourcing team and your hiring managers, so sourcers are 100% clear which kind of candidates will be a good fit for a new role.
  • By default, the user who sources a candidate will be the candidate owner. You can view candidates per hire by owner to see whether one of your sourcers is adding too many underperforming candidates. (If your organization changes ownership throughout the recruiting process, add a tag like "Sourced by Anna Smith" before changing ownership. Later, you can filter by tag on the Explore page to track sourcer performance.)
  • Are your sourcing emails effective? Check out some of our sourcing email templates, or use Lever Nurture to measure the effectiveness of each of your campaigns. (For more, see pages 44-45 of our 2019 Benchmarks Report.)
  • Focus on re-engaging with unresponsive candidates vs. a "spray and pray" sourcing method. Candidates who don't respond to your first touchpoint frequently respond to followup messages - so add multiple touchpoints to your campaign. (For more, see page 25 of our 2019 Benchmarks Report.)

Referred

  • Are you over-incentivizing your company's referrals program with bonuses, etc? Consider updating your referral program and limiting your rewards - especially for referrals who weren't hired.

Agency

  • Revisit your agency partnerships. Are you paying agencies per hire - or per candidate? Make sure you've configured your agency portal to ensure each candidate is attributed to the correct agency. This allows you to identify agencies which continually put forward too many low-quality candidate.

Not enough candidates per hire

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Use our built-in integrations to source candidates from 20+ platforms.

If you have a low candidate to hire ratio, it might mean that you're hyper-efficient at hiring (woo!) - or it might mean that you're settling for subpar talent because your pipeline isn't offering you a lot of choices.

Identify which origin has your lowest candidate to hire ratio (see example B). Depending on which origin is seeing below-average candidate yields, we have a few suggestions to consider:

Applied

  • Turn on Lever's one-click job board integrations with LinkedIn and Glassdoor.
  • Rethink your job descriptions - review our best practices for making your open roles compelling to high quality candidates.
  • Get creative with Lever's custom URLs! They're not just for job boards. Share links to your open roles in Facebook groups, with email lists - we've even seen Lever customers use custom URLs in podcast ad campaigns!
  • Encourage your team to share social referral links on sites like LinkedIn, Twitter, and Facebook. Tip: super admins can export a list of social referrals and award a prize to the employee who generated the most applications!

Sourced

  • Turn on Lever's built-in integrations with 20+ top sourcing platforms.
  • Install Lever's Chrome extension to keep track of potential leads.
  • Use our 2019 Benchmarks Report to set a minimum quota of candidates for an open role. Source a certain percentage of those candidates into your account each week to ensure a steady stream of talent to evaluate. For more information about forecasting, see our section below. (Not sure how to get started sourcing? Watch our webinar with Amanda, Lever's Director of Recruiting.)

Referred

Internal

  • Have you launched an internal jobs site yet? While it's exciting to search for outside talent, don't neglect the incredible in-house talent around you. Your colleagues have already proven themselves worthy of hiring, and opportunities for advancement will drive greater retention.
  • Consider giving internal candidates a 'head start' before opening new roles to external candidates. Publish a new job posting as 'internal only' - then edit the job posting status to 'External & Internal' once your initial window has closed.
  • Don't forget to publicize your internal job postings early and often! Flag internal opportunities in Slack, company newsletters, all-hands meetings and more.

Hit your headcount goals on time

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Use job posting dashboards to track weekly pipeline progress.

Understanding the nuances of each department or team's pipeline will help you develop more accurate forecasting for your headcount plan - and signal when it might be time to adjusts your sails.

For example, let's say you work at a company with 214 employees, and you need to hire an engineer and a customer service representative within the next 12 weeks. Based on our 2019 Benchmarks, companies your size usually need 113 engineering candidates to make a hire, and 34 customer service candidates to make a hire. Based on this information, you know you'll need to:

  • open the engineering role first, to allow more time for more candidates to apply 
  • commit to driving 12 engineering candidates and 3 customer service candidates into your pipeline each week
  • block off more time on your technical recruiters' calendars to screen the engineering candidates - they'll be reading more resumes and scheduling more interviews

Set the right expectations

"Choose reality" is a core value here at Lever - especially when it comes to hiring!

Setting realistic timeframes

When recruiters and hiring managers hold a kickoff meeting before opening a role, this is a great opportunity to review the role's historic metrics, or those of similar roles in the industry. Set realistic expectations around how many candidates will be needed to fill the role, and how long it will take your team to drive that amount of candidates into your pipeline.

Setting realistic requirements

When candidates per hire ratios are extremely high or low for a particular role, it may indicate your hiring team has unrealistic expectations.

Are you screening out candidates based on true dealbreakers - or is there any room for flexibility? Are you making those dealbreakers clear in your job description, or expecting your candidates to be mind readers? For example, if your team is rejecting hundreds of candidates based on their university background, ask yourself whether that university background is truly a dealbreaker. If so, make sure that your expectations are clearly spelled out in the job description.

Are you searching for a "purple squirrel" - a.k.a. a unique combination of skillsets which doesn't occur in the wild? Roles with a very low candidates per hire ratio may be searching for a talent pool which doesn't exist. For example, if you want your candidates to have 5-6 years of experience in a field which is only 4-5 years old, it may be time for your team to revisit whether the years of experience are a must-have, or a nice-to-have.

What's next

Read through our 2019 Benchmarks Report for the latest hiring and sourcing metrics, broken down by company size and department.

Calculate the candidates per hire ratio for each of your open roles.

  • How many candidates do you need in your pipeline?
  • How long do you have to fill that role?
  • How many candidates will you need to find per week to reach your goal?

Review our best practices for data hygiene, so your reports accurately reflect your day-to-day hiring process. Remember: reports are only as accurate as the data they contain. 

Expect our next Understanding article next month!

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