It’s a deceptively simple question: Are our tech recruiting processes working? When you try to answer this question, however, you quickly realize how complex it really is. To start, what do you mean by “working?” What metrics or outcomes indicate success for your team? Then, once you’ve decided which outcomes to measure, how do you define a good versus a bad outcome? And compared to what?
This is where recruitment benchmarking data can help. In this post, we’ll define:
- What recruitment benchmarking is (and why recruiting teams need it)
- Top recruiting metrics to benchmark your tech hiring process
- How to measure the effectiveness of your technical assessments
What is recruitment benchmarking?
Recruitment benchmarking is the process of measuring an organization’s recruitment performance against the practices and results of other companies within the same industry. It involves assessing key recruitment metrics such as time-to-fill, quality of hire, and cost per hire, among others, and comparing them with industry standards or competitors’ data. By leveraging this comparative analysis, companies can identify gaps in their recruitment strategies and make informed decisions to improve their processes. It offers insights into the effectiveness of an organization’s recruitment tactics and provides a guideline for what constitutes good performance in a specific industry context.
Why hiring teams should use recruitment benchmarking
Recruitment benchmarking can reveal valuable insights about market trends, innovative practices, and competitive advantages. For instance, if your company’s time-to-hire metric is significantly longer than the industry average, this could indicate inefficiencies in their recruitment process that need to be addressed: Does your company have too many rounds of assessments and interviews in your process? Is there a slowdown or bottleneck at any particular stage of your process? Understanding where you stand relative to your competitors allows your hiring teams to set realistic targets, prioritize improvements, and track progress over time. To make this easier, hiring teams can visualize this data using dashboards, which make patterns and trends simpler to identify.
What recruiting metrics should we track?
To do recruitment benchmarking, you’ll first need to decide which metrics you want to track and benchmark against. Here are the top recruiting metrics we recommend tracking—including what information you gain from each:
Candidate volume is simply counting the number of applicants for a job opening—both those who come in by themselves (inbound) and those you reach out to (outbound). To benchmark this, you need to keep a track of the number of applications received for similar roles in the industry and compare it with your numbers.
Measure candidate volume if you want to: understand the success of your sourcing and talent marketing efforts. It’s also useful for estimating candidate volume further down the funnel: number of screening interviews, number of onsite interviews, etc.
Interviewing time spent on unqualified candidates
The interviewing time spent on unqualified candidates metric is all about the hours your hiring team spends on candidates who aren’t a good fit. This may involve resume reviews, grading take-home projects or coding challenges, and live interviews. You can benchmark this metric by conducting a time study of your recruitment processes and comparing the results with industry standards.
Measure interviewing time spent on unqualified candidates if you want to: gain buy-in from the hiring team for recruiting tools like screening assessments that ensure only qualified candidates are passed along to the interview stage.
The onsite-to-offer rate tells you what proportion of your onsite interviews lead to a job offer. Remember, this doesn’t tell you if the candidate says yes to the offer. It’s important to track because it gives you a measure of the quality of candidates reaching the onsite interview stage. You can benchmark this metric by comparing your ratio with industry norms to see if you’re on track.
Measure onsite-to-offer rate if you want to: better understand the quality of candidates making it through to the onsite. A high onsite-to-offer rate suggests your process is effective at screening for qualified candidates at the top of the funnel.
Time-to-fill describes the duration it takes from posting a job to onboarding a new hire. It is often measured by the number of days between publishing a job opening and hiring a candidate. To benchmark this metric, look at industry standards and competitor data, and compare your time to fill to see how you’re performing.
Measure time-to-fill if you want to: improve your ability to set and deliver on realistic headcount goals.
Candidate drop-off is all about how many candidates choose to leave the recruitment process at any stage. If you’re using technical assessments, this metric refers to the number of candidates who complete an assessment compared to those who were invited to take it. To benchmark this, look at the drop-off rates of similar roles within the industry and see how your rates compare.
Measure candidate drop-off if you want to: measure candidate experience throughout your hiring process.
Cost per hire
Cost per hire is calculated by adding up your recruitment expenses for a specific period (such as a quarter) and dividing it by the number of hires you’ve made during that time. To benchmark this, compare your cost of hire with industry averages or the average cost per hire at similar companies.
Measure cost per hire if you want to: calculate and forecast your recruiting budget given the number of roles your team needs to fill.
Quality of hire
Quality of hire can be tricky to measure, but it’s an essential metric. Quality of hire measures how well a new hire performs, usually in their first year. You can benchmark this metric by comparing the first-year performance ratings of your new hires with industry averages or the average performance ratings of new hires at competitor companies.
Want to get a sense of quality of hire before the one-year mark? Assessment scoring benchmarks provide an early indicator of the quality of your candidate pool, allowing you to optimize for quality of hire early in the recruiting process.
Measure quality of hire if you want to: answer the question, “is recruiting bringing in the right talent?”
How can we measure the effectiveness of our tech recruiting?
Here at CodeSignal, we’ve helped countless hiring teams evaluate and improve their technical hiring processes using funnel analysis. Funnel analysis, in the context of recruiting, refers to the examination of various stages in the recruitment process to identify potential bottlenecks or points of candidate drop-off.
Similar to a sales or marketing funnel, a recruiting funnel has several stages, typically starting with sourcing candidates, administering assessments, conducting interviews, and finally making job offers. By analyzing how many candidates progress from one stage to the next, hiring teams can gain insights into the effectiveness and efficiency of their recruitment process. Paired with benchmarking data, funnel analysis is a powerful way to evaluate the success of your tech recruiting process—from sourcing to hire.
We’ve launched CodeSignal Analytics to help companies do just this by providing data dashboards and insights to build, measure, and optimize an industry-leading tech hiring process that bolsters their bottom line.
With CodeSignal Analytics, you get:
- Savings quantified: Realize and quantify the amount of time and money your organization is saving, substantiating your ROI.
- Refined hiring metrics: Track and improve your hiring process with the ability to measure key metrics like time-to-hire and cost-per-hire.
- Efficiency unleashed: Gain valuable visibility into key process stages to identify and address bottlenecks where candidate drop-off exceeds benchmarks, ultimately boosting efficiency.
- Quality assurance: Ensure your talent pipeline meets key standards by comparing your score distribution, skill proficiency, and more with industry peers.
- Volume management: Regulate your interview volume effectively with insights into how scoring thresholds impact your candidate pass-through rate.
Get started with CodeSignal Analytics
Want to learn more about building a data-driven tech recruiting process with CodeSignal’s end-to-end tech hiring solutions? Contact your CSM or schedule a call with one of our experts.