It’s challenging to measure the ROI of recruiting—especially when you’re speaking to a boardroom of people who are laser-focused on the company’s bottom line. How do you measure the value of an individual you hire? It’s easy to get stuck in qualitative factors that are hard to measure.

If you’re unsure where to start, we’ve got you covered. We’ve rounded up the three key ways you can show leadership the ROI of recruiting, so they trust it will increase your bottom line.

1. Access to better talent

One of the greatest advantages of recruiting is it increases your talent pool. Some of the best candidates will only learn about your organization and its open roles if your hiring team is proactively sourcing and reaches out to them.

There may be a couple of reasons candidates are unaware of an opportunity with your company:

• Job search overwhelm. There’s a good chance some candidates won’t even see your job simply due to the sheer number of job postings online. Even if they do see your job posting, they may not apply without some encouragement because they are mentally exhausted from researching and applying for jobs.

  
  

• They are passive candidates. Some of the most qualified candidates are happy with their current role and rarely (if ever) seek a new role because they’re in such high demand. According to research by LinkedIn, only 30% of the workforce are active job seekers—which means you could be missing out on 70% of the workforce if you’re not tapping into this pool of passive candidates.

  
  

Sourcing and recruiting break down these barriers and help you access more qualified candidates—ultimately resulting in better business outcomes. These high-quality employees strengthen a company’s bottom line because they’re:

• Efficient

• Innovative

• Driven

• Require minimal training

• Have fewer skill gaps that have to be filled in by additional talent

How to show you’re reaching talented candidates

Track these metrics to show leadership your recruiting efforts are bringing in valuable candidates:

• Volume of Qualified Candidates. It’s one thing to get a bunch of applicants—but out of those applicants, how many meet your minimum requirements for an interview? This metric will show if you’re attracting the right talent with your job descriptions, messaging, and interview process.

  
  

• Candidate Performance. While performance measurements may vary by role, recruiting talented candidates typically results in employees that exceed expectations and bring innovative ideas to the organization.

  
  

• Budget Spent on Training. Every new employee will need some onboarding training, but highly qualified candidates typically need minimal  additional training to get up and running in a new role.

  
  

2. Reduced time and cost of hiring

LinkedIn reports the median time-to-hire (dependent on industry) is between 33 to 49 days, and some positions take as long as 82 days. These sobering numbers are only compounded by research from The Society for Human Resource Management (SHRM), which reports the average cost-per-hire is $4,683 and the average cost-per-hire for executives is a whopping $28,329.

Based on these stats, it’s not a hard argument to make with leadership that reducing the time-to-hire and cost-per-hire should be a goal of any organization. And a strong recruiting process is the key to creating the efficiency needed to reduce both the time and cost involved in hiring.

Excellent recruiting reduces both the time and cost of hiring by:

• Engaging candidates with targeted messaging. Great hiring teams personalize their communication which makes candidates feel valued and understood, so they're more likely to respond and move on in the hiring process. According to research by LinkedIn, personalized recruiting messages perform 15% better than those that are not.

  
  

• Reducing time wasted on interviewing the wrong candidates. A strong recruiting process weeds out under-qualified candidates early in the hiring process

  
  

• Minimizing the impact of employee turnover and promotion. Great recruiters proactively build a talent pipeline that accounts for role succession

How to measure reduced time and cost per hire

Track these metrics to show leadership the cost and time savings of your recruiting process:

• Time-to-Fill. How long the entire hiring process took, from when the acquisition request was made to when the position was filled. This metric illustrates how efficient your recruiting process is.

  
  

• Time-to-Hire. How long it took from when a candidate entered the pipeline to when they accepted an offer. This metric will tell you how efficient your interview process is.

  
  

• Cost-Per-Hire (CPH).The total cost of internal and external recruiting costs incurred, divided by the total number of hires made. This metric will show how effective the tools and resources you’re using to hire are.

  
  

• Response Rates. Show how quickly and frequently candidates respond to recruiting messages and vice versa. This metric is a strong indicator of how well the recruiting team engages candidates, if the messaging resonates with candidates, and ultimately how messaging accelerates or slows down the hiring process.

  
  

3. Increased offer acceptance and retention rates

Part of a strong recruiting process is building an Ideal Candidate Profile (ICP), which creates a unified and clear vision of the right candidate for everyone involved in the hiring process. A structured recruiting process also encourages hiring teams to focus on the core competencies outlined in the ICP, so they choose candidates who have strong skill sets and align with the company culture.

These candidates are likely to stick with the company because they’re a good match—saving time and money spent on recruiting for the same role again. Less turnover also means less disruption. Team members can focus on their work instead of looking for replacements and burning out from juggling multiple roles and responsibilities.

How to measure offer acceptance and retention rates

Track these metrics to showcase how a strong recruiting process leads to gaining and retaining great talent: 

• Retention Rates.The percentage of employees that were retained over a period of time. This metric is a strong indicator of whether a candidate turned out to be a good fit for a  role.

  
  

• Offer Acceptance Rate (OAR). The percentage of applicants that were successfully hired of those that were made offers. This metric reflects whether your hiring team can create accurate  ICPs and use them to effectively evaluate candidates. It also reflects how competitive your job offers are and your hiring team’s ability to negotiate terms.

Covey: Your secret to increasing recruiting ROI

All of the metrics we’ve covered so far require a lot of time and attention to impact positively. You might even be feeling a bit overwhelmed at this point, especially if you are trying to run a lean recruiting organization or scale one. We get it, which is why we built Covey.

Covey Scout is the world's most intelligent AI sourcing tool that increases the ROI of recruiting by reducing manual sourcing processes, or tedious resume reviews, and multiplying the impact of small teams.

Even better? Covey can generate reports and create visualizations for the data you need.

Ultimately, Covey makes recruiting faster, easier, and more effective through highly-targeted, fully-customized talent acquisition features. Learn more about how Covey will transform your recruiting efforts and make showing ROI easy— book a demo!