By: Rebecca Skilbeck
Recruiters and hiring managers are always looking for ‘the one’ – the star candidate that not only has the right skills, but fits the culture of an organization. They check all the boxes: they’ve been screened, interviewed and tested. But do they want to work for you? If you’ve ever taken a candidate through the recruitment process only to have them decline an offer, you’ll know how frustrating and costly the process can be.
So what makes candidates reject you at the eleventh hour? To understand why it’s happening, you need to start tracking one often-overlooked recruitment metric: offer acceptance rate.
Are you tracking the right metrics?
Working closely with HR professionals over the last decade has shown me that most HR teams aren’t measuring the right recruitment metrics, and as a result aren’t seeing the full story. When they get turned down by candidates, they can’t answer why.
Tracking your offer acceptance rate will help you understand what’s going on and how you can improve. Your offer acceptance rate is the percentage of candidates that have accepted a formal job offer. This metric matters because recruiting is expensive: the average cost to hire is more than $4,000 per person, so each candidate that turns down a job offer costs your organization money. Tracking and improving offer acceptance rates can not only save you money, but also save you considerable time, increase hiring manager engagement, improve the candidate experience and help strengthen your employer brand.
What does a good offer acceptance rate look like? PageUp research shows that high-performing organizations average a 99% offer-acceptance rate year-in, year-out, with an average of 94% across all industries. I recently worked with a number of organizations to understand how their offer acceptance rates measured up. The results were illuminating. One organization had no idea that they had been turned down by over 100 candidates that year, while another thought they were performing fantastically – but weren’t getting the full story.
How does your offer acceptance rate compare?
To identify opportunities for improvement, I took talent acquisition professionals at two organizations through their current offer acceptance rates. The first team was shocked when they calculated a total of 112 declined offers year-to-date. This gave them the push they needed to examine why this was happening and brainstorm ways to bring this number down.
The second organization initially believed their offer acceptance rates were on par with industry benchmarks. However, when they did the calculations their results didn’t just rank below their industry – they also ranked below the average for all industries. Again, a quick brainstorm session helped the team identify three potential causes for their low offer acceptance rate and ways to address this.
Is your data reliable?
When measuring offer acceptance rates, the insights you gather are only as good as the data you’re capturing. One organization I worked with was experiencing phenomenally high offer acceptance rates – or so they thought. When the team explored why this was happening, they quickly realized they were only progressing candidates to a formal offer after receiving a verbal acceptance. By not capturing verbal offer decline rates, their offer acceptance rates were skewed. To accurately measure the success of your recruitment efforts, it’s crucial to capture all of your data, from all sources.
Is your recruitment process too slow?
Another organization I worked with was continually losing high-quality candidates at the last stage of the recruitment process. This was both time-consuming and costly: to figure out why this was happening they examined their recruitment journey to find the bottlenecks and pain points in the process. Doing so told them they were offering jobs too late and as a result were losing candidates to other companies. They were then able to use that data to redesign their recruitment approach and make offers at the right time.
Don’t rely on gut feel
Recruiting great talent is the foundation of an organization’s success, but getting it right can be a challenge. We live in a data-driven age – 82% of HR teams planned to increase their use of big data by the end of 2018 – but many recruiters still rely on their instincts when it comes to hiring decisions. Offer acceptance rate is just one of five Recruitment Metrics HR teams could get enormous value out of, but which many aren’t using.