A talent pipeline is a network of engaged passive candidates who can fill future roles in your company. Talent pipeline metrics help you measure the effectiveness of your sourcing strategies in finding and engaging those candidates. Here’s a primer on five common talent pipeline metrics and how to calculate them:
Source of hire
Source of hire shows what percentage of your overall hires entered your pipeline from each recruiting source (e.g. referrals, social media sourcing.) This information helps you plan your recruiting budget and allocate resources for the most effective recruiting channels. For example, if employee referrals bring in a high percentage of hires, consider investing in a fully-fledged referral program.
It’d be a good idea to track candidate sources too. For example, a source that brings you a large number of high quality candidates is valuable, even if you end up hiring someone from another source. Use recruiting data from your Applicant Tracking System (ATS) to find out what percentage of your most qualified candidates each source brings in.
Candidate conversion rates
Candidate conversion rates show how effective recruiters are in enticing passive candidates and moving them further along in their pipeline. Imagine your talent pipeline model has the following main stages:
Measure conversion rates from each stage to the other. For example, let’s assume that you send a sourcing email to 30 candidates in a week. Ask yourself:
- How many candidates reply? If five of them reply and agree to talk further, then your email conversion rate is 5/30*100% = 16.6%.
- How many candidates do you routinely follow-up with post-screening call? If you regularly check-in with one out of three candidates you speak with, then your conversion rate is 1/3 *100% = 33.3%.
- What percentage of your engaged candidates moved forward to an interview (or are hired)? For example, if you recommend five candidates from your talent pipeline per month, and hiring managers interview (or hire) three of those candidates, then your pipeline conversion rate that month is 3/5*100%, or 60%. The higher this rate is, the higher the quality of your pipeline.
Track these metrics across your recruiting pipeline and across time and calculate the average annual/ quarterly rates. Aim for the highest possible conversion rates.
Job offer acceptance rate
Your offer acceptance rate (OAR) shows what percentage of candidates accepted your job offer. Here’s the formula to calculate OAR:
So, if you extended job offers to 10 candidates the past month, and six of those candidates accepted, your offer acceptance rate is 60%.
Track this metric per position and per hiring manager. Also, measure your OAR specifically for candidates you sourced and engaged with. This metric can indicate whether:
- Your candidates had positive experiences that compelled them to accept your job offer.
- You successfully matched candidates in your pipeline to open roles they were interested in.
- Your job offers are attractive enough for the best people in your talent pipeline.
Time to fill
Maintaining a talent pipeline helps you reduce the number of days it takes to fill an open position (your time to fill.) This is because you’ve already qualified and engaged candidates in your pipeline before a position opens. If you find that your talent pipeline doesn’t significantly reduce your average time to fill, you may need to make your hiring process more efficient or rethink how you qualify candidates.
To calculate your time to fill, first define the time period you will be measuring. For example, your starting point could be the day HR or Finance approves a job opening. Then, count the days until your best candidate accepts your job offer.
Compare your time to fill across positions and departments to find out which teams or roles might need a stronger talent pipeline.
Candidate experience metrics
To build talent pipelines, recruiters should care about their candidates. This candidate-centric approach helps you build good relationships with candidates, boost your employer brand and even enhance your pipeline through referrals from your engaged candidates.
A good way to measure candidate experience is using online survey tools (e.g. Typeform) to ask for both qualitative and quantitative feedback. Here are example questions:
- How would you rate your overall experience communicating with our recruiter?
- What do you think we could improve in our hiring process?
Supplement this feedback by monitoring reviews on Glassdoor and social media.
These five talent pipeline metrics will help you assess the quality of your pipelines. Each company may choose to monitor additional recruitment metrics that fit specific needs. Always track cost per hire and quality of hire for a well-rounded view of your recruiting strategies.