If you are in a Human Resources position at a small to medium-sized company, you need to do it all: Recruit talent, train, manage HR policies and procedures, and much more. Time is money. You want to be efficient in all your activities, including recruiting.
Did you know that there is one metric you can track to determine if you are recruiting efficiently? This one hiring metric will tell you if you and your hiring team are on the same page.
That metric is your pass-through-rate (PTR). PTR measures the percentage of candidates who make it through each step of the recruiting process. As Jeff Moore wrote in “A Modern Take on Data-Driven Recruiting from a Google Recruiting Leader,” PTR is a useful metric for identifying any problem areas where a disproportionate number of candidates fall out of the recruiting process.
Moore explained how PTR works with some hypothetical numbers. He assumed that you have a recruiting team that converts 1577 applications into 48 hires this year – that will give you a PTR of 3.2%. You can break that down into 5 or more steps and see the conversion rate at each step.
In this case, you might see that the conversion rate for application to phone screen is as little as 49%. You then need to explore factors that affected how many applicants were screened, and brainstorm ideas to improve it.
“One example could be that your hiring managers are setting extremely specific criteria for passing an applicant forward to a phone screen. You could discuss that criteria with the hiring manager to reveal ways to open it up without compromising the quality of the candidates that get hired,” Moore wrote.
He then said, “Let’s say you open it up, and now 65% of applicants make it to the phone screen. With that single change, you would increase your PTR from 3.2% to 4.0% and fill an additional 15 roles with the same number of applicants!”
What PTR can tell you about your recruiting process
Analyzing your PTR can reveal many things about your recruiting process:
- As the example above illustrates, it can help you identify if any miscommunications are occurring among your hiring team
- It can help you determine lags in the process – and sometimes a slow hiring process will result in a loss of good candidates
- Determine where and why candidates fall off – determine if they fell off in phone interview, or after compensation was discussed, or at other times
- Decide if the role is incorrectly described – is the candidate clear on the available position?
Moore suggests that taking a backward look at candidate profiles is a way to improve your hiring process.
Segment your candidate data by various characteristics and profile details – so that you can identify any patterns in your best candidates.
Compare the PTR data for different pools of talent to either support or debunk the idea that only candidates from “the top computer science programs,” for example, will be a good fit.
You also might encounter bottlenecks when you analyze your PTR. As The Hire Team wrote in another Google blog, “5 Core Recruiting Metrics Every Hiring Team Should Benchmark”:
- “A high screening-to-interview rate might suggest that your screening process should be more selective; too many unqualified candidates make it through to interview, needlessly taking up interviewer time and slowing down the entire process.
- A low offer-to-hire rate could suggest that some aspect of your offer letter is deterring candidates, effectively sabotaging the hard work required to identify the best candidates. Digging into common reasons for rejection might allow you to overcome the problem by offering a more competitive compensation package, responding faster to candidates, and so on.”
It will also pay off to analyze where your candidates are coming from: from social media or referrals? Calculate the ratio of hires to applicants via each channel to decide which is the most productive for your firm.
Having a clear sense of your most common rejection reasons “highlights any roadblocks that repeatedly prevent great candidates from accepting your job offer,” according to this Google article. Are your candidates turning down offers because of your compensation package? Were your hiring decisions made quickly?
Once you get this kind of feedback, you can adjust your process to address these concerns.
As a recruiter, you want to become familiar with hiring metrics like PTR that allow you to act on the insights you uncover. These will help you improve your hiring and will aid you in satisfying the essential requirements of your job: Saving time and money. By paying attention to the easily accessible data that is available to you, you will be solidifying your role as a key driver of your company’s success.