Key recruitment metrics survey 2016
Author: Jo Jacobs
XpertHR's research examines the latest trends and challenges in a competitive recruitment market.
UK unemployment, at a rate of 4.8%, is at its lowest rate since 2005 and organisations are reporting a median (midpoint in the range) number of 50 recruits over the past year - based on our latest data from 242 responding organisations. This corresponds to one-fifth (20.5%) of each organisation's total workforce - in line with the figure from 2015 of 19% and following an upward trend from 15.5% in 2014.
The recruitment market is buoyant, but challenges remain. Skills shortages, embracing digital recruitment methods, devolving responsibilities to line managers and thinking about Brexit are on the agenda for many organisations. This survey report covers the key recruitment metrics and an accompanying report analyses social media and recruitment.
This report sets out a summary of the key findings from the XpertHR 2016 recruitment metrics survey, including:
- an overview of recruitment activity;
- key recruitment metrics;
- candidate attraction strategies;
- application methods;
- areas of skills shortages;
- recruitment challenges; and
- line manager involvement.
XpertHR's benchmarking service has the full data on all the questions from the survey, including data breakdowns by factors such as industry sector and organisational size.
An accompanying article covers social media and recruitment.
Total time to hire
One of the core recruitment metrics is the time taken to hire candidates - the typical length of time it takes from deciding a vacancy exists to the successful applicant starting work.
Our research shows that time to hire depends on the level of seniority in an organisation. The median length of total time is:
- 20 weeks for directors;
- 13 weeks to hire managers; and
- eight weeks to hire staff.
For many organisations (42.6%), there has been no change in the time to hire. Among the remainder, apart from those who are unsure, respondents are split between those who believe the time to hire is getting shorter (23.6%) and those that think it is getting longer (26%).
However, almost one respondent in five (19.4%) believes that the time to hire in their organisation is "poor" or "very poor". Organisations can miss good quality candidates if they take too much time to get a job advertised and can lose out on valuable productivity time by taking too long to make a job offer.
Our benchmarking service provides a breakdown by job level for the length of time (in weeks) that each part of this two-stage process takes - the time between deciding a vacancy exists to making a job offer and the time from when the job offer has been made to the time the applicant starts work.
Cost per hire
The cost per hire figure includes advertising costs, agency fees, reimbursed candidate expenses, and psychometric or similar test costs. There is wide variation in the typical cost involved in filling vacancies by seniority - our analysis reveals a median of:
- £12,000 for directors (average £12,989);
- £5,000 for managers (average £5,201); and
- £1,250 for staff (average £2,172).
More than one-third (38.4%) of organisations believe the cost to fill vacancies is increasing; three organisations in 10 (29.8%) believe it is staying the same; and approximately one-fifth (21.1%) think the cost is going down (10.7% are unsure). Cost pressures seem to be more severe in the public sector, where exactly half of organisations believe the cost is going up.
Two in five (38.6%) respondents believe that the cost-effectiveness of their organisation's recruitment and selection practices is "good", while one in seven (15.3%) believes it is "poor" or "very poor". With a tighter labour market, employers need to focus on maximising the cost-effectiveness of their recruitment and selection processes.
Time to effectiveness
More than one organisation in 10 (12.8%) measures time to effectiveness for certain roles - this is defined as the time between a new employee's start date and optimal performance and, while a relatively new measure, is a key metric to assess recruitment and selection processes employed. Approximately nine organisations in 10 (87.2%) do not measure time to effectiveness, however, a quarter (24.4%) of all respondents have plans to measure this in the future.
The median time to effectiveness is 12 weeks and this is the same for all levels (directors, managers and staff).
Attracting candidates
Many respondents look within their organisation to fill vacancies - this is the most common method of attracting candidates, taking place at 86.8% of organisations. Table 1 presents the popularity of attraction methods while chart 1 shows how employers' use of job advertisements has changed over time.
Table 1: Methods used by respondents to attract candidates
| Candidate attraction methods | % of respondents |
|---|---|
| Internal applicants | 86.8 |
| Online job advertisements - corporate website | 79.8 |
| Online job advertisements - general job boards | 79.3 |
| Employment agencies | 77.7 |
| Social media networks | 74.8 |
| Online job advertisements - specialist job boards | 65.7 |
| Raising the organisation's profile as a good place to work, ie employer branding | 54.1 |
| Employee referral scheme | 52.1 |
| Search consultancies | 46.7 |
| Succession planning | 45.9 |
| Attending recruitment/careers fairs | 30.2 |
| Applicants directed from newspaper advert to the organisation's website to gather further information about vacancy and/or organisation | 19.4 |
| Open days for prospective applicants | 18.2 |
| Advertising vacancies in local newspapers | 15.7 |
| Advertising vacancies in national newspapers | 10.3 |
| Other | 8.7 |
n = 242 organisations. |
|
The use of newspaper adverts as an attraction method varies by sector. While it remains common practice in the public sector, where it has traditionally always featured - 45% advertise in national newspapers; and 40% advertise in local newspapers, in private-sector-services the use of these methods is considerably lower at 7.3% and 14.5% respectively.
The strong growth in the use of social media networks - from the sixth most popular means of advertising roles and used by 29% of respondents in 2012, to third and used by 74.8% of respondents in 2016 - is an indication of the level of change in processes since the move towards online recruitment and selection.
Chart 1: Employers' changing methods of advertising jobs, 2012 to 2016
n = 242 organisations.
Source: XpertHR.
Most effective recruitment methods
Organisations stated the single most successful method of attracting good quality candidates is:
- employment agencies (23.1% of organisations);
- online job advertisements on general job boards (21.9%); and
- through sourcing internal applicants (11.6%).
Application methods and volume of applicants
CVs remain the most widespread application method - more than three-quarters (77.7%) of organisations accept CVs by post, uploads or email. Approximately six organisations in 10 (59.1%) use electronic (online) application forms and just over four organisations in 10 (43.4%) use paper-based application forms.
Letters of application are used by 39.7% of respondents while just over a quarter (26.4%) of organisations allow applicants to provide links to online CVs on social media.
Following convention, the public sector continues to prefer application forms over CVs - 85% of organisations in this sector use online application forms and 65% use paper-based forms. Conversely, only half of these organisations accept CVs and only 5% allow applicants to provide links to online CVs on social media.
The median number of applications received for each vacancy (across all sectors) is six for director positions; 12 for managers; and 20 for staff. Three-quarters (77.7%) of respondents believe that the quantity of candidates their organisation receives is "good" (45.5%) or "neutral" (32.2%). The quality of the candidates the organisation attracts is deemed to be "very good" (10.7%) or "good" (57.9%) by more than two-thirds (68.6%) of respondents.
Competition for candidates
Low levels of unemployment often translate to strong competition for candidates. The challenge of skills shortages continues, with close to nine organisations in 10 (86.4%) experiencing difficulties in attracting good quality candidates. Table 2 ranks the functions identified by organisations as having the highest skills shortages during the past 12 months.
Table 2: Skills shortages reported in different functions over the past 12 months
| Function | % of respondents |
|---|---|
| Engineering | 70.1 |
| Science, technical (non-engineering) | 58.6 |
| IT | 57.3 |
| Management | 57.1 |
| Marketing/sales | 48.9 |
| Manual roles | 47.2 |
| Retail | 39.1 |
| Finance | 37.7 |
| Executives/directors | 34.7 |
| Legal | 27.6 |
| HR | 21.5 |
n = 206 (organisations that recruit for at least one of these functions). |
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Widespread recruitment challenges
In the past 12 months, close to half (46.3%) of organisations have experienced problems associated with recruitment once a post has been advertised.
The main problem associated with recruitment is the poor quality of applicants (knowledge, skills or attitude), which is cited by almost nine organisations in 10 (87.5%). This increases to 92.9% of organisations in the manufacturing-and-production sector and 100% of public-sector organisations.
Three-quarters (76.8%) of organisations say there are too few applicants. Around half of respondents have either experienced applicants accepting a job offer then subsequently withdrawing (57.1%), and/or failing to appear for the interview (49.1%).
A recent challenge affecting some organisations is Brexit. While this has had no effect on many respondents' recruitment plans, several organisations say they are affected or may be in the future. Many organisations that recruit employees from Europe are concerned about the free movement of people and ability to recruit from EU countries - this is cited for both manual labour and for professional roles. Other respondents are experiencing fewer EU citizens applying for roles, or they expect a reduced pool of applicants in the future.
Line manager involvement
The responsibility of recruiting for new staff lies principally with line managers in more than half (56.2%) of organisations. Line managers are more likely to have responsibility for recruiting in the public sector (at 75% of organisations) and in larger-sized organisations (at 65.5% of organisations).
At nine organisations in 10 (90.9%), the HR department helps to manage recruitment. Senior managers are involved in this process at 44.6% of organisations.
Organisations offer a range of training and development to help line managers in recruitment - the three most common are:
- receiving advice from HR (85.5%);
- interviewing skills (47.5%); and
- receiving recruitment advice as part of general management training (36.4%).
At approximately one-third of organisations line managers receive training on equal opportunities/diversity in recruitment (34.7%) and/or attend a specific face-to-face training course on recruitment/selection (33.9%). Respondents were given a list of training and development methods for recruitment and each one of these methods was more prevalent in the public sector than it was in the private sector.
It is rare for line managers to receive no training and development to help them manage recruitment effectively - but this is the case at 8.7% of organisations (these organisations are all in the private sector).
Our research
This report is based on original research carried out in September and October 2016. Responses were received from 242 organisations, employing 410,736 people.
The breakdown of respondents by economic sector is as follows:
- 179 (74%) are in private-sector services;
- 43 (17.8%) are in manufacturing and production; and
- 20 (8.2%) are public-sector organisations.
Broken down by workforce size, the respondents comprise:
- 123 (50.8%) organisations with between one and 249 employees;
- 64 (26.5%) employing between 250 and 999; and
- 55 (22.7%) with 1,000 or more employees.
The smallest organisation employs six individuals and the largest has 148,000 employees. The median number employed is 242.
What should I do now?
- Discover the benefits and problems with gathering and analysing data in our HR metrics and analytics in practice: 2016 survey.
- Read Employment law manual > Recruitment and selection > Attracting suitable candidates to ensure your job advertisements comply with all relevant legislation, including the Equality Act 2010.
- See Good practice manual > Recruitment and selection > Candidate attraction for a step-by-step guide to developing and implementing an effective candidate-attraction strategy.
