Key recruitment metrics survey 2019/2020

Author: Michael Carty

XpertHR research provides data on key recruitment metrics that can help employers benchmark the efficiency and cost-effectiveness of their organisation's recruitment process.

The labour market is in rude health. Employment levels hit an all-time high in the spring of 2019, according to Office for National Statistics data. While subsequent months have seen what could be the start of a gradual downward trend, employment remains at near-record levels.

Against this background, our research on recruitment trends for 2019/2020 investigates employers' experience and expectations of the labour market, and provides latest readings on key recruitment metrics, including time to hire and cost per hire. We find that employers are responding to the challenges of a robust labour market in a number of ways. These include: embracing digital recruitment methods in preference to more traditional approaches; and an increased emphasis on employer brand to make the organisation more attractive to the best candidates.

Recruitment activity

More than half (52.8%) of respondents to our survey expect to recruit more permanent employees in 2019/2020 than they did last year (2018/2019), rising to three-fifths (61.7%) at the smallest organisations (see table 1).

The median number of permanent employees that employers expect to recruit in 2019/2020 is 55. This is equivalent to 15.8% of the total workforce per organisation in our sample. By broad sector, employers in the public sector report the lowest median planned intake as a proportion of the total workforce (11.9%).

Table 1: Expected change in number of permanent employees recruited between 2018/2019 and 2019/2020

Size of organisation	Increase (% of respondents)	Stay the same (% of respondents)	Decrease (% of respondents)
n = 125 organisations. Source: XpertHR.
1 to 249 employees	61.7	23.3	15.0
250 to 999 employees	41.7	38.9	19.4
1,000+ employees	48.3	24.1	27.6
All	52.8	28.0	19.2

Candidate attraction

Table 2 shows the candidate-attraction methods that employers use when recruiting for most types of vacancy. For the first time, the three most popular candidate-attraction methods are all digital. In the previous three editions of this survey, internal applicants were placed first or second. Print advertisements (in specialist journals, local newspapers or national newspapers) continue the decline in use seen over recent years.

Table 2: Candidate-attraction methods in use, 2019/2020

Method	% of respondents
n = 125 organisations. Source: XpertHR.
Online job advertisements (own corporate website)	90.4
Online job advertisements (general job boards)	84.8
Social media	84.8
Internal applicants	78.4
Employment agencies	71.2
Online job advertisements (specialist job boards)	59.2
Employee referral scheme	53.6
Attending recruitment/careers fairs	39.2
Individuals who are included in a succession plan	34.4
Employer branding initiatives	29.6
Search consultancies	27.2
Specialist journals and/or trade press	18.4
Local newspaper advertisements	16.8
Open days for prospective applicants	16.8
National newspaper advertisements	7.2
Other	4.8

Social media in recruitment

Social media is the candidate-attraction method that has shown the most dramatic growth in recent years. More than four-fifths (84.8%) of employers now use social media, compared with less than one-third (29%) in our 2012 survey.

By far the most popular social media channel is LinkedIn, used in the recruitment processes of more than nine in 10 organisations (93.2%). This is followed by Facebook (used by 62.1%), Twitter (43.7%) and Instagram (16.5%). Only one employer in 20 (4.9%) shares YouTube videos to attract candidates.

Among those providing details of how social media is used in candidate attraction, two notable trends emerge. Organisations tend to use social media:

• for employer brand messaging in addition to, or instead of, sharing job advertisements; and/or
• to post job advertisements from official accounts, then encourage employees to share these with their own networks of social media connections.

Employee referral schemes

More than half (53.6%) of organisations operate an employee referral scheme. Among respondents providing details of their scheme, referral payments range in value from £25 to £6,000, depending on the organisation and the specific roles they are seeking to fill. A minority of employers make these payments to the referring employee when the referred candidate joins the organisation. But a more common approach is to hold back some or all of the payment until the referred candidate has successfully completed their probation.

Application methods

Table 3 shows the ways that prospective candidates can apply for vacancies, with online applications overtaking the traditional CV as the most popular method. Analysis by sector reveals that online applications are universally used by public-sector respondents, compared with around four-fifths of those in the private sector. As online methods rise in popularity, more traditional solutions are declining. Around one organisation in four (27.2%) accepts paper-based applications, down from just over one-third (36.6%) a year ago.

Table 3: How candidates can apply for vacancies, 2019/2020

Method	% of respondents
n = 125 organisations. Source: XpertHR.
Online applications	80.0
CVs	77.6
Letter of application	34.4
Paper-based applications	27.2
Providing links to online CVs on social media	25.6
Other	5.6

The median number of applications that organisations receive per vacancy is:

• 10 for directors;
• 15 for managers; and
• 25 for staff.

Candidate satisfaction

Investigating the candidate's experience can provide employers with useful feedback to help them improve the hiring process in future. However, this is a comparatively unexplored area among our sample, with just one in three (35.2%) tracking candidate satisfaction with the recruitment process.

Among those giving details of how they monitor candidate satisfaction, the focus tends to be limited to the experience of successful candidates. Only a minority take into account the experience of all candidates, whether successful or not. One private-sector-services employer provides an example of the latter approach: "Automated email sent from the applicant tracking system (ATS) to the candidate upon initial application. When joining, candidates complete a survey rating the whole experience."

Skills shortages

One consequence of the current robust labour market is strong competition for the best candidates, resulting in or exacerbating skills shortages. More than nine in 10 employers (93.6%) have experienced difficulties recruiting individuals to specific functions in the past 12 months.

Recruitment difficulties have been particularly widespread for IT (39.2%), finance (27.2%) and engineering roles (24.8%).

Issues when recruiting employees

Nearly all employers (99.2%) report having experienced problems when recruiting. As table 4 shows, the most common issue is poor quality applicants (in terms of knowledge, skills or attitudes).

One in eight respondents (12%) has attributed their recruitment problems to Brexit. Nearly all of those providing details cite a sudden dearth of candidates from Europe, and in particular from Eastern Europe.

Table 4: Problems experienced when recruiting new employees, 2019/2020

Recruitment problem	1 to 249 employees (% of respondents)	250 to 999 employees (% of respondents)	1,000+ employees (% of respondents)	All (% of respondents)
n = 125 organisations. Source: XpertHR.
Poor quality of applicants (knowledge, skills or attitudes)	90.0	91.7	96.6	92.0
Too few applicants	71.7	69.4	65.5	69.6
Salary expectations too high	58.3	75.0	69.0	65.6
Failure to appear for interview	38.3	50.0	65.5	48.0
Acceptance of job offer then subsequent withdrawal	36.7	58.3	44.8	44.8
Difficulties matching competitors' pay and benefits packages	30.0	52.8	48.3	40.8
Difficulty in retaining new employees once they have joined the organisation	16.7	44.4	24.1	26.4
Too many applicants	25.0	13.9	37.9	24.8
Overall cost of recruitment and selection	16.7	11.1	6.9	12.8
Issues relating to Brexit	13.3	8.3	13.8	12.0
Unwillingness to relocate	5.0	13.9	13.8	9.6
Cost of candidate attraction	8.3	13.9	6.9	9.6
None	1.7	0	0	0.8
Other	3.3	0	0	1.6

Time to hire

Nearly all organisations in our sample measure time to hire, with the majority generating useable data for analysis.

Our total time-to-hire measure breaks down into two components, which together cover the complete hiring cycle. The first measures the period between when the employer decides a vacancy exists and when it is able to make a job offer to the successful applicant. For 2019/2020, the median time to hire on this measure stands at:

• 10 weeks for directors;
• six weeks for managers; and
• four weeks for staff.

The second time to hire breakdown reveals that the median period between the employer making the offer and the successful candidate starting work in the new role is:

• 12 weeks for directors;
• six weeks for managers; and
• four weeks for staff.

No clear pattern emerges on how the typical time to hire is changing. One organisation in three (32.8%) says it is either getting shorter or staying the same. A further three in 10 (28%) say it is getting longer, while the remainder (6.4%) do not know.

Among those reporting an increase in time to hire, the most widely cited causes are: skills shortages; a tight labour market; and economic uncertainty.

Falling time to hire, meanwhile, tends to result from streamlining recruitment processes in response to an increasingly candidate-driven labour market. One private-sector-services respondent says: "We need to be quick in our offer process. Decent staff won't wait around for us."

Cost per hire

Table 5 shows the typical costs associated with filling a vacancy in 2019/2020 for our respondents. We define these costs as including: advertising costs, agency fees, reimbursed candidate expenses, and the costs of psychometric or similar tests.

Table 5: Cost per hire by vacancy type, 2019/2020

Job level	Lower quartile (£)	Median (£)	Upper quartile (£)	Average (£)
n = 99 organisations. Source: XpertHR.
Directors	5,000	10,000	15,000	12,780
Managers	1,000	3,500	6,000	3,945
Staff	300	1,000	2,800	2,158

Two in five (40%) employers report that cost per hire is increasing. Three in 10 (29.6%) say that it is staying the same, and one in four (24.8%) that it is decreasing.

Employers that believe that cost per hire is rising cite a number of contributing factors, including: the tight labour market; growth in recruitment advertising costs; and the need to make increased use of more expensive recruitment methods such as employment agencies and digital recruitment.

Many of those reporting a fall in cost per hire say that this is due to moving recruitment processes in-house, rather than relying on external employment agencies.

Time to effectiveness

Another useful recruitment metric is time to effectiveness, defined as the period between the new employee's start date and their achievement of optimal performance in their role. This is monitored by one employer in six in our sample (16.8%). But while usage is currently limited, one employer in three (33.6%) plans to introduce this metric.

Among the small minority of respondents that provided their latest readings on this measure, the median time to effectiveness stands at:

• 24 weeks for directors;
• 12 weeks for managers; and
• 12 weeks for staff.

Effectiveness of recruitment processes

Three-fifths (60%) of employers rate their organisation's recruitment and selection practices as effective or very effective in terms of sourcing quality hires (see table 6). This suggests that organisations believe that they are successfully rising to the challenges posed by the strong labour market.

A number of respondents providing details of why they chose an effective or very effective rating mention their organisation's emphasis on building its employer brand. For example, one public-sector respondent describes how the employer brand is central to the organisation's proactive and responsive approach to recruitment: "We have focused on improving our employer brand and recruitment strategy over the last few years and it's showing - much better quality of candidates and a much higher volume." But there is always more to be done, they continue: "It's still a tough, competitive market and we will undertake more proactive strategies over the coming year."

Table 6: Effectiveness of recruitment and selection practices in sourcing quality hires, 2019/2020

Effectiveness level	1 to 249 employees (% of respondents)	250 to 999 employees (% of respondents)	1,000+ employees (% of respondents)	All (% of respondents)
n = 125 organisations. Source: XpertHR.
Very effective	3.3	2.8	0	2.4
Effective	51.7	66.7	58.6	57.6
Neither effective nor ineffective	35.0	25.0	37.9	32.8
Fairly ineffective	10.0	5.6	3.4	7.2
Very ineffective	0	0	0	0

Our research

This summary report is based on original research carried out online by XpertHR in September and October 2019. Useable responses were received from 125 organisations with a combined workforce of 133,111 employees. The breakdown of respondents by economic sector is as follows:

• 94 (75.2%) are in private-sector services;
• 23 (18.4%) are in manufacturing and production; and
• 8 (6.4%) are in the public sector.

Broken down by workforce size, the organisations for which respondents work comprise:

• 60 (48%) with between one and 249 employees;
• 36 (28.8%) employing between 250 and 999; and
• 29 (23.2%) with 1,000 or more employees.

The smallest organisation in the survey has 10 employees and the largest has 14,000. The median number of employees is 273.

What should I do now?

• Access and drill down into the complete results data from this survey to benchmark your organisation's key recruitment metrics.
• Understand how to use positive action but avoid discrimination when attracting suitable candidates.
• Choose the right recruitment selection technique for your organisation.