Recruiting top talent is crucial for any organization’s success However, sifting through stacks of resumes to find the perfect candidates can be tedious and time-consuming This is where calculating your applicant to hire ratio comes in handy.
The applicant to hire ratio, also known as the recruiting yield ratio, is a useful metric that helps recruiters evaluate and improve their hiring process Simply put, it is the number of applicants divided by the number of hires made in a given period. Tracking this ratio over time provides insight into the efficiency and costs of your recruiting efforts.
In this article, we will walk through the steps to calculate your applicant to hire ratio. We will also explore how to analyze the ratio to identify bottlenecks in your hiring process. With some simple tweaks, you can improve the quality of hires and return on investment from your recruiting activities.
How to Calculate the Applicant to Hire Ratio
Follow these three simple steps to determine your organization’s applicant to hire ratio:
Step 1: Gather Applicant and Hire Data
First, you need to collect relevant recruiting data over a set time frame. The most common periods are monthly, quarterly or annually. Include the following metrics:
- Total number of job applications received
- Total number of hires made
Compile this data from your applicant tracking system or HR records. Make sure to use the same date range when gathering your applicant and hire numbers.
Step 2: Divide Total Applicants by Total Hires
Next, divide the total number of applicants by the total number of hires for the selected time period.
For example, if you had 1,200 applicants and hired 24 people last quarter, your calculation would be:
1,200 (total applicants) / 24 (total hires) = 50
This produces an applicant to hire ratio of 50:1.
Step 3: Analyze and Compare Ratios Over Time
The final step is to analyze what your ratio means and track how it changes over time.
Compare your current ratio to previous periods and look for trends. Some key questions to consider:
- Is your ratio higher or lower than last month/quarter/year? Why?
- How does your ratio compare to industry benchmarks?
- Are you satisfied with the current ratio or do you want to decrease it?
Evaluating changes in your applicant to hire ratio will shed light on the effectiveness of your recruiting process. Now let’s look at how to dig deeper into the numbers.
How to Analyze and Use Your Applicant to Hire Ratio
Once you have calculated your organization’s ratio, you can gain valuable insights by assessing what the number means and taking action on opportunities for improvement.
Benchmark Against Industry Averages
One way to analyze your ratio is to compare it to applicant to hire ratios for similar roles or industries. For example:
- Entry-level positions often see ratios of 25:1 to 50:1
- Specialist roles may range from 10:1 to 30:1
- C-level executives tend to have lower ratios under 10:1
If your ratio is higher than industry benchmarks for comparable positions, it indicates applicants are dropping out of your hiring process early on. You likely need to refine your screening and selection processes.
Set a Target Ratio
Determine what applicant to hire range makes sense for your hiring needs. Set a target that aligns with the open roles you are recruiting for.
For instance, your organization is hiring a high volume of customer service reps. You want to bring on 20 new reps this quarter. Given your target hires and current application volume, your ideal ratio may be 30:1.
Once you define a target, you can work to hit that ratio through recruiting process improvements. Monitor your progress each period.
Identify and Address Bottlenecks
A high applicant to hire ratio often means candidates are falling out of the hiring process prematurely. Analyze each step to detect roadblocks or leaks in your funnel.
Look for stages with significant drop-off such as:
- Many applicants failing screening calls
- High candidate rejection after interviews
- Very few hires from referral programs
Then explore why candidates are not advancing at each problem area. Refine your processes to remove barriers and keep suitable applicants engaged.
Calculate Cost Per Hire
Your applicant to hire ratio directly impacts your cost per hire. This measures your overall investment in recruiting. The formula is:
Total recruiting costs / Total hires
A lower applicant to hire ratio reduces costs like job board fees and recruiter time spent on unqualified candidates. Estimating your cost per hire can demonstrate the financial benefits of honing your ratio.
Assess Quality of Hire
While a low ratio is positive, focus on quality over quantity. Calculate metrics like performance ratings, ramp-up time, and retention rate for recent hires. This verifies you are hiring the best people even with less applicants coming through the process.
Set Goals to Reduce the Ratio
With your target ratio defined, set quarterly or annual goals to decrease your current number. Develop tactics like sourcing from new channels, using predictive hiring tools, or improving your employment brand. Track your progress meeting milestones along the way.
In our original example, the company had a 50:1 ratio. Their goal is to reduce it to 30:1 in a year. They create an action plan and timeline to hit this target.
Tips for Lowering Your Applicant to Hire Ratio
Here are some proven ways to tighten up your recruiting process and hiring funnel:
Refine job descriptions – Update job posts with clear, detailed requirements. This attracts more qualified applicants from the start.
Offer referral bonuses – Referrals often convert better. Give incentives to employees for successful recommendations.
Prescreen applicants – Add phone or video screening early on to filter applicants who lack required skills.
Test for key abilities – Administer skills, personality or aptitude assessments to evaluate fit.
Train hiring managers – Ensure interviewers have consistency and avoid biased decisions.
Speed up process – Remove delays between recruiting stages to keep candidates engaged.
Give real expectations – Be upfront about the role, culture and interview process when sourcing.
Review analytics – Track metrics like time-to-hire and offer acceptance rates. Address areas that need improvement.
Increase employer brand – Promote your workplace reputation and employee value proposition.
Fine-tuning your recruiting funnel takes time and commitment. Monitor your applicant to hire ratio regularly to see the impact of changes over both the short and long term.
Frequently Asked Questions
Still have some questions about calculating and using your applicant to hire ratio? Here are answers to some common FAQs.
How often should I calculate our ratio?
Aim to track your applicant to hire ratio at least quarterly. Monthly is ideal for a real-time pulse on your recruiting effectiveness. Avoid less than 4 times per year as trends are harder to identify.
What is a good applicant to hire ratio?
There is no universal “good” ratio as it varies significantly by industry and job type. Entry-level roles often fall between 25:1 and 50:1. More specialized positions may be 10:1 to 20:1. C-suite executives regularly see ratios under 10:1.
What if we have no hires in the time period?
With no hires, you cannot calculate a meaningful ratio. Exclude periods with no hiring from your analysis. Focus on periods where active recruiting occurred.
Should I calculate separate ratios for each open position?
You can break down ratios by role, department or location. But an overall ratio is simpler for high-level insights. Calculate separate ratios when recruiting for very disparate positions.
What are signs of a poor applicant to hire ratio?
Extremely high ratios over 75:1 indicate your process needs refinement. Low ratios under 10:1 may mean you are missing qualified applicants. Spikes up or down over time also warrant a deeper look.
How do I get applicant tracking system (ATS) data?
Most ATS platforms have reporting features to pull applicant, stage and hire counts. Ask your IT team to extract the required numbers for each period into a spreadsheet.
Putting the Applicant to Hire Ratio into Practice
Calculating your applicant to hire ratio provides tangible insights into the efficiency of your recruiting process. By regularly tracking this metric and analyzing trends over time, you can identify successes and problem areas. This allows for data-based process improvements.
With a streamlined hiring funnel, you reduce costs and time spent on unfit applicants. Your recruiting team can focus their efforts on the best candidates. Moving forward, continue monitoring your ratio against goals. Refine your tactics based on the latest data.
Getting recruitment right is crucial for building an awesome workforce able to drive business results. Knowing your applicant to hire ratio sets you on the path to hiring better talent efficiently. Use these steps and tips to calculate, understand and optimize your organization’s ratio.
What is a good interview-to-hire ratio?
A good interview-to-hire ratio can vary significantly based on the industry, specific roles, the company’s hiring practices, and the overall conditions of the labor market. More specialized or senior positions may require interviewing several candidates, potentially pushing the ratio higher when finding the right match with the necessary skills and fit. On the other hand, for more general or entry-level roles, the ratio might be lower due to a larger pool of suitable candidates.
A study by the National Association of Colleges and Employers (NACE) found that the average interview-to-offer ratio was approximately 2:1. This means that for every 100 candidates interviewed, 50 received job offers. Additionally, the acceptance rate of these offers was about 3:2, indicating that, of the 50 offers made, 30 were accepted by candidates.
Factors affecting the interview-to-hire ratio
Several factors can influence the interview-to-hire ratio, including:
- Role complexity: The complexity and seniority of the position can greatly impact the ratio. Complex and senior roles often have higher ratios due to more thorough vetting processes, while simpler roles have lower ones.
- Hiring strategies: The nature of a company’s hiring practices, including the rigor of its screening processes (e.g., use of preliminary tests), can affect how many candidates are interviewed before a hire is made.
- Effectiveness of the recruitment channels: The effectiveness of the sourcing channels (e.g., job boards, social media) can also impact the ratio. Some channels might bring in more qualified candidates than others, impacting how many interviews are needed per hire.
- Company reputation and employer branding: A strong employer brand can attract higher-quality candidates, improving the interview-to-hire ratio. Conversely, a poor reputation may lead to a lower-quality applicant pool.
- Labor market conditions: Job market conditions can significantly impact the ratio. In a candidate-driven market with more jobs than qualified candidates, the ratio might increase as companies need to interview more candidates to find suitable hires.
