How to measure if your ROI is a success or not?

Organizations opt for recruitment management software to streamline seamless recruitment procedures. Recruitment management needs to keep a track on the ROI score along with recruiting employees.

Let's discuss few elements to measure the success of ROI :

Turnover rate

The primary function of a recruitment management software is hiring eligible candidates for the organization. However, if the newly hired employee quits after a short period of time, it embarks the hard work of the recruitment team in vain, starting the procedure all over again. To ensure a longer stay of the employee the HR team needs to keep an eye on the cost of retention and the turnover rate of the organization. To determine these rates it requires acute research using the data stored by recruitment management software. With efficient use of data the team can determine if the organization is losing new employees within a year indicating a problem which needs to be solved.

Employee performance

Employee performance is one of the most imperative metrics used to measure the success of a recruitment product. Although it comes with a huge amount of work, it provides valuable insight into the quality of employees hired by the organization.

There are a handful of metrics to measure employee performance. Regardless of the recent number it is essential for the employer to ensure that the employee hired on board will perform at a higher level in future. This research helps the employer to plan further training programs to upgrade the skills of the employee guiding them to prepare for higher roles and responsibilities. One of the easiest ways to evaluate the performance of the newly hired employee is to keep a regular check on the day to day improvements. This might require proper planning with the assistance of the managers to figure out the best way to measure the performance.

Cost per hire

Cost per hire needs a brief introduction, cost per hire implies the investment that an organization bears in hiring an employee. These expenditures are easy to calculate. Let's evaluate the element that determines the cost per hire. Start with internal calculation. The very first element is the recruiter's salary, referral bonus that an employee receives along with the investment routed in a sourcing platform.

External cost includes elements such as cost in advertising, career fairs, and expenses in recruitment software. Both internal and external cost combined determines the total expenses along with the hours spent in hiring one employee. This determines the average cost required to hire one employee.

Time to Recruit

The more the time the more the cost. If the recruiter requires more than a month to hire one employee that indicates a problem. It is debatable on how long it takes to hire an employee. Yet it is advisable to hire an employee within this time frame. Once a recruiter finds an eligible candidate delaying an offer might demotivate the newly hired employee to join the company. Availability of a position means that the workload of the existing employee. While this can be managed for a short period of time but can be troublesome for the longer run. Hence increases the need to have a specific time frame to hire an employee.

Experience of the candidate

Organizations often tend to hire employees with higher experience. As with experience comes wisdom. Experienced candidates can be hired for higher responsibilities. Sourcing experienced candidates is a challenging task. It increases the hiring cost of the organization. It cannot be ignored that the higher the experience the higher the return on investment.

In a perfect world the recruitment procedure might seem a seamless process but it has a lot of layers which needs to be understood. These elements help the organization understand the nitty gritties of the ROI.

I’m Amit Kumar, and successfully working professional in Digital Marketing field. I have been working in this industry from past 8 Years found it so useful for everybody in today’s scenario. I am a blogger too and well known to predict market trends.