This is the fifth post in a series about the 5 key performance indicators (KPIs) we use at Greenhouse to measure our recruiting team’s success. Learn the methodology behind our KPIs in the introductory post and find the description of the first KPI here, the second KPI here, and the third KPI here.
In previous posts, we’ve looked at the key performance indicators (KPIs) that will help you measure what’s happening at the top of the recruiting funnel, what type of candidate experience you’re offering, and how quickly candidates are moving through the application process. This week, we’ll be taking a look at the KPI that will help you measure your team’s overall effectiveness: offer acceptance rate.
Read on to learn which KPI helps you determine your team’s effectiveness (particularly in the later stages of your process) and how can you make sure you’re not cheating yourself out of good data when you track it.
KPI #4: Offer acceptance rate
Offer Acceptance Rate (OAR) is the percentage of extended offers that are accepted.
This metric should be heavily relied on as an indication of a team’s effectiveness. A strong OAR usually indicates that the team has successfully filled a pipeline with candidates, created an efficient and thorough interview process, poured thought into the candidate experience, and, finally, helped the hiring team extend the right offer to the right candidate for their team.
The OAR highlights the team’s ability to draw out the candidate’s priorities, needs, and deal-breakers before an offer is extended, and to land on the offer that finds the sweet spot for both the candidate and the business’ needs.
Something to note: It is important that organizations use this metric in an authentic way. It can be tempting not to “create” or document an offer until you’ve gone through a lot of pre-closing work with a candidate and feel near certain that the paperwork, once sent, will be signed. In these cases, the offer is simply a formality with little risk, and therefore provides little information about your process or the strength of your employer value proposition. We’ve realized that this approach creates bias that inflates OARs to near 100%, and denies the metric the gravitas it deserves. As tempting as this may be, it squashes interesting insights!
At Greenhouse, we analyze the rejection reasons we collect when an offer is rejected in order to improve our recruiting process and offers. For example, we learned that the candidates for one department were rejecting offers because they didn’t think the interview process was challenging enough. That perceived lack of challenge in the interview process was acting as a signal to them that the role might also not be challenging enough to be interesting. We used this data to rally hiring managers around reworking interview kits to more accurately reflect the true challenges this team faces.
Wondering how you measure up? Across Greenhouse customers, the average offer acceptance rate is 87%. However, this surely includes some of the bias I mentioned above. Greenhouse customers, help us make sure these benchmarks are accurate!
You can get all five KPIs in one handy format when you download our ebook, “The 5 Recruiting Key Performance Indicators.” Simply click the button below!