Conversion rate
What is the conversion rate?
The conversion rate is the proportion of candidates that finish a certain stage of the recruitment process—most notably, those that are hired—in comparison to how many candidates entered that stage.
Formula:
Conversion Rate = (Number of successful hires / Total number of candidates) × 100
Why should we calculate the conversion rate?
Monitoring recruitment conversion rates is critical for maximizing your hiring strategy and enhancing overall recruitment performance. It allows you to:
- Improve the candidate experience by finding and resolving pain points in the hiring process.
- Quantify recruitment efficiency by assessing the extent to which each phase advances candidates.
- Make data-driven decisions about recruitment strategy, budget, and resource planning.
- Establish benchmarks for assessing improvement over time or comparison with industry benchmarks.
What are the various HR conversion rates?
Application to interview rate:
Tracks how many applicants progress from applying to being invited to an interview. A low rate may imply your job ad isn't getting qualified applicants or your screening criteria are too strict.
Interview to offer rate:
Shows how many interviewed candidates receive job offers. If this rate is low, it could mean there's a mismatch between candidate expectations and role requirements or that interviewers are not aligned on evaluation criteria.
Offer acceptance rate:
Indicates the proportion of applicants who accept job offers. A low offer-to-hire ratio tends to indicate problems like suboptimal pay, excessively delayed offers, or subpar candidate experience.
Source conversion rate:
Analyzes which hiring channels (such as LinkedIn, referrals, job boards, or career fairs) are actually driving successful placements. It assists in getting HR teams to invest in the top sources and eliminate what's not contributing.
Stage-to-stage rate:
Measures how many candidates progress from one step to the next in the recruitment funnel (e.g., from screening to first interview, from final interview to offer). It identifies particular points at which candidates are falling off.
What influences the conversion rate?
A number of internal and external influences can affect conversion rates at various stages:
Job description clarity:
Ambiguous or unrealistic job advertisements can discourage qualified candidates from applying.
Employer branding:
Candidates are more likely to move forward with firms they perceive as credible and good places to work.
Recruiter responsiveness:
Slow communication can cause candidates to disengage or drop out.
Interview experience:
The quality and consistency of the interview process determine if candidates move forward in the process.
Compensation and benefits:
Competitive compensation and benefits packages can both improve offer-to-hire and acceptance rates.
Application process:
A lengthy or confusing application process can decrease initial conversion.
Candidate fit:
Incongruence between candidate qualifications or expectations and the job can reduce conversions.
What are ways to enhance the conversion rate?
Improve job postings:
Write concise, inclusive descriptions that reflect the role and company culture.
Streamline the application process:
Make it mobile-responsive, simple to fill out, and time-friendly for candidates.
Improve screening techniques:
Leverage data-driven technology to provide effective and unbiased initial screening.
Train interviewers:
Standardize interviewing techniques and get evaluators aligned on role expectations and evaluation standards.
Streamline communication:
Keep timely, transparent, and consistent communication with candidates throughout the process.
Review compensation offers:
Stay current with market pay and benefits.
Monitor and adjust:
Monitor conversion data on a regular basis and make ongoing improvements based on trends and feedback.