There’s a saying: what gets measured gets managed – and recruiting is no exception.
New technologies and big data have changed the way we do almost everything, and physician candidates can find information about your company, your jobs, your competitors’ jobs, and more with a few mouse clicks. Access to this new information has changed the way marketing is done, and it’s certainly changing how we recruit.
How do you allocate your recruitment resources appropriately in this new age of recruitment? Measuring what you and your team are doing is the only way to make sense of your hires and recruiting efforts in terms of dollars and cents. We’re talking about recruiting return on investment or the ROI of your recruiting, and it’s critical for effective physician recruitment.
The good news is you don’t have to be a data wiz or a math major to calculate ROI. To that end, over the next few weeks we’ll be posting a series of articles that will help you understand these metrics and apply them to your work in physician recruitment. As a reminder, ROI is the ratio between the amount of return on investment delivers relative to its cost.
Why does ROI matter?
Knowing the return on investment for the specific strategies you employ will help you manage your resources and allocate time and money appropriately to your most effective recruiting efforts. It helps you be smarter with your investments. When you do it right, ROI lets you do more with less. Let’s start with a few basic metrics.
Time to Hire
Time to hire is simply the amount of time it takes to bring a new hire on board from the first moment you publicize an open opportunity. This is an important recruiting metric because it focuses on the efficiency of recruitment and the sourcing channels used. To improve the Time to Hire metric, you can break it down into intervals of time between the day you post a job and the hire’s first day on the job, e.g., when a candidate was sourced, when they interviewed, etc. The goal, ultimately, is to shorten the Time to Hire.
Cost per Hire
Because physician recruitment comes down to the bottom line, Cost per Hire is one of the most important metrics to track. It’s important to know how much it’s costing to hire each position and where you might be losing money. Cost per Hire takes into account a few other metrics, which varies based on the position you’re hiring for. Some common metrics here include:
- Job board/ email list subscription costs
- Referral bonuses
- Advertising costs
- Relocation costs
Measuring Cost per Hire is as simple as looking at your external and internal costs and dividing that number by the total number of hires.
Another metric most physician recruiters measure is Days to Fill, or the number of days from when a job is opened until it’s been filled. Per the Association of Staff Physician Recruiters the average time it takes to fill a Primary Care position is 170.9 days.
Hard and Soft Metrics
If you’re judging the tools you use based on number of hires and nothing else though, you’re not measuring the true success of your recruitment efforts. Cost per Hire is a “hard” metric of success that’s valuable, but a hard ROI calculation doesn’t consider other factors that contribute to your recruiting success over time.
That’s where some “soft” or “indirect” metrics come into play. These aren’t as easy to quantify and measure, but they’re just as important for your long-term recruiting success and sustainability. They might be hours spent building your recruitment funnel, improved brand reputation and perception, the number of high quality leads or interviews generated from a specific tool, and more.
Here’s an example of measuring soft metrics specific to candidates. One candidate may apply to different jobs at a company once or multiple times. If one candidate submits three different applications, it would typically be counted as one “lead” and three inquiries. If you measure it in terms of ROI, you’d probably measure it this way:
- Net new candidates: the count of new candidates only
- Existing candidates: the count of candidates who were already in your system and applied again to a different position
- Candidates by channel: the count of new vs. existing candidates by free and paid channels
If measuring ROI seems daunting, think about it this way: You’re simply turning data into information, and information into insight. When you measure soft and hard ROI calculations, you can communicate the importance of your time and dollar investments to your team. In turn, you’ll ensure you’re investing your time and money to methods that are most fruitful for your organization. Perhaps most important, measuring ROI builds respect and accountability – which is crucial to physician recruiters because when it comes to recruiting great doctors, the best gravitate to the best.
This is just Part 1 of our Physician Recruitment ROI Series. Next up is How to Measure the Effectiveness of your Recruiting Tools for better ROI.
Or jump to Part 1, Part 3, Part 4, or Part 5. After reading, you can Calculate your own ROI with our Easy to Use Calculator. Finally, make sure to download our 11 Terms to Remember When Calculating ROI.