How Measuring ROI in Talent Acquisition Drives Innovation
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Key Takeaways
⇨ Over 50% of companies report a lack of relevant skills as a barrier to implementing AI and automation, highlighting the critical role of effective talent acquisition.
⇨ Organizations should focus on key metrics like cost per hire, time to fill, quality of hire, and retention rates to evaluate the success of their talent acquisition strategies.
⇨ Aligning talent acquisition with business priorities, streamlining processes through automation, and taking a holistic approach are essential for improving hiring efficiency and achieving company goals.
Every organization knows talent acquisition is important – particularly SAP companies. Finding the right applicants with requisite skills and experience is essential, particularly as companies work to implement advanced capabilities like AI and automation.
However, talent acquisition can be a major stumbling block for companies. SAPinsider’s recent AI & Automation in Finance benchmark research report found that over 50% of companies said a lack of relevant skills was a barrier to implementing AI and automation, and there are numerous other examples of skill gaps impeding other important functions. But how do companies go about improving their talent acquisition capabilities? The key lies with data.
Measuring Outcomes for Success
Recently, the talent acquisition experts at Radancy highlighted some of the most important metrics that companies should track when evaluating the ROI of their talent acquisition strategies.
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They recommend that businesses understand:
- Cost per hire: A core measure of talent acquisition efficiency, calculated by dividing total hiring costs by the number of hires.
- Time to fill: Indicates process efficiency, with faster hires often reflecting streamlined workflows.
- Quality of hire: Measures new employees’ performance over time, ensuring hires align with business needs.
- Retention rates: Tracks how long new hires stay, revealing the effectiveness of hiring and onboarding strategies.
There are, of course, other metrics that companies should keep track of like how the company culture is perceived internally, as well as the outside brand perception. However, these can be difficult to accurately quantify. Organizations should focus on the measurements that they can actually track and work to ensure that they are maximizing workflows to attract and retain top talent.
Maximizing Value
Radancy also offered three guiding principles for businesses that want to better align their talent acquisition with overall company priorities, known as the Business Value Triangle. This framework emphasizes that companies need to align their Business Priorities, Structure, and Processes.
The foundational layer of business priorities aligns talent acquisition with the organization’s overall objectives. Whether it is revenue growth, market expansion, or innovation, talent acquisition teams should be aware of the high-level business priorities so they can respond to shifting business needs, from scaling specific teams to supporting diversity and inclusion efforts.
Once priorities are established, companies should structure their talent acquisition teams so they are empowered to make decisions quickly and equip them with the resources needed to execute their essential functions.
Finally, companies should streamline their talent acquisition process, implementing systems that reduce hiring times and improve efficiency. AI-driven automation can optimize these processes, allowing recruiters to focus on strategic functions like nurturing talent pipelines and analyzing trends.
What This Means for SAPinsiders
Focus on what you can control and quantify. Organizations often concern themselves with outside perceptions. While this is important to put their best foot forward, companies should focus on tracking internal metrics that can be easily quantified to guide their behavior and bolster their goals.
Take a holistic approach to talent acquisition. Organizations often hire employees to fill empty positions without asking themselves about what the overarching goal of that position is. Companies that want to strengthen their position should help talent teams better understand their corporate goals so that they can align their searches to better meet these needs.
Don’t rely on outdated methods. Efficiency is a key aspect of talent acquisition. Companies can bolster their ROI by reducing time-to-hire through automated solutions like the Radancy Talent Acquisition Platform. This offers AI-driven insights that help find the right candidates and onboard them more effectively.
