Source to Hire Rate
How to Calculate Source to Hire Rate
Source to hire rate (STHR) is calculated by dividing the number of new hires by the total number of candidates sourced (found through any means: job boards, referrals) during a given time period and multiplying by 100. For example STHR in Q1 is:
Q1 STHR = (# new hires in Q1 / total number of candidates) x 100
So, if a sourcer found 500 candidates for various roles and 4 of them ended up hired, the source to hire rate would be 0.8%:
(4 / 500) x 100 = 0.8%
Source to hire rate is a measure of the performance of your sourcing and recruiting operations
HR professionals see source to hire rate as a reflection of their sourcing quality. A good source to hire rate indicates that you're doing a great job identifying top talent before they get poached by other companies.
Fantastic sources know exactly where to look to find stellar candidates for a variety of roles. The more great candidates they bring into the hiring funnel, the higher the chances of candidates’ ultimately converting. And the higher your STHR, the better.
While 0.8% seems low in the example above, anything at or over 1% is very good.
If your source to hire rate is closer to 0%, there could be issues with your:
- Sourcing team
- Employer brand
- Compensation and benefits
However, there are many factors that go into determining how high or low your STHR should be depending on what kind of company you work for and what industry it operates within.
For example, if you're at a huge company like Amazon, you will get thousands upon thousands of qualified candidates applying. But startups may have trouble getting enough candidates, and having an excellent, lean sourcing strategy is far more important to get first hires done quickly.
What to do if you have a low STHR
First of all, try not to force anything. Trying to bump up your STHR by hiring people who aren't right for the job isn’t going to help in the long term.
Here are a few ways to increase your STHR:
- Take time to re-read your job description to ensure job requirements are reasonable
- Research competitors’ salaries for comparable roles
- Analyze interviewer performance
And last but certainly not least, assess your candidate NPS score for clues as to what turned candidates off in your hiring process
A candidate net promoter score (CNPS) indicates how likely candidates are to recommend your hiring process to a friend or colleague. The CNPS is similar to the NPS survey customer success teams use in that it’s measured on a scale of zero to ten. A seven or above means that candidates were generally impressed with your hiring experience and would encourage their peers to apply to your organization.
Every part of the hiring process contributes to a candidate’s overall experience. Consistently sending out CNPS surveys and tracking the results helps you track down what’s going well and what needs improvement.
Use your SHTR to level up your recruiting strategy
The source to hire rate is a great tool for measuring and scaling your sourcing and recruiting performance. It shows how many candidates you're finding that turn into employees, which can help you improve over time. If you have a low SHTR, take time to delve into why your STHR is low. Look for ways to adjust your JDs, streamline your interviewing process, reassess your salary ranges, and evaluate your interviewers.