How To Calculate Your Applicant-To-Hire Ratio in 3 Steps
By Indeed Editorial Team
Published September 29, 2021
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
Recruiting is an essential part of building a talented, driven and successful workforce. In human resources, there are metrics you can track, including the applicant-to-hire ratio. If you're interested in finding strong candidates to apply for positions at your company, it can be helpful to use this ratio to improve your recruiting strategies. In this article, we explain what the applicant-to-hire ratio is and how to calculate it, then provide tips for using it in your own hiring process.
Read more: What Is Recruitment? A Comprehensive Guide
What is an applicant-to-hire ratio?
The applicant-to-hire ratio is the number of candidates applying for a position compared to the number of people you need to hire. The formula for the applicant-to-hire ratio is:
Applicants to hire = (total number of applications / total number of hires)
For example, if a company receives 12 candidate applications for a customer service position and can hire three people to fill the roles, they have an applicant-to-hire ratio of 12:3, which simplifies to 4:1.
What factors affect the applicant-to-hire ratio?
How widely you advertise a position can affect your applicant-to-hire ratio. Here are some other aspects that could affect your applicant-to-hire ratio:
Level: An entry-level position may receive more applications than a more specific position with more required experience and criteria.
Brand: If you work for a recognizable brand, people may be more familiar with your company and seek you out.
Compensation: The higher your compensation rate is, the more people may apply to it, especially if it's higher than the industry average for that position.
Market: if unemployment is high, you may have more candidates than you would if unemployment was low.
Medium: If you post a job online, you may get more candidates because it's easier to apply, and you can reach a wider audience online.
Related: What Is Recruiting?
Why is it important to calculate applicant-to-hire ratio?
Here are some reasons this metric can help you with your recruiting processes:
You can use your metrics from previous job postings to set expectations with managers and hiring teams for how intensive the hiring process may be. Communicating your applicant-to-hire ratio can help you explain why the application process takes time and how much work you're doing to find the right candidates for the open positions. For example, if you work at a company that has consistently high applicant-to-hire ratios, you can use that information and make a plan to:
Schedule time to go through application materials
Advocate for additional team members to assist in the hiring process
Set a realistic timeline for interviewing and vetting candidates
Related: Why Is Recruitment Important?
Understanding your applicant-to-hire ratio can also help you determine if your hiring processes are helping you save time and reach qualified candidates. Having a high applicant-to-hire ratio means you're reaching a lot of potential applicants, which can be good. However, it can also mean that you're getting applications for candidates who may not be qualified. You can determine whether you need to change your processes to make the hiring process easier for HR, like rewriting the job posting or using applicant tracking systems.
If you've changed your application process, you can use your applicant-to-hire ratio as a metric that helps you measure if your changes are successful. Your application process should attempt to target candidates in the correct industry with the right qualifications. The more targeted your postings and advertising is, the lower your applicant-to-hire ratio can be. At the end of every recruiting period, calculate your applicant-to-hire ratio to determine if there has been a change and how that change may affect your recruiting processes in the future.
Read more: 23 Tips for Recruiting
How to calculate the applicant-to-hire ratio
Here are some steps you can follow to calculate the applicant-to-hire ratio:
1. Review previous hiring information
Determine how many hires you made in your recruiting period, usually a year or a quarter. The number of hires and the number of applications should be from the same time period. This way, you can get an accurate understanding of the results of the previous period. Try to keep accurate and easily accessible recruiting records so the HR team can use them to make more informed hiring strategies.
Related: How To Be a Good Recruiter
2. Divide the total number of hires by the total number of applications
Once you have the data from your previous recruiting period, you can use the formula to find your ratio. For example, if you had 10 open positions last year and 350 applications, you can fill out the equation like this:
Applicants to hire = 350 / 10, or 35 / 1
Applicants to hire = 35:1
3. Analyze the results
Once you have your ratio, you can use it to make predictions about your hiring process and determine if you want to make any changes. For example, if you have an applicant-to-hire ratio of 35:1, you had to review 35 applications to hire one candidate, which can be an average ratio for many jobs. If your ratio was lower, it might mean you could benefit from expanding your recruiting reach. A higher ratio might mean you could try refining your job posting to reduce the number of people who apply.
Related: 7 Steps for Making a Hiring Decision
Tips for using the applicant-to-hire ratio
Here are some additional tips you can use to understand your applicant-to-hire ratio:
Use applicant tracking software
Many companies that have high applicant-to-hire ratios usually use applicant tracking systems to filter and track application. An ATS can help you keep track of the applications you have reviewed, denied or moved forward in the application process. They can also help you find qualified candidates easier because they can scan application materials for keywords and qualifications you add. They can help you send out assessments and hiring information to make your hiring process easier for your HR team.
Determine your ideal ratio
The ratio you want is usually specific to your industry or company, though it can also vary from job to job. If you're recruiting by yourself or with a small team, it might be more cost- and time-efficient to try to lower your ratio, like 20:1. With the help of an ATS or a large HR department, you might feel comfortable with a higher applicant-to-hire ration, like 100:1.
Compare within the industry
You can use your applicant-to-hire ratio to compare your status with the industry standard. Like all metrics, the applicant-to-hire ratio can mean different things depending on the context. Using analysis with other metrics, like how many candidates you called for an interview, can help see how your ratio fits in the entire recruiting process. This metric can also help you understand your company's role in the market in terms of desirable workplaces for candidates. For example, if your company has a reputation for being a good place to work, you may have a higher than average applicant-to-hire ratio.
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