OFFER %
HR Metric - Offer%
What (Definition)
Candidates who successfully pass through the interview stage are given offers to join the organization’s team. Calculating the percentage of offers is a key metric used by the HR department for several beneficial reasons. Employers measure the proportion of applications progressing to the offer level to make better decisions for the well-being of the company.
Why (Benefits)
Calculations of this metric can be advantageous to analyze the recruitment process.
Organizations can evaluate the hiring process by knowing the percentage of applicants progressing to the offer stage.
A low percentage indicates an inefficient interview process or a smaller number of qualified candidates from the total applications.
Therefore employers can plan out different strategies to increase the value of this metric by making interview processes smoother and easier and targeting candidates from different sources.
Allocating resources becomes easier. A high percentage of offers given can be misleading as the number of offers can be higher than the number of job openings.
The HR department can then limit the number of applicants passing the interview stage by only sending offers to the candidates passing the screening process with high scores.
How (Calculation?)
Employers should follow certain simple steps to calculate this recruiting metric.
Count the number of applicants that have reached the Offer stage (the stage where offers are sent out)
Make sure all these data are from a particular hiring period to get accurate results.
Data on the hiring period in an organization is provided below.
Hiring Stages in the Applications Table
Data may vary from one organization to another or different departments of a single organization.
The general formula to calculate the percentage of offers sent during the hiring period:
Percentage of Offers sent = (Number of applications progressed to offer stage / Total number of applications) * 100
The number of applications that passed to the offer stage during the period is 8.
Say, the total number of applications received during the recruiting period is 50.
Using the given formula below we can calculate the percentage of offers given out of all applications received.
Therefore,
Percentage of Offers sent = (8/50) * 100 = 16%
We can now conclude that 16% of the total applications have been offered the position of Finance Manager in this organization.
The use of an Application Tracking System (ATS) makes life easier as the calculations are automated once the relevant data is entered into the system.
Organizations can also use spreadsheet software to calculate this metric by using the formula features built within it.
A Higher Offer % could mean that you are finding good candidates from the application pool.
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Now it’s your turn.
Do you calculate the percentage of offers sent out during the hiring period in your company? Please share your thoughts on how you do it below. We would like to hear from your experience.
To learn more about other recruiting metrics please visit HR reporting tools.