Yield Rate (Selection Rate) – Definition
Yield Rate (Selection Rate) is an HR Metric that measures the efficiency of each stage during the staffing process from receiving applications to recruiting the candidate. In simple terms, the HR metric used to measure the percentage of candidates were hired out of the total applications received.
Basically, the recruiting process forms a pyramid starting below with receiving the application at below level with high numbers and decreasing to a point at finalizing or recruiting the candidate for a particular post.
These processes include the following stages:
- Receiving the applications
- Screening of applications
- Shortlisting of applications
- Interviewing the candidates
- Giving Assignments (This step is optional)
- Final Interview of the candidates
- Recruiting the candidates
Small organizations have fewer stages whereas the MNC’s have long recruiting process and more stages.
Formula To Calculate the Yield Rate(Selection Rate)
Starting at the stage of receiving the application and ending at recruitment of the candidate, you can calculate the yield rate (selection rate) by the following formula:
Let us understand it with a small example.
You posted the job on a job portal of your choice and received 185 CV. Out of these 185 CV, 42 of them were called for an interview. So by applying the above-given formula:
Yield Ratio of the screening process = (42 / 185) x 100% = 22.77 % = 23 %
This numbers will go on increasing as you move up in stages until the final recruitment.
Benefits of Yield Ratio
Yield ratio is one of the important KPI (Key Performance Indicator) in human resources. It shows the percentage of candidates from a specific source invited for an interview or candidates recruited against the number of applications received. Thus, shows how efficient your selected recruiting process/method is.
It allows us to find the effective source of candidates for the job openings. Sometimes it happens that a particular source derived good numbers for the previous post, but it might not be the case if the job profile differs.
Thus, you must continuously evaluate the sources. In the end, keeping track of thee things help to reduce the recruiting costs.
The main objective bei=hind calculating the yield ratio is to find the source that gives the best candidates at the feasible low cost.
Sometimes, it happens that you interview a lot of candidates but fail to extend offers. This will bring the yield ratio less and thus it is the time to look upon your selection process.
In some cases, candidates don’t accept your offers. This could be due to a difference between the employer’s and candidate’s expectations or your competitors might be paying higher than you. This will help you know where you are losing the candidates and their possible reasons.
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