offer acceptance rate
Offer Acceptance Rate (OAR) is the percentage of extended offers that are accepted. This metric should be heavily relied on as an indication of a team’s effectiveness.
What is the definition of offer acceptance rate?
Here’s the formula to calculate offer acceptance rate:
In this formula, you should only include final official offers to external candidates. Offers made informally or in different stages of the process don’t usually count towards this metric.
This metric has some flexibility. It’s usually calculated annually but you can also calculate it more frequently if, for example, you’ve had a busy recruiting month. Also, you could calculate job acceptance rate per recruiter, hiring manager or department.
As with every recruiting metric, numbers can be suspect. A 40 percent average offer acceptance rate shows that something is definitely wrong with your talent acquisition strategies. Hopefully, not many companies suffer from this affliction. Even an acceptance rate close to 100 percent could look odd, unless you’re Google or another prestigious company.
Generally, companies aim high with this recruiting metric. An offer acceptance rate above 90 percent can indicate that there’s a good match between a company’s requirements and selected candidates’ expectations. This high offer to acceptance ratio could be the result of good communication, reasonable and competitive offers and good candidate experience.
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How to achieve high offer acceptance rates
A good way to tackle low acceptance rates (or preserve high ones) is to understand why candidates turned you down. Here are a few examples:
Some reasons, like personal restrictions, are outside your control. Other reasons, like company culture and leadership, aren’t just one person’s responsibility and can be difficult to fix. But, for other reasons, there are remedies.
Generally, you need to answer four questions:
1. Are my job offers competitive?
Benchmarking can help with this. By knowing your competition and their job offer acceptance rates, you can draw conclusions about whether they make better offers than you (and what these offers are). Along with competitive analysis, you can also find help in aggregated salary data from sources like Glassdoor and Payscale. (Our salary profiles also provide detailed information about salary ranges for various HR positions.)
Tips to Improve Your Offer Acceptance Rate:
At any given point when individuals talk about the candidate experience, it’s typically the application procedure that they have at the top of the priority list.
When all is said in done, there’s an entirely extreme disconnect over the application experience – the normal candidate goes through 3-4 hours submitting a single application, while 70% organizations think it takes them less than 60 minutes.
Barely surprising at that point, that 60 percent of job searchers quit trying to fill out online job applications as a result of their length or complicated nature.
High drop-off rates lead to loss of top quality candidates, brand damage from candidates baffled with the procedure, and the greater expenses related to abandonment in cost-per-click hiring models have become a new-age dilemma for recruiters.
Around half of businesses accept that the length of application processes is positive. As far as anyone knows it “gets rid of” candidates that aren’t adequately dedicated. Great talent ought to be sufficiently committed enough to fill out any sort of complex structure that is tossed in their direction.
In actuality, the opposite of this is valid – the best candidates have a lot of changes in the present employment market. They aren’t as ready to go through the limitless hoops, and will happily go where the grass looks greener.
Taking your own application is the most straightforward approach to walk a mile in your candidates’ shoes and see what needs to change. Apply with a fake name and qualifications, and take an honest approach to your recruitment procedure.
Top tier candidate experience is all about creating experiences for candidates that feel genuine, humane, and authentic. It’s tied in with building personal associations with the applicants, not simply handling resumes, in a way that is valuable without feeling meddlesome or awkward.
For organizations that are currently hiring, giving an extraordinary candidate experience may appear to be somewhat unique and different than it used to. In the period of social distancing, face to face interviews over coffee, on-site meetings, and lunches with the team is not, at this point a choice. Therefore, numerous organizations are finding better approaches to make their candidates feel esteemed — or inventive methods of recreating these familiar interactions from a remote place.
Candidate experience covers each touchpoint and engagements that candidates will experience all through the phases of your organization’s recruitment campaign(s) — commonly known as the candidate journey from application to onboarding.
As such, in other words, the candidate experience is an assortment of all touchpoints between the candidate and your organization, from the second they first observe your job vacancy until the second they are recruited and onboarded in your team.
In a research conducted by the Wynhurst Group in the year 2007, it was found that the new employees who had a pleasant experience and a systematic onboarding process (58%) were more inclined to stay with the company for at least more than three years in comparison to those who didn’t have a good onboarding experience.
Employee onboarding is so much more than just meeting the new hire at the reception and then just skipping to “here’s your laptop, and here’s your workstation,” but actually it is a crucial transition period where you imbibe the organizational values, culture, and systems to the new recruit. It is the initial and most important step to keep the talented individuals excited, happy, and engaged for long.
Every new person who joins your organization should be set up for nothing shorter than success from the very beginning. Your employee onboarding process should not just teach the new joiners about their job role and duties, it should also draw a clear picture about the company culture and how they can contribute to the organizational growth and thrive within the company. Don’t take any shortcut in this initial process: the kind of tone you set in the onboarding, orientation and the training procedure on the day one can set the tone of the employee’s expectations in his/ her entire tenure at the organization.
A well structured and proper mentorship program is the next step in where the employee is walked through the soft skills, the company culture of how things actually work there and it is a good chance for them to get acquainted with the company’s long term vision statement. With these things being explained clearly in the onboarding process they can follow their mentors to assimilate themselves seamlessly into the existing work culture.
When a fresh hire is paired with a mentor or a guide who can help them slowly get accustomed to the organizational culture it will become a great feature or component to add to your onboarding orientation. The guide or the mentor can provide them the necessary guidance to the newcomers, welcoming them to the organization. And it is a win-win situation for everyone. An experienced employee can show a fresh hire the ropes of the company and the new recruit can bring in a fresh perspective to the mentors in return.
It’s significant in this competitive labor market for organizations to offer appealing compensation packages. That incorporates compensations, obviously, yet additionally rewards, bonuses, paid time off, medical benefits, and retirement plans. Each employee ought to have a full comprehension of the advantages that they receive from your organization from the starting point.
As indicated by a collection of recent surveys on employee retention, only 24% of “Generation X” employees say that financial stability motivates them to stay in their current job. Yet 56% of employees state that health care and insurance concerns keep them in their current job. Benefits and perks that are really beneficial matters. Money matters. What you offer your employees in this area must be equivalent to different organizations in your industry in your area.
Regardless of whether it’s paid time for volunteering, occasional catered food snacks or free bites, and coffee every now and then, these perks and advantages can make your working environment stick out and help in improving employee spirit. A few organizations arrange group discounts on first-class buys, from vehicles and homes to cell phones and home security frameworks.
New employees join an organization with the attitude to improve their aptitudes and take amazing steps in their careers. With an all-inclusive scope of abilities, they can contribute widely to the advancement of your organization. All things considered, it’s mutually beneficial. An employee development program centers altogether around the employee’s requirements for learning, development, and improvement.
Focus on it and make it a priority to put resources into your laborers’ professional development and look for opportunities for them to develop. A few organizations pay charges and travel for employees to go to conferences or industry seminars every year, give educational reimbursement, or pay for continuing education training.
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Communicating all aspects of the job with potential candidates helps to boost your offer acceptance rates.
How many times have you recommended a candidate to your client and they extended an offer to the candidate; only to discover the candidate rejects the offer? It can be disappointing if you invested your time and energy into an opportunity that doesn’t come to fruition. As a recruiter, your Offer Acceptance Rate (OAR) is an important metric that can identify issues in your recruiting process. While these issues can be easily fixed, they can be very troublesome if they go undetected.
In this series, we’re looking at several recruiting metrics and talent acquisition metrics that recruiting and staffing firms should know or measure to ensure continued success. Last week, we published a blog about Time to Fill recruiting metrics and now we’re diving into Offer Acceptance Rate and what it means for your firm.
Why is a High Offer Acceptance Rate Important?
Just like it sounds, OAR reveals the percentage of candidates who accepted job offers that you or your clients extended. Your OAR is an indicator for how attractive and competitive your job offers are. The OAR highlights your team’s ability to identify the priorities, needs, and deal-breakers for your candidates before an offer is extended-enabling you to find an offer that strikes the perfect balance between the candidate and the clients’ needs.
A positive OAR metric can mean that your team has a good pipeline of candidates, an efficient and thorough interview process, your candidate experience is positive, and that your team has made compelling offers.
How to Effectively Measure Your Offer Acceptance Rate
The math behind OAR is relatively simple. To get the percentage, take the number of offers that were accepted and divide them by the total number of offers extended. It gets really interesting when you begin comparing your numbers to industry averages.
To accurately compare your metrics, you must categorize the industries and type of placements made. A slight difference in industry or seniority-level can change your data extensively. It could also uncover that your firm’s engineering roles have lower OARs than sales roles; meaning there’s room to optimize your recruitment of engineers.
Once you’ve developed an accurate OAR measurement, and you have industry data for comparison, you can identify areas for improvement. Is your rate below your industry average? You may not be making the most competitive offers. Or perhaps candidates are not attracted to the locations/benefits/salaries of your open jobs.
Improving Your Offer Acceptance Rate
Several factors can affect your OAR negatively, but one of the biggest detractors is compensation. Yes, many offers have other factors, but most candidates favor compensation the most. Without increasing your compensation, operating with transparency, and setting clear expectations from the beginning, candidates are more likely to get skittish near the finish line.
Time to hire also factors into your OAR; if your time to hire is too high, candidates may accept other offers sooner if they aren’t aware of a better one.
You can also increase your OAR by learning your candidates’ priorities early on. Find out what motivates them. Ask them what they like and dislike about their current role, what they’d like to see in their next opportunity, and why they decided to engage with your organization.
The key is to learn from each rejection. When a candidate declines your offer, ask them why so you can make your recruiting process better or present stronger offers in the future.
If you need software solutions to track, analyze and improve your KPIs, ATS and CRM solutions from Crelate are the right tool for the job. Get in touch and see how our offerings can help your firm succeed.