Offer Acceptance Rate: Measuring Your Recruitment Success
Just how often do candidates accept your offers of employment? Some perennially popular employers like Google might be able to boast near-100% acceptance rates, but it’s likely your organization falls somewhere below that. Your offer acceptance rate is an important metric that offers high-level insight into the success of your talent acquisition strategies.
When you find the perfect candidate for a job, you’d like to think they’ll accept any offer you make. But there are many reasons why applicants reject an offer, including some that are beyond your control. By measuring your offer acceptance rate over time, you can begin to see how successful your team is at bringing a candidate on board after extending an offer.
In this post we’ll explain how to calculate the offer acceptance rate recruiting metric, some internal and external factors to consider, and a few novel ways to approach the KPI.
How to Calculate Your Offer Acceptance Rate
Offer acceptance rate is a very straightforward metric, and can be expressed as a percentage of offers accepted as well as a ratio of offers needed to achieve one acceptance. Both metrics are valuable.
Offer Acceptance Rate (%) = ( Number of Acceptances / Number of Offers ) x 100
Offer-to-Acceptance Ratio = Number of Offers / Number of Acceptances
Typically, the percentage of offers accepted is used to demonstrate the effectiveness of a company’s overall recruitment strategies, while the ratio helps determine how many offers or interviews are needed to secure a hire.
As with any metric, you will also need to define the time period your calculation will cover. Employers experiencing high volume hiring may choose to measure offer acceptance rates every month or every quarter. The most common benchmark data for this metric is calculated annually.
Factors that Influence Your Results
Before you dive into the underlying factors of your own offer acceptance rate, you might want to compare your performance to other organizations. Industry-level benchmarks will be the most useful, as the process of making and accepting an offer will vary across different sectors. The National Association of Colleges and Employers (NACE), in its Recruiting Benchmarks Survey Report, breaks down the offers made to recent college graduates by industry:
Mean offer acceptance varied from 89% for engineering services roles to 62% among miscellaneous support services jobs. NACE also calculates national offer and acceptance rates:
If you intend to measure and analyze your offer acceptance rate as part of your overall talent acquisition metrics, you should determine the industries and experience levels you want to compare your organization to. Besides the NACE, ERE Media offers the Talent Acquisition Benchmarking services (TABS), for the confidential comparison of recruitment metrics and KPIs against your peers.
Once you’re confident in your offer acceptance rate 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 of your jobs.
There are also some factors beyond your control. If you’ve made the best offer you can, but a candidate doesn’t accept, they might have received a better offer from a company with a bigger balance sheet. Personal reasons and family obligations may also drive candidates to select one offer over another. Talent acquisition leaders shouldn’t expect that every offer their team makes will be accepted, but you should still aim high with this metric.
Improving Your Offer Acceptance Rate
The first step toward improving your offer acceptance rate is to review the offers you make. How many are rejected because you offer below-industry salaries? Are candidates aware of all the benefits that come with the job? Recruiters should consider bringing offers up to industry standards, and then making them stand out with perks unique to your company. There’s also a case to be made for creating some type of evaluation process for why a candidate did or didn’t take a position.
Another strategy is to focus more on the people involved in an offer, not just the number. Candidates are increasingly searching for jobs with purpose, and a team they truly enjoy working with. So make sure your candidates can get to know their potential co-workers and leaders. LinkedIn Talent Solutions found that one of the top reasons candidates take a new job is that they see better leadership from senior management at the new company.
And don’t be afraid to think about the seemingly negative aspects of a job. Many recruiters and managers only pitch the good side of a role to a potential hire. Research from Harvard Business Review found that more realistic explanations of a job’s opportunities and challenges actually lead to higher offer acceptance rates. Odds are your applicants want to decide for themselves whether a job is worth taking, so don’t be afraid to be frank with them. It just might swing the offer acceptance rate in your favor.
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