How to calculate source of hire?

Source of Hire [Pros, Cons, How to Use it]

Source of Hire is a recruitment metric that shows what percentage of your overall hires have entered your pipeline from each platform, channel, or source ( e.g., applications, job boards, referrals, and direct sourcing ). In other words, it helps you to get a better understanding of:

Where do my hires come from?


Source of Hire is divided into two categories: 

  • Internal hire: This term refers to all candidates that were hired from within an organization. Sourcing methods include promotions, transfers, and referrals.
  • External hire: This term refers to all candidates that were hired from outside of an organization. Sourcing methods include job boards, social media platforms, or thirty-party recruiting agencies.

Why is it so important?

Source of Hire tells you where your old and new hires are coming from, that knowledge is useful, not only for understanding the journey of past hires but also to help you create a better recruitment strategy for future hires. Examining your recruiting source statistics will help you accomplish the following goals:

a) Measure the effectiveness of your recruiting efforts?

When your advertising job posts across a variety of channels, not all of them will yield the same results. Just like marketers track the results of each campaign, recruiters can follow the success of their job postings to find out which channels give them the best results.

Sneak peek: Up to 82% of companies say their best source of hire is referrals.

b) Allocate resources to suitable channels?

There are a wide variety of channels and tactics that are available to recruiters. Therefore it’s challenging to decide when and where you should be spending your budget. Source of Hire data can help you in determining where you should be investing your money and resources, in other words, SoH helps you spend smarter. Just like Recrooit. 

For example, a recent study found that 73% of job seekers found work through social media, data from SoH can help you determine which channel to place an advertisement on. It can also point you towards a recruitment platform that works better with social media, via link sharing, having a solid network, or other tools like Facebook Groups.

c) Increase the quality of future candidates?

Sometimes channels that offer you the largest talent pool don’t always deliver the highest quality candidates. Source of Hire data isn’t just used to show you where to find the most hires, but also where to find your best hires.

In many cases, data will point to referrals as the top SoH because it lowers costs, increases the likelihood of hire, and has a lower turnover rate. If you can find a referral-based solution from the start you are well on your way to a better recruiting experience.

How to measure Source of Hire?

First, you have to determine what a “source” is. You can track individual sources and overall categories: referrals, agencies, channels, job boards, etc.

Then you have to decide whether you’re only monitoring hires or collecting data on candidate sources. Define what your measuring and stick with it consistently. Here are some suggestions on how to measure SoH:

a) Conduct a survey 

Conducting surveys is a very straightforward way for asking relevant questions on job applications, and companies often give a short questionnaire to new hires to get the most feedback out of them, which will help them in future hires.

b) Maximize your Applicant Tracking System (ATS)

ATS is used to record the source from which a candidate has entered your pipeline. Extract a report that will show you the number of candidates and hires between different sources.

c) Explore web analytics 

Recruitment platforms can help you track candidate engagements across a variety of different channels. These types of platforms are beneficial because they keep all of your candidate’s applications in one place.

d) Start gathering data from all members of your recruiting team.

Recruiters mostly document the candidates they sourced, or have engaged with, via social media, recruitment platforms, and direct sourcing. All of this gathered data will help you improve your Source of Hire strategy.

How to calculate Source of Hire data?

You can get SoH data as a percentage of hires from specific channels, sources, job boards, or referrals. To calculate Source per Hire, use the following formula # of hires/total # of applicants from a particular source = % of hires from a specific source. 

How to calculate source of hire formula

You can also track the total amount of hires, applicants, or interviewees per source.

How to get the most out of Source of Hire data

Although using Source of Hire data cannot guarantee you 100% accuracy, there are a few steps you can take that can help you get the most out of the data that you collected. The following steps are: 

Step 1: Ask for the source of hire after you’ve hired the candidate.

After you have hired a candidate, feel free to ask them clarifying questions and have an open conversation with them about the hiring process, once they have integrated into your company, they don’t have any reasons to lie to you, in fact, they even feel obligated to provide a thorough and accurate answer to their new employer. You can collect loots data from their experience, which will help you in your future hires.

Step 2: Incorporate recruiting sources into the onboarding process.

Whether you are leading the onboarding process or not, ideally, you should work with all involved departments to collect recruiting source data, during the recruitment process. The best way to do it is in person, but if that isn’t a possibility, you can try sending a written survey. If you choose to go with a study, be clear with your questions, and continuously strive to follow up with candidates about their results, that way, you will get the most out of your survey.

Step 3: Always ask the right questions.

The key to getting the right answers involves asking the appropriate questions. Not asking the proper questions means that you probably won’t get the information that you were looking for, here are some items that we recommend you try:

  • What channel first made you aware that our company was a great place to work?
  • What is it about our company that makes you want to work here?
  • Where did you see or hear about our job opening?
  • Was there something specific that you saw on the job post that made you want to apply for the open position?

Using recruiting sources data

Once you have formalized a process on how to collect recruiting sources data, now you have to implement a plan on how to use that collected information. Now it’s not enough to eyeball the information that you have gathered, and you must also analyze them carefully and find ways to apply them to your work. There are a few things that you have to pay close attention to:

  • What sources have led to the most successful hires?
  • What sources have led to the most valuable hires?
  • Which factors have lead candidates to apply for open positions?
  • Which factors have prevented candidates from applying for open jobs?
  • Find out what channels are spreading positive and valuable information about your company.
  • Find out what channels are spreading negative information about your company.

Using this information will help you develop better strategies and improve your recruiting strategy, also improve your brand reputation.

referrals as source of hire
Referrals as a source of hire

What are the pros and cons of adopting the Source of Hire metric?

Pros: SoH provides you with insights on where you can reduce costs, how to allocate your advertising budget, and gives you a better idea of which recruiting programs and tools yield the most results.

Cons: SoH can sometimes introduce bias into the selection process. To avoid that situation, you can try to be more involved in every stage of the recruitment and selection process. For example, if a particular external recruiter gives you a few good candidates, SoH will be turned in favor of that recruiter. Still, then you may be missing out on candidates from other recruiters or sources. We recommend pairing SoH with other metrics, so that way, you will have more options that will help you make better decisions.

Now you are ready to learn How to calculate Source Costs.

Tell us what you think of the efficacy of this metric?