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Source of Hire and First Year Attrition

This document discusses two key performance indicators (KPIs) used by reputable firms: source of hire and first year attrition. [1] Source of hire tracks what percentage of hires come from different recruiting channels like referrals, job boards, or direct sourcing to help allocate budget and refine processes. [2] First year attrition measures the percentage of new hires that leave within their first year, which can hurt employer brand, recruitment budget, and team balance if not monitored. Tracking these KPIs helps companies improve hiring and retention.

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Alina Binte Ejaz
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53 views

Source of Hire and First Year Attrition

This document discusses two key performance indicators (KPIs) used by reputable firms: source of hire and first year attrition. [1] Source of hire tracks what percentage of hires come from different recruiting channels like referrals, job boards, or direct sourcing to help allocate budget and refine processes. [2] First year attrition measures the percentage of new hires that leave within their first year, which can hurt employer brand, recruitment budget, and team balance if not monitored. Tracking these KPIs helps companies improve hiring and retention.

Uploaded by

Alina Binte Ejaz
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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KPIs Used By Reputable Firms

 Source of Hire
“Source of hire (SoH) shows what percentage of your overall hires entered your pipeline from
each recruiting channel or source (e.g. job boards, referrals, direct sourcing.)”

For example, imagine you’ve hired 50 people in the past six months from external sources. Data from
your Applicant Tracking System (ATS) shows that 20 of them were referred (40%), 15 applied through
job boards (30%), 12 were contacted through direct sourcing efforts (24%) and three came from career
fairs (6%.) This distribution can be presented in a pie chart:

Companies may use this information to allocate their recruiting budget more effectively and refine their
processes. At a minimum, tracking source of hire helps recruiters:

Direct more resources to the most valuable channels. For example, based on the previous report,
referrals represent a significant percentage of hires. If you don’t have a formal referral program, it may
be time to create one. Or, if you already have a program, you could justify purchasing a dedicated tool
to make the process more efficient and help drive more referrals.

Drop or adjust consistently lagging sources. In our current example, career fairs seem to be the least
fruitful source of hire. If they remain at the bottom of the distribution for a long time, experiment with
other sources or rethink the way you screen candidates from career fairs.

Companies that use this KPI also include Unilever which indicates the significance of this KPI.
 First Year Attrition
“It means “new hire turnover” which usually refers to the number of employees who leave a company
within their first year on the job.”

Here’s a formula to measure first year turnover rate. You can adjust this formula to calculate your
unique turnover rate (e.g. 30, 60, 90-day turnover):

Why does new hire turnover matter?

Watching new hires leave so soon is concerning for good reasons. That’s because hire turnover can hurt
your:

1. Employer brand. Disgruntled new hires who’ve left your company suddenly might have an axe
to grind. They’re more inclined to leave negative reviews on social media (Twitter, Facebook and
Glassdoor) that make qualified candidates think twice before applying for your open roles.
2. Recruitment budget. Turnover hits recruitment budgets hard. Every time employees leave and
you need to fill their positions, you spend more money than you anticipated on hiring (e.g. job
boards fees and skill assessment software.)
3. Team balance. New hire turnover takes a toll on your teams by leaving them short-staffed. It
also takes time to hire and onboard new employees. These changes can hurt your team’s
productivity and morale.

You don’t need to promise new hires the moon to entice them to stay. Just be consistent. Make sure the
job lives up to how you described it during your hiring process and you’ll nurture a positive work
environment for all employees. The KPI is crucial to most of the type of companies but especially SMEs
where employees don’t hesitate to leave.

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