How To Calculate and Increase Your Offer Acceptance Rate
An offer acceptance rate is the percentage of job offers accepted by candidates who have been offered a position within an organization. This metric is used by HR professionals to gauge the effectiveness of their recruitment and selection process and to identify any areas where improvements can be made.
A high offer acceptance rate indicates that you’ve done a good job of attracting and selecting the right candidates. Equally, a low offer acceptance rate may indicate that your company needs to improve its recruitment and selection process, or that the job offer is not competitive enough compared to others the candidate is considering.
Contents
What is an offer acceptance rate?
How to calculate the offer acceptance rate
Analyzing your offer acceptance rate: What to know
How to increase your offer acceptance rate
What is an offer acceptance rate?
An organization’s offer acceptance rate is an important metric that measures the percentage of job offers extended by a company that is accepted by candidates.
This metric is important for several reasons:
- Recruitment success: A high offer acceptance rate indicates that you’re successful in attracting and hiring the right candidates for the job. It shows that the company is able to offer competitive compensation, benefits, and other incentives that attract top talent.
- Cost efficiency: A low offer acceptance rate can result in wasted time, effort, and resources spent on recruitment. You may have to re-advertise the position, re-conduct interviews, and start the hiring process all over again, which can be costly and time-consuming.
- Employer brand: A high offer acceptance rate contributes to a positive employer brand. Candidates who have a good experience during the recruitment process are more likely to recommend the company to their network, which can help to attract more qualified candidates in the future.
- Retention: Candidates who accept job offers are more likely to stay with the company long-term. Ensuring you’re hiring candidates who are a good fit for the role and the company culture can reduce turnover and improve retention rates.
How to calculate the offer acceptance rate
To calculate the offer acceptance rate, you need to know the total number of job offers extended by your company and the number of those offers that were accepted by candidates.
Here are the steps to calculate the offer acceptance rate:
- Determine the time period: Decide on the time period you want to measure, such as a quarter or a year.
- Count the number of job offers extended: Determine how many job offers were extended during the chosen time period.
- Count the number of job offers accepted: Determine how many of those job offers were accepted by candidates.
- Divide the number of job offers accepted by the total number of job offers extended, and then multiply the result by 100 to get a percentage.
Offer acceptance rate = (# of job offers accepted)/
(# of total offers extended) x 100
For example, let’s say your company extended 100 job offers during the first quarter of the year, and 80 of those offers were accepted by candidates. The offer acceptance rate for the first quarter will be calculated as follows:
Offer acceptance rate = (Number of job offers accepted / Total number of job offers extended) x 100 Offer acceptance rate = (80 / 100) x 100 Offer acceptance rate = 80%
Analyzing your offer acceptance rate: What to know
Good offer acceptance rate
The ideal offer acceptance rate can vary depending on the industry, the job market, the location, and the level of the position. According to SHRM’s Talent Acquisition Benchmarking Report, a high offer acceptance rate in recruiting is generally considered to be around 90% or higher.
This indicates that the employer is offering high salaries or attractive benefits packages, resulting in a large volume of candidates.
Average offer acceptance rate
According to some surveys and studies, an average offer acceptance rate is between 80 and 90%, indicating that there may be some issues to address.
A lower acceptance rate can indicate that the employer is facing challenges in attracting and retaining candidates or that the candidates are receiving more attractive offers from other companies. It can result in increased time and resources spent on recruitment, leading to delays in filling positions and additional costs.
Low acceptance rate
A low offer acceptance rate in recruiting is generally below 50%. In this case, there are several challenges in attracting and retaining candidates, and the job offers are likely not competitive enough compared to others in the market.
This may lead to prolonged recruitment timelines, resulting in higher costs and lower productivity due to the extended vacancy. It can also place increased pressure on the recruiting team to fill the position quickly and may compromise the quality of hires.
It can also negatively impact the employer branding and reputation, making it more challenging to attract top talent in the future. You’ll need to invest more resources in sourcing and selecting candidates, resulting in increased recruiting costs.
A low offer acceptance rate means it’s time to take action. You will need to identify the reasons behind the low rate and make adjustments to improve the effectiveness of the recruitment process, such as re-evaluating the compensation and benefits package, improving the candidate experience, or enhancing your organization’s brand and reputation.
Additional recruiting metrics to include in your analysis
While the offer acceptance rate is an important metric in recruiting, it should be evaluated in conjunction with other metrics, such as time to fill, cost per hire, and retention rate, to gain a comprehensive understanding of the effectiveness of your recruitment process.
How to increase your offer acceptance rate
Your offer acceptance rate can show if job candidates had a sufficiently positive experience that they were compelled to accept your offer. According to Statista, offer acceptance rates for technology-related roles are low, with 27 percent of organizations in a survey stating they had a shocking low acceptance rate of between zero and 20 percent.
Increasing your job offer acceptance rate requires a strategic approach that takes into consideration various factors impacting the candidate’s decision to accept the job offer.
Here are 6 points to help you increase your job offer acceptance rate:
1. Analyze your competitors and benchmark
Research the salary and benefits offered by other employers in your industry and location to ensure your package is competitive. Offering a salary and benefits package that aligns with the market can make your job offer more attractive to candidates. Research benefits and salaries through sites like Glassdoor and PayScale.com to ensure your offers are on par with industry standards.
The three most important trends for the future of recruiting and HR are soft skills (91%), work flexibility (72%), and pay transparency (53%). Work flexibility is becoming the norm and more employees are demanding it. Companies that offer flexibility are going to be in a far better position to retain top talent over the next three to five years.
Daniel Barber, CEO of DataGrail, shared that since his company reversed course from being nearly all in-person pre-pandemic to a flexible model that prioritizes talent, it has been able to attract the top 1% in a wide variety of geographies. By paying the market rate, DataGrail’s offer acceptance rate has climbed to 89.7%, and its retention has never been higher.
Although pay has always been a confidential topic in the workplace, the benefits of pay transparency are becoming more obvious. It sets salary expectations with candidates early on and also clarifies misinformation that could be damaging to employee morale and retention. Most significantly, transparency helps to ensure fair pay across gender, race, and other demographics, creating a more trusting relationship with employees.
2. Streamline the recruitment process
The recruitment experience can change a candidate’s mind about your company – for better or worse. A long and cumbersome recruitment process can be off-putting to candidates, resulting in a lower offer acceptance rate.
Streamlining the process and reducing the time-to-hire can increase the likelihood of candidates accepting the job offer. 60% of candidates have quit a job application process midway because of its length and complexity, while 83% of candidates surveyed said the overall recruitment experience could be greatly improved if employers provided a clear timeline of the hiring process.
Understanding how to optimize the job recruitment process can shorten the hiring cycle by 60% while improving quality.
Develop a clear timeline of the recruiting process, review the length and complexity, and pare down your application and interview stages to remove unnecessary steps from the evaluation process and candidate interactions. The simpler your recruiting approach is, the more you can speed it up, and boost your job offer acceptance rate.
Bear in mind that 64% of candidates would share negative application experiences with family and friends, and 27% would even actively dissuade others from applying to the same organization.
3. Personalize the offer
Finding the best candidates in a hyper-competitive market is challenging enough. When you’ve made your choice, how do you ensure top talent accepts your offer?
It’s important to build relationships within the recruitment process. Rather than keeping candidates at a distance and leaving them to decide on their own, establishing a rapport and building personal connections with candidates throughout the process can make the difference between a successful hire and one that got away.
San Francisco-based Fireclay Tile has achieved excellent results with this approach. Candidates are interviewed by at least four people including bosses, HR, and peers, so connections are created at several levels within the company. The interview process is used to start building personal relations and a sense of community from the start. And once an offer letter has gone out, it’s followed up with friendly congratulatory, and welcoming messages from the entire hiring group.
Personalizing the job offer to the candidate’s needs and preferences can demonstrate that you value them as an individual. Consider offering flexible work arrangements, tailored benefits, or professional development opportunities to make the offer more appealing.
4. Communicate clearly and transparently
Poor communication from recruiters is a common complaint among candidates.
Follow up with prospects within a day after each recruitment process stage to keep them informed of the latest status regarding the recruitment cycle. If a candidate is rejected, make sure to communicate why. An applicant who’s rejected and gets no feedback is twice as likely not to apply or do business with that company again. Send surveys to rejected candidates to understand how they felt about the process.
Communicate the job offer and its details clearly and transparently, including compensation, benefits, and job responsibilities. A positive candidate experience can make a lasting impression and increase the likelihood of a candidate accepting the job offer. It can make the candidate feel valued and excited about joining your organization.
5. Negotiate effectively
Negotiation can be an essential part of the job offer process. Compensation is the main factor driving employee career choices, with 50% of respondents in a survey indicating it was more important than meaningful work, or a safe working environment. What’s more, 56% of companies offer signing bonuses to new business school hires, and the median bonus is $10,500.
It’s important to listen to the candidate’s needs and concerns and negotiate in good faith to find a mutually beneficial agreement. Effective negotiation can lead to a higher job offer acceptance rate and help establish a positive employer-employee relationship.
6. Make your employer brand stand out
At a time when companies are competing for top talent, employer branding can be incredibly influential when a candidate has to consider a job offer.
Careers pages are often your first point of contact with potential candidates. 89% of candidates agree that an employer’s career website is important for finding key information and making a decision on whether to take a job. Are you presenting the best possible version of your company?
Research reveals that 55% of jobseekers abandon applications after reading negative reviews online, and only 45% of employers ever monitor or address those reviews. 89% of candidates evaluate your business before applying to a role with your organization.
Key takeaways
- Offer acceptance rate is an indicator of recruitment success: Of all the recruitment analytics you can collect, your offer acceptance rate can show if candidates had a positive experience with your organization and is key to attracting the best people.
- Calculating your offer acceptance rate is simple: Take the number of offers accepted and divide it by the number of offers your company made. Most organizations should calculate their offer acceptance rate every year.
- Aim for a high offer acceptance rate: This indicates that your company is offering high salaries or attractive benefits packages, resulting in a large volume of candidates.
- Improving your recruitment process: By streamlining your recruitment process, communicating clearly and often with candidates, and personalizing your offer, you can boost the level of talent in your organization, as well your employer brand.
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