Selection Ratio | Meaning and Definition

What is selection-ratio?

Selection ratio is the term mostly used by Human Resources (HR) to validate the total number of hired employees to the total number of employees in the organization. In other words, it is similar to the number of applicants who are applying per opening. The Applicant to Hire ratio is the ratio of the total number of hires to the total number of applicants for a particular position. The Applicant-to-Hire ratio is one of the important HR metrics that help in summarizing the relationship between the market and the hiring process.

What is the formula for calculating the selection ratio?

Let us explore the meaning of the selection ratio with an example. Consider there is a single vacant position in an organization. The total number of applicants to be hired is 1, and the total number of applications received from the applicants to the organization is 20.

Now, while applying the formula:

Selection ratio = 1/20 =>0.05 =>5%

Now, consider there are multiple vacant positions in an organization. The total number of applicants hired is 50, and the applications received are 500.

Now, while applying the formula:

Selection ratio = 50/500 =>0.1 =>10%

The HR prefers a relatively low ratio because the lower the ratio, the better the result.

What are the factors that affect the Selection Ratio?

Ø  If an organization posts the job vacancy in a proper channel, then the company will receive more applicants. Hence, the selection ratio will be meager. 

Ø  The brand of an organization plays a vital role in the hiring ratio. If the organization’s brand is more popular, the applications will be more.

Ø  When the compensation policies provided by an organization are far better than the competitor, the application flow will increase.