What Is Selection Ratio?
The selection ratio is a concept used by business human resource (HR) professionals to help make better choices concerning the hiring of applicants for job positions. Calculating selection ratio involves dividing the number of applicants that the business plans to hire by the total number of applicants for the open positions. Staffing specialists and HR managers prefer a low selection ratio since that means that they can afford to be judicious during their hiring process. A low ratio, however, also increases the chance that strong, qualified applicants will need to be rejected.
HR managers take great care in the hiring process, since a business is usually only as productive as the employees who work there. While hiring can be a long and arduous process, deliberation is absolutely necessary to ensure that the right applicants will be chosen. Those in charge of hiring often look to use methods of testing applicants that are as accurate as possible in terms of predicting job success. In many cases, the best chance of hiring good applicants depends upon attaining a good selection ratio.
As an example of selection ratio, imagine that a company decides to open up a new branch that requires hiring 20 new workers. This number becomes the numerator in the ratio equation. Once the positions are posted, 100 people apply for the jobs. 100 is now the denominator. 20 divided by 100 leaves a ratio, in this case, of 0.2, meaning that 20 percent of all applicants will be hired.
HR professionals prefer a low selection ratio because it means that they can be highly selective in their hiring. A low ratio can be achieved by either hiring for just a few positions or by garnering a high number of applicants. As the number of open jobs and the number of applicants get closer together, the ratio rises. This in turn raises the chances of hiring individuals who may not have the most desirable candidates.
By using certain accurate testing methods for hiring, and combining them with a low selection ratio, business HR professionals can be practically guaranteed a high success rate for their new employees. If, however, a low ratio is accompanied by inaccurate testing methods, it can be problematic for HR professionals because it leaves less room for error. This could result in qualified applicants being rejected in favor of unqualified ones, leading to significant impact on overall production and business success.
If you think about it, a low selection ratio across most industries is a good indication the economy is not healthy. That is bad news for workers -- they'll have problems finding jobs and are not in a great position to negotiate for better salaries and benefits when they do.
That's just basic "supply and demand" stuff, isn't it. It's not a lot of fun to go looking for a job when supply outstrips demand, is it?
HR managers might love a low selection ratio, but what does that say about the overall economy? For the past few years, most industries have had a slew of job applications from which to choose because a lot of people are searching for employment.
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