Recruitment Metrics: Tracking KPIs in Recruitment

Recruitment Metrics provide valuable insights into the efficiency and effectiveness of your hiring process. This has become increasingly important over the years as the end goal of hiring has shifted from filling positions as quickly as possible to strategic and quantifiable measures of long-term success. 

We’ve also come a long way in recognizing the financial burden of inefficiency in hiring. Studies show the average cost to replace an employee is 6-9 months of that position’s salary, driving home the importance of (1) optimizing to reduce those costs and (2) getting it right the first time so you don’t have to do it more often. 

A data-driven approach isn’t only about reducing costs and streamlining processes for efficiency—although that’s an integral part of it! It also offers a lens into the more subjective aspects of hiring to improve the quality and diversity of hires and set the stage for creating a better user/job seeker experience.

Let’s review the essential KPIs you need to track to achieve these results and how they can transform your hiring strategy.

Key Recruitment Metrics to Track

1. Time to Fill

Time to fill measures the time from when a job is advertised to when an offer is accepted. A shorter time to fill can indicate an efficient recruitment process. Moreover, job seekers are a commodity and don’t remain viable forever. A recent study by HiringThing found that 66% of job seekers said they would wait only two weeks for a callback, after which they consider the job a lost cause and move on to other opportunities. Knowing how long it’s taking your hiring team to acknowledge, screen, engage with, and categorize applicants is vital to ensure you’re not missing out on top-tier talent. 

How do I calculate “Time to Fill”?

[(Time to fill Job A) + (Time to fill Job B) + (Time to fill Job C) + (Time to fill Job D)] / number of jobs = time to fill

So, for example, if you filled four positions and they took 10, 20, 20, and 30 days to fill, you would add those numbers and divide that number by four.

The equation looks like this:

(10 + 20 + 20 + 30) / 4 = 20 days 

The company’s average time to fill a position is 20 days.

2. Quality of Hire

Quality of hire (QoH) assesses the performance and retention of new employees. Tracking this metric helps ensure that the recruitment process attracts candidates who are qualified and a good fit for the company culture.

How can my company quantify “Quality of Hire”?

Despite the apparent importance of understanding “quality of hire,” there’s no standardized way to calculate it.

Because quality depends on a variety of unique factors, companies measure it in various ways, using a combination of different indicators.

Let’s take a look at the most commonly used indicators, according to a recent LinkedIn report.

1. New hire performance metrics are used by 51% of companies. They are the most popular way of measuring quality of hire. Performance metrics include any kind of measurements that indicate a new hire adds value, like meeting X sales quota, delivering Y number of product units or achieving Z customer satisfaction ratings.
2. Turnover and retention metrics are used by 48% of companies. They give an indication of whether new hires are good fits. They’re risky metrics though, because attrition might have other causes like an ineffective onboarding process or ineffective management practices.
3. Hiring manager satisfaction ratings are used by 41% of companies. They show how impressed hiring managers are with the quality of their company’s hiring process and their eventual hires.

How can I use indicators to measure “Quality of Hire”?

With your chosen indicators in mind, you can calculate QoH using this formula.

Here’s an example using arbitrary numbers.

QoH = (new hire performance + new hire engagement + culture fit)/3

QoH = (80% + 85% + 90%)/3

QoH = 85%

Performance reviews on sites like Glassdoor can offer another perspective on the quality of hires being made. Positive reviews correlate with higher retention rates, and we know that higher retention rates correlate with better-quality hires. 

Interested in reading more about this topic? Check out “The Talent Delusion: Why Data, Not Intuition, Is the Key to Unlocking Human Potential” by Tomas Chamorro-Premuzic. You can find other books to help execute and drive better recruitment processes in our recent blog post, Top 5 Books for Talent Acquisition: Elevate Your HR Game.

3. Cost per Hire

This metric calculates the cost of hiring a new employee, including advertising, recruitment agency fees, and onboarding expenses. These costs can be divided into internal and external expenditures.

This metric calculates the cost of hiring a new employee, including advertising, recruitment agency fees, and onboarding expenses.

These costs can be divided into internal and external expenditures.

How can my company track cost per hire? 

Here’s a basic formula you can follow.

So, hypothetically, if your total recruiting costs (internal + external) = $10,000

And your goal is to make 5 hires

$10,000/5 = $2,000

Your average cost per hire (CPH) is $2,000

So, what does this all mean?

By analyzing cost per hire, organizations can identify areas to optimize spending. According to Indeed.com, some of the most significant expenses are the cost of recruiters (salaries/commissions), software/hiring tools (Applicant Tracking Systems), and external agency fees.

Consider participating in TalentAlly’s Career Fairs to reduce advertising costs and connect directly with potential candidates. Check out our Enterprise Job Board packages for cost-effective recruitment management solutions, which can free up resources for other strategic initiatives.

4. Candidate Experience

A positive candidate experience can enhance your employer brand and attract top talent. Metrics such as candidate satisfaction surveys and application drop-off rates provide insights into the candidate journey. Implement feedback mechanisms to continuously improve the recruitment process. A strong candidate experience can lead to higher acceptance rates and a more favorable reputation in the job market.

5. Diversity Hiring

Tracking diversity metrics ensures that your recruitment strategy aligns with your organization’s diversity and inclusion goals. Monitor the diversity of your candidate pool and hires to identify gaps and opportunities for improvement. Leverage TalentAlly’s job board to reach a diverse audience of job seekers. A diverse workforce can drive innovation and reflect the diverse customer base that many companies serve.

Recommendations

Leverage Technology 

Utilize applicant tracking systems (ATS) to automate data collection and analysis of recruitment metrics. This will provide real-time insights and help you make informed decisions. Technology can streamline processes, reduce manual errors, and provide a centralized platform for tracking all recruitment activities.

Set Clear Goals

Define specific, measurable goals for each recruitment KPI. For instance, aim to reduce our average time to fill by 20% over the next quarter. Clear goals provide direction and a benchmark for success, enabling teams to focus their efforts on achieving tangible outcomes.

Regularly Review Metrics

Conduct regular reviews of your recruitment metrics to identify trends and areas for improvement. Referential information can also be very impactful here. Consider consulting industry experts, like Appcast, to keep up with the latest recruitment benchmarks and industry trends. Cross-reference this data with your internal audits to ensure your strategies align with changing market conditions and organizational goals. 

Final Thoughts

Recruitment metrics optimize hiring by improving efficiency, attracting top talent, and promoting diversity, ensuring companies build strong, high-performing teams. 

Remember, TalentAlly is here to help you!

Check out our job posting packages to see how we can help you find cost-saving options to keep your CPH in check. Consider one of our career fairs to find better talent for niche, highly skilled, or otherwise hard-to-fill roles and improve your QoH scores. 

Start leveraging these resources today to optimize your recruitment KPIs and attract the best talent tomorrow!