15 Key Recruiting Metrics to Track in 2023
Believe it or not, the end of the year is already upon us which means we are all battening our shores and examining what strategies will yield the most success in 2023. If you, like many organizations are looking to improve your recruitment processes and the quality of your new hires, then it’s essential to define goals and track recruitment metrics.
However, the challenge is often identifying which measurements will truly produce meaningful insight for your team.
But, have no fear, we have gathered the 15 most commonly referenced and (in our opinion) most useful KPIs for recruitment process validation and improvement.
1) Time to fill
Time to fill refers to the number of days between when a position is posted and a candidate accepts a job offer. This is a straightforward way to measure your recruitment process effectiveness.
The average time to fill a position is 42 days. Meanwhile, the cost of an open position (also known as “cost of vacancy” or COV) can reach hundreds, if not thousands of dollars per week, depending on the role and industry.
Many factors effect your organization's time to fill, ranging from supply and demand ratios for specific positions and your recruitment efficiency.
How to calculate time to fill
Measure the number of calendar days between the job being posted and the candidate accepting your job offer.
2) Time to hire
Time to hire (also called “time to accept”) is similar to time to fill, but focuses on the time it takes to move a candidate through the hiring process once they submit a job application.
The longer your recruitment process is, the more it costs your organization and the more negative your candidate experience becomes. Many organizations find that they can optimize their time to hire by using automated interview scheduling and automated resume screening using tools like Emi.
How to calculate time to hire
You can calculate time to hire by measuring the number of days between when a candidate applies for a position and when they officially accept a job offer.
3) Source of hire
Whether you use social media and job boards for recruiting, or employee referrals and recruitment agencies, tracking your source of hire can show you where your most qualified candidates come from so you don’t waste time on low-value channels.
How to calculate source of hire
Using a recruitment tool is a great way to track your source of hire. And, if this tool integrates with your applicant tracking system, you can see exactly where new hires found the open requisition (internal hire, referral, job board, social media, etc.). From there, you can compare which source leads you to the most (and least) qualified new hires.
4) Cost per hire
Your organization's cost per hire tells you how much you spend acquiring a new employee. This measurement is one of the main components of the total expense your organization accrues when filling an open position.
Cost per hire factors in several variables, likely including recruiting fees, advertisements, training costs, and background checks.
This adds up quickly. The Society for Human Resource Management (SHRM) reports that the average cost per hire is around $4,700.
How to calculate cost per hire
Before calculating cost per hire, you'll need to decide which expenses you want to include. Typically, internal and external costs for recruitment include:
- Recruiter or agency fees
- Referral bonuses
- Interview process costs
- Advertising and technology costs
- Travel or relocation costs
Once you’ve determined this, you will calculate the cost per hire by dividing your total recruiting costs by the number of hires within a given time period.
5) Quality of hire
Bad hires cost organizations tens of thousands (or even hundreds of thousands) of dollars every year. But measuring the quality of hire can be complicated; after all, it's not something you can confidently know until the new hire has spent some time time with your company.
Another challenge is identifying quantifiable characteristics of a candidate that can be consistently collected. But, if hiring teams know what measurable traits make a quality hire, they can look for those attributes in new candidates. This creates a cycle of dependable hiring while reducing churn, open positions, and time to fill.
How to calculate quality of hire
As mentioned, how your organization chooses to measure quality of hire will vary. But we’ve found that many organizations will use performance scores, cultural fit scores, and ramp-up time scores to gauge the quality of a hire on a scale of 1-100. From there, scores for each employee are added and divided by the number of factors being measured to reveal an overall quality of hire score.
6) First-year attrition
Your organization will also want to pay attention to first-year attrition (also known as "candidate retention rate"), which is essentially a measurement of new hire turnover. High attrition rates mean that candidates aren't sticking around, whether it’s due to poor management, toxic work environment, lack of growth opportunities, or lack of recognition.
How to calculate first-year attrition
To calculate first-year attrition, simply divide the total number of employees who churn in less than one year by the total number of employees on your payroll in that given timeframe.
7) Hiring manager satisfaction
Hiring manager satisfaction measures how happy hiring managers are with the company’s hiring process and candidate quality.
Measuring this KPI can provide insight into the company hiring systems, like the quality of your job descriptions and how well applications are being screened, overall candidate quality, and onboarding effectiveness.
How to calculate hiring manager satisfaction
Many organizations will simply send out satisfaction surveys to hiring managers every quarter. These surveys ask hiring managers to rate new hires and their job performance on a scale of 1-100.
8) Applicants per opening
Tracking your applicants per opening is a great way to determine how attractive a position is to prospective candidates. This metric can also reflect the quality of the job listing, listing source, or outreach itself.
How to calculate applicants per opening
To measure applicants per opening, divide the number of applicants for each position by the total number of job openings.
9) Selection ratio
Another important metric to track is your selection ratio—also known as the "submittals to hire ratio." This metric tracks the number of hired candidates against the total number of applicants, with a low ratio indicating a selective hiring process.
How to calculate selection ratio
To calculate the selection ratio, divide the number of hired candidates by the total number of applicants.
10) Offer acceptance rate
Your organization's offer acceptance rate refers to the number of candidates who accept a job offer compared to those who received an offer. A higher acceptance rate may indicate that you're offering an attractive compensation package and that your organization is an appealing place to work. When offer acceptance rates are low, this may reflect the need to improve compensation offerings or take other measures to make your workplace more attractive to candidates.
What's considered a high offer acceptance rate? This will vary based on many factors, including industry and position. In general, however, an acceptance rate of 90% or higher is a great goal.
How to calculate acceptance rate
To calculate your acceptance rate, divide the number of job offers accepted by the total number of offers made during any given period.
11) Percentage of open positions
This figure refers to the number of open positions compared to the total number of positions posted. A low percentage of open positions may indicate a high demand for jobs in an industry or department.
How to calculate percentage of open positions
To calculate the percentage of open positions, divide the number of open positions by the total number of existing positions. You can calculate this for your entire organization, by department, or both.
12) Recruitment funnel effectiveness
Candidates pass through seven major steps in the recruitment funnel: awareness, attraction, interest, application, pre-selection, interview, and hiring. Many modern organizations rely on tools like Emi to simplify this complex process with automation, which removes much of the manual element.
The more candidates that make it through each stage of the funnel, the more effective it is. However, if candidates are dropping off during one stage, there may be areas of your recruitment strategy that need work. For example, say there’s a sharp decrease in candidates after the application stage. This could indicate that it’s taking your hiring team too long to follow up with applicants, and they’re losing interest.
How to calculate recruitment funnel effectiveness
To calculate recruitment funnel effectiveness, you’ll need to calculate how many candidates make it through each phase—also known as your yield ratio for each step.
For each stage of the recruitment process (awareness, attraction, interest, etc.), divide the number of applicants who complete the stage by the total number of applicants who initially entered the stage. For example, if you screen 50 resumes during pre-selection and submit 10 of them to the hiring manager for interviewing, then your yield ratio for the pre-selection stage is 1:5. Ideally, you want your ratio to be as low as possible.
13) Sourcing channel effectiveness
Whereas source of hire focuses on the volume of candidates entering your recruitment funnel through each source, sourcing channel effectiveness considers where your most qualified candidates come from. This allows you to make better-informed decisions regarding which recruitment channels best serve your organization and ultimately secure the best talent.
How to calculate sourcing channel effectiveness
There are two ways to calculate this metric. If you want to track from a quantity standpoint, count the number of candidates generated from each recruitment channel during a given time. You'll quickly see which sources are the most effective based on which have the highest numbers of candidates.
Of course, not all candidates generated are quality candidates. This is where it may be helpful to weed out and count only the number of viable candidates that emerged from a recruitment channel. For example, you might count only the ones who made it through the first stage of the hiring process.
14) Sourcing channel cost
This can help you better understand the cost efficiency of different recruitment channels, allowing you to focus your funds on the ones that offer your organization the best return. If you notice high spending to bring in just a few candidates, then it may be time to reevaluate the channels you're using as part of your recruitment strategy. Likewise, if you notice that you're getting several candidates out of a particular channel, you may want to ramp up your spending to broaden the pool even more.
How to calculate sourcing channel cost
To calculate the cost of a sourcing channel, divide your ad spend on any given platform (such as LinkedIn) by the number of successful applicants you receive from that platform during a given time period.
15) Recruitment performance metrics
You probably invest significantly in the recruitment channels or recruiting team you use to source the best candidates. Keeping an eye on performance metrics gives you insights into how well each of these resources perform.
One way to measure this is to measure each recruiter’s response rate. You may also want to keep an eye on a recruiter's interview conversion rate, which can tell you how effectively the recruiter generates interviews with top talent.
How to calculate recruitment performance metrics
The process of calculating recruitment performance will vary depending on the exact metric you're tracking. For instance, to track a recruiter's response rate, you would divide the number of replies from candidates by the number of emails sent out during a given period.
To track interview conversion rates, you would divide the number of interviewed candidates by the number of emails the recruiter sent.
Recruit better with Emi
Now that you have a better understanding of what the most important recruiting metrics are (and how to calculate them), it's time to work these into your organization's own recruitment strategy. From there, you can set goals and benchmarks for each metric and track your progress as you work towards a more streamlined and successful recruitment process.
If all these numbers have your head spinning, Emi's recruitment automation platform is here to help. Learn more about how Emi is revolutionizing recruitment and providing a quality experience for organizations and candidates alike. Request your demo today to get started.