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Many organizations are looking to improve their recruiting process and the quality of new hires. To do this, it’s essential for talent acquisition professionals to define goals and track recruitment metrics. However, the challenge is often identifying which measurements will produce meaningful insight for teams.
If your company is one of the many looking to achieve better frontline hiring practices, you’ve come to the right place. We’ve compiled 15 of the most commonly referenced and useful recruitment KPIs for process validation and improvement.
Why should frontline recruiters track their hiring efforts?
Before jumping into vital recruiting KPIs for your hiring manager or recruiter, it’s essential to know how tracking these metrics benefits your organization in the long run.
Like any business initiative, being able to deem recruiting efforts successful or in need of improvement is imperative. Not only will you discover which section of the recruitment funnel you most often lose candidates, but you’ll also be able to see what’s working well. Recruiters can accomplish this by using SMART goals.
Creating SMART goals—specific, measurable, achievable, relevant, and time-bound—allows recruiters to monitor performance and make adjustments where necessary. This ensures a company has a successful hiring process and onboards the highest quality applicants.
Tracking the recruitment process: Knowing which KPIs to track throughout the recruitment process
There are many different KPIs that talent acquisitions can track--each telling a different part of the hiring performance story; however, it can be challenging to know what KPIs should be tracked at any given stage of the hiring or candidate process.
In figure 1, we've mapped some of the most commonly used KPIs across the recruiter and candidate journeys broken into categories of metrics. Within each category, you will see where in each phase of each journey the metric is most relevant.
15 key recruiting metrics talent acquisition teams should track
1. Time to fill
Time to fill is a recruitment metric that 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 affect your organization's time to fill, ranging from supply and demand for specific positions to the number of recruiters and employer brand reputation.
How to calculate time to fill
Time to fill is calculated by measuring the number of calendar days between a job posting being made public and the day a candidate accepts a job offer.
2. Time to hire
Time to hire (also referred to as “time to accept”) is similar to time to fill but focuses on the time it takes to move a quality candidate through the hiring process once they submit a job application.
Overly long time to hire can lead to a higher cost per hire (which we’ll cover later) and poorer candidate experience. Many organizations find that they can automate interview scheduling and resume screening to optimize their time using tools like Emi, a leading recruitment automation platform.
How to calculate time to hire
Calculate time to hire by computing the number of days between when a candidate applies for a position and the day a candidate accepts the subsequent job offer.
3. Source of hire
Whether organizations choose to use social media, job boards, employee referrals, or recruitment agencies, tracking the source of hire can highlight where the most qualified candidates come from so teams don’t waste time on low-value channels.
How to calculate source of hire
Using a recruitment tool is a highly effective way to track your source of hire. And, if this tool integrates with your applicant tracking system, TA managers can see exactly where a new hire 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 candidate.
4. Cost per hire
An organization's cost per hire tells you how much you spend acquiring a new employee. This measurement is one of the main components of your organization's total expense when filling an open position.
Cost per hire factors in several variables, often including recruiting fees, advertisements, training costs, and background checks, which can add up quickly. SHRM reports that the average cost per hire is around $4,700.
How to calculate cost per hire
Before calculating cost per hire, organizations will need to decide which expenses they want to include. The metrics leadership decides to include will depend on strategic business goals. 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 which factors to account for, you can calculate the cost per hire by dividing 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 annually. But measuring the quality of a new hire can be complicated; after all, it's not something you can confidently know until they’ve spent some 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 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 called "candidate retention rate"), which is a measurement of new hire turnover. High attrition rates mean candidates aren't sticking around, whether due to poor management, a poor work environment, an absence of growth opportunities, or lack of recognition.
How to calculate first-year attrition
To calculate employee retention rate, 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's hiring systems, like the accuracy of job descriptions, employee screening, and onboarding.
How to calculate hiring manager satisfaction
Many organizations will 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. These results may be aggregated across the department or broken down by sub-department.
8. Applicants per opening
Tracking your applicants per opening is a useful 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 recruiter outreach.
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 more selective hiring process.
How to calculate the selection ratio
To calculate the selection ratio, divide the number of hired candidates by the total number of applicants.
10. Offer acceptance rate
An 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 companies are offering an attractive compensation package and that the employer brand is strong. When offer acceptance rates are low, it may reflect a need to improve compensation offerings or take other measures to improve an employer’s reputation.
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 offer acceptance rate
To calculate offer 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 job posting options made public. 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. Teams can calculate this across the entire organization, department, or both.
12. Recruitment funnel effectiveness
Candidates pass through six major steps in the recruitment funnel:
- Attracting
- Applying
- Screening
- Interviewing
- Background check
- Job offer
Many modern organizations rely on tools like Emi to simplify this complex process with automation, which streamlines manual processes.
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, and applicants are losing interest.
How to calculate recruitment funnel effectiveness
To calculate recruitment funnel effectiveness, talent acquisition leaders need to calculate how many candidates make it through each phase—also known as the yield ratio for each step.
For every stage of the recruitment process, divide the number of applicants who complete the stage by the total number of people 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
The source of hire focuses on the volume of candidates entering the recruitment funnel through each source, whereas the sourcing channel effectiveness considers where the most qualified candidates come from. This allows teams to make better-informed decisions regarding which recruitment channels best serve the organization and ultimately secure the highest quality 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 generated candidates meet the standard your organization seeks. This is where it may be helpful to 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 ad spend on any given platform, such as LinkedIn, by the number of successful applicants received from that platform during a given time period.
15. Recruiter performance metrics
Organizations invest significantly in the recruitment channels or recruiting teams used to source the best candidates. Keeping an eye on performance metrics gives recruiters insights into how well these resources perform.
One way to track this is to measure each recruiter’s response rate. It may also be helpful to monitor a recruiter's interview conversion rate, which can show how effectively the recruiter generates interviews with top talent.
How to calculate recruiter performance metrics
The process of calculating recruiter performance will vary depending on the exact metric being tracked. For instance, to track a recruiter's response rate, divide the number of replies from candidates by the number of emails sent out during a given period.
To track interview conversion, divide the number of interviewed candidates by the number of emails or outreaches the recruiter attempted.
How to improve your recruiting KPIs
Upgrading hiring performance starts with automating recruitment practices. By streamlining hiring operations, companies can improve the applicant and recruiter experience. Eliminate manual tasks and move qualified candidates through the recruitment funnel faster by implementing a recruitment automation platform.
Free up the talent acquisition team’s time by enhancing productivity, reducing the time to hire, and connecting more people to your organization. This allows them to focus more on engaging with applicants and tracking performance.
Recruit better with Emi
Now that you have a better understanding of the most important recruiting metrics, it's time to plan your organization's recruitment strategy around them. From there, you can set goals and benchmarks for each metric and monitor your progress.
If all these numbers have your head spinning, our team of experts at Emi is here to help. Learn more about how Emi is revolutionizing recruitment, creating a better experience for organizations and candidates alike.
Request your demo today to get started.
