With the increasing demand for hiring top talents quicker and more efficiently, HR managers are now shifting towards more data-driven recruitment, which optimizes the hiring processes.
Recruitment metrics play a crucial role in data-driven recruitment as it helps evaluate the hiring process’ overall health and effectiveness. HR managers can take advantage of these data analytics and metrics to attract more talents. They can use recruitment metrics to create strategies to improve employee retention rates.
Furthermore, recruitment metrics help talent acquisition teams to increase business value while allowing better strategic workforce planning. But what are the metrics you should track?
Here are the recruitment metrics you need to focus on to make better and well informed hiring decisions in the long run. Read on!
The Time to Fill
Time to fill is one of the most important recruitment metrics that help HR managers identify how long it takes the team to fill open positions or replace former employees.
This metric refers to how many days it will take to source and hire new candidates. Usually, this involves measuring the amount of time between approving job reacquisitions and chosen candidates accepting the job offers.
Many factors would influence the time to fill, such as the industry requirements, supply, demand, and the performance speed of talent acquisition teams. It’s essential to measure this metric as it would directly impact the team’s ability to onboard top talents.
The average time it takes to fill a position is 14-63 days. It would vary across industries. For example, it would be longer to fill a position in the healthcare industry compared to that of a call center.
The Time to Hire
Many HR managers mistake time to fill with time to hire. However, these are two very different recruitment metrics!
Time to hire is a metric that tracks the speed at which candidates are screened, evaluated, interviewed, then hired for open job positions. It describes how long candidates will spend in every step, giving you a bigger picture of the recruitment turnaround time benchmark.
This metric will indicate how efficient the hiring process is and the overall job applicant experience. As you analyze the time spent in different stages of the hiring process, you’ll most likely identify bottlenecks. It’s actually a good thing, as you know what to prioritize where teams will better spend time in.
For example, you realized that specific candidates take longer in the hiring manager review, or there’s a faulty integration preventing candidates from moving to the next stage. Knowing what takes up more time and resources than required can help HR teams know what to improve, lessening the time and resources it takes to recruit top talents.
Time to hire will depend on the role type, industry, and the organization’s specific hiring processes. You need to determine the recruitment turnaround time benchmark so you can lead a better team that will spend less time, money, and resources in the hiring process.
Quality of the Hire
This is another one of the most crucial recruitment metrics indicating the new candidate’s value to the organization’s success in the long run.
Also called the First-Year Quality, you can calculate this metric by adding the percentage of candidates who were accepted for employment and those who did not leave, then divide that by two.
The final answer you get will indicate how effective the recruiting team is in identifying high-quality and loyal talent. It will also represent the difference between more candidates and the best ones.
According to LinkedIn’s Global Recruiting Trends Report, the quality of hire metric is the most valuable KPI. There are various factors to consider when talking about the quality of hire, such as:
- Employee Engagement: This metric talks about the relationship between the employees and their organization, quantitatively and qualitatively.
- Time to Productivity: This metric measures how long it takes until a new hire reaches full productivity. It gauges how quickly fresh candidates can attain specific productivity levels.
- Job Performance Indicators: These are indicators of a reporting manager’s employee performance reviews.
- Cultural Fit: This is measured by their managers’ and colleagues’ 360-degree ratings of new employees. According to the USDA, just one bad hire can cost the company 30% of an employee’s first-year earnings. While measuring the value of new employees is subjective, it’s crucial for the organization’s success.
Some might believe that you can improve this metric by changing how candidates are submitted or how the recruiting team works. Before, it would have worked. But now, there are new technologies, like artificial intelligence, that can build models based on performance data and use it for pre-employment assessments.
This is a recruitment metric that shows where the new hire came from. The source of hire metrics can help HR managers identify what channels and sources can bring in the most talented applicants for open positions, which end up driving a considerable return of investment for businesses.
You can analyze channels like referrals, recruitment agencies, social media advertisements, paid advertising platforms, job listing platforms, and your organization’s careers webpage.
The Ratio of Applicants to Hire
This is another useful recruitment metric that represents how many applicants are applying for a specific role and how many candidates were hired for it.
Knowing this metric will help hiring managers to understand how intense the hiring process is and if they must implement any additional hiring criteria when vetting candidates.
If the applicants to hire ratio remains consistently higher, such as 200 applicants for only one position, recruiters can roll out pre-employment tests and utilize data-driven recruitment processes. Doing so will save time and resources while still hiring the best-suited candidates.
The average ratio of applicants to hire is 1:8:1, while a good ratio is 3:1.
Cost Per Hire (CPH)
The cost per hire is another critical hiring metric indicating the efficiency of a recruiting process. It will also help in evaluating the return of investment.
Basically, the cost per hire is the average amount of money spent to recruit new employees. It’s an important measure, especially when tracking the recruiting budget.
Here’s a simple formula to calculate the CPH = (Internal Recruiting Costs + External Recruiting Costs) / Total number of hires
The CPH will include costs related to recruitment, onboarding, travel, administrative, benefits, referral programs, equipment, paid advertising, agency and job board fees, and the like. Everything will be accounted for from the candidate attraction to the onboarding process.
In large organizations, this metric will have a measurable impact. For smaller organizations, it can make or break their yearly budgets!
View this metric with the context of the other metrics mentioned here. For instance, less time to fill will result in a lower cost to fill. However, you can justify higher expenses because of an increase in the quality of hire.
This means that while the metric should inform the team’s recruiting strategy, the CPH shouldn’t ultimately drive it.
The attrition rate is also called the churn rate, which refers to the rate employees resign in any given period. You can calculate the attrition rate by dividing the number of employees who left the organization by the average number of employees over a certain period.
Obviously, high attrition rates are concerning for HR managers because replacing top talent will be very costly in terms of finances and resources needed to find new candidates and onboard newly hired employees.
Because of that, companies must calculate and evaluate this metric to further understand employee satisfaction levels. This allows HR managers to create employee retention strategies appropriately.
Candidate Job Satisfaction
The candidate’s job satisfaction is a valuable recruitment metric assessing a candidate’s experience with the entire recruitment process. It also shares the candidate’s satisfaction with their current job position in the organization.
One key indicator of this metric is the Net Promoter Score or the Candidate NPS. This is an indicator helping HR managers understand the likeliness of newly hired candidates to recommend the organization to friends or colleagues based on personal experiences.
Assessing candidates’ experiences is vital to acquiring top talent by understanding if job descriptions match new hires’ expectations and how efficient recruiting teams present the open position.
If you have an unsatisfied candidate, a company is less likely to receive more top talents. It can even have organizations lose business, which is why you must focus on building stronger candidate satisfaction.
Wrapping It Up
Recruiting top talent is vital to the success of any organization. That’s why it’s time for HR managers to begin utilizing analytics and data to optimize and scale recruitment processes. As a result, they can hire the best candidates quicker and more efficiently.
When you switch to data-driven recruitment, you get to reduce hiring costs while maximizing efficiency gains. And when you monitor the appropriate recruitment metrics and use the data correctly, you’ll gain a competitive advantage. It will assist you in creating well-informed hiring decisions aligning with the organization’s goals, ensuring organizational and human capital growth.
There are numerous tools and platforms to help you collect and use recruitment metrics! Check them out now and begin reaping the benefits measuring recruitment metrics offers. Good luck!