Sure, recruitment is a means to an end — with the end in this case being a stable workforce — but it’s also so much more. The recruitment process is likely the first real interaction most of your future employees will have with your company and has the capacity to set the tone for their entire employee experience. Oh, and for those recruiters who feel like they hold all the cards when sitting down at the interview table, be aware that 49% of candidates in high-demand fields have actually turned down offers because of bad experiences during the hiring process.
So, yeah. There’s something to be said for improving your approach to recruitment.
Of course, it’s hard to improve something if you can’t quantify it. And that means we’re going to talk about recruitment metrics.
What Are Recruitment Metrics?
Recruitment metrics are — wait for it — metrics used to track and evaluate the recruitment process. These key performance indicators (KPIs) provide a data-backed view of how effectively your business is handling hiring, and where you could stand to make some improvements.
In fact, a recent survey of more than 500 talent acquisition professionals identified “More data-driven recruitment practices” as the fourth-most-important hiring trend for 2022, and 73% of respondents said that data would become even more crucial to staying competitive in hiring. That’s because metrics allow for detailed data analysis, streamlining important processes for effectiveness and efficiency while also empowering businesses with clearer insights into sourcing, assessing, and selecting top-quality talent.
In other words, it’s all in the metrics. Provided they’re the right metrics.
What Metrics Matter Most in Recruitment?
There are a lot of different metrics that can be applied to the recruitment process. Like, a lot. But we know that you’re a busy person, so we’ve distilled this section down to a quick look at 11 of the most important metrics you should be tracking while you hunt for the best candidates:
1. Time to Fill
An empty position in the company means that either work isn’t getting done, or some other poor sap is having to do double duty. As such, one of the biggest concerns in recruitment is how quickly a company can bring someone on board. Time to fill is a KPI focused on the amount of time that passes between the company approving a job requisition and having a candidate accept the offer of employment.
How do you calculate time to fill? Well, you just count the days. Define the starting and ending periods and then see how many days pass in the interim. It’s pretty straightforward.
SHRM reports that the median time-to-fill for non-executives across all industries is 44 days, but that number is obviously going to fluctuate depending on what kinds of positions you’re hiring for. A better benchmark would be to do some research into the average time to fill in your industry and then see how your company compares. Recruitment tracker software and automation tools can help you fast-track the hiring process without getting sloppy, so that you can fill open positions quickly and snatch up the best recruiter targets before your competition.
2. Source of Hire
If top candidates submit resumes, does it matter where they come from? Absolutely it does! Knowing how the candidate found out about the job and what drove them to apply can be valuable information for measuring the effectiveness of your recruiting channels. Tracking the source of hire will help you determine where your recruiting efforts are best spent, and where you may be able to cut spending without too much heartache.
For example, say that you currently employ a sourcing agency in addition to using job boards, your company website, and social networking sites. If all of your best hires come to you through social media and none of them seem to originate through the sourcing agency then you’re probably going to want to shift those resources over to focus on the channel where you’re getting the most traction.
3. Quality of Hire
Naturally, just filling a position isn’t enough; the new hire needs to be able to perform the job well. The quality of hire metric determines whether the recruitment process is effective at attracting and committing valuable talent.
How do you determine which hires are considered top talent? That’s not really our problem — by which (of course) we mean to say that it’s up to you and your organization to determine how best to evaluate and quantify employee performance. But once you do have an idea of which employees are performing at the right levels and which are not, you can then calculate your quality of hire (QoH) success ratio, like so:
QoH Success Ratio = Number of hired candidates that are performing satisfactorily / The total number of candidates hired
A low success ratio can mean that your recruiters are failing to identify the best candidates. And given that a single bad employee can cost their organization at least 30% of their first-year expected earnings, this is definitely a metric worth keeping an eye on.
4. Candidate Job Satisfaction
Hey, it’s not always about you. Sometimes a candidate makes it through the hiring process only to find that the job they thought they were applying for isn’t exactly the job they got. Tracking candidate job satisfaction is a way to measure whether the initial expectations match up with the reality of the position.
Getting the right data for this metric means asking your new hires, usually through an anonymous survey. You can then calculate the ratio of satisfied new hires against those that are not.
Candidate Job Satisfaction Ratio = Number of hired candidates that are satisfied with their position / The total number of candidates hired
A low ratio of satisfied candidates means that something in the recruiting process is failing to accurately convey the reality of the job or its responsibilities. Providing a realistic job preview that communicates the good and bad aspects of the position in terms that are clear and honest will help ensure that those who take your offer are aware of what to expect.
5. Candidate Experience
How your prospective hires feel about the recruiting process can likewise offer valuable insights. The candidate experience measures the perception of the candidate, usually through surveys presented at different stages of recruitment.
Candidate experience surveys help illuminate which aspects of the recruiting process are working, which ones need to be improved, and what the overall sentiment is among those who apply. Also, don’t simply limit your survey to those you end up hiring; the ones who fall off may have even more valuable insights than those who make it through.
6. Cost per Hire
You’ve got to spend money to make money. More specifically, you’ve got to invest money in the hiring process if you want to see any positive results. But how much money? Cost per hire (CPH) measures the total recruitment cost investment in bringing in new employees, including advertising costs, agency fees, time spent by managers and recruiters, new hire training costs, and any other internal or external expenses associated with filling the position.
Figuring out the variables involved can take some time, but once you’ve added up your total recruitment costs, you can start equating:
CPH = The total recruitment costs / The total number of candidates hired
7. Offer Acceptance Rate
Have you ever had a candidate dutifully push through the entire recruitment process only to reject your offer of employment? Have you ever had a lot of candidates do that? Then you might have a problem. The offer acceptance rate (OA) tracks and compares the number of candidates who accepted your job offer to the total number of those who received an offer. Like so:
OA = The number of accepted offers / The total number of offers made
If you’re extending offers and prospective hires aren’t taking them, then it likely is a critique of your compensation and benefits packages. You can counter this by improving the starting salary for your new hires and reviewing your benefits programs. And honesty is the best policy; discussing pay earlier in the recruitment process may help weed out candidates that expect more than you can afford to give.
8. Application Completion Rate
Why would a prospective hire start an application but never bother to finish it? There may be several reasons, but probably the biggest has to do with confusion and unnecessary steps associated with complex online recruiting systems. Tracking the application completion rate will give you an idea of how user-friendly your application process is.
Application completion rate = The number of applications received / The total number of applications started
Look, applicants don’t like getting jerked around. Online systems that force candidates to jump through hoops (such as filling out their entire CV by hand when they could simply upload it), repeatedly enter the same information (like being forced to provide the same information multiple times), or that feature branding from the applicant tracking system providers (which makes applicants nervous about who they’re sharing their information with) drive away a huge percentage of possible hires. How huge? According to SHRM, approximately 92% of job applicants fail to complete their applications.
9. Recruitment Funnel Effectiveness
If it’s worth measuring, it’s worth getting granular about. Your recruitment funnel is made up of multiple steps, and any one of those could represent a weakness or a strength in your hiring process. Recruitment funnel effectiveness places each stage under a microscope to determine which is which.
Recruitment funnel effectiveness = The number of candidates who successfully complete a specific stage / The total number of candidates who entered the stage
Do we need to say it? If your people are all dropping off at a specific step in the recruitment process, then that’s where you’re likely to find the problem.
10. Cost of Reaching Optimum Productivity Level
We’ve talked a lot about the recruitment process and how to measure its effectiveness in getting the right people to accept your offer. But what about after the offer is accepted? Recruitment doesn’t stop until your employees are performing at the level you hired them for, and the amount that you have to invest in getting them up to speed can say volumes about your onboarding.
There’s a lot that goes into these costs — training expenses, the cost of the time of supervisors and employees involved in training, logistical costs, and more. If these costs are too high and you feel as though you aren’t getting enough out of the hire to justify the investment, then you should reconsider how you approach your recruitment and onboarding processes.
11. Adverse Impact
As our final metric, let’s take a look at something that should make everyone comfortable: biases and unfair employment practices.
Now, we know that you’re committed to building a diverse team (and if you’re not, you should be — Gartner found that hiring for diversity in age, ethnicity, gender, and other factors leads to improved employee productivity), but some biases can be hard to identify. Tracking adverse impact helps ensure your recruiting practices and activities are contributing to a more diverse, inclusive workforce.
The U.S. Equal Employment Opportunity Commission (EEOC) guidelines suggest that the selection rate for candidates from underrepresented backgrounds should be 80% or more than the selection rate of well-represented candidates. Anything less than that may have an adverse impact on the underrepresented group.
Recruitment, amiright? There’s a lot more that goes into it — and a lot more of an impact that it can have on your business — than people tend to give it credit for. Focusing on the metrics outlined above can give you the data-driven insights you need to optimize your hiring processes from start to finish. So get analytical. And start clearing some floor space because your office is about to welcome in some top-grade talent.
Want to learn about how to engage and recruit the best candidates? Download our cheat sheet and if you’d like more insights into making your job offer more attractive, talk to a Gympass wellbeing specialist today!