To put it crudely, the recruitment process can be a tedious task. When you think about it, it’s just a complex and lengthy marketing strategy that’s supposed to help companies attract the best talent and eventually find the one who best fits the company-culture. With 70% of hiring managers stating recruiting departments need to become more data-driven to improve long-term business impact, the need for accurate hiring metrics has never been greater.
It’s no wonder that companies are increasingly demanding their recruiting departments to calculate metrics and demonstrate their ROI. To ensure your hiring team is leveraging the right data, we’re breaking down the top 5 recruiting metrics you should be tracking. But first, let’s look at the basics in this recruitment process guide about what recruiting metrics are, the top recruitment metrics to track and the role they play in hiring someone you've never met in person.
Also check out: The top recruiting myths we'd like to bust
What are recruitment metrics?
Recruiting metrics (sometimes called ‘hiring metrics’ or ‘staffing metrics’) are measurements used to track hiring success and optimize the hiring process.
When used properly, these recruiting metrics help your hiring team evaluate your recruiting process, the success of your hiring strategies, and whether you’re hiring the right talent for your company. It helps with the time to hire and also hiring resources costs.
Just as employers regularly measure employee engagement and performance, it is also necessary to employ recruitment automation to track the recruitment funnel. Lack of surveillance would lead to a less efficient recruitment cycle that isn’t geared for the future of talent acquisition.
A recruitment dashboard gives recruiters a one-view or the digital recruitment platform and the ability to track each stage of the recruitment funnel. For instance, the truth about Applicant Tracking Systems lies in its ability to streamline the recruitment process and eventually land the best candidates that will fit the role.
Now that you know what recruitment metrics are, let’s look at the 5 top recruitment metrics to track.
Top recruitment metrics you should be measuring
1. Quality of hire
The quality of hire is defined as the value a new hire adds to the company. Specifically to the organisation’s long-term success. 40% of recruitment thought leaders rank quality of hire as their top priority. But it is also the most difficult recruitment metric to measure, and the main reason for that is the span of time it will take to asses the quality of performance and results the new hire will bring during their tenure. This may take several months to even years.
Some of the ways quality of hire is measured are by calculating retention rate, satisfaction of the hiring managers, the time it takes for the employee to ramp up to full productivity, job performance, engagement, and cultural fit which is measured by the 360 ratings of the new hire’s colleagues and managers. In order to understand how successful a recruitment process is in general, quality of hire can be scaled by averaging the scores of all hires and including the retention rate.
The formula for calculating quality of hire is:
New hire retention = (number of new hires who remained employed for the measurement period) / (number of new hires at start of measurement period) x 100
In addition to that, recruiters can also continuously optimize the selection process by measuring candidate performance to role-related skills. By focusing on one element, recruiters can obtain metrics that indicate a better quality of hire.
Additional Reading: Do you trust your gut feeling in hiring process decisions? Maybe stop.
2. Source of hire
Given the rise of hybrid recruiting, 79% of job candidates today use social media in their job search (Glassdoor). So, the next essential recruiting metric you should be measuring is the source of hire. A source of hire shows what percentage of an organisation’s overall hires entered the recruitment pipeline from each recruiting channel, such as job boards, referrals, social media channels, and even text recruiting.
Digital recruitment platforms display these recruitment analytics metrics on dashboards for easy visualization. As a valuable metric of recruitment, it helps recruiters understand expenses incurred and stop working on channels that are not bringing any candidates. Instead, the recruitment funds can be directed towards more successful channels.
Apart from this, you can also look out for insights from the top recruiting resources to help you attract and hire the right talent in 2023. It is cost a cost-effective strategy of hiring the right talent. Leaders use relevant hashtags for their posts on Instagram, Facebook, and other social channels to increase their post reach.
Also Read: How to calculate the ROI of ATS
3. Time to fill
Among the top recruitment metrics is Time to fill. It is the amount of time taken to locate and recruit new employees to fill a position. It represents the number of calendar days until the company fills the open position. Generally, the process usually begins with either:
- Submitting the requisition for approval
- HR or finance approving the requisition; or
- An advertisement for the job opening
This is an essential recruitment metric because hiring employees is infamously a lengthy process. It gives recruiters a clear indication on the measures that can be undertaken to reduce time to hire and optimize the hiring process.
4. Cost per hire
Cost per hire is an essential and most common used hiring metric. It refers to the total cost of hiring a new employee, including the expense of the recruitment process, equipment, travel costs, administrative costs and benefits. It gives a complete insight into the efficiency of an effective recruitment process. It’s measured as:
Cost per hire = (internal recruiting cost + external recruiting cost) / total number of hires in a given time frame.
Also read : "How to hire someone you've never met in person"
5. Recruitment funnel effectiveness
The recruitment funnel as a whole is also measurable as a metric. Recruiter analyse and measure every step of the hiring process. With the recent interest in choosing a recruitment management system, candidate assessment and recruitment is more streamlined and efficient.
A good rule of thumb while measuring recruitment funnel effectiveness is for recruiters to check for their yield ratio per step. The calculation is based on the number of applicants that have cleared each stage of the recruitment funnel over the total number of applicants. By following this method of measurement, recruiters can identify which stage of the process requires refinement for better recruitment.
New age recruitment technology expedites the hiring process by leaps and bounds. The recruitment analytics is what determines the effectiveness of the process. Measuring recruitment metrics provides layers of helpful insights that can be used to improve an organization’s top recruiting challenges.
There are various other metrics to measuring recruitment efficiency in HR aside from the essential five listed above. But measuring everything may not be the right strategy for every company. Organizations must always be mindful of measuring only what’s important to its business goals. Applying strategy and measuring the right hiring metrics can mean everything for human capital and organizational growth.