Did you know that a bad hire can cost a company around $17,000? Making the right hiring decision not only saves money — but also boosts team morale and productivity.
Recruitment metrics help make this possible. When used correctly, these metrics can offer quantifiable insights that help organizations evaluate their hiring strategies, pinpoint areas for improvement, and make informed data-driven decisions.
KPIs for Contingent Staffing
If you’re hiring through agencies or contract recruiters, here are some of the most important metrics for recruitment to look at:
- Time-to-fill – This measures the average time from the job request to the candidate’s start date. To calculate, take the approval date for the job requisition and subtract it from the employee’s hire date. For instance, if approval for a position comes through on 2 June and the role is filled by 14 July, the total time to fill is 42 days.
- Cost-per-hire – This encompasses all expenses in filling a position, including agency fees and internal costs. To measure, add up all internal and external hiring expenses and divide by the total hires. If the total cost to hire eight employees is $20,000, for example, then the cost per hire is $2,500.
- Quality of hire – This evaluates the worker’s fit in terms of skills and performance. To track this metric, rate employees from 1 to 10 across categories (such as performance, training completion time, team compatibility, etc.) and average the scores.
- Early turnover rate – This is the percentage of contingent workers who leave early. To figure out this metric, divide the number of new hires who left or were let go by the total number of new hires in the same period. If 89 out of 125 new hires left within their first month, the early turnover rate is 71%.
KPIs for Direct Hiring
Direct hiring metrics focus on the long-term integration and success of employees:
- Offer acceptance rate – This is the percentage of accepted job offers out of the total made, indicating the company’s attractiveness to candidates. Calculate by dividing accepted offers by total offers made. If you extend seven job offers and five are accepted, the acceptance rate is 71%.
- Employee referral rate – This measures the percentage of hires coming from employee referrals, indicating the health of internal culture and satisfaction. Track the number of hires from referrals and divide this number by total hires.
- Candidate satisfaction – This gauges how candidates feel about the recruitment process. Surveys or interviews post-application can provide valuable feedback to inform improvements and enhance your system.
- Time-to-productivity – This tracks how long it takes for a new hire to reach full productivity and reflects how effective the onboarding process is.
To measure it, subtract the start date from when a new hire reaches full productivity and then average this across all new hires. The resulting number is your organization’s average time to productivity.
Compare this average to industry benchmarks and aim for improvements where needed. For reference, an employee usually takes 5 to 8 months to reach full productivity.
KPIs for Your Recruiters
Assessing recruiter performance through the following metrics can streamline hiring processes:
- Hiring manager satisfaction – Measured through surveys or interviews with hiring managers, this metric evaluates the recruiter’s ability to meet departmental hiring needs effectively.
- Recruitment cost ratio – This is the total cost of recruitment divided by the number of new hires. A lower ratio indicates more efficient hiring and lower expenses per new employee.
- Candidate quality ratio – This ratio gauges the effectiveness of your screening process by showing the proportion of candidates that meet or exceed job requirements. Industry experts suggest aiming for at least 75% of your applicants to move to the interview phase.
- Time-to-submit – Track the average time it takes recruiters to submit qualified candidates to measure their efficiency in sourcing and screening.
KPIs for Contingent Staffing
If you run a staffing firm, measure these metrics to ensure that you’re meeting your client’s needs effectively:
- Fill rate – This is the percentage of job orders filled within a specific timeframe. The formula is: Total positions filled / Total job openings X 100. For example, if you start a quarter with 42 job vacancies and successfully fill 33 positions by the end of this period, divide 33 by 42. The result is 0.78 or 78%.
- Candidate retention – To calculate the retention rate, divide the number of employees who stayed by the total number of hires within the same period. If you retained 249 out of 272 hires over a year, the resulting retention rate is 91%. The higher this number, the better.
- Client satisfaction – This metric evaluates your firm’s service quality and ability to meet client expectations and can be gathered through feedback surveys.
- Cost-effectiveness – Analyze the value your firm delivers versus the cost of your services to determine your efficiency and value proposition.
FAQ
What are recruitment metrics, and why are they important?
Recruitment metrics indicate the hiring process’s effectiveness, help pinpoint improvements, support data-driven decisions, benchmark performance, and enhance talent attraction and retention.
How can we promote diversity and inclusion in our hiring process using metrics?
You can use recruitment metrics to track the diversity of applicant pools, assess interview fairness, monitor hiring manager diversity, analyze retention by demographic, and set specific diversity targets.
How do recruitment metrics contribute to onboarding success?
Recruitment metrics improve onboarding by predicting new hire performance timelines. This allows for personalized onboarding plans and identifies early support needs.
What’s the best way to use recruitment metrics to improve our hiring process continuously?
To leverage recruitment metrics for ongoing improvement, set clear objectives, maintain consistent data collection and results analysis, communicate your findings, and adjust insights-based strategies. Don’t forget to prioritize the ethical use of data throughout.
