What are recruitment metrics?
Recruitment metrics measure the effectiveness of your company’s recruiting and hiring process. They help you evaluate your current hiring process and how well it works at attracting, hiring and retaining candidates. Performance metrics for recruiters also more clearly identify areas of the hiring process that can be improved.
Types of recruitment metrics
There are several types of performance metrics for recruiters, all of which give you a closer look at different aspects of your recruiting and hiring process. Here are 16 recruitment metrics you can use to evaluate the success of your hiring process:
Hiring manager satisfaction
Hiring manager satisfaction measures the quality of hire. Use surveys to gauge how hiring managers feel about new team members. Ask them how satisfied they are with the competency and performance levels of new hires. Based on their responses, you might consider finding ways to improve your recruiting or hiring methods (e.g., revise job postings, prepare a new set of phone screen questions, conduct talent assessment tests).
Cost per hire
The cost per hire metric is used by recruiting staff to determine how much money the company spends hiring a new employee. This metric can also help identify how many new employees can be hired within a given fiscal year based on your company’s budget. Cost per hire is important because it can reveal if your recruitment process is economically efficient not. It can also be a place to reduce costs on the annual budget. Businesses with high employee turnover should be especially careful about their cost per hire.
To calculate this recruiting metric, add your total internal and external recruiting costs for a given time frame and divide them by the number of employees hired during that same time.
Time to hire
The time to hire metric tells you how long the hiring process takes. It can be used to evaluate the level of productiveness among your recruiting staff and the effectiveness of your recruiting strategies. For example, if your company’s hiring process generally moves slowly, you might want to consider readjusting your advertising techniques and general recruitment procedures. This metric is especially important if you’re losing key employees faster than you’ve been able to replace them.
Calculating time to hire can be done by subtracting the number of days that passed between a candidate applying for a position and then filling it, from the total number of days that the position was open and unfilled. Average time to hire among several openings can also be calculated by adding together the specific times to hire for each and then dividing the sum total of them by the number of roles.
Offer acceptance rate
The offer acceptance rate is the percentage of candidates that accept your job offer. This metric can be used to determine the success rate of recruitment tactics in attracting and securing talented professionals to say yes to your company. If your calculations show an initial high interest but low acceptance, you should consider what factors might be causing candidates to decline a job at your company.
Calculating the offer acceptance rate is pretty simple: Simply divide the number of accepted job offers by the total number of jobs that were offered during the same period of time. The percentage outcome of this represents how likely candidates are to accept your work openings.
The new hire turnover rate
A new hire turnover rate is the percentage of new employees that resign within a certain time frame. It can be used to measure turnover during arbitrary periods of time, such as a month or several months. If the turnover rate is high, you might want to consider reviewing exit interview documents with your human resources department to understand what factors lead to employees’ quick departures.
Calculate new hire turnover by dividing the number of departures during a certain time by the number of people hired during the same time. Multiply the result by 100 for a percentage. You can set the time frames at one month, three months, six months or any range you like.
Quality of hire
The quality of hire metric may include factors such as an employee’s culture fit, management abilities, overall performance relative to cost and how well they were retained. Because of this, it can be a difficult metric to qualify. However, by quantifying key performance factors such as job performance, sociability or productivity on a scale of 1 to 10, with 1 being poor and 10 being excellent, you can measure the overall quality of a given employee.
The basic calculation for quality of hire would work as follows: job performance score + social engagement score + productivity score / total number of factors = quality of hire.
Candidates per hire
The candidate per hire metric is one of the key measurements of how effective your recruitment process is. It’s derived from looking at how many candidates had to be interviewed before one was finally hired for a position. Improving this metric can help you save time on interviews and better align hiring criteria with potential candidates. Candidates per hire also measures how well your recruiters and hiring managers are performing.
This metric can be calculated by noting how many interviews a recruiter or manager had to conduct before they could hire someone. Ideally, it should be no more than four or five.
Candidate callback rate
Another important recruitment metric is the candidate callback rate. It measures the number of candidates your organization’s recruiters reached out to vs. the number of candidates that called back. For example, if your company contacts a dozen candidates with an offer and requests that they reply, but only one does, this could be considered a poor callback ratio.
The candidate callback ratio also measures how effective your recruiting is. Furthermore, whether recruiting is being conducted by email, phone or other means, this metric lets you observe the performance of each of these recruiting avenues and adjust your pitches to be more compelling.
Also known as net performer score, the candidate experience metric tries to quantify how a candidate perceives their recruiting experience with your organization. This qualifies your recruiting tactics from an external viewpoint.
For example, you may measure candidate experience by asking your candidates to score the performance of your recruiting across several metrics, such as responsiveness, interview competence, communication skills and courtesy. The result can create an overall score of your own hiring managers as perceived by new or potential employees.
Sourcing channel effectiveness
Sourcing channel effectiveness is a measurement of what each of your sourcing channels contributes to your overall hiring process. The successful recruitment metrics you derive from each channel will let you know which channels need to be optimized. Examples of sourcing channels include email outreach campaigns, recruitment ads, social networks and personal contacts.
You can quantify this metric by counting how many successful candidates each channel has generated over an equal number of outreach attempts per channel. A given time frame might also be used as a measurement for all channels, but you should control for the possibility that not all channels are used with the same frequency.
Sourcing channel cost
Related to sourcing channel effectiveness is sourcing channel cost. This is a measurement of how much each of your sourcing channels is costing you in labor expenses, ad spend or other monetary outlays per successful candidate.
The formula for this metric is the cost of sourcing platform, such as social media ads, during a designated time frame divided by candidates hired during the same time.
Employee retention rate is one of the more important KPIs that your organization should monitor. It measures your ability to keep employees. High employee turnover is a sign that something isn’t working well inside your organization or that your hiring process needs to be improved.
Retention rate can be measured by dividing the total number of employees who stayed for an entire measurement of time by the total number of employees at the start of that time frame.
Your organization’s fill rate is an interesting recruiting metric for deciding if you should use your organization’s own recruiting process to find new candidates or rely on an external agency to help you with the job. By assigning an equal number of positions to fill to both your internal hiring team and a recruiting service and by giving both the same fixed period of time to fill them, you can measure how well each performs.
This metric is calculated by diving the total number of jobs filled by the total number of jobs assigned.
Application completion rate
The application completion rate effectively measures the performance and quality of your job application process and platforms. This performance metric is based on the number of candidate engagements with your application platforms or systems vs. the number of fully completed applications. For example, a faulty online application form that frequently crashes might be the cause of a low application completion rate.
This metric can be measured by dividing the number of submitted applications by the total number of applications that were started, and then multiply by 100 for a percentage.
First-year attrition is similar to retention and turnover rate metrics except that it measures employee turnover by seeing how many employees finish a year of employment since the day they were hired. For example, if you hired several employees on different dates during a given year, you would find first-year attrition by measuring how many of them subsequently completed a full year of employment.
Calculate this KPI by diving the number of first-year employees who left the organization by the number of first-year employees at the start of the measurement period. Then multiply by 100 for your first-year attrition percentage.
The hiring metric of selection ratio measures how competitively placed your open job offerings are on the wider market. If your open positions consistently generate high volumes of applicants relative to the number of people you end up hiring per position, it indicates that either those positions or employment with your organization are highly sought after.
The selection ratio can be calculated by dividing how many candidates you hired by all the applicants for a specific position. If you’re measuring the selection ratio for multiple positions, then divide the total number of hired candidates by the total number of applications for all positions.
Best practices for hiring managers and recruiters
Here are some ways your hiring managers and recruiters can use the above metrics to measure the effectiveness of your company’s recruiting and hiring process:
Delegate metrics measurement to team members
Recruitment metrics should be measured regularly for the most accurate look at how well your recruiting strategies are working. One way to ensure this is by dividing the responsibility of measuring recruitment metrics among HR team members.
Use ATS and data technologies
Applicant tracking software (or ATS) can help you both monitor certain recruiting metrics and help you streamline your hiring process when you’re looking for ways to improve. Some ATS software, for example, tracks status changes for a candidate moving through the recruitment process. By evaluating when these status changes occur, you’re better able to pinpoint slow points in the hiring process and take appropriate action to reduce your time to hire.
Set a time frame for metric calculations
Another important component for hiring managers to consider is the time frame allotted for each metric before they make calculations. For example, a hiring manager meets with their team in January to review the timeline for recruitment metrics. They decide that metrics such as cost per hire and new hire turnover will not be calculated until December of the next year, whereas the offer acceptance rate will be calculated biannually.
Establish both qualitative and quantitative goals for improvement
An important practice for hiring managers to consider is continually revising the methods of approach for the hiring process and adapting those methods to achieve new goals. This can help keep your recruitment staff motivated while also making sure the company is implementing cost-effective hiring tactics to onboard talented professionals.
Recruitment metrics FAQs
Who should I involve in recruitment metric tracking?
In order to maintain accurate and timely data for future hiring initiatives, it’s a good idea to get the help of multiple departments and leaders at the company. Involve the recruitment team, talent acquisition staff, human resources and even your CEO. These individuals each have their own role in the hiring process, and working with them can be useful in helping your company reach its hiring goals.
How are recruitment metrics calculated?
Recruitment metrics are calculated differently depending on the metric. For example, certain metrics simply require you to total the amount of data gathered during a given time frame, like the number of days it took to fill a job or how many new employees left the company within the span of a year.
On the other hand, other recruitment metrics are more complex and require you to use formulas. For example, in order to calculate how much money each new employee costs your company, you would use the following formula:
Cost per hire = internal recruiting costs + external recruiting costs / total number of new hires
How do you set KPIs for recruitment?
The total volume of HR-related data in your organization can easily become overwhelming if it’s not carefully categorized and qualified with specific measurements about what does and doesn’t work. This is why each recruitment metric comes with its own unique key performance indicator to ensure that a specific measurement of its effectiveness is being made and can be tracked over time.
These recruitment metrics themselves serve as crucial performance indicators of your recruiting process. The KPI for each of them lets you consistently monitor how well you’re hiring and managing employees.