All organizations that thrive and succeed have one thing in common: a streamlined recruiting process. It’s why they can consistently source and hire the best talent to maintain their competitive edge in the market.
But if you’re in HR or a manager, you’ll know that hiring competent employees is no easy feat.
You’ll see all types of candidates apply, making it difficult to consistently look and find people who are good for your organization. To remove the guesswork from the recruitment and hiring process, managers have started to rely on another tool to help them measure the effectiveness of their hiring strategies: recruitment metrics.
Recruitment metrics are powerful measurements that provide quantitative data to assess the performance of the hiring and recruitment process. These metrics help managers track the effectiveness of the recruiting and hiring process and are essential for a data-driven recruitment strategy.
There are many recruitment metrics to track, making it difficult to judge which ones would be suitable for your business. But having a good idea of your business goals and what kind of talent you’re looking for can make the process much easier.
In this article, we’ll discuss what recruitment metrics are important to track and some best practices to consider that will streamline the hiring and recruitment process.
What are Recruitment Metrics?
Recruitment metrics are measures used to track and monitor the hiring and recruitment process. They allow hiring managers to make better, well-informed recruiting decisions and ensure a higher ROI on each hire.
Recruitment metrics provide quantitative data which can be gathered, reviewed, and analyzed to set benchmarks for hiring candidates. The hiring process may vary from company to company as different businesses have different needs, which is why they may also choose to track different recruiting metrics.
No matter the metrics you choose to track, a study on recruitment metrics done by the Journal of Management Research and Analysis (JMRA) states that metrics should be:
“...actionable and predictive, consistent, provide a benchmark for internal performance, open to peer comparisons and help in the best quality of hire, and return on investment.”
Many tried-and-tested recruitment metrics have the above-stated qualities, making it hard to judge which metrics would suit your business needs.
Below we’ve discussed some of the most common and effective recruitment metrics to help you choose which will optimize your organization's hiring process.
8 Most Essential Recruitment Metrics to Streamline the Hiring and Recruitment Process
Time to Fill
Time to fill refers to how long a job position was opened before finding a suitable candidate to accept the opening. It is calculated by dividing the total open job postings by the number of days the job position was open.
Many factors can affect time to fill, giving managers deeper insights into how long it takes to find quality candidates. This metric is commonly used in businesses as it provides vital data on how long it takes to fill a vacancy.
This metric can improve the time to fill open job positions, allowing a competitive data-driven recruiting strategy to find higher quality candidates in shorter times. It’s also effective for anticipating how long it would take to find new talent if you plan on expanding operations or replacing current staff.
Time to Hire
Time to hire, or time to accept, is a recruiting metric that tracks the number of days from when a job was posted till the candidate's first day on the job. It is calculated by measuring the number of days it took for the candidate to move through the recruiting funnel and become an employee.
This metric can help you track hiring success by identifying inefficiencies or bottlenecks in the recruitment funnel.
If the time to hire is taking too long, the recruitment process may be too exhaustive, which can risk the best candidates applying and working elsewhere. A long time to hire can also affect the company's reputation, as candidates would be frustrated at the excessive time taken to get hired.
Improving the time to hire enables you to find the best candidates quickly and remove any inconsistencies from the recruiting process. Although this metric may be able to identify weaknesses in the recruitment strategy, it won’t tell you exactly where the problem lies.
Use caution when tracking this metric, as sometimes a high time to hire may be necessary for some projects. If you’re looking for a candidate to fill a complex/high-risk position, it’s important to take extensive steps and ensure you hire the right candidate.
Offer Acceptance Rate
The offer acceptance rate measures the percentage of people that received an offer.
It is calculated by dividing the number of people that applied to a job opening by the number of people that received an offer.
Reasons for a low offer acceptance rate usually indicate poor compensation to candidates. It may also be that compensation isn’t discussed earlier in the process, which could prevent candidates from applying.
Measuring the offer acceptance rate and improving it will help you offer better compensation plans and gain a competitive recruiting advantage and offer better compensation plans.
The offer acceptance rate can be improved by offering better compensation and discussing it earlier in the recruitment process, such as mentioning it in the job posting, to lower the chances of a refused job offer.
Source of Hire
The source of hire recruiting metric looks at where your candidates are coming from. This includes tracing sources like:
- Job boards
- Company website
- Employee Referrals
- Social media
- Hiring agencies
This is a popular metric used by businesses to track the sources which attract new hires. It allows managers to improve resource allocation for recruitment and identify reliable sources for hiring candidates.
Tracking the source of hire can help you identify which source is giving you the highest ROI from your investment. These insights will allow you to decrease spending on channels that aren’t bringing you good-quality candidates to channels that are.
Hiring Manager Satisfaction
Hiring manager satisfaction looks into how happy or satisfied a hiring manager was after interviewing a new employee.
It can be calculated through surveys, which can be portrayed in ranges that allow managers to rate the candidates on a scale of 1-10 or 1-5. You can take the survey average by dividing the number of satisfied managers by the total surveys and multiplying by 100 to get the percentage.
There are many ways to conduct surveys or measure how satisfied a manager is with a candidate. Some people management platforms also allow you to automate the process and send a survey to the manager to review what he thinks of the new hire.
No matter the method you choose, it can be best practice to provide open-ended questions along with rating scales, as this will give reasons for why a candidate was or was not up to mark.
Improving the hiring manager satisfaction rate can lead to a better and more engaged workforce. That’s because often managers impressed or satisfied by candidates tend to be much more successful employees.
Quality of Hire
Quality of hire assesses the productivity, job performance, cultural fit, and management satisfaction of new employees based on their first-year performance. Candidates with a high quality of hire usually become successful employees and directly contribute to the business's success.
A low-quality of hire can easily number out poor-performing employees which can save the company thousands of dollars down the line. It can also indicate a poor recruiting process or an incompetent hiring manager who cannot source good candidates for the company. Either way, the quality of hire metric will also help recruiters fine-tune the selection process.
This is one of the most popular recruiting metrics to track and measure. However, it can be challenging to find out the accurate quality of hire due to the wide variety of ways to track it.
Candidate Job Satisfaction
Candidate job satisfaction looks into how happy or satisfied a candidate was after applying and starting work for a company.
This metric is calculated through satisfaction surveys, which may include detailed open-ended questions with rating scales to rate their experience working there. The surveys are used to evaluate if the candidate is satisfied with the benefits, company culture, and job responsibilities.
This metric is a great way to track how the job aligns with the candidate’s expectations. Candidates often have an idea of what the job would be like, but hiring managers should manage expectations to ensure they don’t end up disappointed down the line.
A low candidate job satisfaction score may indicate poor management of expectations or incorrect job descriptions. If the employee is required to do more or less than what was mentioned in the job description, it can make them feel less valued and, thus, less satisfied with the company.
To improve candidate job satisfaction, managers can set a realistic view of the job by discussing positives and negatives and writing accurate job descriptions.
Interview to Hire Ratio
The interview-to-hire ratio measures how many applicants were interviewed before filling a vacancy. It is calculated by dividing the number of interviews conducted by the number of job positions filled.
This ratio can help identify the demand for the job or how many candidates it takes to narrow down to one successful applicant.
A high interview-to-hire ratio can indicate that the job description is too broad or that the number of job seekers is higher than the number of jobs within that area. The interview and screening phase of the recruitment process is often the most costly and resource-intensive, so it is necessary to maintain a healthy balance between the number of interviews and hired candidates to reduce expenses.
To improve the interview-to-hire ratio, managers need to set specific criteria to reduce the number of general applicants to a smaller number of more suitable candidates. You can also combine this with the source of hire metric to identify good sources for hire, which may reduce the number of candidates while finding several qualified candidates for the job.
Best Practices for Measuring Recruitment Effectiveness
Sticking to some best practices to track recruiting metrics can be beneficial and ensure the likelihood of successful hires. Here are some best practices to maximize the benefit you get from recruitment metrics.
Explore Current Hiring Trends
Hiring trends are constantly changing with new technology, making hiring quality candidates easier and more effective.
For example, during the COVID-19 pandemic, we saw an increase in remote interviewing. According to an October 2020 Gartner survey, 89% of businesses used video interviews to hire.
Businesses are also adopting robotic process automation (RPA) to automate tasks requiring several hours of manual work, such as bulk-verifying candidate documents.
Look at how competitors are sourcing and hiring successful candidates and how the hiring trends are evolving throughout different industries. This can allow you to explore opportunities to refine and enhance your recruitment process and align with current hiring trends to ensure a higher ROI on your recruiting strategy.
Assess Business Needs
The recruitment metrics you choose to track largely depend on what you want from them. Tracking the proper metrics comes down to your business needs and goals. Are you planning to expand, or do you need to fill a vacant position? Do you operate in an industry with a high supply/demand of jobs? What’s your current labor turnover like?
Assessing your business needs will help hiring managers make better decisions during the hiring process and optimize the recruitment strategy to find highly targeted, qualified candidates, which leads to a higher ROI.
Improve Candidate Engagement
It’s important to ensure that managers and candidates are satisfied with the recruitment process. You can improve candidate engagement by making workers want to work for you. This can be done by setting realistic but positive job expectations, providing satisfactory compensation, and keeping communication open, direct, and concise.
You can also conduct surveys to get feedback from candidates, which will give you more information on how to improve candidate engagement.
Also, you shouldn’t stop to engage the candidate after they’ve been hired. Conduct occasional surveys to assess their satisfaction with their experience and understand how well they fit within the company.
Reduce Turnover Rates
Apart from refining the recruitment process, you should also strive to reduce a high labor turnover rate by decreasing or preventing the challenges faced by current employees. A high turnover rate could lead to a negative perception of the business by applicants and also increase recruiting costs.
It may be beneficial to look into employee engagement programs that can help increase employee satisfaction and motivation, leading to a lower labor turnover rate. This will also reduce recruitment costs as only a few positions need to be filled.
Consequently, a better recruitment process will reduce labor turnover, as managers will be able to hire better candidates.
Identify Talent Gaps
Review your current workforce and try to identify talent gaps. These may be the required skills and expertise your team needs to thrive, so identifying and sourcing them can lead to success. You’ll need to first look within your organization to find talent gaps.
By looking at your current employees’ strengths and weaknesses, you can identify talent gaps and find opportunities to promote and engage existing employees. Finding employees to promote will also lead to job openings, which can be a way to fill the talent gap within the organization.
Evolve the Recruitment Process
Finally, you need to be able to refine and enhance the recruitment process constantly. The above-described metrics should be incorporated into any good recruitment strategy to identify any difficulties or challenges in the recruitment process to optimize them for a higher ROI.
Using recruiting metrics can help evaluate the effectiveness of the recruiting process and help managers improve it. It can help you decrease the time to hire, improve manager satisfaction rates, and reduce recruitment costs.
You should also stay updated with current recruiting technology and hiring trends to ensure you get the maximum benefit from your recruiting efforts.
Conclusion
Many successful companies rely on a proven recruiting process to help identify, source and hire the best talent. But what tools help managers optimize the recruiting process for reducing costs, maximizing ROI, and improving the employee experience?
Tracking recruiting metrics helps measure the effectiveness of recruiting teams and discover opportunities to improve the recruiting process. From hire cost to time-to-fill, countless metrics can be used to measure recruiting effectiveness.
However, just knowing about these metrics and how they’re calculated isn’t enough for a business to successfully source and hire amazing talent. Hiring teams should also set benchmarks for candidates and hold their attention through engagement programs.
This post discussed some of the most common recruitment metrics and best practices to measure their effectiveness. Although the list provides a comprehensive overview of these metrics, you should only choose the recruitment metric that aligns with your business goals.
If you want to skip the process and find the best talent today, you can contact our hiring team to source the best talent for you. We have years of experience helping organizations fill talent gaps and find the best-performing employees that meet their business needs.
