If you can’t measure it, you can’t improve it.
At its most basic level, recruitment is about advertising and filling roles. But companies that regard the function in such simplistic terms, and fail to ask themselves some key questions, are missing out on opportunities for improvement.
These questions include: How long does it take to fill a position? What’s the cost per hire? What percentage of people start but never complete a job application? There are dozens of metrics that could be measured, with the data (in most cases) easy to acquire. It only takes a motivated, data-savvy recruitment professional to seize the opportunity to add value through measurement and improvement.
Why track recruitment metrics?
Around 70% of recruiters believe the profession needs to become more data-driven in order to address spiralling HR costs and the revenue impacts of unfilled roles.
Analysing data can make decision-making more efficient, reduce time-to-hire and cost-per-hire, and improve retention rates. Better still, tracking recruitment metrics will not only identify areas for improvement, but can reveal areas in which your recruitment team is performing well.
Understand why you’re measuring recruitment metrics
Remember, there’s little point in gathering data if you don’t have a plan to action it. Make sure your metrics are presented in a way that makes the data easy to understand, shareable, and actionable.
Don’t fall into the trap of having only one person in the team (such as a data analyst) who keeps the data to themselves; instead, share the insights with the whole recruitment team so everyone understands which key areas you’re work towards improving (or maintaining). According to a recent report, less than 25% of recruiters say key metrics are used by the entire team, but for recruiters who do use key metrics, 50% share this data with their wider teams at least once per week.
The top 10 recruitment metrics to measure and why
There are dozens of recruitment metrics to track. Here is our compilation of the top 10, and why you should be measuring them.
1. Application completion rate
This metric tracks the percentage of people who complete and submit the job application form. It is calculated as follows:
Number of submitted applications / total number of applications x 100
A high application completion rate indicates that the application process has been appropriately designed, whereas a low rate implies the process is clunky or not user-friendly.
Applicants could be frustrated and deterred by long application forms, technical issues or requests for lots of additional information. The average application completion rate is 10.6%, but this drops enormously when an application takes longer than five minutes to complete or contains over 25 questions.
Identifying where and why prospective candidates are dropping out of the process, and adjusting requirements accordingly, will improve the application completion rate and ensure talented applicants are not lost at the first hurdle.
This metric is typically measured by the number of days between advertising a job opening and a candidate being hired. Yello’s 2020 recruitment trends report found that a shorter time-to-hire directly correlates with a lower cost-per-hire. Not only does this metric give an indication of how effective the recruitment process is, but it also helps an organisation to accurately gauge how long future hiring will take.
The cost-per-hire metric can be calculated as follows:
Total recruitment cost (both internal and external costs) / total number of hires in a set time period.
The result will tell you how cost-effective and efficient your organisation’s recruitment process is. Cost-per-hire can also be used to guide future recruitment budgets.
4. Turnover rate
This metric measures the rate at which people within your organisation are choosing to leave, whether by termination, resignation or job abandonment. It can be calculated as follows:
The number of employees who turned over during the measurement period / the total number of employees engaged during the same period
It has been shown that refilling positions due to staff turnover is often more expensive than filling new roles within an organisation, so getting the right people in the door from day one pays.
By understanding what your turnover rate is, it can help businesses better understand which department or line manager has the highest turnover, whether the turnover is due to voluntary or involuntary departures, or if higher turnover occurs at a particular time of the year.
5. Positive candidate experience
For many businesses, candidates are also customers, which means a poor recruitment experience can lead to a loss of business elsewhere. One organisation reported a $5.4 million loss in revenue as a result of bad recruitment interactions.
To measure candidate experience, gather feedback by surveying all candidates (successful and unsuccessful) at the conclusion of the recruitment process.
6. Offer acceptance rate
The offer acceptance rate is calculated as follows:
Number of offers accepted / number of offers x 100
This metric is used to track the number of candidates who accept and reject a job offer. A low acceptance rate suggests candidates are not satisfied with some aspect of the offer, including (but not limited to) offered compensation, opportunities for growth within the organisation or other employee benefits, such as annual leave. Candidates may also leave simply because they have a better offer elsewhere.
A low acceptance rate usually indicates a gap between what the candidate expects from the offer, and the offer they actually receive. To address this, check that the job description doesn’t over-promise, be upfront about the salary and other benefits at the earliest possible opportunity, and ensure you ask shortlisted candidates to share their expectations.
7. Time to productivity
This metric measures the time it takes for a new hire to reach the point where they fully contribute to the organisation, essentially matching the output of their predecessor. Research by Oxford Economics found this takes an average of 28 weeks.
One method organisations use to calculate time to productivity is measuring the number of days it takes for a new employee to meet their KPIs. While this may sound like an HR metric, a low time-to-productivity implies hiring processes are working and the right people are being matched to the right job, as well as effective onboarding and training.
8. Source of hire
It is useful to keep track of where new employees are coming from, whether it’s job boards, social media, the company website or via external recruitment agencies.
Collecting this data makes it easy to evaluate the success of different recruiting channels and help recruitment teams decide how and where to distribute their marketing budgets.
9. Quality of hire
Measuring quality of hire enables you to understand the value a new employee brings to your organisation. Having quality people on your team reduces turnover, boosts productivity, enhances workplace culture and leads to greater overall success for your business.
Quality of hire can be difficult to measure, seeing as every organisation and role places different demands on a new candidate however, you a good place to start is by conducting performance appraisals, surveying the managers of new hires, and tracking employee output and retention.
Define the factors that contribute to a quality hire in your company and when evaluating, give the new employee a score between 0 and 100 for each indicator (such as cultural fit, time to reach productivity in the new role, overall job performance and engagement).
For recruiters, this metric helps them understand if they’re recruiting candidates that fit well within the organisation.
10. Hiring diversity
Today, it’s widely accepted that diverse businesses do better, with increased innovation being one of the most-lauded benefits of having a diverse team. As a result, diversity quotas are becoming more commonplace.
With or without quotas, it’s important for organisations to keep track of diversity over time. If the figures indicate a largely homogenous workforce, it may be necessary to implement changes to the recruitment process to attract more diverse applicants. This may include widening the talent pool by making job descriptions more inclusive, advertising jobs on new platforms, or overhauling your recruitment process to minimise unconscious bias.
How to choose metrics relevant to your organisation
Wondering which metrics to track? Don’t overdo it: take the time to choose metrics based on your enterprise-level company goals, or the goals specific to your function. Metrics may also be chosen based on identified pain points, such as a high attrition rate.
In the age of automation, the nuts and bolts of attracting and recruiting talent will increasingly be done by intelligent AI. Recruitment professionals can stay relevant by finding ways to measure and continuously improve the process, shifting the conversation from reactive to strategic recruitment.