As HR and Recruitment teams are increasingly being pushed to justify their decisions on the basis of data and analytics as opposed to subjective human judgement alone, it has become imperative to build measurement programs that appropriately track the effectiveness of recruiting activities. Oftentimes, you see companies make hiring decisions and not track how those decisions actually turn out or how the decision was made. When some hires inevitably turn out poorly, teams will go back to refilling that same position with the same hiring process that didn’t work! Building a recruitment measurement program represents a critical business activity for teams hoping to avoid the endless chain of hiring, turnover and management frustration. The measurement of recruitment KPIs gives you the opportunity to improve candidate experiences, produce cost savings and optimize efficiencies. With the aim of measuring and improving the effectiveness of recruitment activities, you have to consider what metrics you can track and what metrics you want to track. The options of what metrics to track are seemingly endless, and some are more helpful than others depending on the context and the needs of the situation. But where should you start? Below is an exhaustive list of some of the most important recruitment metrics to track.
One of the simplest metrics to track, the number of applicants per position opening is exactly what it sounds like. This metric will give you insight into the effectiveness of your sourcing efforts as it relates to reach and awareness. If you aren’t getting a lot of applications for your open positions, that usually represents a problem in 1) Your recruitment marketing efforts, namely, an inability to reach a large enough pool of talent that may be qualified for the position, or 2) a poorly constructed preview of the job within the job description, which doesn’t sound attractive to enough applicants to make the effort of applying.
Slightly different than the metric above, the applicants per hire metric is a ratio of the number of applications that are considered for each hiring decision that is made. This metric captures the effectiveness of your sourcing efforts in a different way, mainly whether or not your recruitment marketing is attracting qualified candidates to apply.
Time to hire is one of the most cited recruitment metrics to track, signaling its importance to recruitment teams. Simply stated, time to hire tracks the efficiency of your hiring process by monitoring the amount of time it takes an applicant to move from the initial application all the way through the hiring process. The longer a position remains unfilled, the longer an organization goes without a boosted level of productivity from having that position filled. By tracking this metric, you may be able to identify bottlenecks in the hiring process and suggest improvement solutions.
Also a frequently cited recruitment metric, the cost per hire represents the amount of incremental dollars spent to hire a new employee. There are an array of cost centers that are bundled into this metric, including labor (recruiters), advertising, software, employee time spent in interviews, and more.
This is a more subjective metric as it depends on how your organization might define “quality”. For the most part, companies may look at post hire metrics like performance, productivity, and retention in order to quantify success criteria for a candidate. In measuring the quality of hire, recruitment teams can get a better understanding of how their screening procedures are doing at identifying positive characteristics of candidates and what characteristics might lead to bad hires.
Candidate quality gives you a better understanding of how effective your organization is at attracting qualified candidates to your open positions. There are a number of ways to develop insight into this metric, though it can most simply be achieved by dividing the number of applicants by the number of interviews you conduct. If your organization is attracting high caliber talent, it is likely that you will be conducting more interviews than you would otherwise.
Candidate experience is of utmost importance to many hiring organizations today. It’s a more fluffy metric than most, but is often defined as the feelings and attitudes candidates have towards your hiring process. The best way to get to know how people feel is to ask them how they feel, and so the best way to monitor candidate experience is to ask candidates how their experience was through a survey. Alternatively, you can track the number of applicants who drop off at some point in the hiring process, as this may indicate a poor experience. Additionally, tracking the applicant drop off rate will give you insight into why they might be dropping off at specific points in the process.
Recruitment teams leverage a wide array of sourcing channels to tap into different pools of talent. Wouldn't it be nice to know which of these channels is the “best” in terms of producing the highest number of hires? That’s what tracking sourcing channel effectiveness hopes to give you insight on. It’s most often tracked by conversions and conversion rates, meaning the number of candidates that come from one specific channel as compared to other channels. You can investigate the extent to which certain recruitment marketing materials work, how messaging impacts effectiveness, and more.
Hiring processes typically consist of multiple points of evaluation that ideally incrementally add to your understanding candidates skills and capabilities. But how effective is each individual screening procedure relative to the broader hiring process? You can track the effectiveness of your screening procedures by simply keeping a tab of how many you need to do in order to produce a new hire. For example, how many interviews do you need to conduct before being confident enough to extend an offer? If you have to do five, it’s likely that the previous four interviews weren’t producing valuable enough information. This same logic can be applied to all screening procedures, including the number of resumes you review, the number of assessments sent, the number of phone interviews conducted, and more.
How quickly do candidates move through your hiring process? Ideally, both for candidates and recruitment teams, this happens as quickly as possible. The amount of time a candidate spends at one stage in the process before moving to the next may be indicative of screening efficiency. This can most easily be tracked by outlining each stage in your process, and calculating the average amount of time a candidate spends between steps. For example, if a candidate is stuck in the resume screening phase for an extended period of time before moving to the next step, there is likely some sort of inefficiency involved. In fact, if it gets too long before hearing back, candidates might just assume that you’re not interested and will move on by themselves.
Similar to the metric above, the pass through rate highlights candidate quality and screening effectiveness simultaneously by demonstrating the effectiveness of your filtering process. Each screening procedure should tell you more than you knew in the preceding stage, and therefore should help inform selection decisions.
Relative to the number of offers you extend to candidates, how many are accepted? This ratio will give recruitment and executive teams insight into how their offers fare relative to the competitive landscape. If a high percentage of candidates are rejecting offers that you are extending, it may be an indicator that your offers aren’t attractive enough, poor employer brand and more.
When organizations make a hiring decision, the hope is usually that his new hire grows within the organization for a sustained period of time. When candidates become new employees and then quickly become turned over employees, recruitment teams are left frustrated as they have to start the process all over again to fill the same position, and management teams are left frustrated because of the astronomical costs associated with refilling positions. First year turnover rate will give you a better understanding of how effective your hiring process is at identifying candidates who are in it for the long run.
Organizations hire people to produce more productivity for the firm. Although an imperfect metric, one way companies can do this is tracking the incremental revenue that is gained (or lost) per full time employee or full time equivalent. Ideally, as your workforce grows, your revenue grows also.
You can’t improve what you don’t measure, so measurement can go a long way in helping you improve. However, it’s important to proceed with caution. Quantification often fosters the illusion of certainty and precision when that may not be the case. As we stated upfront, there are a wide array of metrics that can be tracked, but there are only a certain cluster of metrics that you should track. Unfortunately, the particular cluster of metrics that works best for your organization is probably unknown upfront, and can best be determined by testing what works and what doesn’t.
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