Written by Chris Russell
18th February, 2021
Recruiting Metrics: A Guide for Measuring Recruitment Success
Management guru Peter Drucker once said, “what gets measured, gets managed.” In recent years, the need for data and analytics has reached its way into the field of recruiting often with fortune 500 companies having a whole sub-department within HR dedicated to providing people and recruiting metrics. Measuring and monitoring these numbers helps a business understand the talent market and landscape relative to their overall operations.
What are recruiting metrics?
Recruiting metrics are ways to measure hiring success and also to optimize your recruitment funnel. When analyzed correctly, they help talent organizations to evaluate the effectiveness of recruiters and the efforts of their outreach and recruitment marketing spend. It’s important to gauge your recruiting “ROI”. After all, hiring someone who is more suited for the job has the potential to create an enormous return on investment for the employer.
Recruiting metrics are best used in looking at the short term and long term view of bringing talent into an organization. The short term view can be average time to hire and turnover. Utilizing average time to hire and turnover together can help an organization build a staffing plan. One would not think to look at turnover when considering average time to hire, but it’s important because turnover drives when an opening occurs.
Time to Hire Metrics
The average time to hire is important to look at not just at the organization/enterprise level but also across disciplines (IT, accounting, legal, etc.) and countries as different cultures have different professional standards. Oftentimes organizations want the fastest time to hire which is great to have, but getting there takes time. According to data from ATS vendor Yello, average time to-hire across all industries is 3-4 weeks. Of course harder to fill roles will always skew these types of numbers.
To really find out where hiring is slowing down, looking at each step of the recruiting process and finding the bottle necks allows an organization to truly reduce this time. Why should an organization perform this analysis? Reducing the time to hire is all about generating a positive candidate experience and helping the organization succeed in the war on talent and delivering on its overall strategy. After all, you cannot deliver on strategy without people!
Source of Hire Metrics
One of the most popular metrics to track is the source of hire which identifies where your candidates are coming from. Following this metric allows you to track the effectiveness of your recruitment marketing spend by showing you incoming applications from job boards, social media, email campaigns, referrals and your career site. Today job search engine Indeed is typically at the top of the list when it comes to source of hire. LinkedIn is also a top performer.
Capturing where candidates are coming from is important because it informs the organization/company where talent pools are located, and it is best viewed on an annual basis to allow time to gather the data. Gathering sources of hire is especially important for diversity, equity, and inclusion initiatives when it comes to recruiting.
Cost Per Hire Metrics
Cost per hire can include several factors: recruiter salaries, cost of job board postings, interview time, loss of production time due to turnover, etc., and it can also vary by industry. Some employers don’t include recruiter salaries in this number so it can be a matter of choice if you just want to track paid spend that converts to hires.
Talent leaders often overlook their Apply conversion rates. For instance do you know how many clicks it takes from your Indeed spend to generate one completed application? By analyzing this data (clicks divided by applies) one can learn a great deal about which traffic sources perform best. By constantly evaluating these numbers you can adjust marketing spend and ensure you are getting the best ROI for your money. From the data we’ve seen, traffic from Google for Jobs is one of the best when it comes to generating applications and time spent on your site.
Quality of Hire Metrics
Quality of hire typically includes the overall performance rating of the new hire which is usually only captured once a year in large businesses. For small to medium size businesses, it might include new hire turnover (employees <1 year of service). Sometimes referred to as “First-year attrition”, this key recruiting metric indicates hiring success.
If a candidate fails to live up to expectations within the first year of work something went wrong when evaluating them. This error costs companies money. But there are steps you can put in place to mitigate this risk.
It might mean revamping your job descriptions to align better with the role you have an opening for. Oftentimes candidates can misunderstand the job description and/or employers can “oversell” the role as something it is not.
Taking the longer term view on metrics allows the talent acquisition department to look into the “rear view” mirror to see how the talent delivered that the recruiters brought into the organization.
Job Satisfaction Metrics
Candidate job satisfaction is a way to measure whether you are meeting their expectations. So it’s important to survey them six months into their work experience. A low job satisfaction rating surly indicates that what the recruiter told them about the role has not played out. This again points to using a more realistic job preview set forth by the job description and hiring manager.
Recruiting Metrics & Business Outcomes
In reporting recruiting metrics, an organization’s talent acquisition and/or human resources department can drive accountability with hiring managers in regards to generating a positive candidate experience, but it also allows talent leaders and C-suite executives to measure how they are doing against their business strategy.
If the strategy includes revenue growth, then having the right sales force and support in place at the right time is critical. Without knowing and/or reporting on recruiting metrics, the business is losing out on valuable data in order to scale and plan both in the short term and long term when it comes to hiring the right talent.
There are certainly other recruiting metrics to be tracked such as things like offer acceptance rates, percentage of open jobs per department, recruiters sourcing times and selection ratio, but the metrics mentioned above provide the best baseline for how effective your recruiting process is. Time spent analyzing these numbers will prove to be a win-win for your recruiting team and the candidates they seek.