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If you're looking to optimize your recruitment process, you have to manage your recruitment metrics. Improving the quality and quantity of the candidates in your talent pool for open roles begins with a basic understanding of what you're trying to accomplish, what's working, and what's not. It's also how to measure recruitment effectiveness. With the right metrics in place, you're able to easily uncover challenges and drive smarter hiring decisions.
Recruitment metrics are a set of key performance indicators (KPIs) used to measure the success of each step in your recruitment process. Hiring managers track these metrics on a recruitment metrics dashboard to assess the effectiveness of their recruitment campaigns, benchmark them against previous ones and make informed decisions about the quality of the people who're joining their company.
The primary metrics measured on this dashboard are:
- Time to fill: The amount of time it takes from when the job is posted to when you make an offer and accept it.
- Cost per hire template: A template used to measure the total cost of recruiting a new employee, including any related fees or costs associated with finding and hiring a candidate.
- Hiring source: The number of hires that were sourced from a specific location or recruiting channel.
- Quality of hire: A metric used to measure the performance of new employees compared to their peers.
There are many more metrics to manage than the ones mentioned above- but this is a good place to start. Note that these metrics are the foundational four, but yours may vary according to industry, company size, and other contextual factors. To stay ahead of your competition you must keep updating your hiring metrics regularly so as not to be left behind when making hiring decisions.
To stay ahead of the curve, think about the recruitment metrics that directly correlate with aspects of your hiring funnel that aren't getting the results you'd like to see them achieve. For example, in today's rapidly shifting world where technology changes from day to day, we're all trying to hire effective, productive, innovative, inclusive, and resilient employees. If you reverse engineer this process and break it down step-by-step it looks something like this:
1. Qualified Talent Pool
2. Screening Process to eliminate candidates that aren't a good fit and identify the "cream of the crop."
3. An interview process that uncovers hard and soft skills, part performance, and culture values/ company fit.
4. Background and reference checks to ensure candidate accuracy.
5. An onboarding process that allows the new hire to engage and achieve as quickly as possible, generating quick wins and a celebration of their presence.
6. And, clear objectives for new hires to achieve that prove the hire was a success.
Now take an engineering approach to each step in the process. Ask yourself questions that help you identify where you're experiencing the biggest challenges in your funnel. Questions like: "Did we find the candidate we needed?" If the answer is, "No," then why? Did they meet our expectations and accomplish the goals that we outlined in the job description? If so, then did we write the wrong job description or set the wrong expectations?
You can look at recruitment process examples up and down your hiring funnel and solve problems every time you face a challenge. Or, you can use Pillar's interview intelligence software that will show you where your recruitment process is going wrong and how to improve it.
By taking a step back and analyzing each stage of the hiring funnel with the right metrics, you can start to build a better recruitment process that yields successful hires.
Evaluating the Performance of Recruiters Using Metrics:
Recruiter effectiveness and efficiency are vital to making great hires. To ensure that recruiters are performing well, you need to measure their performance on several factors - but before we talk about the factors themselves, let's talk about why you'd want to measure performance.
Recruiter performance metrics can help you identify areas of improvement in the recruitment process, create a structure for recruiting improvement initiatives, and track the progress of those initiatives. They can also help you pinpoint when something isn't working as well as you'd like it to in the recruitment process, and allow you to create improvement initiatives that focus on those specific areas.
How to Evaluate Recruiter Performance:
When evaluating recruiter performance, each industry and role will have a unique set of metrics that you need to track. Here are some common recruiter KPI sample metrics:
1. Time To Fill: The time period between job posting and hiring an employee. This metric determines the anticipation of recruiters to fill open positions quickly.
2. Quality Of Hire: Assessing the longevity, engagement, productivity, and performance of the new hires helps in evaluating recruiter efficiency.
3. Source Of Hire: Determining where the recruiters find their candidates is an excellent way to measure recruitment effectiveness. It enables decision-making on jobs that waste resources and those that should be rerouted for valuable outcomes.
4. Candidate Experience: A good candidate experience has a significant influence on promoting positive organizational branding and healthy hiring budgets.
5. Offer Acceptance Rate: Knowing how often candidates deny job offers correlates significantly with the accuracy of assessment processes, positioning ads, and consistent follow-up.
So let's look at some recruiter performance goals examples. Each metric has a correlating goal that recruiters should be working towards: For instance, If you're looking to decrease time to fill (time-to-hire) by 20% then you should probably also consider your Source of Hire and your Acceptance rate. If you can increase the number of qualified applicants by 20%, then it's likely that your time-to-hire will decrease as well.
These metrics should be monitored and reviewed on a regular basis to be sure that you're achieving company objectives. Doing so will help you effectively evaluate recruiter performance and identify areas where improvements can be made.
Calculating the costs involved in recruiting a new employee is an essential part of any hiring process. Here's a cost-per-hire template that can help you understand what a good cost-per-hire looks like and how to optimize it.
As a recruitment platform, one of the questions we get asked is, "What is a good cost per hire?" The answer depends on the industry, company size, and other contextual factors. However, a good cost-per-hire template includes a few factors.
Template: Cost Per Hire Calculation
1. Recruitment Expenses: When hiring someone, you obviously will need to pay for things like job ads, job sites, and recruiters who help you find the right person for the job. Example: $2,500- 25,000
2. Travel Costs: These are fairly self-explanatory but will include any expenses related to travel for interviews or job fairs. Example: $1,000
3. Administrative Costs: Think about the money it costs to hire people. This includes the time HR staff spend looking for people, deciding who to talk to, and arranging meetings. Example: $1,500
4. Benefits: Include the costs associated with employee benefits, such as health insurance, retirement plans, or other perks provided to the new hire until the employee generates an ROI for the company. Example: $6,000 per month.
5. Equipment/ Software: If you use any special tools, or the new hire needs special machines for their job, you need to include the cost of buying or setting up those things in your budget. Example: $800
6. Onboarding: Think about the expenses associated with onboarding and training the new hire, including orientation materials, software licenses, or training programs. Example: $1,200
7. Referral Bonus Program: If you have a referral bonus program in place, include the costs of incentives provided for successful employee referrals. Example: $500- 5000.
To calculate the total cost per hire, sum up all the above metrics. The formula looks like this: Total Cost per Hire = Recruitment Expenses + Travel Costs + Administrative Costs + Benefits + Software/ Equipment + Onboarding + Referral Bonus Program.
Obviously, we're using example costs in this template, but as you can see, the costs to hire one employee stack up very quickly- and that's a good employee, the costs of hiring a bad employee can amount to hundreds of thousands of dollars and potentially years of lost time and damage to company culture and internal relationships.
That's why these Recruitment Metrics hold great significance in making informed decisions on hiring the right person for the job. They help you evaluate recruiter performance, measure the success of your recruitment process, and keep track of the direction you are heading in. They can help you save time, money, and resources- so make sure to keep a close eye on them!
Pillar helps companies decrease time-to-hire and the costs involved with making great hires. Our interview intelligence software is used by leading VCs, tech, and SaaS organizations to help them make more informed hiring decisions and accelerate their recruitment process. Schedule a chat with someone on our team to see how we do it!
Since we've covered many of the vital recruitment metrics and talent acquisition, KPI examples in the previous sections, I don't want to belabor the point much further. So, let's take a look at some recruiting metrics benchmarks, and then we'll talk more about the importance of talent acquisition metrics.
My first question here is, "What do you truly want to accomplish?" As humans, we often tell our bosses that we want to help them "reach company objectives," but in reality, what we want is to systemize and automate much of our work- aka, we want to do what we love and let machines handle the rest. There's no shame in admitting that the boring and monotonous aspects of our roles that take up time and burn energy aren't fun and that we'd like to skip as many of those aspects as possible... And, that's what I'd like to help you do here.
See, I believe that automation actually allows you to be more human in your recruitment. Interview scheduling software, video interview platforms, and interview intelligence all help you to "be" present with the candidate. To ask better questions, to listen better, and to really get to know the candidate so that you can make an informed hiring decision.
This "humanization" of the recruitment process helps the candidates feel seen, heard, and understood, and that contributes to their experience interviewing with your company. It's a win-win for everyone, and it helps you reach those company objectives faster and easier because the wrong hires quickly become apparent.
Let's drill down on one specific metric that is often used to measure recruiter performance and success: time to hire metrics. This metric measures the average time that has passed between when a job opening was posted and when an offer was accepted - but first, let's talk about the differences between "time-to-fill" vs. "time=to=hire."
There are two key metrics that you should be aware of
1. Average Time To Fill
2. Average Time To Hire
The difference between the two is that time to fill measures how long a job has been open while time to hire measures how long it takes you to fill a job once it has been opened. Average time-to-fill is the amount of time from when a job is initially posted until when the position is filled, whereas average time-to-hire is the amount of time from when the application was received until when an offer is accepted.
Generally, the faster you can fill a job opening, the better. Employers who have quick turnaround times on job postings generally have a higher applicant-to-hire ratio and spend less time and money on recruitment costs. By tracking the average time to fill and the average time to hire, you can look for areas of improvement in your recruitment process.
Ultimately, time-to-hire metrics provide invaluable insights into the effectiveness of your recruitment processes and help you to identify the areas that need improvement. When collecting these metrics, make sure to track them for each job posting so you can compare the results and get a better understanding of your recruitment process. The more data you have, the easier it will be to evaluate the success of your recruitment process and make informed decisions about where to allocate resources.
Pillar’s interview intelligence software that's powered by Ai helps companies cut time-to-hire and make great hires quickly and easily. We recently helped a tech giant cut time-to-hire in half... stay tuned for the Case-study or Book Your Demo to see how we did it!