Successful companies trust numbers. They use statistics and key performance indicators (KPIs) to measure success and growth. And because it costs a lot of time and money to recruit new candidates, hiring new talent should be no exception.
As with any significant time and financial investment, you want to be sure your money and energy are going towards the right places. For this reason, understanding how to calculate recruitment KPIs, can help you improve your recruiting strategies.
It can help your HR department become more efficient at their task and allow your company to hire the best talent available for the job positions that you advertise.
So how do you track your recruitment efforts? In this guide, we go over some of the best recruitment KPIs and how to interpret them. Let’s get started with some basics.
What are recruitment KPIs and why are they important?
Recruitment KPIs are specific metrics that help you assess the effectiveness of your recruitment process. We’ve talked about the importance of having an efficient recruiting process and how to get there.
However, having hard data to rely on before you make any changes is extremely important. It will allow you to address the particular pain points that your recruiters are experiencing, which might not be obvious at a first glance.
There are several important things that KPIs can teach you about your hiring process, including:
- How long does it take to hire someone?
- Is your potential candidate the right fit for the job?
- How much money are you spending on the entire hiring process?
- How efficient are you in the hiring process?
- How many candidates are applying for your job postings?
- Which places are the candidates looking for your job postings?
- How well does your new employee perform at the job?
- Does the job description that you provided with the listing accurately represent the actual job details?
- Is your recruitment journey engaging, transparent, and efficient?
Best recruitment KPIs
To be able to stay on top of the competition and snag that all-star employee, you will need to analyze and understand the following KPIs.
1. Qualified candidates per opening
Anytime you post a new job opening, it’s great to see recruits flocking to the position and sending in the CVs by the hundreds. This shows that your company has a strong employer brand that is coveted by many.
However, if those candidates aren’t qualified for the position, you’re only wasting your time. Not connecting with qualified candidates could be a sign that the job description is lacking or you aren’t using the appropriate channels for the job posting.
The ratio of qualified candidates per opening tells you what share of people applying for each open position is actually qualified for that role. If this metric is low, you might want to reconsider your job descriptions and advertisements.
2. Time to hire
This KPI measures the time between when a candidate is contacted for a job opening or enters the recruiting funnel, and when they accept a job offer.
This is an essential measure of efficiency and helps identify bottlenecks in the recruitment process. Desirable candidates rarely stay on the market for more than a couple of weeks. So, keeping the time-to-hire as short as possible can boost your quality of hire and lower your costs.
Additionally, having a good data set on the length needed for hiring will allow you to start recruiting for projects on time and ensure a functional team that will start meeting deadlines from day 1.
3. Recruit source quality
This indicator shows you the usefulness of your sourcing channels, or where you advertise job openings. It helps you understand where you find the most qualified candidates and whether your money for job ads is well spent.
To find source quality, take a look at the number of high-quality candidates coming from each source. For example, if you find out that your best candidates are from referrals, you might want to strengthen your employee referral program.
4. Quality of hire
This recruiting metric indicates whether the person who was appointed to fill the position is good or bad for your organization.
It is generally used to measure the performance of an employee during their first year of employment. Low ratings can indicate bad hires, and this can cost companies a substantial amount of money. Knowing exactly how your employees are helping your organization and what skill sets they’re bringing to their job, is integral.
5. Cost per hire
Understanding how much money you spend for each new hire is essential. Recruiting is an investment, there’s no secret about that. But keeping an eye on the average money you spend for each new employee can go a long way.
Comparing the average to individual costs can help you identify if there are ways you can cut costs without sacrificing the quality of your hire. Additionally, it can let you know if maybe investing a bit more money results in a stronger candidate.
6. Interviews to hire
The interviews are the most time-consuming element in the entire recruiting process. While platforms like RecruitMe can help you reduce screening time and keep track of statistics, interviews need to be personal in order to create the best recruiting environment.
For this reason, it’s essential that you uncover how many of your interviews are actually productive.
This KPI will show you the number of interviews you conduct before you sign a new employee. It can help you see which part of the interview process is lacking and needs a bit more work to speed up the recruitment process to improve the overall worker experience.
Conclusion
In this short article, we went over some of the most important key performance metrics for recruiting new candidates. These can help you get some incredible insights regarding your recruitment process.
The ball is now in your court. Do you think you have what it takes to improve your recruiting process? You can start by measuring these KPIs with the help of the RecruitMe dashboard and start advancing towards your recruiting goals immediately.