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Recruiting metrics are an important part of any organization’s hiring strategy. These metrics offer a data-driven strategy for you to check the health of your recruitment process.
But many companies find themselves confused about which recruiting metrics matter. And they struggle to choose what data they should focus on to inform their decisions. To ensure your hiring team doesn’t get overwhelmed, we’re highlighting the 8 important metrics you should track in 2023 and beyond.
Let’s dive in.
What are recruiting metrics?
Recruiting metrics are used to track and improve different parts of the hiring process in a company. These measurements show how well the hiring strategies are working. They tell us if the strategies are efficient, effective, and performing well overall.
By analyzing these metrics, you can make data-driven decisions to enhance candidate experiences. You can also use them to improve the hiring process and make talent acquisition strategies better.
For example, by tracking and optimizing the candidate diversity recruiting metric, you might see some interesting findings. For example, the reason you aren’t attracting and hiring black employees might be simple. Maybe you’re just not posting your job openings in places black candidates frequent.
Now that we’ve set the stage, let’s look at 8 important and relevant recruiting metrics:
1. Quality of hire
Getting the right people for a job is really important! It’s like finding the perfect puzzle piece. We call this a ‘quality hire,’ and it’s a big deal.
The quality of hire metric measures how well new employees perform in a company. So, it measures how new hires are performing their roles. And it also measures their success over time in the company.
Quality of hire is the most important recruiting metric. And measuring it can help save your organization money. In fact, research shows that a bad hire can cost a company $14,900 and even $240,000 for other companies.
But it’s the most challenging metric to measure. And that’s because it involves a combination of qualitative feedback (eg. evaluations from peers and managers) and quantitative data (eg. retention rates, performance metrics).
Why quality of hires matter
When companies hire great workers, good things happen! These people bring their skills and happiness to work. They understand what the company wants and work hard to make it better.
Good hires are like superheroes for a company. They make work better, make others happy, and they stay longer. This saves time and money because the company doesn’t have to find new people all the time.
So, when companies hire the right people, it’s like finding the best fruit in the garden. They get great workers, and the company becomes better and stronger. It’s a win-win for everyone!
Here are steps to help you in your journey of measuring the quality of hires:
- Define your metrics: These will help you assess the quality of your new hires. The metrics can be:
- Job performance: Check how the new employee is performing. For example, are they meeting their sales targets? And how are their project completion rates?
- Retention rates: Calculate how well your new hires are staying in the company, preferably in the first year.
- Time to productivity: Assess how quickly new hires become productive in their jobs.
- Ratings and feedback: Gather feedback from peers, managers, and colleagues. Do this through regular evaluations and performance reviews.
- Collect data: Get the important data to calculate your metrics. You can do this by using your organization’s feedback mechanisms, HR databases, and performance management systems.
- Analyze the data: Now analyze the data you’ve collected from your metrics. Compare the performance and important data of new employees to the current employees.
Now use the data to get a comprehensive understanding of how your new employees are performing.
2. Source of hire recruiting metrics
The source of hire metric measures how candidates find job openings in a company. This metric helps you understand which recruiting channel is effective. For example, if you see most of your new hires are coming from LinkedIn, focus there.
When you look for new workers in the right places, the company benefits! You can find people who understand your company and work well with your team. These people are happy to be there and do a great job.
The source of hire is like a map. It shows you where to find the right people. When you follow it, you get team members with great ideas and energy. And they make your company better and more creative.
So, tracking the right source of hire is like picking the best store for your groceries. You want fresh, good stuff. Similarly, when you find employees from the right places, your company becomes better, more lively, and ready to do awesome things!
To track the source of hire, do this:
- Implement an Applicant Tracking System: Your ATS can show data on the different channels through which your candidates entered the recruitment pipeline.
- Survey candidates: Survey candidates to find out how they found your job openings. For example, ask a question such as, How did you learn about this position?
- Check your web analytics: Use cookies on your career websites to track different hiring sources. Recruitment marketing tools can also help you trace how applicants engage with your brand online.
Knowing your source of hire statistics will help you get the top talent. And it will also help you drop the ineffective methods.
3. Cost per hire recruiting metrics
The money you spend to hire new people really matters for your company! It’s called ‘cost per hire. Cost per hire measures the costs associated with hiring new workers. These include expenses such as recruitment advertising and sourcing costs. It also includes referral bonus program costs and onboarding costs.
When you spend wisely, it pays off in the long run! It means you’re using your money in the best way to find the right people. And this helps your company grow and do well.
Cost per hire is like a budget. So, you need to make sure you’re not spending too much. When you manage your costs, you can hire great people without wasting money.
Choosing the right cost per hire is like shopping smartly. You want good quality without overspending. When you find the right balance, your company becomes stronger, more efficient, and ready to succeed!
You can divide the cost-per-hire expenses into external and internal costs. The internal costs can include administrative, compliance, training, and development costs. External costs can include travel expenses, sourcing, background checks, and marketing costs.
Jonathan Merry is the founder at Moneyzine. He adds,” As a CEO, I calculate our company’s cost per hire by tracking candidate sources like agencies, referrals, and job boards. I analyze the cost of each source against the number of hires it brings. We methodically calculate the annual fee associated with utilizing the hiring platform. And then divide this by the number of candidates successfully hired through it within the same time frame.
This helps us understand if higher-cost options like agencies are truly worth it. Or if platforms like LinkedIn and Upwork, with service fees, offer better value.”
4. Offer acceptance rate
The offer acceptance rate shows the percentage of candidates who accepted your job offer. So, this metric is important to measure the effectiveness of your entire recruitment process. A high offer acceptance rate shows that your recruitment process is good. Moreover, it’s an indication that your compensation is fair. And it also shows that your candidates are satisfied.
On the other hand, a low offer acceptance rate is an indication that there is a problem. This problem could be with your compensation, benefits, and general recruitment process.
Martyna an HR specialist at ePassportPhoto, adds, “We keep track of every single candidate via our ATS. Changing the recruitment process statuses lets us track how many candidates received an offer when they received it and whether they accepted it. And if they didn’t, why they declined it.
Our ATS calculates the offer acceptance rate automatically. But the formula we use is: Offer Acceptance Rate = Number of Offers Extended ÷ Number of Accepted Offers × 100%. We do a quarterly review of the offer acceptance rate to analyze the trends and effectiveness of our strategy.”
5. Application completion rate
The completion rate measures how many people start and finish an application process. Tracking this metric can help you know how easy or hard your job application process is.
For example, let’s say there’s a high drop rate in the number of candidates who finish your job applications. It means there’s a problem. For instance, it can mean that your application process might be too long. Or maybe you’re asking for too many details.
To improve the application completion rate you can:
- Simplify the process
- Ensure mobile friendliness
- Provide clear instructions
- Use of progress indicators
- Provide a save and resume process
- Continuously test and monitor the process
Lastly, let’s say the percentage of candidates who complete job applications is high. Then it means you have a good job application process.
6. Candidate diversity
Candidate diversity is no longer a feel-good recruiting buzzword. But it’s an important recruiting metric to help you attract top talent. And a survey by CNBC has also shown that currently, most employees want to work for companies that value diversity.
So, ensure you’re tracking this metric efficiently. To do this, look closely at these types of data:
- Composition of your workforce: Analyze your workforce to know whether gender, ethnicity, age, and disability factors are well represented in your company.
- The diversity of candidates at every recruitment stage: Always check whether there are diverse groups of candidates from your hiring, interviewing, and onboarding stages.
- Pay equity: Frequently examine your compensation structure. Do this for all your different demographics to ensure they are all being paid fairly.
- Promotion and progression: Keep track of all employees being promoted to ensure it’s fair to your entire workforce.
Lastly, you must ensure you’re getting different candidates to apply for your job openings. To do this use inclusive language in your job descriptions. Ongig’s Text Analyzer software helps you write inclusive job descriptions. Using this tool, your job descriptions will be free of any bias such as gender, race, ageism, disability, and more.
7. Time to hire recruiting metrics
Time to hire is not to be confused with the time to fill metric. It measures how quickly a candidate moves through the hiring process. So, this covers from the moment they send in their application to the time they accept your offer.
The time to hire metric tracks the speed and efficiency of the recruitment process. Additionally, it provides data on how quickly an organization can identify, assess, and hire top talent.
Calculating the time to hire metric is easy. For example, imagine the day you posted your job position as day 1. And let’s say that your ideal candidate accepted your job offer on day 30, and they had applied on day 12. In that case, your time to hire then is 30-12 = 18.
Having a good plan for hiring makes sure you find the right person quickly. But, it’s important to know that finding the perfect fit can take time because of different reasons. Reasons can include how many people have to agree on the choice and how tricky the job tasks are. You have to make sure the person is the best match. So, make sure that there are also tasks to see how they do. And you can also check on this when you talk to them before deciding.
8. Employee turnover rate
What is employee turnover rate? Employee turnover rate measures the rate at which employees leave an organization. A high turnover rate is a sign of problems in your company. This could be a lack of effective management and poor working conditions.
High turnover versus low turnover
Low employee turnover means people stay at a job for a long time. This is good because it shows they like their job and get along with others. When this happens, the company is happy and saves money because they don’t have to find and train new workers all the time.
High turnover is when people leave jobs quickly. This can mean problems like not being happy, bad bosses, or not enough chances to grow. When many people leave fast, it’s not good for the company. They have to spend lots of money to find and teach new workers. Also, the people who stay might not feel happy, and others might not want to work there.
So, if people stay at a job for a long time, it’s good for everyone. But if lots of people leave fast, it’s not good, and it can cause problems.
Critical employee turnover rates to measure are:
- Overall retention rate: Measuring the overall retention rate provides important insights into the health of your company as a whole. Finding the overall retention rate is easy. You do this by dividing the current number of your employees by the number of employees at the start of your measurement period. This mostly annually. And then you multiply it by 100.
- Overall turnover rate: If the turnover rate is high, then that’s a sign of a problem in your organization. So, to find the percentage, divide the number of employees who left by the average total number of employees. And then multiply by 100.
- Voluntary turnover rate: Employees quit all the time. It’s common in the corporate world. So, be sure to schedule exit interviews with the employees who quit. This data can help with insights to know how to improve.
- Involuntary turnover rate: Sometimes some employees just aren’t good for the organization. For example, they may misbehave or perform poorly. So, it’s important to keep track of why employees were let go. This helps when hiring new employees.
Riva Jeane May Caburog is the media coordinator at Nadrich & Cohen Accident Injury Lawyers. She adds, “To track the employee turnover rate, we maintain a comprehensive database that records the entry and exit of each team member. We categorize turnover into voluntary and involuntary departures. And this segmentation provides deeper insights into underlying reasons.
Moreover, we analyze exit interviews to pinpoint trends and patterns that might not be clear at first glance. For instance, we noticed a peak in voluntary turnover among junior associates due to limited growth prospects. With this data, we’ve implemented mentoring programs and career development initiatives. This resulted in a 20% reduction in junior associate turnover.”
WHY I WROTE THIS:
Ongig’s goal is to help you in making your recruitment process effective and inclusive. We provide our Text Analyzer to help you. You want to attract and keep top talent. That’s how you will make sure your company continues to grow. Book a demo today to learn how to write inclusive job descriptions.
SHOUT-OUTS:
- The Cost of a Bad Hire [2023]: How Bad Hires Impact Business by (Linkedin)
- Martyna an HR specialist at ePassportPhoto
- Riva Jeane May Caburog, the media coordinator at Nadrich & Cohen Accident Injury Lawyers
- Jonathan Merry, the founder at Moneyzine
- Majority of employees want to work for a company that values diversity, equity and inclusion, survey shows by (CNBC)
- Time To Fill: Formula and How It Compares to Time To Hire by (Indeed)
