How to track important recruitment metrics?
In an organization, filling vacancies with the right individuals quickly and cost-effectively could help smoothen the hiring process. But how could an organization achieve this? Optimizing the hiring process is necessary to achieve this. By tracking the key performing indicators (KPIs), employers can get an understanding of how smooth the hiring process runs. So, what do hiring metrics mean? Recruitment metrics are the key performing indicators (KPIs) used to measure the performance of a company’s recruiting team and the effectiveness of the hiring process. In other words, these KPIs aid in measuring how successful the recruiting team is in attracting, evaluating and keeping individuals. Once these hiring metrics are analyzed, the hiring team can come to know the strengths and weaknesses of the hiring process. This enables them to make improvements where necessary.
This article aims to bring out the key recruitment KPIs that need tracking, emphasizing their significance and the various methods employed for tracking them.
Why should you keep track of recruitment KPIs?
Keeping track of recruitment metrics is necessary for organizations seeking to understand the cost-effectiveness and productivity of their hiring processes. To add, hiring managers can evaluate the quality, and how successful the screening, and selection techniques are. By monitoring recruitment metrics, businesses can gain valuable insights into their ability to identify and hire the right candidates quickly. Additionally, they can evaluate the quality of their hires and analyze the costs per hire. By comparing the costs with the quality of hires, you can assess the success rate of your recruitment efforts. The hiring KPIs can indeed help in identifying bottlenecks in the hiring process. Bottlenecks are the instances where the flow of hiring process slows down. Ultimately, this information allows businesses to take better decisions to improve their recruitment strategy if necessary. So, let’s move deeper as to why tracking recruitment KPIs is important.
Identifying areas for improvement
Tracking recruitment metrics help to improve the hiring process. Once the recruitment metrics such as time to fill, cost per hire, offer acceptance rate are tracked, recruiters can identify which areas in the hiring process are inefficient. For example, if the time to fill a certain position is longer, it would indicate weaknesses in the hiring process that need to be addressed. If you analyze the issue further, it might be due to the job description not written in an appealing way or the sourcing channels used to advertise the job vacancy are not tapping into the right communities. As a result, the desired candidates are not attracted promptly. Depending upon the data, improvements can be made to quicken the overall timeline. This ensures that positions in a company are filled sooner without any delay
Improves candidate experience
Recruitment metrics such as time to fill can also provide an insight into the overall candidate experience. By tracking recruitment metrics such as time to fill, recruiters can identify areas that cause delays in the hiring process. You can notice the instances where candidates quit during the hiring process. For example, if the hiring process is longer than usual or has some delays, it could negatively impact a candidate’s impression towards the company. Addressing these areas could lead to a smoother process, ultimately enhancing the candidate’s experience.
Reducing new hire turnover rate
By tracking turnover rate, employers can come to know how successful they are in retaining new employees. To elaborate, imagine a situation where there is an increase in turnover rate in new hires. Upon closer analysis, the companies can realize that the candidate screening criteria doesn’t align with the job role requirements properly, leading to mismatches between the skills of new hires and the job roles. After analyzing the reasons for employee turnover, they can create a plan to reduce it, such as refining the candidate screening process in which skills would better align with the job requirements. Thereby, by tracking recruitment metrics, this would help in reducing the turnover rate.
What recruitment KPIs need tracking?
Recruiters depend on various recruitment metrics to gain insights into different aspects of their hiring efforts. Here are 8 hiring metrics that could provide indicators of the hiring process’s success.
Source of hire
This metric helps the hiring teams understand the effective channels that need to be used to attract the right candidates. Job boards, company websites, internal and external referrals, social media platforms fall under these channels. By tracking this important recruitment metric, you can come to know the successful and unsuccessful channels in bringing in qualified candidates. An applicant tracking system (ATS) like Hiretrace, , can be used to retrieve data about candidates who entered from different sources. Simply, you can monitor what percentage of candidates entered your hiring pipeline from each of the channels. By analyzing these figures, you can adjust the recruitment strategy by considering the channels that provide the best results.
Quality of hire
It is not only about focusing on filling vacancies but selecting individuals with the right mindset is also important. So, what is meant by quality of hire? Infact, this metric measures the value the new employees bring to a company. 39% of companies worldwide prioritize quality of hire as the most valuable recruitment metric. It determines to what extent the new employees are performing and contributing to the company. Are they meeting or going beyond the expectations that the company has set? Normally, it is measured after a certain period following the arrival of new hires at the company. Some of the ways that could determine the quality of hire are by focusing on turnover rate, job performance, retention rate. The higher the QOH, the better because it mentions that your recruitment strategy has been successful in identifying top notch candidates.
Time to fill
Time is always precious, and this applies to the hiring process too. This hiring metric determines how long it takes to fill a job from the moment the job opening is approved by the hiring manager, or the day the vacancy is published up to job offer acceptance date or the onboarding day. A long time to fill could signal inefficiencies in the hiring process that would result in missing out great candidates. On the other hand, a short period of time to fill implies that you are reaching out to the candidates without any unnecessary delays. Imagine that less time to fill means you are approaching the best candidates before your competitors do.
Time to fill = Date the position was officially published – Date candidate accepted the job offer
Time to hire
This is one of the common recruitment metrics used by recruiters. It measures the duration from the moment a candidate enters the pipeline to the point of accepting the job offer. It is important to note the difference between time to fill and time to hire is that time to fill starts when the job vacancy is approved by the hiring manager whereas time to hire begins when the candidate has entered the pipeline. Reducing the time to hire could lead to quality hires. On the other hand, having a longer hiring time could lead to losing qualified candidates.
Cost per hire
This recruitment metric reveals the total expenses needed to secure a new employee. Both internal and external costs are considered. Internal costs include salaries of the hiring team, administrative costs, training costs. External costs are associated with posting job advertisements on job boards, career fairs and investing in recruitment software. By keeping an eye on cost per hire, recruiters can get an understanding of their recruitment expenses. This would allow them to review the budget and reduce unnecessary costs. If you come to know that the cost per hire is high, you can optimize it by refining the recruitment methods.
Cost per hire = (Internal costs + External costs) / Total number of hires
Application completion rate
This is one of the recruitment metrics that assesses how effective your job application platform is. It is calculated by comparing the number of applications received with those who start the applications but do not submit it. For example, if 50 candidates start the application process but only 25 complete it and submit their applications, then the application completion rate would be 50%. A high application completion rate indicates how user friendly your job application platform is. On the contrary, low application completion rate indicates that candidates are leaving the process without finishing. This could be due to factors such as the lengthy application process, technical issues on career pages, and the presence of irrelevant questions. By identifying the factors that contribute to low rate, recruiters can make necessary improvements to job application platform. Ultimately, this would result in increasing the submission rate.
Application completion rate = (Number of applications submitted / Number of applications started) multiplied by 100
Offer acceptance rate
This hiring metric reveals how effectively you have satisfied a candidate to join your company. To elaborate, it is one of the hiring metrics that measures how attractive the company is among the job seekers. Individuals who are well qualified have a higher chance of receiving multiple job offers. So, it is important to persuade them to accept it. This can be calculated by dividing the number of accepted job offers by the total number of job offers made. This metric reflects the hiring team’s performance. Some of the factors such as timing, benefits, salary and company culture can impact a candidate’s decision. To get an idea why the candidates rejected an offer, it is necessary to ask for feedback. Is the hiring process longer than expected or did they get a better job offer from some other firm? Depending upon the feedback the hiring team gets, they can then refine the hiring process.
Offer acceptance rate = (Number of job offers accepted / Number of job offers sent) multiplied by 100
Selection ratio
It is one of the hiring metrics that tells how competitive your job openings are in the job market. If a particular job opening gets lots of applicants, it suggests the positions are appealing to the candidates or working at the organization is desired by the job seekers. It is calculated by dividing the number of candidates who are hired for a certain position by the total number of applicants
Selection ratio = The number of hires / The number of applicants
What methods can be used to track recruitment metrics?
Tracking recruitment metrics is needed to evaluate the effectiveness of the recruitment efforts and taking decisions to improve them. Nowadays, HR software systems like Human Resources Information System (HRIS) and applicant tracking systems (ATS) play an important role in assisting recruiters with data collection of data, analyzing data and reporting. Let’s discuss how HRIS and ATS aid track recruitment metrics, enabling the recruiters to deal with the workflow in a smooth way
Applicant Tracking System
An applicant tracking system (ATS) streamlines the tracking of recruitment metrics by automating data collection, providing visualization tools, enabling you to make data driven decisions to improve the hiring process. An ATS can track the sources or channels from which the candidates are applying. This means it could automatically capture data about the platforms which generate the most qualified candidates. Whether it is job boards, career pages or social media pages that most qualified candidates come from. This information would help determine as to how to allocate the budget for sourcing channels that work well for the company.
Moreover, an ATS can monitor the time taken to fill a position, right from the moment it is opened to the moment the position is accepted. By analyzing this data, recruiters can come to know if there are any weaknesses in the overall timeline of the hiring process and then take measures to correct it. Many ATS like Hiretrace have built-in visualization features. The system could visualize data in the form of charts and graphs, making it easier to note down trends. With an ATS, you could automate the generation of reports related to important recruitment KPIs such as source of hire, offer acceptance rate, quality of hire. This could save time and effort when compared to manual data entry.
Human Resource Information System
A Human Resources Information System (HRIS) is software that manages and stores employee related data. It streamlines the HR functions such as administrative work. It provides a centralized database for storing employee information. It can provide data about important recruitment metrics such as retention rate and turnover rate
Summary
In today’s world, finding great employees in record time can be hard. Even if the best tools are used, you may fail if you don’t measure how well you are doing. The success of your hiring process also lies in your ability to measure recruitment efforts. By understanding the company’ s hiring goals and tracking recruitment metrics, you can know whether your recruitment strategies are working as planned.
