17 Metrics to Measure the Effectiveness of Your Hiring Process
If you’re planning to improve your hiring process, the first step is to focus on metrics. You may be wondering: where do I start and what KPIs will help me ensure that my hiring strategy is effective?
Well, you've come to the right place. This recruiting metrics cheat sheet can be your starting point.
It will help you:
Explore a list of key recruiting metrics.
Understand how to calculate each metric.
Determine which metrics best suit your needs.
So, here is a list of metrics that we will look at in more detail below:
Why should a recruiter track metrics?
Obviously, to evaluate the effectiveness of the hiring process.
Think of it as the data that guides your hiring strategy. Based on this data, you can not only take actions, but make truly effective decisions.
The need for recruiting metrics is greater than ever: 70% Hiring managers say recruiting departments need to become more data-driven to improve long-term business performance.
Here are a few more reasons why it's important to track key hiring metrics:
Improving the quality of hiring. It's not just about filling vacancies, but also about selecting suitable staff. Metrics will help evaluate how well new employees help the company achieve its goals.
Create a more efficient hiring process. Metrics like “time to fill” allow you to measure the speed and efficiency of your hiring process and identify areas for improvement.
Resource Allocation: Having a clear understanding of where the best candidates come from (job search services, social networks, etc.) will help you invest your resources and recruitment budget wisely.
Candidate experience: Metrics can help you learn more about your candidate experience, which can impact your employer brand and ability to attract top talent.
These aren't just numbers, they tell the story of your hiring process.
Tracking these metrics will help you make informed strategic decisions that can change your team and your business as a whole.
Now let's move on directly to the metrics.
17 Metrics That Drive an Objective, Data-Driven Approach to Hiring
1. Candidate Search Metrics
Search metrics provide valuable insights not only into where to find the best candidates, but also into how to do so effectively, including from a budget perspective.
Remember that effective recruiting is not just about filling vacancies, it is about finding the right talent in the most intelligent way.
A. Source of Recruitment
Measuring recruitment sources is essential to understanding where successful candidates come from and which channels are most effective.
Formula: Source of Hire = Number of Employees Hired from Source / Total Number of Employees Hired
Understanding this metric will help you allocate resources effectively. For example, a LinkedIn report found that 48% of companies find the best employees through employee referrals.
B. Effectiveness of search channels
This metric evaluates the effectiveness of each acquisition channel. qualified candidates, helping you focus on quality over quantity.
Formula: Channel Effectiveness = (Number of Qualified Candidates from a Source / Total Number of Candidates from that Source) x 100
A high channel efficiency indicator indicates its demand and popularity among the target audience of candidates.
C. Cost of search channels
Knowing the cost effectiveness of different channels is key, especially for companies with limited recruiting budgets.
This metric helps you determine which channels are delivering the best return on investment.
Formula: Cost of acquisition channel = Total cost of acquisition channel / Number of employees hired from this channel
2. Time-related metrics
A. Deadline for filling a vacancy
This metric measures the time from when a job posting is posted to when a candidate is hired. It reflects the efficiency of the hiring process.
Formula: Job opening time = Day the candidate accepted the offer – Day the job opening
A shorter time to fill indicates a more streamlined recruitment process. Regularly tracking this metric helps identify bottlenecks in the hiring process and areas for improvement.
B. Total time of employment
Total time to hire and time to fill are quite similar, but the latter measures the time from the moment a candidate applies for a job posting to the moment they accept the offer.
In contrast, total time to hire measures how long the entire hiring process takes, from the time a job is posted to the time a candidate accepts an offer.
You could say that the total time to hire metric is a more candidate-centric approach that sheds light on the effectiveness of your hiring funnel and engagement levels.
Formula: Time to hire = Day the candidate accepted the offer – Day the candidate entered the funnel.
Reducing overall time to hire can improve your candidate experience and increase your chances of attracting top talent sooner.
3. Candidate Experience Metrics
A. Loyalty Score
Net Promoter Score (NPS) is a critical metric for assessing the overall candidate experience and satisfaction with the hiring process.
To measure this metric, you will need to conduct a candidate survey where you can collect feedback.
Formula: Candidate NPS = (% of positive reviews – % of negative reviews) x 100
To start, ask candidates to rate their likelihood of recommending your company as a place to work on a scale of 0 to 10.
Based on the answers received, candidates will be divided into three groups:
Detractors (score 0-6): These candidates are less likely to recommend your organization. They may have had a negative experience or are not satisfied enough to recommend your company.
Neutral (7-8 points). This group takes a neutral position. Most likely, they will not actively recommend your organization, but they will not speak badly about it either.
Promoters (score 9-10) are your most vocal supporters who have had a positive experience and are likely to recommend your organization as a good place to work.
Higher scores, especially above 30, indicate a strong employer brand and a positive candidate experience.
Scores above 70 are exceptional and reflect an employer's outstanding reputation.
Regularly tracking and striving to improve NPS can lead to increased talent pool engagement and more accepted offers.
B. Application completion rate
This metric measures the percentage of candidates who complete the application process once it has started, which is an indication of the usability of your system.
Formula: Application Completion Rate = (Number of Applications Submitted / Total Number of Candidates Who Started Applying) x 100
A high completion rate indicates a smooth application process, while a low rate may indicate barriers that are discouraging candidates.
If you have a lot of candidates who haven't completed their application, there may be problems:
The application process is too long or complicated.
Technical issues (eg lack of mobile optimization).
Applicants are asked to provide confidential or irrelevant information.
4. Quality of Hire Metrics
A. Quality of Hire
Quality of hire evaluates the overall value and performance of new employees within the company, covering various aspects of their contribution.
Formula: Typically measured using performance ratings, retention rates, and hiring manager satisfaction over a given period.
A quality hire is an indication of the effectiveness of your hiring strategy and the successful onboarding of new employees. Improving the quality of your hire can lead to increased team performance and reduced turnover.
B. First-Year Attrition Rate
The percentage of new employees who leave a company within the first year provides insight into early employee retention.
Formula: Employee turnover in the first year = (Number of employees leaving during the year / Total number hired that year) x 100
High turnover rates may indicate problems in the hiring process, such as misaligned expectations.
5. Indicator of the effectiveness of personnel recruitment costs
A. Cost of one hire
The cost per hire is calculated as the total cost of attracting a new employee. This includes advertising, recruiter fees, and other related expenses.
Formula: Cost per hire = (Total internal recruiting costs + Total external recruiting costs) / Total number of hires.
Understanding the cost per hire is essential for budgeting and ensuring efficient use of hiring resources and tools.
By analyzing this metric, companies can identify areas where they can cut costs without losing the quality of hire.
6. Performance and efficiency indicators
A. Recruitment Funnel Effectiveness
Recruitment funnel metrics are the perfect way to measure the effectiveness of each stage of the hiring process from start to finish.
They help identify the most effective stages of the hiring process and those that need improvement.
Formula: The effectiveness of a recruiting funnel is typically measured by analyzing the conversion rates at each stage of the funnel.
7. Recruiter Performance Metrics
These metrics evaluate the performance of individual recruiters or recruiting teams during the hiring process.
A recruiter's performance is typically a combination of various metrics and factors, such as time to fill, quality of hire, and hiring manager satisfaction.
Tracking these metrics helps identify recruiter training needs and reward high performers.
8. Diversity metrics
Tracking diversity scores helps you understand whether your hiring practices are inclusive and equal.
They help build a diverse talent pool, which, as numerous studies show, leads to increased creativity, improved decision-making, and improved financial performance for employers.
A. Selection coefficient
The selection ratio measures the diversity of candidates and hired employees, ensuring that the hiring process is fair and equitable.
Formula: Selection Rate = (Number of Final Hires / Number of Applicants) for each demographic group.
A balanced selection ratio across different demographic groups indicates an impartial and fair hiring process.
What are some best practices for using recruiting metrics to consider when hiring?
Assessing your recruiting metrics isn't just about crunching numbers; it's about strategically putting together the puzzle of effective hiring. In fact, 68% of organizations today rely on data-driven methods to improve their talent acquisition strategies, and the best part is, these numbers help companies attract and retain 14% more employees.
Here's how you can ensure a more objective and data-driven hiring process by following best practices for using recruiting metrics:
1. Choose the right metrics for your goals
It’s important to choose metrics that are specific to your hiring goals. For example, if your primary goal is to improve the quality of hires, focus on metrics like first-year turnover.
The recruiting KPIs you track should directly support your organization’s broader goals. This alignment ensures that your efforts are effectively contributing to the company’s overall success.
2. Regularly analyze and adapt
The recruiting landscape is constantly changing, so it’s important to review and adjust metrics to ensure they remain relevant and actionable. If specific sourcing channels aren’t helping to attract the quality of candidates you want, it’s time to rethink your approach and refocus your efforts elsewhere.
3. Ensure accurate data collection
Accuracy of data collection is fundamental. Inaccurate data can lead to incorrect strategies and wrong decisions. To avoid these miscalculations, invest in a quality applicant tracking system and recruiting tools to automatically track metrics, which will ensure the accuracy and reliability of the data.
4. Focus on candidate experience
Continuously collect feedback from all candidates, regardless of whether they are hired. Measuring the Net Promoter Score (NPS) can provide invaluable insights into the effectiveness of your recruiting process.
Use feedback to continually improve your hiring process. It’s also a great way to show candidates that you value them, which increases the likelihood that they’ll accept your offer or recommend you as an employer.
5. Train your team
Your recruiting team must understand the importance of these metrics and be able to interpret them effectively. To do this, encourage ongoing training for recruiters and stay current on the latest trends in hiring metrics and analytics.
6. Compare with industry standards
Knowing industry standards helps you understand how your recruiting strategies and metrics compare to your competitors. Use these standards to set realistic goals and targets while continually striving to improve your recruiting practices. Integrating recruiting metrics is about combining analytics with a human approach to hiring.
Remember that effective recruiting is about connecting the right people with the right opportunities, and these metrics are important to achieving that goal effectively.
Frequently asked questions
1. How does cost of hiring affect recruiting strategies?
Cost to hire calculates the total cost of attracting a new employee, including advertising, recruiter fees, and other related expenses.
This metric is important for budgeting and ensuring efficient use of resources. By understanding and optimizing this metric, companies can make more cost-effective hiring decisions.
2. What does recruiting metrics show about quality of hire?
Quality of hire refers to the value a new employee brings to a company and is typically measured through performance metrics, culture fit, and retention rates.
This metric is important because it helps you assess the long-term impact of your hiring decisions. Improving the quality of your hires leads to increased team performance and reduced turnover, which ultimately contributes to the overall success of your company.
We will continue discussing the topic of key metrics for a Senior IT recruiter at an open lesson on September 12. We will analyze:
How to improve your competitiveness with job funnel analytics;
What metrics should Senior IT recruiters consider in their work;
Good and bad examples of maintaining key metrics in recruitment.
You can sign up for a lesson on the “Senior IT Recruiter” course page.
