Recruiting metrics are an essential part of a data-driven hiring and recruitment analytics. However, if you would keep track of every recruiting metric you could find on the web, you’d have no time left to do actual recruiting! In this article, we’ll list the 17 most important ones for you.
But first, let’s answer the question: What are recruiting metrics?
What are recruiting metrics?
Recruiting metrics are measurements used to track hiring success and optimize the process of hiring candidates for an organization. When used correctly, these metrics help to evaluate the recruiting process and whether the company is hiring the right people.
Making the right recruiting decisions is important. This image (from Greenhouse) shows the employee’s lifetime value as the sum of all the HR decisions made about that employee.
Using this image we can see that hiring someone who is more suited for the job has the potential to create an enormous return on investment (ROI).
This is why recruiting the right people is so important. Whether you’re starting off by measuring recruiting data or fine-tuning your recruiting metrics, this list will give you a great overview.
Now that we’ve set the stage, let’s look at the 17 most relevant recruiting metrics.
1. Time to fill
This refers to the time it takes to find and hire a new candidate, often measured by the number of days between publishing a job opening and hiring the candidate. Time to fill is influenced by supply and demand ratios for specific jobs.
It’s a great metric for business planning and offers a realistic view for the manager to assess the time it will take to attract a replacement for a departed employee.
In addition, a short time to fill a position usually has a positive effect on the rest of the team as it means less overtime and instability.
2. Time to hire
Time to hire represents the number of days between the moment a candidate is approached and the moment the candidate accepts the job. In other words, it measures the time it takes for someone to move through the hiring process once they’ve applied. Time to hire thus provides a solid indication of how the recruitment team is performing. This metric is also called ‘Time to Accept’.
3. Source of hire
Tracking the sources which attract new hires to your organization is one of the most popular recruiting metric. This metric also helps to keep track of the effectiveness of different recruiting channels. A few examples are job boards, the company’s career page, social media, and sourcing agencies.
4. First-year attrition
First-year attrition is a key recruiting metric and also indicates hiring success. Candidates who leave in their first year of work fail to become fully productive and usually cost a lot of money. First-year attrition can be managed and unmanaged.
Managed attrition means that the contract is terminated by the employer. Unmanaged attrition means that they leave on their own accord. The former is often an indicator of bad first-year performance or bad fit with the team.
The second is often an indicator of unrealistic expectations which cause the candidate to quit. This could be due to a mismatch between the job description and the actual job, or the job and/or company has been oversold by the recruiter.
This metric can also be used as ‘candidate retention rate’.
5. Quality of hire
Quality of hire, often measured by someone’s performance rating, gives an indicator of first-year performance of a candidate. Candidates who receive high-performance ratings are indicative of hiring success while the opposite holds true for candidates with low-performance ratings.
Low first-year performance ratings are indicative of bad hires. A single bad hire can cost a company tens of thousands of dollars in both direct and indirect costs. To read more about how to assess these costs, check out our article on HR costing.
When combined with the channel through which the candidate was sourced, you can measure sourcing channel quality (see recruiting metric no. 17).
Quality of hire is the input for the Success Ratio. The success ratio divides the number of hires who perform well by the total number of candidates hired. A high success ratio means that most of the hired candidates perform well, however a low ratio means that you need to fine-tune your selection process!
The success ratio is used as input for recruitment utility analysis. This analysis enables you to calculate an ROI for different selection instruments.
6. Hiring Manager satisfaction
In line with quality of hire, hiring manager satisfaction is another recruiting metric that is indicative of successful recruiting metrics. When the hiring manager is satisfied with the new candidates in his team, the candidate is likely to perform well and fit well in the team. In other words, the candidate is more likely to be a successful hire!
7. Candidate job satisfaction
Candidate job satisfaction is an excellent way to track whether the expectations set during the recruiting procedure match reality. A low candidate job satisfaction highlights mismanagement of expectations or incomplete job descriptions.
A low score can be better managed by providing a realistic job preview. This helps to present both the positive and negative aspects of the job to potential candidates, thus creating a more realistic view.
8. Applicants per opening
Applicants per job opening or applicants per hire gauges the job’s popularity. A large number of applicants could indicate high demand for jobs in that particular area or a job description that’s too broad.
The number of applicants per opening is not necessarily an indicator of the number of suitable candidates. By narrowing the job description and including a number of ‘hard’ criteria, the number of applicants can be reduced without reducing the number of suitable candidates.
9. Selection ratio
The selection ratio refers to the number of hired candidates compared to the total number of candidates. This ratio is also called the Submittals to Hire Ratio.
The selection ratio is very similar to the number of applicants per opening. When there’s a high number of candidates, the ratio approaches 0. The selection ratio provides information such as the value of different assessment tools and can be used to estimate the utility of a given selection and recruitment system.
To calculate the utility of these tools, take a look at this article by Sturman (2003) on the ROI of selection tools.
10. Cost per hire
We could write a full article on cost per hire. The cost per hire recruitment metric is the total cost invested in hiring divided by the number of hires.
Cost per hire consists of multiple cost structures which can be divided by internal and external cost. By quantifying all of them you can calculate the total recruitment cost.
11. Candidate experience
When we talk about recruiting metrics, candidate experience shouldn’t be overlooked. Candidate experience is the way that job seekers perceive an employer’s recruitment and onboarding process, and is often measured using a candidate experience survey. This survey uses Net Promotor Score and helps to identify key components of the experience that can be improved.
12. Offer acceptance rate
The offer acceptance rate compares the number of candidates who successfully accepted a job offer with the number of candidates who received an offer. A low rate is indicative of potential compensation problems. When these problems occur often for certain functions, pay can be discussed earlier in the recruiting process in an effort to minimize the impact of a refused job offer.
13. % of open positions
The % of open positions compared to the total number of positions can be applied to specific departments or to the entire organization even. A high percentage can be indicative of high demand (for example due to fast growth) or low labor market supply.
14. Application completion rate
Application completion rate is especially interesting for organizations with elaborate online recruiting systems. Many large corporate firms require candidates to manually input their entire CV in their systems before they can apply for a job. Drop-out in this process is indicative of problems in this procedure, e.g. web browser incompatibility with the application system, or a non-user-friendly interface.
This recruiting metric fits well with our number 15.
15. Recruitment funnel effectiveness
Recruitment is a funnel which begins with sourcing and ends with a signed contract. By measuring the effectiveness of all the different steps in the funnel, you can specify a yield ratio per step. This makes for some excellent recruiting metrics.
- 15:1 (750 applicants apply, 50 CVs are screened)
- 5:1 (50 screened CVs lead to 10 candidates submitted to the hiring manager)
- 2:1 (10 candidate submissions lead to 5 hiring manager acceptances)
- 5:2 (5 first interviews lead to 2 final interviews)
- 2:1 (2 final interviews lead to 1 offer)
- 1:1 (1 offer to 1 hire)
The recruiting funnel has changed a lot over the last few years due to advances in HR tech. The first few steps are often atomized: software helps to automatically screen CVs and select the best fits. Some companies opt to go for video interviews to change submittals and even first interviews.
In other words: expect this funnel to change over time.
16. Sourcing channel effectiveness
Sourcing channel effectiveness helps to measure the conversions per channel. By comparing the percentage of applications with the percentage of impressions of the positions, you can quickly judge the effectiveness of different channels.
A simple way to do this is by using Google Analytics to track where the people who viewed the job opening on your website actually came from.
By setting ‘goals’, like the successful completion of an application form, this conversion rate can be made much more accurate. Maybe the people coming from LinkedIn and Twitter don’t apply, but the people coming in from Facebook do!
17. Sourcing channel cost
You can also calculate the cost efficiency of your different sourcing channels by including ad spend, the amount of money spent on advertisement, on those platforms. By dividing the ad spend with the number visitors who successfully applied through the job opening you measure the sourcing channel cost per hire.
Jump in, Start Upskilling
If you can’t wait to start implementing useful metrics within your organization, take a look at our Strategic HR Metrics Course.
This course teaches you a step-by-step process to develop, implement and align HR Metrics. Because of its practical applicability and assignments, you will be able to put your new skills into practice the same day.