What are Recruiting Metrics?
Recruiting Metrics are an important measure of how successful your recruiting initiatives are. You can’t improve what you can’t measure. Data like Time to Fill, Interview to Hire Ratio, Cost to Fill, and Source of hire, among others, can also illustrate the true value of these initiatives when it comes budget time. This data driven approach to recruiting is a smart way to ensure you are hiring the right people. Below, we will examine ten different recruiting metrics or KPIs that you should definitely be tracking.
Time to Fill Metrics & Other Recruiter Productivity Metrics
Below you will find explanations of not only Time to Fill metrics, but Time to hire Source of hire, First-year attrition, Quality of Hire, Interview to Hire Ratio, Offer Acceptance Rate, Candidate Net Promoter Score, Cost to Fill, and Time to productivity.
Time to Fill
High time-to-fill could be negatively affecting your company. This metric is the average number of days between the date a job opens to when an offer is accepted. The longer the time to fill, the more frustrated hiring managers get, the more overworked the remaining employees are, and the higher your recruiting costs go. An average time-to-fill of 36 days according to the Society for Human Resource Management (SHRM).
To calculate Time to Fill, add up all the time to fill data you have for each position you hired for in a given time period and then divide by the number of roles. Do keep in mind that you should not include metrics for positions that are perpetually open.
Through proper alignment, sourcing, workload balance, and a streamlined process, you can greatly reduce this metric. In fact, companies working with Orion Talent experience a 30% reduction in Time to Fill. Check out the infographic here to learn more about the negative effects of high time to fill, and the improvement possible through Recruitment Process Outsourcing (RPO) solutions with Orion Talent.
Time to Hire
Different than Time to Fill, time to hire is an efficiency metric that tracks the average amount of days between when you engage a candidate to then they accept a job offer. Time to fill, on the other hand, measures the time from the job opening to an offer acceptance. Time to hire helps to measure recruiting efficiency and candidate experience and to identify bottlenecks in the process.
Source of Hire
Source of Hire, or SOH, is another important measure of recruiting capabilities. Tracking SOH will give you the percentage of hires that came from each of the recruiting sources you utilize. These could include resources like referrals, job boards, job fairs, etc. Measuring this will help a company determine where to allocate their recruiting budget. Doing so improves candidate quality and enables you to discontinue channels that aren’t producing.
SOH can be tracked through your Applicant Tracking System (ATS), surveys, or even web analytics. Most importantly, a best practice is to ask new hires for their SOH during the onboarding process. You are likely to get a more accurate answer. A good question to ask is how they first became aware of the job opening, as they may have heard about it multiple ways.
First-year attrition is the percentage of employees with a tenure of less than one year that leave as compared to everyone that was hired at the same time. There are two types of first-year attrition, managed or employee-initiated and unmanaged or initiated by the employee.
A poor First-Year Attrition metric could be reflective of less than optimal hiring and onboarding process, bad management, or even ineffective employee screening. When analyzing this metric, you should consider how you can improve all of these potential causes. High First-year attrition has wide-reaching impacts, such as decreased employee satisfaction, increased employee workload, increased budgets for items like Cost to Fill, and a lack of employees who are up-to-speed in the performance of their duties.
Quality of Hire
Quality of Hire, while often considered the most valuable metric in a recruiting teams arsenal, is often the hardest to measure. This is because quality is subjective and you often need months to years to truly be able to quantify the quality of a new hire.
Knowing this, recruiters often used already quantified talent metrics like retention, hiring manager satisfaction, and first-year attrition to determine quality of hire as indicators. The formula would then look like this:
QOH = Indicator 1 + Indicator 2/N (where N is the number of indicators you use)
A higher QOH means increased revenues, decreased recruiting costs, and increased productivity. If the measured quality of a hire exceeds the cost to recruit them, then you are on the right track.
Interview to Hire Ratio
Interview to Hire is a process metric and is calculated as the number of interviews you conduct before a hire is made. Analyze this metric to find where you can make improvements, break it down by stage, role, or even hiring manager. Understanding your Source of Hire can improve your Interview to Hire ratio by ensuring your candidates came from sources that are a good match for your positions and therefore are more likely to accept your position.
Offer Acceptance Rate
Offer acceptance rate (OAR) is an essential metric that is the percentage of candidates who accepted a job offer (including verbal offers) and is a reflection of the overall success of your recruiting process.
OAR=# of Offers Accepted/Number of offers
The reasons candidates accept or reject a job offer range from candidate experience, time to hire, the interviewer, hiring package, the office itself, employer branding, and even other employees they interacted with during the interview process.
An average OAR over 90% usually means that a company’s requirements and candidates’ expectations are a match. If it is below this, you should revisit the factors above that affect offer acceptance.
Candidate Net Promoter Score
Candidate Net Promoter Score, known as CNPS is another important measure that reveals how candidates feel about your recruitment process (which encompasses your brand and company). The purpose of collecting this metric is to improve your employer branding and improve recruitment.
CNPS ranges from -100 to +100 and can be found using a candidates’ response on a 0–10 scale to the question “How likely is it that you would recommend [brand] to a friend or colleague?”.
0–6 are called Detractors
7–8 are called Passives
9–10 are called Promoters
You then subtract Detractors from Promoters, which gives you your CNPS.
Cost to Fill
Cost to fill is also known as Cost per Hire. There are a number of costs that go into recruiting and hiring a new employee, including both external and internal costs. Taking all of these costs into consideration, for the number of new hires during a specific time period, is Cost to Fill.
Cost per Hire ($) = (Total External Costs + Total Internal Costs) / Total Number of Hires
Internal costs include salary, benefits, bonuses, career development, employee referrals, government compliance, as well as software and hardware costs.
External costs include third-party fees such as contract recruiters and staffing agencies, job posting fees, job boards, pay for performance job advertising, Career fairs and college campus, background checks and drug tests, recruiting and social media resources.
We have done a lot of the analysis for Cost to Fill for you in our cost-per-hire spreadsheet. We can help you calculate your costs and get a clearer picture of where your money is going when you hire an employee. You can download it here.
Time to Productivity
This metric relates directly to FIrst-year attrition. If employees are leaving within their first year, they have not truly become proficient at their job and you will always be operating at a deficit as far as productivity.
Like Quality of Hire, this metric is subjective and often relies on other indicators. Then you can calculate how long it takes an employee to achieve those indicators.
You should strive for a low Time to Productivity, which reflects a solid recruiting, onboarding, and training process.
Mind your Recruiter Productivity Metrics
As you can see, recruiting metrics like those above are integral to the hiring process. No one wants to waste time, resources, and money hiring employees who will leave in less than a year, having absorbed valuable time and training. Finding and retaining the right candidate can be made easier if you track and act on these ten metrics.
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