The journey to onboarding qualified candidates into your company isn't just jumping from job postings to final signatures. Your hiring process needs to be thorough, from the first message on job boards, all the way through to successful hires. Luckily, there are some key recruitment metrics you can use to understand the success of your recruiting process.
Yes, we all know the basics like time-to-hire and cost-per-hire, but there are many other key recruitment metrics that can be beneficial to dive deep into your organisation’s recruiting success. Today, we’ll take a look at what some of these metrics are and how they can be used to take your recruitment analytics to the next level.
Understanding The Basic Recruitment Metrics
Just because they’re basic doesn’t mean they’re not important. Let’s take a quick look at some of the metrics most of us are familiar with.
Time-to-hire and time-to-fill; they're both quite similar.
Time-to-hire refers to the duration of time from when a job posting is first published to the moment a candidate accepts the job offer and becomes an official employee. In other words, it measures the time it takes for a candidate to move through the entire recruitment process, including application submission, interviews, assessments, and the final job offer acceptance.
Time-to-fill, on the other hand, measures the time it takes to find and hire a suitable candidate for a specific job vacancy, starting from the moment the position becomes vacant. This metric focuses solely on the time between the job opening and the candidate's start date, regardless of how long the recruitment process took. Time-to-fill provides insights into how quickly the organisation can address staffing needs and reduce any operational gaps caused by the vacant position.
Investing in a new team member will cost your business, but in the long run, you'll benefit from it. It's important to optimise recruiting metrics that directly relate to your business expenses, and ultimately hiring manager satisfaction.
There are certain costs in the process of hiring candidates that you might not have considered yet. These can be marketing costs for advertising from the recruitment team, interview expenses, the onboarding process, and more. It also helps to compare the different cost-per-hire expenses across different departments.
A hiring manager can calculate this by taking the internal recruiting costs and the external recruiting costs and dividing them by the total number of new hires. Internal costs can be training, marketing, admin, etc. External costs are for screening candidate experience, background checks, travel expenses, and more. The total number of hires is how many candidates accepted the job position.
While time-to-hire and cost-per-hire are some of the most common recruiting metrics, it’s worth checking out some of the following more overlooked ones.
Measuring and Analysing Overlooked Metrics
Quality over quantity, always.
This is probably one of the most important recruitment metrics that you can track. It measures the quality of hire, what your new employees bring to the table to help improve your business, and how they measure up to the job description you originally posted.
Hiring quality candidates is, of course, a priority. You don't want to waste time or money in filling a position. You can calculate these hiring metrics in a number of ways. You can oversee the time it takes to train the new employee, your turnover since the new hire, anonymous team feedback, etc. It's completely up to you.
Your candidate experience is just as important as the satisfaction of your team when it comes to recruiting metrics.
It starts from the first job post – are applicants leaving in the middle of the application process in the recruiting funnel? Your job description could probably be a little more clear, and easy to understand. It's important to make sure your job descriptions are inclusive, so you don't lose potential employees along the way. You need to check how many applicants are actually completing the full application.
The next thing to think about is clear communication: Are you quick to contact prospective employees? Are your interviews straightforward and meet expectations?
Another thing to consider is your acceptance rate – it's a great way to tell how prospective employees feel about your business and company culture from the get-go. You can calculate your acceptance rate by dividing the offers that have been accepted by applicants by the number of offers made by your company. You want this recruitment metric to be high – it measures the quality of your hiring strategy.
Sourcing channel effectiveness is a recruitment metric that goes beyond simply identifying the source from which candidates are coming. While it is important to know where candidates are coming from, assessing the effectiveness of each sourcing channel takes the analysis to a deeper level. It involves evaluating how well each sourcing channel performs in terms of providing high-quality candidates.
To measure Sourcing Channel Effectiveness, HR teams need to track and compare various key performance indicators (KPIs) associated with candidates from different sources. Some of the KPIs to consider may include:
- Quality of Candidates: Assess the calibre of candidates from each sourcing channel. This could involve evaluating their skills, experience, qualifications, and cultural fit with the organisation.
- Conversion Rate: Calculate the percentage of candidates from each channel who progress from the application stage to the interview stage and eventually receive a job offer. A higher conversion rate indicates better candidate suitability.
- Time-to-Fill: Measure the time it takes to fill a position from each sourcing channel. If certain channels consistently result in quicker hires, it may indicate their effectiveness.
- Retention Rate: Analyse the percentage of candidates hired through each channel who remain with the company for a significant period. Higher retention rates from a specific source could indicate better long-term fits.
- Performance and Productivity: Evaluate the performance and productivity of candidates sourced from different channels once they are on the job. This metric helps determine which sourcing channels bring in candidates who perform well in their roles.
- Cost-Effectiveness: Consider the cost associated with each sourcing channel and compare it to the quality of candidates it produces. A lower cost-per-hire with good candidate quality is more effective.
To effectively track these various data points, powerful recruitment and onboarding software with in-built data analytics capabilities is essential.
Cost of Unfilled Positions
The cost of unfilled positions is a crucial recruitment metric that helps organisations understand the financial implications of leaving job openings vacant for extended periods. When a position remains unfilled, it can have several negative effects on a company, which go beyond the obvious loss of productivity and workload distribution among existing employees. Calculating the cost of these unfilled positions sheds light on the real impact and serves as a motivating factor for HR teams to improve their recruitment processes.
Here are some key aspects to consider when elaborating on the Cost of Unfilled Positions:
- Lost Productivity: Unfilled positions directly impact the overall productivity of a team or department. Existing employees may need to take on additional tasks or responsibilities, resulting in reduced efficiency and potential burnout.
- Opportunity Costs: Vacant positions can lead to missed business opportunities. Unfilled roles might delay the implementation of new projects, hinder expansion plans, or cause delays in delivering products or services.
- Revenue Impact: Certain positions, especially in sales or customer service, directly contribute to generating revenue for the company. When these roles are vacant, it can result in lost sales opportunities and potential revenue loss.
- Increased Overtime and Hiring Costs: To compensate for the gap left by unfilled positions, existing employees may work overtime, leading to increased labor costs. Moreover, when the position eventually gets filled, recruitment expenses such as advertising, interviewing, and onboarding costs are incurred.
In addition to the conventional diversity metrics, which typically focus on the overall diversity of the current workforce, HR teams can benefit from measuring diversity at different stages of the recruitment process. By doing so, they can gain deeper insights into the effectiveness of their diversity initiatives and identify potential areas for improvement. This includes looking at:
- Diversity of the Applicant Pool: This metric assesses the diversity of candidates who apply for open positions within the organisation. HR teams can track the demographics of applicants, including gender, race, ethnicity, age, and other characteristics, to ensure that the applicant pool is diverse and inclusive.
- Diversity of Interviewees: This metric focuses on evaluating the diversity of candidates who are selected for interviews. HR teams can analyse whether candidates from diverse backgrounds are being invited to participate in the interview process.
- Diversity of Hires: This metric examines the demographics of candidates who are ultimately hired for open positions. It measures the success of diversity initiatives in translating a diverse applicant pool and interviewee pool into a diverse set of hires.
Using HR Software for Recruitment Reporting and Analytics
Tracking these overlooked metrics can improve the efficiency of your recruitment process, creating faster responses to candidates and improving their experience with your company and the career landscape as a whole. When you gather candidate experience, you can understand how future employees feel about your company and, as a result, change accordingly to grow as a business.
It also goes a long way in creating a more inclusive and diverse workforce When you track this data in an objective hiring process, you are creating a space where candidates are valued based on merit. And, your company becomes more successful and innovative as a result.
With that being said, it can be very difficult for recruiting teams to track and calculate these metrics on their own. Whether it be a time-based issue or a resource-based problem, a lot of these metrics are difficult to understand on a larger scale. And even more challenging to constantly monitor.
At the end of the day, though, these metrics can improve your recruiting process and your company as a whole. When you discover the best methods to hire, your team expands and offers more value to your company.
This is why HR and payroll software with powerful AI-driven reporting and analytics features is essential to enhance your recruitment processes. With XCD’s reporting and analytics tool, you can create custom dashboards and advanced descriptive and predictive analytics to ensure your team is using data to its advantage.