21 Recruitment Metrics to Cut Costs and Boost Efficiency
Published: Nov 30th, 2023
Recruitment metrics are the data that helps recruiters, human resources professionals, and hiring managers track how effective their recruitment processes are. In an era of Big Data, we have countless data points at our fingertips. The challenge is uncovering key hiring metrics and how they help us understand the day-to-day functions of recruiting.
For example, most recruiters will track their time-to-hire. This is the time it takes from the start of the search to the day a person starts the job. This metric informs how long a position is open and the resources required to find the most qualified candidates for the role.
Other key recruiting metrics include the hire's source, such as social media or referral programs, and the cost-per-hire. Each of these HR metrics for recruitment will help companies better understand the efficacy of their hiring programs and budgets.
Tracking recruitment metrics isn't just about knowing where talent comes from or how long it takes to hire. A 2019 study revealed that recruitment metrics had a significant impact on the quality of each hire.
This article will give you the most common recruiting metrics and how to use them in the workplace.
What are recruitment metrics?
Recruitment metrics are ways to track exactly how, when, where, and why an organization’s money is spent during the hiring process. They also track how efficient each part of the process is, helping HR teams and business leaders to spot the need to make adjustments along the way.
There are several categories of key recruiting metrics:
- New Hire
But simply knowing what the hiring metrics are isn’t the same as understanding their significance. Recruitment analytics is a complex industry, but recruiters and human resources should know enough about the data to know how well their recruitment programs work.
For centuries, companies have been asking, how do I measure the quality-of-hire? There’s no cookie-cutter answer. To know the right recruiter metrics to track, we have to see how all the elements tie together.
Using recruitment metrics in your business planning is a critical part of the process. Just as you’d create a physical inventory or your year-end budget, assessing your recruitment plan will help you know if you have the right people in the right roles. It can also help you see how to fill in the missing pieces, and how to fill a sudden need that comes from attrition or growth.
The Society for Human Resource Management, or SHRM, suggests the following:
- Know the role of data in talent analytics
- Determine the question before reviewing the data
- Create a business objective
- Know the limits of HR metrics for recruitment
- Embrace what’s measurable
You can see an example of a strategic business plan using recruitment metrics in this Penn State document.
The right recruitment metrics can help you continuously improve your hiring cost, speed, and quality. What gets measured gets improved."
A closer look at key recruitment metrics
Since we have almost unlimited data, breaking down key recruitment metrics into easily discernible categories is essential. There’s plenty of crossover in these concepts, and all of them point to the overall quality-of-hire.
From hiring recruitment metrics to onboarding and ongoing business data, knowing what to measure and why is a critical recruitment metrics best practice.
Hiring recruitment metrics
Some of the most important recruiting metrics to track involve hiring. Knowing the difference between time-to-fill and time-to-hire, for example, is critical for monitoring the right recruitment analytics.
Time to fill
Time-to-fill is measured by the number of days between the approval of the job requisition and the acceptance of the job offer. For businesses, this number shows the past performance of the recruiter working on open jobs.
Time-to-fill can show recruiters how different jobs, resources, and recruiting tactics compare for finding top talent for each open position. Many will use trackers like this SHRM spreadsheet to understand the recruiting funnel better.
Time to hire
If time-to-fill is the time it takes between the job requisition and the offer acceptance, what is time-to-hire? Time-to-hire is how quickly a recruiter can move once the top talent is identified, plus how long it takes to bring them on board.
The time-to-hire is the accepted date minus the date the individual candidate entered the pipeline. A good time-to-hire is considered about ten days. SHRM offers a spreadsheet to track the time-to-hire, such as recruitment cost, time to hire, and speed.
Source of hire
If time-to-fill and time-to-hire are essential, it stands to reason that the source-of-hire is equally as significant. Where do recruiters find applicants for open jobs? Sources can include online job boards, social media, passive candidates, and referrals.
There's a significant push right now for companies and recruiters to expand their sources to ensure a more diverse pool of candidates. If you keep returning to the same sources, you'll find the same types of talent. By expanding, you’ll give more opportunities to more people with diverse backgrounds.
Cost per hire
One of the most valuable HR recruitment metrics for businesses is the cost-per-hire. Recruiting is expensive, and it's important to know what your hires have cost in the past, so you can plan for budgets in the future correctly. The cost-per-hire isn't just the salary offer. It encompasses costs such as:
- New employee productivity
- Coverage for vacant roles
Cost-of-hire also includes the salaries of anyone involved in the hiring process and the costs of pre-screening tools such as drug testing and background checks. The idea is to track the entire cost of the process.
The US Department of Labor calculates the cost of a bad hire at 30% of the worker's expected earnings in the first year. So lowering the high cost of hiring is as much about hiring right the first time as it is about budgeting for resources.
Application recruitment metrics
The application process may be the most critical part of the recruiting funnel. Knowing what to track and how to track it will help you make the right decisions for your process and budget.
Application Recruitment Metrics
- Sourcing channel cost
- Sourcing channel effectiveness
- Qualified applicants per opening
- Application completion rate
- Offer acceptance rate
Sourcing channel cost
Pulling in different types of candidate sourcing will also affect the cost. So is knowing that not everyone who applies to a job will be qualified. Common sourcing channels include job boards such as Indeed, social media platforms like Facebook or LinkedIn, and referral programs.
Sourcing channel effectiveness
The cost of hiring new employees is only one factor. Recruiters and businesses should regularly review their sourcing channels to see if they're getting the right return on their investment. How many resumes are being received from these sources versus job offers made to candidates?
Understanding the cost and effectiveness of sourcing channels will also help inform other recruiting metrics, such as quality-of-hire.
Qualified applicants per opening
Another key metric to review is how many qualified applicants appear per opening. Not all individuals who apply will be fully qualified for each position. This helps rate the accuracy of each recruiting source. (If you’re consistently seeing a low number of qualified applicants from the same source, you’ll naturally start to question the source.)
Track how many applicants have applied at every part of the funnel, and how many of those are qualified. Finally, track the ratio of qualified to unqualified applicants.
Application completion rate
About 60% of applicants quit online applications in the middle of the process. There are various reasons for this startling statistic, including the idea that a lengthy application process will weed out unqualified candidates.
The truth is, these overly complex applications weed out even top talent. Paying attention to the ease-of-application and whether it's optimized for mobile devices will improve the entire hiring process.
Offer acceptance rate
Every recruiter has faced this situation. The perfect candidate doesn't accept the job offer, and you're back to square one. Tracking this metric will help you spot any bottlenecks in your process that cause candidates to back out.
According to the National Association of Colleges and Employers, the current average offer-acceptance rate is 65.7%. That means only about 66 of every 100 offers get accepted.
New hire recruitment metrics
Once someone comes on board, we’re not finished with measuring specific data points. Businesses need to know how effective the recruiting process is for quality-of-hire and retention.
First year attrition
A surprising 33% of employees quit in their first 90 days. And that number was studied before The Great Resignation. Putting people in jobs isn’t enough if they leave within their first year, so tracking and analyzing this data is essential.
The current workplace climate is ripe for attrition as companies continue to see the effects of the great resignation. A turnover tsunami is expected.
Quality of hire
The elusive quality-of-hire comes down to one important metric: the performance rating. While it takes some time to train and onboard an employee, you’d like them to be up to speed as quickly as possible. That key baseline productivity date will inform the quality-of-hire.
One of the most important aspects of tracking the quality of your hires is choosing the right performance metrics for recruiters. Companies can use quality-of-hire to see how effective the recruitment process is and if the recruiter is performing at optimal levels.
Cost of getting to OPL
Not only do you need to train someone up to their optimum productivity level or OPL, but you also need to use resources to do that. Training and tools aren't inexpensive, so knowing how much this process costs can help keep you on track.
For each position, you'll need to know how productivity is defined and what milestones should be reached, at what times in their development.
Time to productivity
How long does it take each new employee to become productive? Unlike some of the more static hiring metrics, time-to-productivity can be difficult to calculate. You need to know the KPI, or key performance indicators, for each role. Then you can calculate the time it takes each new hire to hit that KPI.
Hiring manager satisfaction
Some key recruiting metrics aren't complex numbers. In an age of big data, we can use almost anything to measure success, including satisfaction. The satisfaction of the hiring manager with the new employee at various points of their process is a vital metric.
Survey hiring managers to ensure they’re happy with their recent placements at critical times, including after 90 days and a year. This will help determine the quality-of-hire.
Candidate job satisfaction
Regularly check in with the new employee to find out if they’re satisfied with the job. Candidate satisfaction is built on several factors, including their overall fit within the workplace environment and their assessment of their own job performance.
Candidate net promoter score (NPS)
You may have heard the buzz about employer branding. You know you need to provide a positive hiring and workplace environment to attract top talent. Companies use a metric known as the candidate Net Promoter Score. It measures how they viewed the entire hiring process, your employer brand, and how they’ll talk about their experience to others.
Ongoing company-wide recruitment metrics
Beyond just the recruitment process, it's crucial to track additional company-wide recruitment metrics to get a big-picture view of your HR process success.
Company-wide Recruitment Metrics
- Percent of open positions
- Diversity metrics
- Refferal rate
- Turnover rate
- Retention rate
Percent of open positions
Tracking the number of open positions will help you see how much money you spend on vacancy coverage and problem areas.
The percentage of jobs filled divided by the average number of employees is part of the calculation for KPI. Knowing the percentage of remaining open positions will help you choose the next steps in your recruitment process.
Companies with more diverse management teams have 19% higher revenues. This comes largely from the different mindsets that contribute to innovation in the organization. Track diversity at all levels of the business, including in decision-making roles.
Referrals are still the number one source of new employees across the board. Tracking how many referrals you're given will show you if you need to create a program to help facilitate the process.
There are plenty of tools for creating referral programs, but determining the effectiveness of employee referrals in your business is the first step.
Tracking attrition is essential. Not only do you need to track when someone leaves but also why they're leaving. There are countless reasons why someone would resign from a job, and if it’s due to a life change, that's one thing. But if it's due to contributing factors in the workplace, you can make a plan to improve.
Use this formula from SHRM to calculate your turnover rate.
The opposite side of the spectrum is the retention rate. It's also referred to as the Stability Index. How long is the average employee working for your company? This can help reveal if there are additional aspects that can help improve retention overall.
Conclusion: tracking recruitment metrics
Big data is all around us. It's part of our current communication process for everything we do, including social media. Recruitment is no different, but knowing what metrics to track and how to analyze them makes all the difference.
It's vital to be proactive and consider the metrics that make the most sense to track within your organization. And, most importantly, use them to shine a spotlight on the areas where your recruitment processes could be improved.