Any good staffing professional will agree that recruiting is a time- and labor-intensive activity. If you’re not using data to guide your efforts, you could be pouring those resources down the drain. KPIs for recruiters are a valuable tool that can help you measure your performance against your staffing goals. When examined carefully and regularly, these metrics can help you hire faster, with greater success, and at a lower cost.
What Are Recruiting KPIs?
KPI stands for key performance indicators. A KPI is a metric used to determine the effectiveness of an organization’s recruiting strategies and workflows.
KPIs can be analyzed from an organizational standpoint, by department, by recruiting channel, and even by individual recruiter. This makes KPIs for recruiters a powerful tool to optimize your hiring processes continuously.
Why Are KPIs For Recruiters Important?
KPIs can help recruiters–and the companies they serve–in several important ways.
Better understanding of the recruiting process
When you’re busy juggling the many day-to-day tasks of talent acquisition, it can be challenging to grasp how efficiently the entire recruiting machine is running fully.
KPIs help you see how each of the various components work together, providing a more thorough understanding of how one hiring stage flows into the next, how fast each piece of the funnel moves, how the candidate experiences each process, and what’s happening on the back end in each phase.
Identify areas for improvement
Your recruiting KPIs are a rich source of insights on where your efforts can be improved. Identifying issues like communication breakdowns, process inefficiencies, and workflow bottlenecks empowers you to take corrective steps to save time and eliminate wasted spending.
Make data-driven decisions
Recruiting is one area of business where it’s in your best interest to follow the data rather than your gut. Using recruiting KPIs ensures your decisions are tied to actual business outcomes, performance, and financial results rather than just what “feels right.”
The Top 12 KPIs For Recruiters
1. Time to fill
Time to fill measures the average amount of time it takes to fill a vacancy. It’s measured in days and runs from when a job is posted (or, in some companies, even earlier, when a requisition is approved) to when a candidate is hired. This metric is indicative of your overall hiring speed and efficiency.
A shorter time to fill is desirable to control costs and reduce the risk of losing out on a top candidate to a competitor.
2. Time to hire
Time to hire is another metric used to assess hiring funnel speed, but it’s measured slightly differently than time to fill. It measures the average amount of time it takes for a successful candidate to move through your pipeline.
The time to hire begins when a candidate enters the funnel when they accepts an offer. Because it focuses on the part of your funnel the candidate is involved with, it’s an important metric for analyzing their experience.
3. Interview-to-offer rate
This metric measures the number of interviews required to produce an offer (whether the offer is ultimately accepted or not).
It’s calculated by dividing the number of offers extended by the number of applicants interviewed. So, if you interviewed five people and made an offer to one of them, your interview-to-offer rate would be 20%.
What’s “normal” will vary depending on your industry and the types of roles you’re filling, as well as the conditions in the larger market. However, a noticeable drop in your interview-to-offer rate over time could point to inefficiencies in your screening or interview process.
4. Offer acceptance rate
Offer acceptance rate tells you what portion of the offers you extend are ultimately accepted. It’s an important number if you want to analyze how well you’re positioning your value as an employer and how your offers stack up to the competition.
To find your offer acceptance rate, divide the number of offers accepted by the total number of offers extended.
5. Applicant-to-hire rate
Applicant-to-hire is a ratio that compares the total number of people who applied to the number of hires made. To find this KPI, divide the number of applicants by the number of successful hires.
An elevated applicant-to-hire rate means there’s room to improve your candidate outreach and screening strategies so that you don’t have to speak with as many candidates to find a suitable one each time you have a job opening.
6. Cost per hire
This one’s a biggie–it tells you how much it costs to fill a vacancy. Cost per hire includes all of the direct and indirect expenses involved in getting to an accepted offer, including software, subscriptions, event fees, recruiter fees, and more. Obviously, it’s always a good idea to stay on top of your cost per hire and look for ways to optimize it.
For more on this KPI, we have an entire post dedicated to cost per hire and lowering your recruiting expenditures.
7. Source of hire
Source of hire tells you where your successful hires are coming from, be it referrals, job boards, career fairs, social media, or any other recruiting channel. It’s helpful to analyze each unique source as a percentage of overall hires, i.e., 35% of hires from referrals, 20% from job boards, etc.
This metric should factor heavily into your recruiting strategy, informing where you allocate money and other resources.
8. Quality of hire
This complex KPI assesses your overall hiring success and the value a new hire brings to the company. It’s measured over the long term–typically several months to a year after a candidate is hired–and considers several factors, including performance reviews, interviews with hiring managers, retention rate, and the new hire’s own performance KPIs.
Each company has its own way of calculating quality of hire. One way to do it is to take an average of two or more metrics that are tied to quality, like new hire performance, engagement, and manager satisfaction.
So, let’s say you were working with the following numbers:
New hire performance: 80%
New hire engagement: 90%
Manager satisfaction: 85%
The formula would look like this:
(80 + 90 + 85) / 3 = 85
This particular individual would have a quality rating of 85%.
9. Employee referral rate
This measures the portion of hires that come from employee referrals. A strong employee referral pipeline is usually associated with a positive company culture and high employee engagement. Plus, employee referrals are incredibly cost-effective.
If your employee referral rate is lagging, it’s probably worthwhile to better incentivize referrals and make sure HR and company leaders regularly promote your referral program.
10. Turnover rate
Turnover refers to the number of employees that leave the company within a set period of time. It’s calculated by dividing the number of employee departures by the total number of employees at the start of the specified time frame.
So, if you began the year with 200 employees and 15 of them left the company over the course of the year, your turnover rate would be 7.5%. A 10% or less turnover rate is a good benchmark to aim for.
11. Retention rate
The opposite of turnover rate, retention rate measures how many staff members remain employed during a given period of time. If you began the year with 200 employees and ended the year with 190 of those same employees, your retention rate would be an impressive 95%. Note that the retention rate excludes new hires during the period.
A high retention rate is a good indicator of strong employee satisfaction and engagement.
12. Candidate experience
Candidate experience measures candidates’ sentiments about your recruiting process. A positive candidate experience is closely associated with a strong employer brand and can make it easier for you to recruit in the future.
There are various ways to measure candidate experience. One is the candidate net promoter score, or cNPS. This metric asks applicants to rate their experience with your hiring process using a simple 1-10 scale. An average cNPS of 9 to 10 is considered excellent.
The most important recruiting KPIs to track will depend upon your organization–its size, growth speed, and, most importantly, goals. Zeroing in on the metrics most closely linked to success will help you hire more strategically and ensure your recruiting investments deliver the optimal return.
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