At a time when the market is witnessing unprecedented attrition, recruitment teams are grappling to cope with hiring pressures.
As more and more employees are quitting and competitors are making aggressive offers to hire talent, the recruitment game has taken a new and unexpected turn.
One way organizations are trying to manage this situation is by automating hiring through tools like applicant tracking systems and cloud recruitment software.
However, it is equally crucial for organizations to strengthen their hiring systems; it is important to determine what is working and what is not. What better than recruitment metrics to plug the loopholes and fill the hiring numbers in time?
What are Recruitment Metrics, and Why are they Important?
Recruitment metrics are key performance indicators or KPIs that help measure the success of an organization’s hiring process. With their help, you can optimize the processes and make enhancements for better output.
In addition, you can build a better hiring funnel, reduce the time and cost to fill vacancies, and hire better quality candidates.
When you have this data, you can also create optimized strategies for the future. For instance, if you are planning to expand, you can use your hiring metrics to chart out the timelines accurately and decide the budget.
What are the Key Recruitment Metrics?
1. Time to Fill
Time-to-fill is the time from when a job requisition is approved internally to the time when a candidate accepts the offer. It is a KPI that helps understand your hiring efficiency. Tracking this metric provides input for areas that need more work and helps in accurate forecasting.
You can reduce the time to fill by using candidate management system software to track the status of the applicants. It can help you manage your talent pool more effectively and move faster with scheduling interviews and releasing offer letters.
2. Source of Hire
Most organizations have several channels for sourcing resumes, such as vendors and internal teams. They might also use referrals and job boards to source and build their hiring pipeline.
Source-of-hire tells an organization which channel is the most effective. This information improves processes and budget allocation. For instance, you can chart out a referral program if you have been consistently getting qualified candidates through this channel. A formal process will provide your employees with a platform to refer their friends for open jobs.
To collect this information, you can ask the candidates how they got to know about the job. A resume management software or an applicant tracking system can also help capture this detail.
3. Quality of Hire
You can develop a faster hiring process and add multiple channels to build your talent pipeline. However, your recruitment process is ineffective if it does not lead to quality hires.
This is why the value that a new hire brings to your organization is perhaps the best aspect to determine the efficiency of your hiring system. You can define value as the contribution the new employee makes in achieving the company’s goals.
The problem with this metric is that it is difficult to measure. Secondly, the answers can be subjective in the absence of a standardized process to measure quality.
You can measure this KPI by recording the employee’s performance in the first three, six, and twelve months. In addition, you can check the employee’s sales performance or record their customer satisfaction ratings.
Apart from being qualified for the job, a new hire should also be a good culture fit, or there are chances of early turnover.
Finally, the hiring managers of the new employees can share key inputs to measure the quality of hires. You can use any or all of these ways to measure the quality of hires.
4. Interview to Hire Ratio
Interview to hire ratio is another metric that can help you comprehend the success of your hiring processes. In simple terms, it is the number of interviews the hiring manager has to take before making an offer.
If this number is high, the sourcing needs to be improved. When hiring managers spend an exceptionally high number of hours interviewing candidates to fill a single position, it leads to a waste of resources.
There are a couple of ways you can measure this KPI to build a robust hiring system. Firstly, recording these numbers for individual hiring managers and departments is advisable. This will help you identify if the problem is process-specific or person-specific.
If a hiring manager is taking more interviews than the average interview-to-hire ratio, perhaps you can resolve the situation through training.
Another option is to measure this number through the hiring stage. If you observe more drop-outs happening at the later stage, you may want to investigate and provide better support.
5. Offer Acceptance Rate
The offer acceptance rate helps you measure the percentage of candidates who accept your offer. Apart from measuring the success of your hiring process, it also tells you key things about your employer’s brand.
If this number is low, it means the candidates are not interested in joining you. Perhaps they did not like the employee proposition; maybe something in the hiring process put them off, or your salaries are not in line with what the market is offering.
These are other areas you can divulge into if you observe your offer acceptance rate.
6. Candidate Net Promoter Score
Candidate experience is one of the key parameters that applicants consider while making joining decisions. As per a survey, 60% of candidates share their negative recruitment experiences with their friends and family. Furthermore, 35% will not hesitate to share it online.
This is why measuring your net promoter score can give you insights into enhancing your candidate experience. It measures the extent to which candidates liked or did not like your recruitment process.
When candidates feel valued and respected during the hiring process, they are more likely to join you.
7. Cost Per Hire
Hiring is an expensive activity. As per a survey, the average cost per hire is nearly $4,700. This includes about 60% hard costs and 40% soft costs.
The latter is the time hiring managers and other leaders spend in the hiring process. It includes screening resumes, interviewing candidates, and negotiating offers.
When your hiring process is inefficient, these costs can escalate for a single hire. Automating hiring through tools such as cloud recruitment software and virtual assistant recruiters can increase the productivity of your hiring process and reduce the cost.
In today’s time, hiring has become a complex problem with several dynamic factors playing a role. Automation tools can enhance the productivity of your hiring team and bring efficiencies to your hiring processes.
Measuring key parameters like the ones mentioned above can help you identify the areas that need more work.