Recruitment is a costly yet necessary process that every business must go through to attract the best workers for the job.
The problem is that it’s so easy to lose track of spending, waste resources, and lack the clarity you need when you’re on the hunt for new talent for your brand.
Fortunately, there is a solution that can help you properly evaluate the effectiveness of your recruiting process – recruitment metrics. Recruitment metrics give you an accurate indication of what talent-seeking methods are working and which ones are not, saving you time, money, and energy that you can use more effectively elsewhere.
This article will demonstrate seven key recruitment metrics that you can try out, giving you the keys to implementing a data-driven recruitment process and creating a better and more effective hiring process for your business
Let’s get started.
1 – Source of hire
Knowing where your talent is coming from is key to your recruitment research and your overall recruitment marketing strategy. For example, if lots of your best workers are coming from a specific sector or company, it’s in your favor to identify that source so you can exploit it for hiring more staff in the future.
An easy way to track the source of your employees is by keeping metrics on careers pages, job boards, and your social media sites to look for common trends in where your talent is coming from.
This way, you can direct your recruiting resources to the proper channels. This then increases your chances of getting more of the right people from the right places and helps you allocate your recruitment budget more effectively (budgeting is necessary for all business areas, especially in the hiring sector).
For example, according to Job Description Library, 79% of job seekers currently use social media as part of their job search. Meanwhile, 25% of UK businesses recruit via social media, making it an immensely lucrative platform and source of hire to focus your efforts on.
Once you have successfully identified your primary sources of hire, you can use these valuable recruitment metrics to focus your aims on the right areas moving forward.
2 – Time to fill
Time spent searching for the right candidate can be costly for any business. Each day your business spends on recruiting is another day that could have been used to ramp up your operations.. The average time to fill a vacant position for a business is around 42 days but can vary according to your industry.
Metrics like this are even more critical in the aftermath of COVID-19, as many businesses rush to reopen. Restaurant staffing issues, for example, have led to food businesses being forced to close. Calculating your own business’ time to fill metrics will help you identify recruitment process stages you can optimize. The benefits of a shorter time to fill include:
- More productive hiring managers as they spend less time recruiting and interviewing and more time doing more productive tasks.
- Fewer costs are involved when a vacancy arises since less money needs to be spent over a shorter length of time recruiting.
- It’s a superb forecasting variable and valuable input metric for talent strategies.
To calculate your business’s time to fill, this graphic by Solve simplifies the process:
Calculating this figure should enable you to lead a more efficient work team, harnessing the demonstrable power of what recruitment metrics can have on your brand and utilizing their potential for your advantage.
3 – Time to hire
Unlike time to fill, which shows the general length of time it takes to source and hire a new candidate, time to hire demonstrates how fast a candidate moves through each stage of the hiring process. This stage is sometimes known as the “time in process” step.
Just like how customer analytics are crucial to marketing and sales, recruitment metrics are critical to the quality of your workforce, and time to hire plays a big part in this. However, the “time to hire” is a subjective metric, and a lot of it depends on the nature of the role you are advertising, as well as the efficiency of your business’s general recruiting process.
For example, hiring a new deputy manager for a customer service role may take a lot of vetting, several interviews, written tasks, and psychometric tests to source the right person for the job. On the other hand, sourcing a new cashier for your store may only take one round of interviews, given the comparably lower level of skill involved for the job.
On the whole, however, this recruitment metric gives you the overall picture of your brand’s recruitment turnaround time. If you can, reduce the number of steps required for your hiring proceeds as much as possible. Streamline your hiring process in as many areas as possible without sacrificing quality.
4 – Interview to hire ratio
One essential part of your recruitment metrics to keep track of is your interview to hire ratio. This metric determines the percentage of candidates submitted by the recruiting function eventually hired.
To work out your “interview to hire ratio”, do the following:
Calculate the mean of the number of interviews a hiring manager needs before making a job offer. For example, if a hiring manager interviews eight people before hiring, this ratio will be 8:1.
A correctly calculated “interview to hire ratio” will effectively track how your business finds and screens potential candidates. Keeping an eye on this metric will lead to your recruitment arm becoming more efficient and resourceful, saving you money and time in the short, medium, and long term.
5 – Quality of hire
Of course, there’s no point in streamlining your hiring process, only to result in you hiring someone not suitably qualified for the job. All these cost-cutting measures still need to result in your business recruiting top talents for the job. Otherwise, you’ve just cut corners and sacrificed the result as a consequence.
The quality of hire formula will vary according to the company and industry as different businesses have different definitions of quality. At its core, though, the metric looks like this:
The best way of improving your quality of hire is by using artificial intelligence software, along with top applicant tracking systems, aiding your recruiting team in all areas. According to Ideal, 52% of talent acquisition leaders say recruiting is the most challenging part of screening candidates from a large applicant pool.
You can use AI in the recruitment sector to automate sections of the recruiting workflow, notably the high volume yet repetitive tasks. That, in turn, saves recruiters time and improves the quality of hire, thanks to standardized job matching.
Early adopter businesses that have used AI to automate parts of their hiring processes have seen cost per screen reduced by 75% and increased revenue per employee by 4%. Automation is playing an increasingly crucial role in business and isn’t solely restricted to recruitment – it can increase retail business productivity in general.
Other examples of automation and software, such as a weekly schedule template, can also help your business in other areas.
6 – Cost per hire
Calculating your cost per hire is simple. It’s essentially the total amount your business spends on recruitment per year, divided by the total hires you’ve made.
To use this recruitment metric to your advantage, you need to look at how much it costs you to hire people for each specific role, as well as the funds spent (internally and externally). Internal costs could be employee referrals, while external costs include paying for ads. The formula for cost per hire looks like this:
You’ll need to do some thorough investigating to get an accurate picture of your cost per hire. This can involve exploring other expenses, such as taxes that apply in your state. Using a tool to calculate California state payroll taxes makes this easier for West Coast-based businesses.
Another area you can cut costs is in timesheet scheduling for your current staff. Timesheet apps are a great way of automating this tedious process, saving you time and money you can put back into other areas, such as recruitment.
7 – Offer acceptance rate
This recruitment metric is easy to calculate, yet it’s massively influential on your overall hiring process budget.
To calculate your offer acceptance rate, compare the number of candidates given a job offer with those who accept a job offer.
If your business has a low offer acceptance rate, the chances are that you aren’t making your job roles appear lucrative enough.
For example, the salary you’re offering may not be competitive with similar businesses advertising similar roles. Or, your job benefits may not be up to scratch – why would someone offer a job with you when they can get the same salary but also a company car and better pension with a competing business?
Naturally, your offer acceptance rate is also industry-dependent. For example, hourly roles such as cashiers, retail workers, or call center handlers may depend upon how quickly you offer the role rather than its benefits.
You may also come across a link that specific demographics are refusing your job offers more than other demographics. In this case, perhaps look at the culture of your workplace as data such as this could indicate an issue with your talent pipeline and that specific demographics dislike elements of your current team.
Over to you!
Ultimately, using data and recruitment metrics to guide your hiring process is the pathway to lower costs, less time, energy, and resources plowed into recruiting new staff for your business.
Recruitment is a necessary step for any brand, and it can be costly. But with the guidance of the recruitment metrics discussed here, you can streamline your efforts in ways you never thought possible, simplifying your recruitment funnel at every stage and helping you attract the best talent more smoothly.
Good luck with the future of your business and the hiring process!
About the author
Owen Jones is the Senior Content Marketer at ZoomShift, an online schedule maker app. He is an experienced SaaS marketer, specializing in content marketing, CRO, and FB advertising. He likes to share his knowledge with others to help them increase results.