Finding, attracting and retaining the best talent has become increasingly challenging for many organisations. Especially when it has to do with employees that fit into the organisational
culture, who at productive and can remain motivated at all times. This is why it has become important for organisations to evaluate those talent acquisition factors involved in the hiring process, to enable them better interpret and develop new strategies that will positively impact the organisations recruitment process and increase efficiency in human resources management. To achieve this, organisations must understand and make proper use of recruitment metrics and KPIs. This article will focus on providing detailed explanations of recruitment analytics and KPIs, their meaning, benefits and top examples of these metrics you can start applying to your organisation today.
Recruitment analytics is the process of using a combination of both data and predictive analysis that allows hiring managers or recruiters to achieve better and
faster hiring decisions. Recruitment analytics involves observation and interpretation of meaningful patterns in the recruitment process. In other words, data is used to find and
interpret patterns in data. These data are gotten from sources such as Satisfaction surveys, brand data, Applicant Tracking Systems (ATS), Human Resources information systems (HRIS), and Customer Relationship Management systems (CRM).
You can also use recruitment analytics to answer questions like, what is the is the cost of hire for a position, what part of the recruitment funnel do candidates drop out most, which sourcing channel provides the best candidates and so much more. Answering these questions will help to improve decision-making in these areas.
For instance, if recruits are brought into a company leave within three months, it may indicate that there has been a mistake in the selection and onboarding process.
Recruitment KPIs (Key performance indicators) are used in measuring the recruitment process and performance. They show the value and return on investment for specific recruitment strategies and also highlight areas that need improvement.
KPIs are also recruitment metrics but not all metrics KPIs. Recruitment KPIs are specific metrics usually depicted as numbers, percentages and ratios that provide insight into how close or far you are from reaching your recruitment goals. Meaning, that KPIs should be specifically aligned with the company goals and objectives. By analysing data from within the organisation and outside, recruitment KPIs can help you make better decisions about where to allocate your money and time and where else you need to make adjustments to achieve your target goals more efficiently.
Depending on the long or short-term goals of the organisation, recruitment KPIs can be used to determine the first-year turnover rate, offer acceptance rate, cost per hire and many more.
Measuring and analysing recruitment metrics and KPIs relevant to your organizational goals over some time will help you refine your efforts, reduce inefficiencies and ultimately attract and retain the right kind of talent that will add value to the organisation. Here are some examples of what you can learn from these recruitment metrics that will help you achieve your company goals.
A recruitment funnel is a framework you follow throughout the stages of the recruitment process from start to finish. A typical recruitment funnel will contain the following steps or stages - Awareness, attraction, interest, application, interviewing and hiring. As we already know, attracting the right talent for your organisation can be a difficult task to accomplish, that is why its important to track your recruitment funnel. Failure to do so will only result in your efforts being diluted and less efficient in the long run.
By tracking your funnel, youll gain valuable insight into each stage of the hiring process and also gather key data on things like the length of each stage or the level of activity in these stages. The information youve gathered will be useful in enhancing your overall recruitment strategy.
Now that weve explained what recruitment metrics and KPIs are and how they work. Its time to look at the top recruitment metrics and KPIs that you need for a more productive and profitable business.
Offer of acceptance rate
One of the most important talent acquisition KPIs is your offer of acceptance rate (OAR) which shows your ability to understand your candidates' priorities and preferences. When your OAR is consistently high, it shows potential candidates that your job specifications and hiring processes are transparent and that you're taking measures to tailor your offers to meet their needs and expectations. Through your OAR, you should be able to measure hiring success by analysing patterns and trends. This will allow you to identify any issues present and take strategic action to improve communication, job spec messaging and overall candidate experience, thereby attracting high-quality talents to your organisation and improving your employee retention rate.
Time to fill
Time to fill metrics helps measure the time it will take for you to locate and hire a new employee. It gives you an idea of how long it'll take to fill certain job positions. The process usually begins with an approved request by management to advertising for vacant posts and extends to when the candidate has passed the necessary background checks.
This type of metric is important because hiring employees is a lengthy process. Knowing your time-to-fill metrics will enable the organisation to take measures that will reduce the duration while maintaining the quality of hire.
Net promoter score metrics (NPS) just like KPIs are necessary to keep existing talent engaged, happy and motivated. Candidate experience NPS metrics allow you to narrow in on specific areas of the recruitment process by understanding the satisfaction levels of your candidates. You can do this by asking your candidates to rate their overall experience on a scale of one to ten and if you're asking for specific feedback, remember to identify your percentage of promoters, detractors and passives. Using a recruitment metrics template like this to quantify your candidate experience NPS will provide necessary information to optimize specific areas of your hiring process.
Source of hire
It is important that you know your target audience and where they hang out before placing your job advertisement on various platforms. Smart organisations use the source of hire metrics to help them determine where their potential candidates may be more likely to see their job postings. Platforms like LinkedIn, Facebook, Twitter and other social networks are great sources of hire and it's advisable you make use of multiple channels to get the best results. Also using the source of hire metrics, you can identify which channel is bringing
the worst set of candidates, stop using it and redirect the money to a better channel that is bringing the organisation better and qualified candidates.
Quality of hire
The quality of hire is a recruiting metric that helps you determine whether the person you selected for the position is good or bad for your organisation. This metric usually measures employee performance within 1 year, with low ratings indicating a bad hire which can cause the organisation a huge amount of money and the reverse for a high rating which indicates a good hire.
Sourcing channel costs
This KPI keeps your recruitment strategies economically efficient at all times. This can be achieved by calculating and comparing your recruitment cost per hiring site with the return on investment for each of them. For instance, if you're spending way too much on Facebook ads and you realize that the number of potential candidates from this campaign is way below expectation, you can stop paid advertisements on that channel for a while. As a result, youll save more money and direct more resources to other productive channels.
Cost per hire
Knowing the amount of money you're spending throughout the entire recruitment process is important, as it will help you to better allocate your spending. Take a look at all the costs incurred in hiring an employee and identify those areas you can cut costs without altering the candidates; experience or quality.
Source of channel efficiency
Source of channel efficiency is a recruiting metric that will evaluate the success of your main candidate sourcing channel. Once you've identified your main hiring sources, you can use the source of channel efficiency metric to ascertain which sources convert the best quality candidates and which ones need to be tweaked.
You can then place additional investment into the well-performing channels, optimize the weaker ones to improve your message and attract a wider range of talents while reducing recruitment costs.
Time to hire
Time to hire is a recruitment metric that measures the number of days it takes from when a candidate is approached to when they accept the job offer. This is not to be confused with the time to fill metric. The main difference between the two is that the time to fill starts when the job vacancy request is approved by the company while the time to hire starts when a candidate applies for the job. Reducing your time to hire means cutting out unnecessary long procedures for screening and assessing applications. When you take too long, theres a huge possibility of potential candidates being won over by competitors
Application completion rate
The application completion rate metric will show you how many candidates are stopping halfway or giving up on completing the application process. When your completion rate is low, its an indication that something within your application system is difficult or confusing. You can identify this issue and optimize your application system to increase your completion rates.
Applicants per opening
This metric is used in measuring job popularity. It shows you the number of people clicking on your job posting on different sourcing channels. Using the applicant per opening metric you can determine whether your job description is too vague and needs to be worked on.
Recruiting conversion rate
Conversions show that the recruitment efforts were successful. It is a key indicator of HR performance, as it focuses on the performance of internal human resource executives instead of employees. If one of your recruiters is having low conversation rates, you can find why and provide training and mentorship to propel a positive change.
Recruitment funnel effectiveness
Looking at the recruitment funnel, this metric helps analyse the effectiveness of every stage in the recruitment process. It shows you the number of applicants that have completed each stage of the funnel over the number of applicants that started that stage.
Hiring manager satisfaction
This metric will help you understand how satisfied the hiring managers are considering employee performance. If the managers are satisfied it shows that the candidate fits well with the team, indicating a successful hire.
Without engaged, happy and motivated employees, your business productivity will suffer. Using this metric, you can conduct regular employee satisfaction surveys, and take actions that ensure your employees feel valued and motivated. It will help you create a company culture that keeps your talents satisfied always.
The selection ratio KPI measures the total number of hired candidates compared to the overall number of candidates that applied within a certain timeframe. This metric gives you an accurate idea of the number of quality candidates you're closing as a part of your hiring process. If you're interviewing a lot of candidates and not getting many hires then you need to evaluate your hiring tools and make vital improvements in the process.
Candidate job satisfaction
How well does the employee experience in the workplace match the job description? This metric measures the employee expectations and job satisfaction that theyre experiencing at your organisation.
First-year attrition metrics are used to measure hiring success within the first year. It goes both ways, either the employee leaves the company or the company terminates the contract. This shows that the job description did not meet the candidates expectations or that the candidate did not fit into the organisation.
Employee turnover rate
This is one of the most powerful recruitment metrics as it will give you crucial information on how well your staff retention efforts are working, be able to pinpoint staff turnover issues and make strategic decisions that will reduce your turnover rate and increase staff loyalty
For a fair and balanced work environment that benefits from a broad mix of skills, experiences, and perspectives, it is essential to diversify talent. Utilising the candidate diversity metric will ensure that youre attracting a wide mix of candidates from different recruitment channels and at the same time engaging with a wider mix of talents at every stage of the recruitment funnel.
Female to male ratio
Gender equality is a pressing social issue and not surprising a work issue also. So many organisations lack female talent, leading to an imbalanced workforce. With the female-to-male ratio metrics, you can track gender equality in your workplace and encourage your recruiters to focus on attracting a wider range of diverse talents.
Time to promotion
The time to promotion KPI shows you how many new hires have progressed within the company in a given period. By reducing your time to promotion rate, your internal training and talent grooming initiatives become more impactful and even boost employee retention rate at the same time.
Time to productivity
The time to productivity KPI measures the amount of time it will take for a new employee to find their feet, adapt to the company culture and start working consistently and productively. This is usually calculated from the time of official hire to when the employee begins to fulfil their job responsibilities. By reducing your time to productivity, you'll have better internal integration, an increase in talent retention and business growth.
Dismissal rate metrics are important, so you can determine just how much cost you incur when an employee is dismissed from work over a specific period. These metrics help you to assess the value of your hiring decisions and whether your new employees fit in with your company culture.
Now that you understand the importance and benefits of analytics and metrics in recruitment, you can now take charge of effectively hiring new employees, measuring their satisfaction and allocating hiring costs with care.