Whether you’re hiring for a single role or you’re hiring in volume, recruitment is a big investment. The process can be tasking, requiring both funding and efforts from hiring teams. Amidst this, it’s easy to neglect the importance of tracking the effectiveness of your hiring process. This is where recruiting key performance indicators (KPIs) come in.
Recruiting KPIs are an integral tool for monitoring how close or far you are from achieving your hiring goals. In this article, we will provide 10 top recruiting KPIs that can help you align with your hiring goals seamlessly. But first, we will explain what recruiting KPIs are and why they matter.
What are recruiting KPIs?
Key performance indicators (KPIs) in recruitment are specific metrics that each track a specific hiring goal. In other words, KPIs serve as pointers that measure how close you are to achieving a specific predetermined goal in your hiring. For example, a recruitment KPI, like time to hire, solely measures how long it takes for you to find the right candidate and hire them.
When used correctly, recruiting KPIs can help you determine whether or not your hiring process can adequately assess job fit and hire the right people. The ultimate goal of these metrics is to provide you with enough data about your recruitment. This lets you see the weak points and work on them accordingly.
Why do recruiting KPIs matter?
On the surface, KPIs might look like a bunch of numbers. However, these numbers can help you achieve your hiring goals faster and more effectively. Here’s how:
1. They help in implementing data-driven hiring
Implementing data-driven recruitment in your hiring strategy isn’t possible without the necessary recruitment data. Recruitment KPIs provide this data, empowering you to make crucial decisions more objectively.
This reduces bias in recruitment and allows you to hire candidates based on their proven skills and competencies.
2. Recruitment KPIs help effective resource management
A 2022 Deltek report showed that around 47% of agency leaders are willing to spend a significant amount of resources on hiring new talent. While this is impressive, a talent acquisition strategy’s success depends solely on how well you manage these resources rather than the amount of resources.
KPIs allow you to manage your hiring resources such as funding and align them to achieve your business’s goals. These KPIs provide relevant data about your hiring strategy, giving you all the insight you need to direct your resources toward channels that yield the best candidates, optimizing your results.
3. They help you find recruitment strategies that work and maintain them
Similar to resource management, using recruiting KPIs enables you to test out new recruitment strategies and measure their effectiveness. In the process, you can identify specific steps in your hiring that worked and those that didn’t.
Ultimately, this empowers you to create and maintain better recruitment strategies that yield the best results.
4. They help you identify inconsistencies in your recruitment
Recruiting KPIs work by tracking specific metrics, such as the time to hire and cost per hire. This system allows you to monitor individual goals with a wider lens, spotting inconsistencies and weak spots in your recruitment.
As a result, you can pick out hiring bias, low-reward strategies, and inefficiency within your team. This enables you to tackle these issues as soon as they arise and prevent them from occurring in future recruitment processes.
5. Recruiting KPIs aid strategic workforce planning
Implementing KPIs in your hiring allows you to monitor employee retention and turnover rates, which in turn can point out your workforce needs. This can also help you identify and tackle skill gaps where your company struggles to retain talent.
Additionally, tracking recruitment KPIs like candidate satisfaction helps you discover strategies to ensure your company is attractive to potential candidates. This helps to boost your chances of hiring top talent in future recruitment cycles.
10 Recruiting KPIs you may have missed
The kind of KPIs you need to track depends on your hiring goals to a large extent. However, no matter what your goals are, there are core KPIs common to all recruitment strategies. Here, we will share some of these examples to help you get started:
1. Time to hire
The time to hire measures the period between a candidate’s application for a position and offer acceptance. This KPI is similar to time to fill, which measures the period between your decision to recruit a new employee and their offer acceptance.
Measuring the time it takes to hire lets you know what parts of your recruitment can be streamlined better to save you time and resources. This can help optimize future recruitment processes, reducing the time it takes to find and hire top talent.
2. Cost to hire
The cost to hire measures the expenses of your hiring process, from assembling an HR team to the cost of talent management software. To calculate this, you have to sum up both internal and external costs incurred during hiring.
The cost to hire can also be split into “cost per hire,” which basically measures the amount it costs to hire one new employee. To calculate this variable, simply divide the cost to hire by the total number of employees you hired in a specific recruitment cycle. For example, if your cost to hire is $5000 and you recruited 5 employees, then you can calculate your cost per hire using the steps below:
Cost per hire = 5000/5 = $1000 per employee.
3. Application completion rate
The application completion rate describes how many applicants opened the application form, filled it out, and submitted it. To some extent, this tells you whether or not your application process is engaging and straightforward enough to keep the candidates interested until their submission.
Measuring this KPI lets you see how effective the application process is at retaining potential candidates and driving talent toward your company rather than away from it.
4. Quality of hire
Quality of hire defines how effective a new recruit is. This is a post-recruitment metric that requires you to study the recruit’s performance for a stipulated time, usually within a year.
During this period, you can collect feedback from the employee’s team, managers, and leaders about the employee’s productivity and adaptability to your company’s culture.
5. Interviews to hire
This recruiting KPI allows you to record and measure how many interviews it takes you to find the skills you’re looking for before hiring. It can also help measure what interview channels reduce or increase the number of interviews it takes to hire the best.
Tracking the number of interviews it takes to hire the right candidate can help you decide which interviewing strategies to use. For example, if it takes fewer in-person interviews than virtual interviews to hire talented candidates, then the former is definitely more effective. This indicates that it’s a good idea to invest more in in-person interviews for future hiring processes.
6. Source efficiency
Source efficiency tracks how well a talent source functions by telling you the number of candidates each source attracts. To measure this KPI, you need to monitor the number of applications you receive from each source you use in your recruitment.
The results of this KPI can help you decide which talent-sourcing channels to invest time and resources in to meet your objectives.
7. Offer acceptance rate
Your offer acceptance rate compares the number of candidates who received your job offer with those who accepted it. This percentage tells you whether or not your offers meet industry standards and candidate expectations.
In 2022, the National Association of Colleges and Employers recorded that the average offer acceptance rate in 2023 declined to 69.3% from 73.6%. However, this value could vary depending on how effectively you can implement your candidate engagement and overall hiring strategies.
To calculate the offer acceptance rate for a specific recruitment process, divide the number of accepted offers by the total offers. Then, multiply the resulting value by 100 to convert it into a percentage.
For example, if you sent out 30 offers and 12 candidates accepted the offer, your offer acceptance rate would be:
12/30 x 100 = 40%
8. Candidate satisfaction rate
While you can’t directly track this KPI, it is vital to effective recruitment. It tells you how effective your hiring process was from the candidate’s point of view.
To adequately measure this recruiting KPI, you can add a survey to your hiring funnel. This would give candidates the chance to tell you the hiccups they experienced throughout the process. You can also add a poll to gauge candidate satisfaction and compare the candidates who were satisfied with the process with the total number of candidates.
9. Cost per channel
Calculating the cost per channel, also known as the cost per source, lets you know how much each sourcing channel costs. This is an especially important KPI for companies that have to pay more than the base rate for job postings.
Essentially, the cost per channel measures the cost of advertising, job posting, and any additional costs each talent-sourcing channel incurs. You can compare this KPI with the effectiveness of the channel to find out whether you should invest more in it.
10. Yield ratio
The yield ratio is a measure of the effectiveness of recruitment funnel, which tells you how many candidates successfully pass each stage of recruitment. But before calculating it, you should test different recruitment frameworks and break them down into stages.
At the end of each testing process, you can track the yield ratio for each step in your recruitment frameworks. To calculate this yield ratio, you simply calculate the ratio of candidates who entered the stage and those who completed it.
For example, to calculate the yield ratio of a screening process that started with 50 candidates and ended with 20:
Yield ratio = 50/20 = 5/2 = 5:2
How to align recruiting KPIs to your overall hiring goals
Aligning your recruiting KPIs to your company’s goals beyond only recruiting is a process that requires proper planning. In this section, we will discuss the steps to aligning your KPIs in recruitment to help you achieve your company’s goals:
1. Define your overall hiring goals
KPIs are meant to serve as metrics to track your hiring goals. So, it goes without saying that without these goals set in stone, implementing KPIs can be a hassle. As such, it is always best to define your overall hiring goals at the start of your recruitment as they would guide the entire process.
To define your hiring goals, you can analyze your company’s needs, culture, and standards. This helps you outline the steps you need to take to achieve your business goals, including the KPIs you need to track.
2. Identify your KPIs for recruiting according to your goals
Once you’ve defined your hiring goals, you can set up KPIs to track each one. For example, if your hiring goals are to recruit talent within a stipulated time and increase the quality of your hires, you can identify KPIs that track each step towards achieving these goals.
In the instance above, you can use KPIs, such as time-to-hire and quality of hire, to measure the effectiveness of each of your hiring strategies for achieving these goals.
3. Set benchmarks and targets
Mapping your KPIs to your goals basically means setting targets between the start and end of your hiring. These targets would serve as milestones throughout your recruitment, letting you know how close you are to achieving individual goals.
While setting these benchmarks, you must ensure that they are realistic and achievable compared to your current benchmark. For example, if your normal time to hire is 50 days and your goal is to reduce it, you can set a target of 40 days. Within this time, you can also add milestones like 15 days to round up applications, 15 days for interviews, and 10 days for offer extensions.
4. Implement tracking and reporting systems
At this stage, you can use Applicant Tracking Systems (ATSs) and HR management software like Breezy HR to collect data about your KPIs. These systems allow you to visualize your recruitment’s progress and see what strategies gained the most traction.
By visualizing this data, you can spot loopholes in your recruitment and make better decisions based on the information.
5. Analyse the process and make adjustments
Once you have the data from your tracking and reporting systems, you can highlight key insights from them. This will help you determine which parts of your recruitment need work. In addition, you can identify strategies that would work best with others and rearrange your recruitment process so you’re prepared to achieve your goals.
For example, imagine that you’ve analyzed your reports and discovered that using a short test after the application process increases the quality of your hires. In this case, you can shift your pre-employment testing to earlier in your recruitment funnel.
Vervoe is the platform to help you reach these KPIs
Recruiting KPIs are meant to help you monitor and streamline your recruitment process. As such, you must implement hiring strategies that help you reach your KPIs while assessing the hard and soft skills necessary for the open roles.
Vervoe is an AI-powered skills-testing platform that assesses the core technical skills required for any role. Our platform has comprehensive features that focus on your hiring needs and tailor your evaluation process to meet them.
From an AI grading system customized to your needs to customizable tests, Vervoe gives you complete control over your skill assessment process. This means you can optimize your evaluation to reflect your company’s standards without compromising on quality.
Our assessment library has over 300 customizable pre-employment tests and 300,000 valid questions you can use to build your own tests. This ensures that you’re testing candidates for skills significant to the open role while reducing hiring bias and ensuring you hire right.
Vervoe also uses realistic job simulations to give candidates a day-in-the-life experience of the role while evaluating their skills. This ensures they know what to expect from the role, thus encouraging employee retention even after you hire them.
Our online testing platform also allows you to screen numerous candidates, reducing your time to hire and boosting your recruitment ROI.
Measuring success in recruitment
Hiring success is subjective and depends solely on your recruiting goals beyond finding talent for the job. As such, it’s important to highlight these objectives when measuring it.
For example, let’s consider a business whose primary hiring goal, aside from hiring the best fit for the job post, was to boost their candidates’ experience. In this case, for the business’s hiring strategy to be successful, the candidates must have a positive review of the whole process.
With that said, there are various metrics to consider when measuring hiring success. KPIs empower you to measure some of these recruiting metrics effectively. Below is how to evaluate your company’s hiring success:
- Get feedback from both candidates and hiring managers
- Compare your budget with the expenses you made throughout the recruitment
- Check for employee retention and productivity after hiring them
- Assess referrals in your next recruitment process
- Measure the diversity of the talent you hired
You can determine the success of your hiring process by following these guidelines and keeping your primary hiring goals in mind.
Hire for success with Vervoe
Achieving your hiring goals requires more than creating a hiring plan. You must also set measures in place to evaluate each stage of the process and provide useful insights for future recruitment processes. KPIs can help you do this effectively. However, you still need reliable ways to boost your hiring and increase the effectiveness of recruiting KPIs.
The good news is that Vervoe makes it easy for you to optimize your hiring and empowers you to hire for success. Integrating our platform with your recruitment KPIs can help you save time and cost to hire and increase your hiring efficiency. So, schedule a demo, and let’s pave the way to your hiring success.
