As an HR professional or recruitment manager, you’re no stranger to the hiring process. However, hiring qualified candidates requires more than the basic processes, but a strategy that yields desired results. Here’s where recruitment KPIs come in.
Recruiting KPIs streamline the hiring process and suggest ways to improve your recruitment efforts. In this article, we’ll be diving into the ins and outs of talent acquisition KPIs, examples of key metrics to measure and how you can start setting effective recruitment KPIs for your organization.
What are recruitment KPIs?
Recruitment KPIs (Key Performance Indicators) are metrics HR professionals and hiring managers use to track and measure the effectiveness of their company’s recruitment process.
These metrics indicate your company’s goals and provide insight into how the organization attracts, screens applicants, and hires talents. They also reveal areas for continuous improvement, highlight hiring ROI, and the steps to follow to meet organizational objectives.
Talent acquisition KPIs are usually presented as percentages, single figures, or ratios to ensure clarity within HR teams. While they may look like ordinary numbers on the surface, they’re more than that. They’re effective pointers that provide vital insights into the strengths and weaknesses of your talent acquisition strategy.
For example, say one of your goals is to make the recruitment process faster and candidate-friendly. One of the recruiting KPIs to track is time-to-hire. This will measure how long it takes a successful candidate to complete the application and become a new hire.
Relevant reading: 18 Strategic HR Metrics to Measure for Success
Why are recruitment KPIs important?
Your organization may have the best recruiting strategy that outperforms competitors. But if you’re not measuring and monitoring your hiring initiatives, your strategy will not be effective.
The right recruiting KPIs are a valuable tool for attracting and retaining top talent efficiently. They’re crucial to human resources success as they help to:
Track your progress
Recruiting KPIs help you monitor the progress of your hiring strategy by offering measurable metrics into the entire process. They spot lapses during talent acquisition and identify strengths you should optimize. They also compare current performance with historical data while considering industry benchmarks.
Read next: What is Benchmarking in HR?
Make better decisions
By analyzing recruiting KPIs, organizations access data-driven insights that guide them in making informed decisions.
For instance, recruitment KPIs like source of hire and cost-per-hire indicate which sourcing channels give the best results and how much resources they consume. By evaluating them, you can decide to continue with a particular channel or consider alternative platforms that source qualified candidates.
Benchmarking
Recruitment KPIs let you compare your company’s current recruitment performance with past ones and industry standards. This helps to identify trends, adjust where necessary, set SMART goals, and understand how your organization competes in your industry.
For instance, through benchmarking, you may adjust your company’s hiring processes to ensure fringe benefits and job scope align with candidates’ expectations and competitor brands in your industry. By doing this, your company remains relevant in its line of business and becomes more attractive to top talents.
Demonstrate ROI
Talent acquisition KPIs provide HR teams with concrete data that prove the effectiveness of recruitment strategies to senior leadership. They help determine if the money spent on hiring achieves its goals or not by comparing recruiting costs with the financial value the hires add to the company.
This helps to justify expenses incurred during hiring, reduce costs, and secure additional funding when needed.
Relevant reading: HRIS ROI Calculator: Does Investing in HRIS Pay Off?
Quantitative vs Qualitative Recruiting KPIs
Talent acquisition KPIs generally consist of two types: quantitative and qualitative.
Quantitative recruitment KPIs are metrics that can be measured numerically. They tell you how many, how fast, how often, etc. Their goal is to help you assess the short term efficiency of your hiring process and spot areas for improvement.
Examples include cost per hire, source of hire, time to fill, etc. They’re objective and easy to measure and interpret, especially as they’re often obtained from the hard numbers and accurate data found in the process.
On the other hand, qualitative recruitment KPIs focus on how things turned out. They’re often retrieved through surveys or interview questions. They tell you how well, engaging, or satisfactory the recruitment process went. Tracking these recruiting KPIs helps you easily evaluate the impact of your recruiting strategy and understand candidates’ and employees’ needs, preferences, and motivations.
Some examples include quality of hire, hiring manager satisfaction, cultural fit, candidate experience, and retention rate. However, it’s notable that qualitative talent acquisition KPIs could be subjected to unconscious bias, and may be challenging to track and measure.
Top 10 Recruitment KPIs You Need to Consider
Here are the top talent acquisition KPIs you should track in your organization to measure recruitment performance:
1. Cost per hire
This recruiting KPI assesses how much money the company spends on hiring one employee. It covers every cost related to job ads, employee training, onboarding, screening interviews, background checks, etc.
According to SHRM’s HR benchmarking data, the average cost per hire was almost $4,700.
By analyzing this metric, you optimize the hiring process while reducing recruitment costs. For instance, if the cost-per-hire is high, it may mean it’s time to consider cheaper sourcing channels or re-evaluate the job requirements.
Read Next: Recruitment Fees Explained—Types of Structures You Can Expect
2. Source quality
If your company sources candidates from different job sites or recruitment agencies, measure the effectiveness of each channel.
This recruiting KPI allows you to identify the quality of applicants each source brings. It also checks for the channels that are just garnering impressions without applicants. This ensures you don’t waste money on sourcing channels that aren’t working for you and instead invest more time and money on effective ones.
An easy way to judge the source quality is to compare the percentage of applications with the percentage of impressions of the job postings.
3. Number of qualified candidates per opening
These recruitment KPIs provide insight into how effective your hiring efforts are at attracting qualified candidates and moving them through your recruitment pipeline. Usually, qualified candidates are the number of applicants who go past the first hiring stage because they meet the required criteria.
If your recruitment pipeline lacks qualified candidates, it could be due to wrong sourcing channels or unattractive job descriptions. Hence, the need to track this metric.
4. Application completion rate
According to Zippia’s research, 60% of candidates will quit while applying for a job online due to a lengthy or complex application form. However, measuring application completion rate can help you detect issues early on to avoid losing out on talents.
It calculates the percentage of applicants who started and completed the application process. For example, if 200 candidates began filling out applications but only 120 submitted them, the Application Completion Rate would be 120/ 200 x 100 = 60%.
5. Interview to hire ratio
This is the ratio between the number of interviews conducted and new hires made within a specific period. It helps you know how many people you need to interview to make an offer to one candidate.
Interviews are time-consuming and expensive. If your interview-to-hire ratio is high, it’ll result in higher costs per hire, which means more expenses for your company.
6. Time to hire
This KPI measures the time it takes to hire a qualified talent. It counts from the day the recruiter opens a position to the day it is finally filled.
It’s better to keep your time-to-hire as short as possible. The faster an applicant accepts your offer, the lower your recruitment costs and the higher your talent quality. A long time to hire indicates a long application process. This can be because your job postings aren’t targeting qualified candidates or your recruiting pipeline needs more streamlining.
7. Offer acceptance rate
This KPI indicates how many candidates decide to join your company after getting an offer. It lets you know what prospective employees expect and the terms of employment that convince them to get on board. For instance, applicants who reject an offer may do so because of bad employer branding, a stressful recruiting process, or unattractive compensation.
Additional reading: What to Include in an Employment Contract
8. Candidate net promoter score (NPS)
This refers to how likely applicants are to recommend your company to others based on their experience of your hiring process.
A high NPS differentiates you from your competitors by highlighting candidates’ experience and enhancing your company’s reputation. Ultimately, it positions your organization as one of the top employment choices in your industry.
9. First-year turnover rate
This metric measures the number of employees who quit before completing a full year in your organization. A high turnover rate indicates employee dissatisfaction, poor company culture fit, or workers have probably found a better job.
The higher your turnover rate is, the higher your company spends on hiring. Monitor this KPI and improve your company’s processes so every dime invested in recruitment yields returns.
Learn more: How to Use Data to Better Understand Attrition and Retention
10. Quality of hire
This recruiting KPI helps you understand how effective your team is in recruiting suitable candidates to fill a role. It examines how a new hire fits into a company and contributes to its success within a specific time. It also evaluates such candidate’s performance and draws conclusions about the efficiency of the recruitment process to suit the company’s needs.
Tips for Setting Effective Recruitment KPIs
Define your business goals
Don’t just set recruitment KPIs; ensure they align with your organization’s business goals. For example, if one of the company’s goals is to reduce recruitment costs, monitor metrics like cost per hire to help the business save money while hiring top talent.
Note that these recruiting KPIs will change as your company grows and its business objectives change.
Identify relevant and SMART KPIs
Good talent acquisition KPIs should be specific, measurable, attainable, relevant, and time-bound (SMART). For instance, instead of simply setting sourcing channel effectiveness as part of your recruitment KPIs, make it SMART by specifying, “Optimize sourcing channel quality by 50% within the next 12 months.”
This ensures clarity, gives each goal a timeframe for achievement, and makes it easy to track while ensuring they’re realistic and relevant to your organization.
Gather baseline data
Before implementation, establish and record values for your recruiting KPIs. The baseline data should also include relevant information such as timeframes, budget, and objectives of each task. This will serve as a benchmark for tracking progress and assessing the impact of hiring strategies.
Choose appropriate data collection tools
Use HR software and analytics tools to collect data and monitor hiring metrics regularly. This will ease and automate the recruitment workflow for easy analysis and implementation.
Analyze and improve
Examine the reports on recruitment KPIs to identify lapses and improve where necessary. This helps you generate ROI from hiring efforts by making the most of results, whether negative or positive.
Optimize Your Hiring Process with Omni
Recruitment KPIs play a crucial role in modern businesses by providing valuable insights for decision-making and driving continuous improvement on recruitment processes and strategies.
By comparing talent acquisition KPIs against industry standards or competitors, businesses can identify areas of growth and implement strategies to attract the best of the crop – which is highly pivotal in this ever changing landscape.
With all-in-one HR software like Omni, you can leverage automation and streamline your processes while gaining actionable insights for continuous improvement and team effectiveness. Through leveraging the power of automation, Omni allows HR teams and managers access to custom reports on specific recruitment KPIs in the hiring process and swiftly address potential issues and drive company performance.
To join the 83% of Omni customers who have unlocked new, actionable insights after using our solution, book your demo with our team today.
