Track These Recruitment KPIs to Improve Your Hiring Process

Recruiting the right people is the bedrock for all of your organization’s subsequent success. Hiring well-suited employees is foundational to building a strong, productive team that advances your business goals.

This is why tracking recruiting key performance indicators (KPIs) is vital. Recruitment KPIs help you set benchmarks and measure progress of your talent acquisition, ensuring that your efforts are paying off and helping you make better decisions about who to hire.

Let’s dig right into the most important recruiting KPIs, and how they can help improve your talent acquisitionand hiring process. 

Qualified Candidates Per Job Opening 

This KPI tracks how many suitable candidates you attract for open positions. Employers can look at the total number of candidates for any given opening and assess the qualityof each. This includes reviewing the candidate’s experience level, education, relevant skill set, and job-specific qualifications.

To calculate how many qualified candidates a business receives on average, employers divide the total number of qualified applicants by the total number of open positions. A high ratio indicates that your organization successfully finds the top talent for open positions. A low ratio may signal something needs to be adjusted with your recruitment process, such as altering job descriptions or changing where open positions are advertised.

Steps you can take to improve your qualified candidate ratio include:

• Evaluating job postings and revising them to be clear and concise about what skills, qualifications, and experience they require from applicants. 
• Partnering with staffing agencies that specialize in filling positions like those for which you are hiring. 
• Promoting job vacancies on industry-specific job boards and mailing lists so that qualified candidates are more likely to become aware of them.

Application Completion Rates

This KPI helps employers understand how many candidates complete and submit their applications. 

To calculate this metric, divide the total number of completed applications by the total number of applicants who started the submission process. A higher completion rate may indicate that your job postings attract engaged applicants and encourage those interested in the position to apply.

If you find you have a low application completion rate, consider implementing the following tips:

• Use application systems that don’t require retyping information provided on a candidate’s resume. 
• Minimize the number of platforms candidates need to use throughout the application process.
• If asking applicants to complete a skills assessment, keep it as brief as possible.
• Advertise your company’s benefit’s package in the job description, which can increase the incentive to complete an application.

Source Quality 

Tracking source quality provides insight into which channelsdeliver the best candidates. It helps them determine which of their current strategies works effectively, such as posting openings on job boards, social media, or partnering with other companies. 

Suppose, for example, that most of your recent hires applied through LinkedIn job ads, and none found your job ads on Instagram. In that case, you can focus more of your attention on Linkedin. This saves you time and energy and allows your recruiting team to focus on other avenues. 

To measure this metric, find the number of applicants from each sourcing channel and the total number of hires from that source. They then divide the total number of hires from each source by the total number of applicants from that source. 

Tips you can implement to improve your source quality include: 

• Maintaining a dashboard or spreadsheet where you keep track of results from each acquisition channel.
• Taking note of patterns, such as which job boards yield the most applicants or most qualified candidates.
• Creating targeted strategies for the source channels you have identified to generate quality applicants.

Another way to measure the source quality of your applicants is by tracking the applicants who received referrals. Referrals are typically highly qualified applicants since they come recommended by someone already in your organization. Knowing how many referrers you have compared to other sources of candidates can help you decide if it’s worthwhile to offer referral bonuses or other referral incentives.

Time to Hire

Time to hire refers to the average time between when an employer posts a job opening and when a qualified candidate accepts an offer. A short time to hireindicates that you are recruiting efficiently and quickly. 

To find this figure, begin tracking how many days elapse between when you post a position and when an employment offer for that job is accepted. After a predetermined period of time, average the figures to find how many days it typically takes your organization to find a new hire. You can further break this figure down by department to identify if certain business areas are lower than average. This may indicate the strategies used for finding talent for such positions need to be revised.

The average length to hire in the US is about 24 days. A shorter time to fill a role helps employers stay competitive in their industry’s job market. A longer time to hire may also indicate updates need to be made to your company’s job descriptions, or compensationand benefits package.

To reduce hiring times, try the following: 

• Minimize paperwork and use email templates to  save time when communicate with candidates.
• Leverage platforms like Workday to automatically keep applicants up-to-date on the status of their application.
• Use automated pre-screening tools and resume readers. 
• Streamline internal communication and hiring consensus through a project management or HR software that eliminates extensive email chains. 

Cost per Hire

Cost per hire tells you how much money your company spends to recruit and hire a new employee. 

This KPI can help employers determine which recruitment strategies are worth investing in and which need to be reconsidered. Tracking this metric helps identify both which talent acquisition efforts are cost-effective and where changes could reduce overall spending. Over time, tracking this KPI can help managers forecast hiring expenses to ensure they stay within their budget.

Imagine, for example, that you find the job boards you are currently using are expensive and rarely yield high-quality candidates. This is driving up your cost per hire, so it may be time to consider shifting to a recruitment agency or finding new job boards.

To determine the average cost per hire, divide the company’s recruiting expenditures in a set time period by the number of hires made in that same timeframe. As with other KPIs, this can also be tracked at the department level to inform recruitment efforts at a more granular level.

Interviews to Hire 

This KPI refers to the number of interviewsconducted before a successful candidate is hired. Tracking it can help identify ways you can make your interview process more efficient.

To calculate this metric, focus on a specific high-volume hiring period. Next, divide the total number of interviews conducted in that time by the total number of successful hires. A low ratio indicates that your recruitment process quickly assesses qualified candidates. Conversely, a high ratio indicates a large number of interviews are being conducted for a small number of hires.

If your interview process has room for improvement, consider evaluating the effectiveness of communication between the interviewer and the job candidate. This could include: 

• The quality of questions asked by the interviewer. Did they ask relevant, insightful questions? Were their follow-up questions relevant? 
• The clarity and responsiveness of answers from the job candidate. Did they provide clear, concise answers? Were they able to respond thoughtfully in a timely manner? 
• The overall tone of the conversation. Was there good rapport between both parties? Did they seem comfortable with each other? Was there a positive energy throughout? 

Another key factor in assessing an interview process is determining how well-prepared each side was for the interview. For example, did the interviewer do adequate research on the applicant prior to meeting them face-to-face? Did they have a thorough understanding of their background and skill set before asking questions? Similarly, did the job candidate come prepared with questions about their role or company culture that demonstrates their interest in the position? 

Job Offer Acceptance Rate 

Tracking job offeracceptance rates can reveal which offers extended by your organization are enticing and which may need adjustment. 

This metric is calculated by dividing the total number of accepted job offers in a certain time period by the total number of job offers made. Multiply that figure by 100 to determine the percentage of offers issued that were accepted.

A high acceptance rate indicates that your organization is successfully making attractive job offers. On the other hand, a low acceptance rate can indicate you may need to increase salaires, bolster your benefits package, or provide more information about company culture and work environment to increase your talent competitiveness. 

First-Year Turnover Rate 

The first-year turnover rate is the number of employees who leave or are let go within the first year of their employment. A high turnover rate may indicate issues in the recruitment process, such as hiring people who didn’t meet the criteria or weren’t a good fit for the organization. 

To calculate this metric, employers gather the total number of employees who left within their first year and divide it by the number of hires made during that period. 

A low first-year turnover rate indicates that you successfully recruited suitable candidates. Additionally, a low overall turnover rate reflects well on an organization’s reputation since it demonstrates a high level of employee satisfaction. 

Tracking Wellbeing Levels During the Hiring Process

An all-to-often overlooked hiring metric is how satisfied those involved are with the process.

Your recruitment team and members of hiring committees can provide valuable information about what is and is not working with your company’s talent recruitment efforts, and their overall satisfaction with the hiring process.

Consider measuring hiring manager satisfaction levels before and after a heavy recruiting period. This may help you discover the bottlenecks in the recruitment funnel and solutions that streamline the work during your next hiring season.

Focusing on the wellbeing of your recruiters and potential hires is yet another way to establish the importance of wellbeing in your company. If you’d like to learn more about improving work-life wellness, reach out to a Wellbeing Specialist today!

References 

• 9 effective strategies to reduce recruitment costs for your startup. Freshworks. Retrieved on March 21, 2023 from https://www.freshworks.com/hrms/how-to-reduce-recruitment-cost/. 
• 10 Effective Ways To Reduce Time To Hire. (January 2, 2020). Harver. Retrieved on March 21, 2023 from https://harver.com/blog/reduce-time-to-hire/. 
• How Long Should Your Interview Process Take? We Found Out. (July 28, 2020). Glassdoor. Retrieved March 21, 2023 from https://www.glassdoor.com/blog/how-long-should-interviews-take/. 
• How To Make a Job Offer (With Script). (March 10, 2023). Indeed. Retrieved March 21, 2023 from https://www.indeed.com/career-advice/career-development/offering-job. 
• Job description templates and more. Linkedin. Retrieved March 23, 2023 from https://business.linkedin.com/talent-solutions/resources/how-to-hire-guides. 
• The Top 10 Recruiting Resources for Hiring Managers in 2023. (January 19, 2023). 4Corner Resources. Retrieved March 21, 2023 from  https://www.4cornerresources.com/blog/best-recruiting-resources-for-hiring-managers/. 
• Screening and Evaluating Job Candidates. SHRM. Retrieved March 21, 2023 from https://www.shrm.org/resourcesandtools/tools-and-samples/toolkits/pages/screeningandevaluatingcandidates.aspx.