Why should businesses track recruitment metrics?
Recruitment metrics are a great way to measure the success of a recruitment process and identify room for improvement. Implementing just any recruitment strategy is one thing but actually calculating if it works is where recruitment metrics come in. How successful are your recruitment strategies? Does your hiring strategy need work? How happy are the chosen applicants at your business? These are all important questions to ask if you want to remain sustainable and grow a loyal team of employees.
17 Recruitment Metrics:
1. Source of Hire.
This is a useful metric that helps determine which source channels are attracting most of your new candidates. Source channels can include social media, company websites, job boards, and/or forums. Once you track where your new hires stem from, you'll be able to identify the source channels that work best for your company's hiring process, better manage your advertising budget, and reduce costs.
Review the value of your source channel. Spending unnecessary money on source channels that don't produce enough candidates means you're using capital that could have been put to better use elsewhere. Measure the value of sourcing channels by calculating how much money you spend per applicant, per channel.
Source of Hire Calculation:
Create a pie chart with each of the source channels you use to advertise jobs. Over a period of 6–12 months, document which source channels bring in the most successful candidates and adjust the pie chart where necessary. This will give you a clear indication of which source channel is the most effective.
2. Yield Ratio.
The yield ratio metric is a key performance indicator (KPI) that refers to the percentage of candidates from each source channel that qualified for an official interview. Your yield ratio is similar to your source of hire metric. Ultimately, they both are implemented to determine the effectiveness of a source channel.
The quantity of candidates generated from one source channel does not mean they're worth an interview. Your yield ratio will help identify which source channel produces candidates that meet the relevant requirements to proceed to the interview stage.
Yield Ratio Calculation:
Number of candidates invited for an interview / number of candidates generated = Yield Ratio.
It's important to note that the yield ratio calculation applies to one specific source channel. You cannot use this formula to measure multiple source channels.
3. Application Completion Rate.
Your application completion rate refers to the number of candidates completing and submitting your application form. Typically used by organizations and job boards with intricate online application systems, this metric is great for identifying technical errors and low application completion rates.
A low completion rate means applicants are either not following your application process or they lose interest mid-way and decide to quit. This could be due to a range of reasons, such as the application form is too personal and/or intricate to complete, it's time-consuming, or it becomes repetitive the further one reads. If you have a low application completion rate, it's wise to reevaluate your application forms and identify ways to enhance the efficiency of the process.
Application Completion Rate Calculation:
Number of submitted applications / number of incomplete applications = Application Completion Rate (%).
4. Applicants Per Job.
Also referred to as "applicants per hire," this metric calculates the number of candidates that applied and are successfully chosen to fill a job position. With this metric, you can measure the popularity of each job you advertise and determine if your recruiting methods are working. Because every job is different and may generate various measurements, it's recommended that you calculate the rate for each position.
Application Per Job Calculation:
Number of applicants per position / number of successful hires = Applicant Per Job.
5. Time to Fill.
This is a popular metric that provides a great overview of how long it takes to fill one position, starting from the release of a job description and ending with an official hire. Your time to fill rate can be influenced by a range of internal and external factors, including supply and demand, the speed of your recruitment team, yield ratio, and your acceptance rate.
Time to fill is generally used to assess the effectiveness of a business's recruitment strategies and processes. If your time to fill lasts longer than 50 days, it's seen as a slow time to fill rate and may justify further investigation. In this case, you'll want to reevaluate your recruitment team and strategies to help automate the hiring process.
6. Time to Hire.
The time to hire metric works similar to the time to fill calculation. The only difference between the two metrics boils down to when you start counting the days. With the time to hire metric, you're measuring the time it takes to hire a candidate after you've already received applications. Essentially, time to hire tracks how long it takes to interview, assess, and hire qualified candidates, while time to fill focuses on your overall hiring process.
Time to hire is great for analyzing your hiring teams' efficiency. With this metric in mind, you'll be able to identify areas in your hiring process that needs improvement and work with your hiring team to better locate top talent. With a short time to hire period, you can snatch up any top candidates before competitors are able to catch up.
7. Cost Per Hire.
The cost per hire metric is one of the more important calculations to understand because it refers to the total costs of hiring one candidate. This includes the costs of posting a job description, screening and interviewing candidates, and the onboarding period. The cost per hire metric is crucial to any business's success, thanks to its ability to impact a company's bottom line or break annual budgets.
Your cost per hire calculation is made up of internal and external factors. The factors you include may depend on the efficiency of your hiring process. You'll typically calculate the costs of advertising, labor, onboarding, training, and lost productivity time. In addition, if your business makes use of a recruitment agency, you'll need to add those costs as well.
Cost Per Hire Calculations:
Total Recruitment Costs:
Total internal costs + total external costs / total number of hires = Total recruitment costs.
Costs Per Hire:
Total recruitment costs / total number of hires = Cost Per Hire.
8. Quality of Hire.
Once you've successfully hired a new employee, you'll want to better understand the value they add to the team. This is done by calculating your quality of hire. This metric is typically influenced by a candidate's performance rating during their first year of employment. Ultimately, it distinguishes between more candidates and top candidates and helps reveal if recruiters are wasting time and money or recruiting valuable assets.
Combine the quality of hire metric with your source of hire calculation. This will help you determine which source fails to attract top-performing candidates. If chosen candidates generally receive a low-performance rating, this is an indication that your recruitment and screening processes need improvement.
Quality of Hire Calculation:
Numbered of hired candidates considered satisfactory / number of candidates hired = Success Ratio.
9. First-Year Attrition Rate.
The first-year attrition rate refers to the number of employees that resign or are let go during their first year of work. If your goal is to ensure that you don't waste costs by hiring candidates that aren't the best fit for your company, then you'll need to master the attrition rate metric. If you have a high attrition rate, you'll be constantly stuck in a cycle of hiring, which ultimately costs the company money.
Repeatedly hiring applicants who eventually leave in a short period of time could also be seen as a red flag by your candidate pool. Did the candidate not meet goals and deadlines? Were they not a good fit for the team? Or, did the candidate resign because the company did not meet their expectations? For the best results, you'll need to ensure that you evaluate the cause of the departure and incorporate new strategies that remedy the issue.
Attrition Rate Calculation:
(Number of leaves ÷ number of employees) x 100 = Attrition Rate (%).
For more information about attrition, read through our complete guide on how to lower your attrition rate.
10. Vacancy Rate.
Your vacancy rate and attrition rate will seem similar but both are vital as separate calculations. With your vacancy rate, you have to calculate the involuntary and voluntary vacancy rates for each job position, which is similar to the attrition rate's managed and unmanaged vacancies. This simply means that you need to calculate the number of people that leave of their own free will and those who are let go for various reasons.
Employers generally use the vacancy rate to identify trends or patterns. For example, if one position has a high vacancy rate, this is an indication that the hiring team needs to evaluate the cause and introduce processes that help lower both involuntary and/or voluntary resignations.
Vacancy Rate Calculations:
Number of employees who voluntarily left / number of employees you had during your calculation period x 100 = Voluntary Vacany Rate (%).
Number of employees who involuntarily left / number of employees you had during your calculation period x 100 = Involuntarily Vacancy Rate (%).
11. Conversion Rate.
The conversion rate or 'job conversion rate' refers to the percentage of successful candidates hired compared to the number of vacancies available over a period of time. If you have a low conversion rate, this means that you're not getting a return on investment. Most businesses use this recruitment metric to evaluate internal factors that lead to a high attrition rate and a high vacancy rate.
The conversion rate is an excellent way to determine the value of your recruiters. If they're unable to fill the majority of the jobs with applicants who are qualified, experienced, and a great asset to the team, you'll need to start evaluating their recruitment strategies.
Conversion Rate Calculation:
Successful hires made / total vacant jobs x 100 = Coversion Rate (%).
12. Offer Acceptance Rate.
The offer acceptance rate is a straightforward recruitment metric that calculates the number of applicants who accepted a job offer with the total number of applicants who received a job offer. Going through the entire recruitment process only to not receive a job offer acceptance can be disheartening and expensive. Therefore, it's important that you study the reasonings for low acceptance rates. This may include poor job descriptions, compensation packages, job expectations, or a bad employer brand.
Offer Acceptance Rate Calculation:
Number of successful job offers / number of job offers made over a period x 100 = Job Offer Acceptance Rate (%).
13. Time to Productivity.
The time to productivity calculation is a less common recruitment metric. However, if you have a high first-year attrition rate, it's important to evaluate how long it takes for one employee to settle into a position. Often, high attrition rates could mean that your chosen applicant was unable to fully grasp the key performance areas of the role due to external and/or internal factors.
The time to productivity rate can also contribute to your time to hire calculation. While your time to hire measures the time it takes to hire an employee, the time to productivity metric takes it a step further by evaluating the time it takes for one employee to get up to speed and join the team. For the best results, evaluate each position over a 6–12 months period. This will help you better organize your metrics and create a standard time to productivity period for each position in your company.
14. Employee Turnover Rate.
Your employee turnover rate is a combination of your attrition and vacancy rates. In fact, some employers choose to only measure their employee turnover rate as the results are often the same. However, if you want to get a better understanding of your chosen applicants' first year, the attrition rate is the best option.
Your employee turnover rate measures how many candidates leave the company voluntarily or involuntarily. For a company, its employee turnover rate indicates its level of sustainability. With a high turnover rate, you'll be losing employees every few years, which results in a lack of company loyalty and steep hiring costs.
Employee Turnover Rate Calculation:
Number of employees who left during a time period / total number of employees x 100 = Employee Turnover Rate (%).
For an overview of employee turnover rates, check out our complete guide.
15. Employee Referral Rate.
Employee referrals remain a top source for hiring new employees. Because your current employees have first-hand knowledge of your hiring processes, job expectations, and work environment, they're excellent sources for recruiting new talent. Therefore, it may be wise to keep an eye on your employee referral rates and annually evaluate the success of your employee referral program.
The employee referral rate essentially calculates the conversion rate of your referral program. If your employee's referrals have a low conversion rate, this may be a sign that your referral program needs work or that they don't understand the expectations or responsibilities of the job position.
Employee Referral Rate Calculation:
Total number of referrals / number of those referrals hired x 100 = Employee Referral Success Rate (%).
Read through our complete guide for a more in-depth look at employee referral programs.
16. Candidate Experience.
The candidate experience is not necessarily considered a metric as there is nothing to calculate. However, employers often choose to survey the candidate experience to help improve their employer brand and identify key areas that are lacking. During the hiring process, it's not uncommon to find multiple applicants who suit the position. In this case, you want to ensure you leave a positive impression because you may need to hire them sometime in the future.
The candidate experience is all about the applicants who did not receive a job acceptance letter. Ultimately, you want applicants to walk away from the hiring process feeling satisfied with the experience and confident that you gave them a fair chance. To ensure that you create a positive candidate experience, ask applicants to complete a survey and/or poll that focuses on their personal experience.
17. Candidate Withdrawal Rate (CWR).
The candidate withdrawal rate (CWR) is a straightforward metric that calculates the rate at which candidates withdraw from an interview process. In competitive industries where the candidate pool is small, it's wise to evaluate your CWR if you want to better your chances of recruiting specialists. The reasons for withdrawing may be external factors but often, applicants withdraw because they were hired faster elsewhere, offered better compensation, or felt like the hiring process was too complicated.
Candidate Withdrawal Rate (CWR) Calculation:
Number of candidates that withdrew / number of candidates that were invited for an interview x 100 = CWR.