In our last post, we reinforced the message that companies must always be recruiting, and we highlighted five steps an organization can take to launch an ABR initiative.
Once you have a firm recruiting foundation, the next logical step is to begin measuring whether your extra efforts are yielding results. What recruiting metrics should you be measuring, and how can you effectively gather the needed information?
There are dozens of popular recruiting metrics, including the venerable Cost per Hire and Time to Fill. And while these two tried-and-trues remain important factors to measure, there are even more insightful metrics organizations can use to steer and hone their recruiting efforts.
Here we list the seven qualitative recruiting metrics that matter—and compare them to their similar, more quantitative counterparts.
Source of Applicants versus Source Quality
Determining which sources are responsible for generating the most applicants is certainly important, but an even better metric is to measure the quality of candidates each source is supplying.
Source quality is calculated dividing the number of hires generated a source the number of applications generated that source. Obviously, the most valuable sources send you the most hires.
Offers per Post versus Offer Acceptance Rate
While Offers per Post simply measures how many offers you extend to candidates applying to a specific job, Offer Acceptance Rate takes into consideration the percentage of those offers that get accepted.
The first metric can be useful to see if you’re attracting good candidates, the second is the money shot—how many of those good candidates ultimately come to work for you.
If your offer acceptance rate is low, then you may need to revisit your compensation packages or other disqualifying factors.
Applicants per Hire versus Qualified Candidates per Post
Applicants per Hire is a ratio of how many applications are considered for each hire, calculated dividing the number of applicants for a position the number of hires for that same position.
It can be a useful metric to determine if you are successfully sourcing applicants, but a more useful measurement is the number of qualified candidates you’re generating for each job.
What makes a qualified applicant?
You decide of course, but one accepted determinant is to count applicants that make it past the first milestone of your screening process.
Using that, Qualified Candidates Per Post is calculated as the number of candidates for a position who make it past the first round of review divided the number of hires for that same position.
Fill Rate versus Turnover Rate Source
Fill Rate is calculated dividing the total jobs filled a person, team or recruitment channel the total jobs assigned to that person, team, or channel to fill. It is often used to determine if you should be using an outside recruiting agency or whether your internal team is doing the job.
But Fill Rate quickly loses its value if those hires leave the organization within the first year or so. Take the fill rate measurement a bit further comparing it to the Turnover Rate Source.
This allows you to evaluate which channels are feeding you employees that remain with the company for a specific period of time (typically at least one year).
Time to Fill versus Source to Close
Time to Fill is commonly calculated as the time to hire from start to end of the recruiting to hire process, but a more insightful metric is Source to Close, which measures how quickly candidates accept an employment offer—minus the sourcing phase.
Why the distinction? One reason is that companies may recruit continually for certain roles, so the open date of the position related to the hire date becomes irrelevant.
Another factor that contributes to the amount of time “to close” is the fact that hires for many higher-level positions need a longer transition between their old company and the new job.
Cost per Hire versus Quality of Hire
The Talent Acquisition Benchmark Report SHRM report found that the average cost per hire is $4,425 (in 2017, likely more today). Clearly the Cost per Hire is important to your organization’s bottom line, but even more important is the Quality of Hire.
In fact, according to LinkedIn’s Global Recruiting Trends Report, quality of hire ranks as the most valuable performance KPI. You certainly don’t want to spend that much money on bad hires. How can you measure Quality of Hire, you ask?
One straightforward (and admittedly subjective) way is to simply ask the hiring managers if they would hire the employee over again. Other methods can include studying performance reviews or determining an Employee Lifetime Value, similar to the more familiar Customer Lifetime Value metric.
Time to Hire versus Candidate Experience
Time to Hire is simply the average number of days from the start of the recruiting process to the signing of employment contract.
It’s an easy-to-count metric that has merit on its own, but more significantly, it has a direct impact on a more qualitative measure, Candidate Experience, calculated using what’s called a Candidate Net Promoter Score, from a candidate survey asking questions like, “How likely are you to recommend [your company/this recruiting experience] to a friend?” You are surveying your candidates, aren’t you?
Choosing Quality Over Quantity
Certainly, measurements like Cost Per Hire and Time To Fill are important, practical and relatively easy to gather, but the real value emerges when you dig a bit deeper, using metrics that don’t simply count activities—they measure performance.
An Applicant Tracking System is an ideal way to begin capturing and making sense of the metrics that matter to your organization.