Attracting and retaining skilled talent has always been a business imperative, and with labor shortages persisting into 2024, this is truer now more than ever.
Are you confident in your recruitment strategy? Or do you see room for improvement? Before you make any major changes, take a closer look at your key recruitment metrics.
Tracking key performance indicators (KPIs) for recruitment is essential to assess the effectiveness of your hiring processes, identify areas for improvement, and make informed decisions. Recruitment metrics tell the story of your team’s effectiveness and reveal ways to streamline the process and improve results.
In this blog post, we’ll explore the top five recruitment KPIs that every company should track to optimize their talent acquisition efforts.
What are recruitment KPIs?
Recruitment KPIs are a metric designed to uncover the strengths and weaknesses of your hiring strategy. They provide an objective reference to track progress toward your talent acquisition goals.
Recruitment KPIs can include metrics like:
- Time it takes to hire a new employee once applications are submitted
- Percentage of qualified candidates in each batch of resumes.
If the KPIs do not meet expectations, you know which process to troubleshoot to improve your hiring results.
What makes recruitment KPIs indispensable?
Your ability to hire quality employees drives your organization’s success. Key performance indicators in recruitment ensure the hiring process is serving the company’s well-being. They help the hiring team provide excellent support to the rest of the company.
There are always things that are out of your company’s control. The economy, the number of qualified candidates in your area, or the competitiveness of the job market are examples. However, recruitment metrics help you optimize those factors within your control, leading to more wins regardless of external circumstances.
Here are five important recruitment KPIs to track and approaches to improve them!
1. Time to hire
Almost any recruitment KPI template includes time to hire. Time to hire measures the number of days between when you receive a candidate’s application and an accepted job offer. It includes the time to shortlist, interview, make offers, and negotiate with prospects after their applications are submitted.
This KPI helps you identify any areas of the process that are moving too slowly, any factors contributing to a bottleneck, and ways to streamline or automate the process.
Vacant positions that remain unfilled for weeks or months can damage productivity, drag down team morale, and cost more. If you have applications and are not responsive, talented candidates with options will pursue other opportunities. Time is of the essence in hiring top talent.
Ways to improve time to hire:
- Map out every touch point in the hiring process and establish a schedule for each one.
- Maintain a talent database of quality applicants who weren’t right for a particular position but may be a good fit later.
- Fill your talent pipeline by proactively connecting with passive job seekers and vetting them in advance of a specific position to fill.
- Build your employer brand on social media, including posts relevant and interesting to job seekers.
- Utilize Applicant Tracking Software (ATS).
- Outsource your recruiting needs to a dedicated staffing agency like Insight Global.
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2. Qualified candidates per open position
In terms of key performance indicators for recruitment, qualified candidates per open position reveal several useful factors. It speaks to how well you define the job in the job posting, how effectively you are reaching your target candidate, and if your company has the employer brand presence to attract quality candidates.
No matter how targeted your ad is, you will receive some applications that are not relevant to the position. The key is to minimize unqualified applicants and increase the number that can be a great fit.
Improving the percentage of applications from qualified candidates you receive from each job posting will help you refine your job marketing process. It increases the likelihood of finding a suitable candidate when you post a listing.
To calculate this recruitment KPI, divide the number of candidates who make it through the first stage of your hiring process by the total number of applications received. For example, if you received 100 applications and called 12 for interviews, your qualified candidates per open position metric are 12 percent.
Ways to improve qualified candidates per open position:
- Implement an employee referral program to encourage employee referrals.
- Build your employer brand on your website and social media. Share your values, mission, diversity practices, and ESG initiatives. Create behind-the-scenes videos and give employees a chance to share why they enjoy working for your company.
- Post to targeted job boards. If you’re looking for a specialized skill set, see if there are job boards customized to that career.
- Offer a competitive salary. While pay on its own is not enough to attract top talent, staying competitive in the marketplace is essential.
3. Application completion rate
This talent acquisition KPI is about removing friction from the application process. It is normal to see a percentage of applicants start to apply and then stop. There can be countless reasons for this, and many have nothing to do with your application process. However, you are losing candidates if this number is high or climbing.
A lengthy or complicated application process will turn prospects away. Growing numbers of applicants use their mobile phones to search for jobs. If your application isn’t mobile-friendly, you’ll lose applicants.
To calculate this KPI, divide the number of applications you receive by the total number that were started.
Ways to improve application completion rate:
- Keep your applications simple and only ask for the information you need to get started.
- If you can help it, don’t require applicants to re-enter information already on their resumes.
- Make resumes easy to upload or attach.
- A/B test application processes to see which gets a higher completion rate.
4. Cost per hire
The longer a position is unfilled, the more costly it is. This recruiting metric includes every direct expense related to recruiting and hiring, from the job posting and ATS to any hiring or employee referral bonuses you pay.
It also includes the time spent by your staff interviewing applicants and analyzing the best fit.
You can calculate the cost per hire by dividing your total recruiting cost for a period by the number of hires you made. If your cost per hire is large, you can look for ways to streamline the process.
Ways to improve cost per hire:
- Implement an employee referral program.
- Develop your talent pipeline.
- Utilize free job boards.
- Encourage employees to share job postings with their networks. Also, use groups and company pages to connect with passive job seekers.
- Attend virtual job fairs.
- Systematize your hiring process, including using recruiting software to automate repetitive tasks.
5. Interviews to offer
The interview is a critical step in the hiring process. It gives the hiring team a chance to speak with the candidates and determine if their experiences, aptitudes, skill sets, and personalities are a suitable match for the position.
Interviewing is a skill, and while it’s a chance for employers to evaluate the candidate, applicants are also assessing the employer.
A low interview-to-offer ratio will indicate a problem in the interview process. Is it too long and causing delays? It’s an opportunity to investigate and identify ways to speed up and improve the interview process.
To calculate this KPI, divide the number of job offers by the number of candidates interviewed.
Ways to improve your interviews to offer rate:
- Use a structured interview process that asks each candidate the same questions in the same order.
- Consider automating a portion of the interview process.
- Automate interview schedule, allowing candidates to pick an available time on the calendar.
- Use panel interviews to speed up the hiring process.
- Train interviewers on interviewing best practices.
- Ask interviewees for feedback.
Improve Your Recruitment KPIs with Insight Global
Developing an efficient and effective hiring process takes consistent effort, but the payoff is worth it. A happy and productive team drives better business results.
If your hiring process is not meeting your company’s current needs, we have the experience, resources, and expertise to help you hire top talent. Connect with our team today to learn more!