Measuring key performance indicators (KPIs) around recruitment can help to ensure that your process of talent acquisition is efficient, cost-effective and has a positive long-term business impact.
It is important to ensure investment is placed in the right areas, so regularly tracking your KPIs helps to provide a data-driven performance overview, indicating areas for optimisation and displaying the value your hiring process brings to your business.
What are Recruiting KPIs?
Recruitment KPIs are metrics that can be tracked to analyse and evaluate the performance of your hiring process. KPIs are data-based insights, which can be used to review progress towards specific or overall goals.
Monitoring your recruitment data using KPIs helps to clearly structure your assessment of its effectiveness. KPI tracking quickly indicates key recruitment aspects in which your business is excelling – and highlights areas that require further focus, optimisation or investment.
If your recruitment or HR teams are already operating with high efficiency, tracking recruitment metrics provides the data to evidence return on investment and safeguard budget allocations.
Regardless of the size of your recruitment department, taking the time to establish monitoring and evaluation structures is worthwhile.
Collectively, KPIs can form an incredibly valuable picture of overall performance – which can then be broken down into individual metrics where necessary.
When analysing your KPIs, it is important that they are considered in the context of previous data and in relation to your targets. This helps them to become more than just numbers.
If used correctly, recruitment KPIs can lead to informed and targeted action to improve performance – optimising investment of both time and money.
Important Recruiting KPI Metrics to Track
The key performance indicators you chose to track will depend upon your set goals and objectives regarding recruitment and your target organisational growth. To effectively monitor your progress, you may wish to consider the following 10 performance metrics:
1. Qualified Candidates per Opening
Tracking the number of qualified candidates who apply for each of your job openings helps you to ensure you are reaching the right audience. Whilst a high level of interest in vacancies correlates to an increased chance of finding the ideal candidates, if the majority of these candidates are unsuitable, your recruitment approach needs adjusting.
If this is the case, you may be advertising in the wrong places or failing to write engaging job postings that speak to your target hire. It may also be that your expectations are too high for the level of role you are advertising.
Qualified candidates per opening is best tracked as a ratio, which can rapidly alert you to whether your recruitment method is attracting the right level of candidate.
2. Application Completion Rate
Tracking your application completion rate lets you know the percentage of candidates who are starting, but failing to complete, your online application form.
Whilst a candidate may conclude the role isn’t the right fit and change their mind about applying, low application completion rates can signal that candidates are being discouraged by the application process itself.
Possessing this insight means your application process can be reviewed and adjusted as necessary, to ensure the best talent is encouraged to invest their time and submit their interest. Application completion rate should, however, be reviewed alongside your other metrics.
You may have a low application completion rate but be shortlisting a sufficient number of high-quality, qualified applicants. If the rate isn’t having a detrimental impact on your hiring process, then it shouldn’t be a significant point of concern.
3. Source of Hire/Quality of Source
One of the most popular recruitment metrics to track is the source of your hires. This refers to understanding where your successful candidates found out about your open vacancy.
Monitoring the source of hire requires logging whether employees came to you through your company careers site, a recruitment agency, a job board, LinkedIn, via employee referral or as an internal hire.
This information enables you to target your marketing and advertising, investing in a presence on the most beneficial platforms. You can gain greater insight collecting further data on the quality of the source by tracking where all your high-quality candidates (those who make it to the latter stages in your recruitment process) come from.
4. Time to Hire
The time to hire refers to the period of time between a new hire being formally requested and the chosen candidate accepting the role. It includes the time taken to review applications, administer any pre-employment testing, run assessment centres, interview shortlisted candidates and make a formal offer.
An awareness of how long it takes to hire a new employee can help you to launch recruitment for new roles at the right time. Recording the time taken for each stage of the process can help to identify areas that are holding up the recruitment process, so it can be adjusted to speed up your time to hire.
5. Channel Source Efficiency
Taking a step back to review where your top talent is being sourced from is a really important step in reviewing your recruitment KPI metrics. After all, how will you truly know which job boards and platforms to invest your resources and time if you don’t know which channels are serving you the best?
Channels could include universities, online job boards, recruitment agencies, print media, events, internal/referral or social media sources.
6. Quality of Hire
Measuring the quality of hire helps to keep track of whether you are successfully employing individuals who are the right fit for your roles. Quality is, however, subjective.
To track this metric, you will need to decide upon measurements that can be used to correlate to a quality hire. Consider aspects such as employee engagement, alignment with company culture, reception by colleagues, job performance, manager satisfaction and time to full productivity.
The sole aim of the recruitment process is to place the correct candidates in role so they can thrive so, although it is trickier to assess, it is vital to track the quality of your hires.
7. Cost per Hire
Tracking your cost per hire is important for budget tracking, to ensure your recruitment process is operating as a good investment. As well as tracking individual cost per hire, it is beneficial to calculate the average cost to place someone new in the role.
This can be calculated by totalling recruitment costs (internal and external) and dividing by the number of new hires for a given period (such as per quarter).
When considered alongside your other metrics, cost per hire can help you to assess whether there are areas where recruitment spending could be cut, or whether more investment is needed in order to attract higher-quality candidates.
You may also wish to calculate cost per hire by category, such as department, job position, job level or source. This will give a greater understanding of costs across different company metrics.
Remember to always consider industry benchmarks when assessing your cost per hire data.
8. Candidate Experience
Your recruitment process reflects directly upon your company brand, so high candidate satisfaction should be sought. Candidates who are left feeling satisfied with a recruitment process are more likely to accept an offer, reapply or promote future vacancies within their networks.
Building a satisfaction survey into your recruitment stages is a quick and simple way of gathering valuable information to help monitor and adjust the process. This insight enables you to ensure candidate satisfaction is high, reflecting well upon your organisation.
9. Adverse Impact
Tracking adverse impact helps to ensure your recruitment process is encouraging inclusivity and diversity. Adverse impact seeks to identify unconscious bias, highlighting a selection rate that may work to the disadvantage of members of a particular race, ethnicity or sex.
A selection rate of less than 4/5 or 80% of the group with the highest rate is considered to have an adverse impact upon minority groups. Therefore, selection rate should be tracked to ensure the rate for a protected group is always at least 80% of the selection rate for non-protected groups.
Preventing adverse impact is essential for a fair and legal recruitment process that leads to diversity in the workplace – improving company performance and innovation.
10. Retention Rate
A low retention, or high turnover, rate is costly and has a detrimental impact on productivity. Whilst it is important to place the right candidates in role, the effort counts for little if the talent is not retained. Turnover disrupts workstreams, damages relationships with clients and requires great duplication of effort.
A low rate of retention - particularly within the first year of employment– signals that new hires are failing to settle and could suggest a more embedded issue, such as unrealistic work expectations or an uncomfortable work culture.
To calculate first year turnover rate, divide the number of employees who exit after less than a year in post with the total number of employees who have left their roles. This will highlight whether you are disproportionately losing talent within the first year of hiring.
This insight can be used to explore whether adjustments in the recruitment or onboarding process are necessary to improve employee retention and long-term business impact.