Hiring / Leadership

3 Types of Essential Recruitment Metrics for HR Leaders

It’s easier than ever to collect massive amounts of data on your recruiting and HR processes. And it’s harder than ever to know which recruitment metrics are worth paying attention to.

Business leaders are typically most interested in time- and cost-based metrics because they’ve earned a line on the balance sheet. However, other metrics, such as candidate quality and attrition, are also worth evaluating to track the effectiveness of the hiring process itself.
Which numbers you choose to focus on should be driven by your talent strategy and organizational priorities. Consider these key recruitment metrics to track across your hiring processes.

1. Time- and Cost-Based Recruitment Metrics

Business leaders are often most interested in metrics related to time and cost, which have a direct impact on the business’s bottom line. Here are some of the most important metrics to track in this category.

Time to Fill

Time to fill refers to the amount of time that elapses between posting a job opening and closing the deal with an accepted job offer. This is one of the most important recruitment metrics to track because it reflects every stage of your talent strategy.
A lengthy time to fill draws out the hiring process and drives up hiring costs. It also lowers productivity because the longer a role is vacant, the less that surrounding team members can accomplish.
A number of issues can slow down time to fill: Is there a market shortage of the talent you need? Or do you need to change your process, such as better retargeting ads to attract the right candidates? If your time to fill isn’t where you’d like it to be, identify what’s causing the problem then address it.

Time to Hire

Time to hire refers to the number of days it takes between when a candidate applies and when they accept a job offer. This metric is important for tracking the efficiency of your hiring process.
In addition to driving costs up, taking too long to hire a qualified candidate creates a poor experience. You risk losing quality talent to faster-moving competitors if you can’t close the gap.
Evaluating this metric allows you to pinpoint which parts of the process aren’t working, so you can draft a plan to fix them.

Cost Per Hire

The cost-pe-hire metric tracks the dollar amount spent closing the deal on a new hire. This metric accounts for time to fill, as well as the cost of sourcing and labor during the recruitment process.
A high cost per hire draws from your overall HR budget, pulling resources away from other initiatives. This is a metric that business leaders will be interested in, and it may affect how they perceive the HR function.
Monitoring cost per hire gives you a complete picture of hiring expenses. With a baseline cost in place, you can try different tactics to create greater efficiency in your hiring process.

2. Measuring Candidate Quality and Attrition

Candidate quality and attrition metrics help you monitor and refine your processes until you’re only attracting qualified candidates who can succeed in your organizational culture and structure. These metrics take time to track but provide valuable insights into the effectiveness of your hiring process.

Quality of Hire

This metric accounts for the new hire’s performance over the course of their first year. You can identify the success ratio of your hiring processes by dividing the number of successful hires by the total number of hires during a set time period. The higher your success ratio, the more effective your hiring process is.
Measuring quality of hire isn’t as straightforward as time and cost, and it requires some interpretation. To calculate this metric, you need to define “success.” Consider your hires’ length of employment, performance record and alignment with company culture and values. Tenure is an important factor on quality of hire, since replacing a bad hire is one of HR’s biggest expenses.

Source of Hire

The source of hire is a recruiting funnel metric that tracks where your best candidates are coming from. Compare the source of hire against the quality of hire to determine which channels are bringing the best candidates to your company.
This metric is crucial for informing your ongoing hiring and recruiting processes. If your best hires are coming from the local community college job expo, for example, then you can pull funding from channels that aren’t performing as well and focus on nurturing talent at the community college.
To make the most of your hiring budget and reduce the costs and time associated with hiring, you need to identify the job boards and community activities where you can begin nurturing relationships with top-tier job seekers.

Job Conversion Rate

Job conversion rate refers to the number of successful hires relative to the number of vacancies over time. A low conversion rate indicates a poor return on your investment in recruitment processes. This metric is typically used to evaluate the effectiveness of individual recruiters or recruiting teams.
This metric is an important starting point for identifying strengths and weaknesses in your recruitment team. You can identify your highest- and lowest-performing recruiters and compare their habits and processes to improve your overall recruitment.

First-Year Attrition

First-year attrition accounts for the amount of turnover you see in your new hires’ first year. High attrition, or turnover, indicates potential problems in your ability to identify high-quality candidates whose values align with the company’s.
Evaluate whether attrition is managed (the manager’s decision) or unmanaged (the candidate’s decision). Neither is better than the other. Managed attrition could indicate poor values alignment or that your assessment process is measuring the wrong qualities in candidates. These factors affect the candidate’s performance once hired.
Unmanaged attrition often comes down to poor communication with the candidate regarding your expectations. Another cause could be not spelling out the scope of the role in the job description. If a candidate feels that you haven’t been honest about the work you expect them to do, they’re more likely to disengage and leave within their first year.

3. Assessing Completion and Experience

Metrics around completion and experience are often related to each other. When candidates have a better experience, they’re much more likely to complete the application and assessment processes. That gives you a wider pool of applicants to choose from and better data to help hiring managers make the right decisions.

Application Completion Rate

This metric refers to the number of candidates who completed the application — including any assessments — relative to the number of candidates who began the application. Assessing this metric, especially where candidates drop out, provides insights for improving your application process.
If candidates are closing the application before or during the screening assessment, for example, consider the factors that might be influencing their choice. Do they have to click away from the application, download an app or create an account on another platform to take the assessment? Consider how your application is delivered, its ease of access and what information you require candidates to input.

Assessment Completion Rate

More companies are implementing assessments across the hiring process. Monitor the completion rate for each assessment to determine whether candidates are having a positive assessment experience.
Determine where candidates are failing to complete assessments. If they’re not completing in-depth personality assessments, for example, that may indicate that they fail to see how such assessments are relevant to the role. Collect feedback from applicants to determine the root cause behind a low assessment completion rate.

Offer Acceptance Rate

The offer acceptance metric accounts for the number of candidates who receive a job offer compared to the number of candidates who accept a job offer. Getting to the end of the hiring process only to be rejected by your top candidate can extend the hiring process and cause you to miss out on other candidates who are qualified but moved on.
A low acceptance rate could indicate problems communicating the role to candidates, issues with compensation or a poor perception of the employer brand. Survey candidates to find out what impact the hiring process has on their perceptions of the company.

Candidate Experience

Candidate experience is an important metric to track. Providing a positive experience can make a crucial difference for your employer brand. Use surveys to determine your candidate Net Promoter Score.
This recruitment metric can help you pinpoint weaknesses in your candidate experience so you can address them. Some common factors to address include keeping candidates updated about their status, providing and collecting feedback, and using objective hiring criteria to make a fair decision.

Implementing Recruitment Metrics Best Practices

Monitoring these metrics is important for determining the success of your hiring processes. With baseline metrics in place, you can make small tweaks over time and gauge their impact. This helps you create a targeted plan for improving talent acquisition practices and producing better hiring results.
Tracking these recruitment metrics empowers you to devote your hiring budget and resources to where they can make the biggest difference to your business.

Aon | Assessment Solutions

Aon's assessment solutions provides clients with powerful tools and insights to help them make better talent decisions at every stage of the employee lifecycle. This includes pre-hire assessments, identifying future leaders, screening for digital skills and agility, and AI-enabled solutions.

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