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When the hiring process works like a well-oiled machine it’s easy not to overthink it. But when there’s talent drought or a kink in the machine, it helps to take a closer look under the hood. If you don’t know what’s broken, you won’t know how to fix it. You can track the strength of your hiring process with recruiting metrics.
This is the only way to know if your hiring processes are working for your recruiting team. Recruiting metrics will tell you about your team and candidates if you learn to read between the lines.
Here's my list of the 15 most important metrics. I'll share how to calculate them (where possible), and what they mean to your hiring process.
1. Time to Fill
Time to fill examines how long it takes to fill a job opening. This measures the number of days between the job requisition order and a signed offer.
You can identify weak points in the hiring process like talent shortages or skills gaps. This helps your recruitment team plan ahead.
A longer hiring process may cause candidates to move on and lose interest. A rushed hiring process can mean that you end up with a bad hire. To secure the best candidates, a balanced time to fill is essential. The SHRM benchmarking report states the average time to fill as 36 days in 2017 with the median at 30 days.
How to Calculate
Simply track the days between approved job requisitions and candidate acceptance.
2. Time to Hire
This measures the number of days it takes a candidate to move through the hiring process. This recruitment metric relates to the productivity of the recruiting team. A shorter time to hire can mean a better candidate experience and result in more employee referrals.
If you're hiring for a niche role with complex requirements, it's natural that the time to hire will be longer. Bear this in mind when interpreting this important metric.
How to Calculate
Average number of days from the start of the recruiting process to an accepted offer.
3. Sourcing Channel
Here we investigate the quality of channels where you are finding candidates. A graph or other visual aid can help you to understand where you find the majority of your talent. Some examples are social media, job boards, or the company website.
How to Calculate
Review where each hire's application originated from. Track to a spreadsheet and measure.
4. Conversion Rate or Fill Rate
The conversion rate is the percentage of job vacancies filled compared to the total number of open vacancies.
High fill rate > Low fill rate
When fill rates are low it can suggest that the recruiter requires clarification or that a more efficient hiring process is needed.
How to Calculate
Total positions filled ÷ total job openings x 100
5. First-Year Turnover Rate
A high turnover that happens for candidates under one year of tenure is a red flag for the recruiting team.
New hires that leave their position within the first year may be from a lack of proper onboarding, misaligned expectations, or a lack of culture fit.
How to Calculate
Number of hires who leave in year one ÷ total number of hires
6. Candidate Experience
To understand how talent rates your onboarding and hiring process, try asking them with a survey. The Net Promoter Score (NPS) survey helps flesh out key areas for improvement. It’s better to get this feedback firsthand than to be notified by a negative tweet or Glassdoor review.
Talent Board published a candidate experience resentment calculator that determines your revenue losses if applicants are also customers.
Improving on candidate experience protects company reputation, prevents loss, and drives revenue.
How an NPS Survey Works
Sample question: “On a scale from 1-10, how likely are you to recommend this application process to a friend or colleague?”
Subtract all candidates who answered 9/10 from candidates who answer between 1-6.
The score that remains is -100 to +100. A score of 0 is good and a score of over 50 is excellent.
7. Quality of Hire
When you examine the number of candidates who accept their job offer and the number who have stayed it indicates the quality of loyal hires.
Quality of hire distinguishes the difference between having a high number of candidates and the best candidates.
How to Calculate
Number of candidates accept job + candidates who stay ÷ 2
8. Applicant Drop-Off Rate
A drop-off rate measures the number of applicants who apply for open roles but don't complete their application. A low drop-off rate can be a sign of positive candidate experience.
A low drop-off rate also means you have access to more quality talent, which is excellent for the team. Qualified candidates know that their job applications will go far. They won't often waste time on clunky recruitment processes.
Optimize the drop-off rate with better user experience design and fewer steps.
This leads to funnel effectiveness.
How to Calculate
You can calculate the applicant completion rate and then subtract from the total number of applicants to get the drop off rate.
To calculate applicant completion rate:
# of submitted applications ÷ total # of candidates who started an application = application completion rate
9. Recruiting Funnel Effectiveness
To understand the total recruiting process, you'll need to learn how effective each stage is. This is referred to as a yield ratio.
Automation supports the start of the hiring process to filter candidates. Funnels, as a result, are a constant work in progress.
Know that your yield ratio is a metric that will change as your recruitment methods and sources shift over time. They should be periodically re-evaluated.
How to Calculate a Yield Ratio of Stage X
# of applicants who completed the stage ÷ total # of candidates who entered at stage X
10. Hiring Diversity
The World Economic Forum reports that diverse teams enjoy benefits like increased innovation of up to 20%.
Know how to provide a balanced and unbiased hiring process by evaluating the current diversity makeup in your team.
How to Calculate
There's no magic formula to calculate diversity hiring. Start by assessing the types of representation in leadership. Ensure that third party recruitment tools incorporate diversity awareness into their hiring practices.
11. Cost Per Hire
Cost per hire includes all financial burdens on recruiting internally and externally.
Examples of costs are hours billed, recruiter fees, advertising, and software costs.
Knowing your cost per hire metrics helps to budget for future hires and ensures that recruiting efforts are worthwhile.
How to Calculate
(Total internal costs + total external costs) ÷ total # of hires
12. Hiring Manager Satisfaction
This metric goes hand in hand with the quality of hire. When hiring managers are happy with new hires it can mean enhanced productivity. When new employees fit in it means a smoother onboarding process, lower turnover, and successful hires.
How to Calculate
Measured by way of survey or regular assessment
13. Reach for Hire
Determine the total number of job seekers reached with recruiting campaigns or job postings using reach for hire. Measuring reach for hire against responses can give you a sense of how effective your advertising is.
Be aware that some followers may overlap between networks so it isn't a perfect metric.
How to Calculate
Add up all the followers and connections via social networks
14. Offer Acceptance Rate (OAR)
An OAR is exactly what it sounds like. You track how many applicants accept the job offers given.
If offers are being rejected it can be a sign that your salary is not competitive with the market.
If OAR is low in one department, the hiring manager may need training on interview techniques. Any OAR below 30% requires strategic re-evaluation.
How to Calculate
# of offers accepted ÷ total number of offers = %
15. Optimum Productivity Level (OPL)
OPL represents the ramp-up time it takes new hires to hit their stride in their new role.
This starts from the first day of work and ends when they make a contribution to the bottom line.
According to research by Oxford Economics, the average time a new employee takes to reach their OPL is 28 weeks.
How to Calculate
This cost will waver significantly depending on the new hire's seniority, the size of the company, and resources available to the new hire being onboarded.
Recruiting Metrics Build Strategy
These 15 recruiting metrics can save time, help with budget planning, and test process effectiveness. Stick to the most important metrics rooted in your business goals and it will prevent analysis paralysis.
Try Prelude to enhance the candidate experience and free up your recruitment coordinator’s time. It syncs with your applicant tracking system to streamline candidate data and make scheduling interviews super easy. When it comes to how you hire for future roles, streamlining unnecessary coordination efforts make it easy, efficient, and enjoyable.
