Recruitment Metrics: Important key performance indicators (KPIs) used to measure the effectiveness of the recruitment process

May 07, 2024

As per one survey result, 82% of companies rank data as crucial in making their recruitment decisions. Translation is that if your company is not measuring recruiting metrics that are relevant to the business, it could be losing top talents and risk falling behind the competitive group. With more and more advanced recruitment processes coming up, the future of recruitment outsourcing will have something to offer in terms of learning and guidance, thereby enabling your firm to concentrate on its strategic staffing targets.

Recruitment KPIs, which are the navigational tools for your company's recruitment strategy, are the compass that will guide your recruitment strategy. These KPIs do not just concern metrics, but they also serve to bring your recruiting strategy in line with your main business goals.

This blog is going to allow you to see why recruitment metrics are important and which important metrics you should be tracking to measure your efforts.

What are recruiting KPIs?

Recruiting KPIs (Key Performance Indicators) are quantifiable measures that gauge the success of your hiring efforts and the performance of your recruiting team. By understanding these metrics, you can evaluate how effectively your recruitment strategy is progressing toward your goals and decide where to focus your resources for improved results.

Although, KPIS may look like simple numbers at first, analyzing them in relation to your company's objectives reveals crucial insights into your recruitment strategy. This analysis helps identify your strengths in engaging with potential candidates and areas where adjustments are needed for better outcomes.

When reviewing your KPIs, it's essential to have a reference point for comparison. You can evaluate your metrics against industry benchmarks or your own historical data, such as month-over-month or year-over-year trends, to determine your progress and identify areas for improvement.

How to Set KPIs for Recruitment?

Recruitment process key performance indicators (KPIs) can guide you in evaluating the success of your hiring strategy and identifying areas for improvement. Answer these questions to help you decide which KPIs to focus on:

  • How frequently do we find suitable candidates for specific job openings?

  • How long does it take to hire for specific positions or teams?

  • What is the cost of sourcing and engaging with qualified candidates?

  • What percentage of qualified applicants reach the interview stage?

  • How many interviews are needed before hiring managers choose a candidate?

  • What is the average time to recruit a qualified candidate?

  • How does our compensation compare to our competitors?

  • How do new hires view our recruitment process?

  • How many internal referrals do we receive for open positions?

Sometimes there can be an overwhelming amount of HR and recruitment data, understanding RPO services and KPIs can help simplify the analysis by highlighting trends, benchmarking against similar companies, and assessing metrics like hiring costs. This approach lets you identify which recruitment efforts are effective and where improvements are needed to improve the recruitment strategy.

Important recruiting KPIs to track

It is important to gauge your company’s recruiting and growth goals while deciding which KPIs to focus on. Here are some of the important recruitment KPIs to get started with:

Qualified candidates per opening

As a company, we want many candidates to apply for the job opening. It is obvious that the more candidates there are, the more options there will be to choose from.

But if these people are not the best fit for the position, you will be wasting your time. If you are failing to connect with the ideal candidates it might be due to weak job postings or not distributing them through the right channels. It could also indicate that your expectations for candidates are overly ambitious.

To understand whether there's a deeper problem, you can track the ratio of qualified applicants per job opening. 

This key performance indicator (KPI) measures what proportion of people applying for each position meet the basic qualifications for the role. A simple way to determine if an applicant is "qualified" is if you advance them past the initial hiring stage.

Tracking this KPI allows you to assess whether you're targeting the right audience from the start. If the ratio of qualified applicants is low, it might be a sign that you need to revamp your job listings and refine your recruitment strategies to reach more suitable candidates.

Therefore, considering the importance of an RPO company and Offshore Outsourcing in your recruitment efforts can help you maintain a strong pipeline of qualified applicants. By tracking this KPI, you can ensure your recruitment process is efficient and aligned with your company's growth goals.

Application completion rate

If you find that there is a large number of candidates who begin an application but never follow through, then you are probably passing up on many qualified persons. So this group of people just leave the app because they get distracted or discover that they are not the right fit for the job. On the other hand, it is also possible that a high number of incomplete applications means that you have a complex application process.

To measure how fast candidates proceed through applications, divide the number of complete applications by the number of applications that were started.

Source quality

It is necessary to achieve the best results from every recruitment technique you use, when the resources are scarce. If you are bringing in potential employees from multiple places including job boards, LinkedIn, or employee referrals then you should be concentrating on the sources that deliver the best talent. It is in this stage that the RPO Recruitment Technology comes with a crucial role in bringing your recruitment process to a more effective one.

Through the evaluation of your sources, you are able to filter out A-rated ones and, thus, save your recruitment time and efforts. This consequently assist you to develop the best possible and consistent talent pipeline enabling you to optimize your recruiting process.

To gauge source quality, consider the number of top candidates coming from each source. Much like determining your total number of qualified candidates, examine which sources yield the applicants who progress the furthest in your hiring process. Look and examine the trends to identify any significant patterns. You might find that the majority of your most promising candidates come from a single source. For example, if most of your top applicants are from employee referrals, it could be a sign to bolster your referral program.

Time to hire

This recruitment metric refers to the duration between when a candidate applies fo the job position and when you bring them on board. This includes every step in the process, not just from the point of extending an offer.

Knowing the length of the hiring process helps you make better forecasting of your labor force needs and develop your recruitment strategy better. Aware that the process is rather lengthy and takes about two or three months, it is advisable to begin the hiring campaign early enough so that the new worker join when needed.

When you realize the time needed for Healthcare Staffing or any other Business and plan ahead for it, your team will be spared from being overloaded and keep business up to speed. The knowledge of its hiring timeline helps to identify the reasons for delays, and therefore you can start addressing them and refine your hiring process, so as to reduce the time to hire.

Quality of hire

Measuring a new hire’s quality is done by establishing how well the new recruit aligns with the values and objectives of the organization and the job description. This can be a difficult task as the "quality" of service can be different depending on what you, as a company, need and what you are trying to achieve with your marketing strategy. For the sake of designing a right metric for your business, in the first place define what quality is.

One measure to be taken is to test the time a new employee needs to be at the optimal productive level and their compatibility with the company's culture. From the managers' perspective, the satisfaction that comes with the employee's performance can also be taken into account. The appraisal of whether the new hire is successfully integrated into the ecosystem of your organization and the degree of their impact on it will help you assess whether he/she is the right person for the position.

The complex nature of the candidates and the unpredictability of the human behavior prevents us from the complete and accurate knowledge about the best fit person until he or she has already started working. Such analysis of trends associated with the successful hires and those, who for some reason, didn’t make it to the expectation level, can help establish some qualities predicting a quality hire. Such data can give you a clue of the best recruitment strategies as you will be able to fine-tune your selection process, thus landing the right candidate for the position.

When comparing RPO vs. staffing Companies looking for a higher caliber of hires might prefer RPO due to the fact that it deals with recruitment strategies on a more holistic level and offers the candidates a thorough screening.

Cost per hire

Recruiting new employees costs money, so it's important to know if you're getting good value for what you spend. "Cost per hire" tells you how much it costs on average to hire someone new. It helps you avoid overspending and also lets you plan your budget when you're expecting to hire more people.

To keep your costs in check, you should look at the average cost per hire and also review the cost of each individual hire. This way, you can find out where you might save money without lowering the quality of your new hires. It also helps you see if spending a little more can lead to better candidates. In short, understanding your cost per hire can guide you in spending wisely on recruitment.

Wrapping Up

In summary, tracking recruitment metrics can provide powerful insights into improving your recruitment process and achieving better results. Once you understand that your decisions and behavior directly affect your hiring results, you will implement specific practices to improve your hiring process and achieve your desired goals.

If you want to learn more about the What is RPO and other recruitment metrics you can track and the insights you can receive from our RPO services, contact Collar Search today!