October 27, 2022
What happens to a business when you don’t track any metrics? Performance stays undefined and growth cannot be attained as the business processes don’t improve. Whether it is sales, marketing, revenue generation, or recruitment – measuring multidimensional results is the key to optimizing your functions. For instance, you cannot work on improving your margins if the customer acquisition cost is unknown. Talent acquisition is one of the most critical verticals of a business and similarly, recruitment metrics play a decisive role. A company’s trajectory is driven by the hiring team, so it’s imperative that their performance is tracked.
Recruitment teams need to follow a data-driven approach today to produce long-term impact – 70% of hiring managers agree to this too. Not to forget – if one needs to beat the enormous competition over talent, and win the race against time, continuous improvement is a necessity. Intuitions and assumptions in recruiting don’t work anymore. Tangible facts have to be referred to build your hiring strategies. Although data-driven efforts were pretty difficult to execute efficiently earlier, a plethora of analytics software and tools are available now for analysis.
But why exactly do you need recruitment metrics? While three of the core factors are time, quality and cost of hiring – as they significantly contribute to the overall business optimization, you need to dig in deeper for extracting actionable strategy on your recruitment metrics. In this blog, we will discuss the top recruitment metrics, why they are important and how you can track them to step up your recruitment game. Let’s dive straight in.
The evaluation of your hiring methodology and recruitment team’s success is done through measurements known as recruitment metrics. Not only do these metrics help you track hiring success, but also enable the optimization of your entire recruitment funnel through performance analysis.
At ground level, these metrics tell you whether you’re hiring the right people for your company and if you’re doing it the right way. In order to set quantifiable recruitment objectives, and help your hiring teams make educated choices and get the most optimal ROI – following recruitment metrics effectively is vital.
The most common characteristic that differentiates top hiring managers in the world is the amount of analysis they do with data and metrics. It’s a more competitive landscape than ever and growth can sustainably be attained by taking foolproof decisions. As a recruiter or as a business owner, recruitment metrics can help you in multi-dimensional ways. Here are the primary reasons to track them:
The list of recruitment metrics that you should track is fairly long. However, we did the heavy lifting for you in filtering out the most important ones:
The time (in days) between the application or sourcing of a candidate and the onboarding, is referred to as time to hire.
Did you know that top talent is available in the market for only 10 days before getting hired? It’s one of the many big reasons why you need to track and optimize your hiring time. As the metric reflects the time taken by a candidate to travel through the entire recruitment cycle for an organization, it directly conveys the efficiency of the recruitment process and the team. It is a significant measure because the entire growth strategy depends on it, and projecting the time required to fill a position becomes an important requirement.
All organizations ideally want to minimize their time to hire, but it’s a tricky metric – why? Because as an enterprise, you don't want to compromise on the quality of hire at the same time. Not to forget – time of hiring will also help you figure out the existing performance bottlenecks in your recruitment process.
One of the recruitment metrics most organizations are concerned about, hiring cost is defined as the total cost incurred in the process of acquiring talent – from sourcing to onboarding. While framing the yearly financial plans, the hiring budget is taken as a priority. It is a crucial metric because there’s never a single source of sourcing candidates for your company. The list of hiring expenditures widely varies – job posting sites, social media ads, agency costs (if any), referral rewards, administrative expenses and more.
To understand your hiring expenses comprehensively, you can utilize the ‘cost per hire’ metric which covers the following:
It should be noted that hiring cost is also directly proportional to hiring time. The higher time it takes to hire a candidate, the more expensive it is because human resources costs add up. To optimize hiring costs, the time of hiring must be worked upon and the channels generating the best results for sourcing should be entirely focused on.
Optimizing the time and cost of hiring is meaningless if the hired candidates do not satisfy the required skillset and competence.
Hiring quality is defined by the performance rating of a candidate usually given as the first-year performance report. Managers, team leads and vertical heads are often expected to review the hiring quality through performance ratings. The measured performance rating is further used as input to calculate the success ratio of a company. It’s nothing but the ratio of candidates with satisfactorily performance ratings to the total number of hired candidates. The quality of hire is undoubtedly the topmost metric that comes to stakeholders’ minds while analyzing recruitment performance. It helps in figuring out if financial resources and human efforts are being invested optimally or not.
As the name defines – it’s the ratio of the total number of candidates applying for a job to the number of candidates hired. Applicant-to-hire ratio is often overlooked but is a crucial metric. Here’s how – suppose you’re not receiving enough applications even after posting numerous openings, it’s a sign that the job specifications are not clear. It can also be about the hiring process is too complicated, or your job posting is not reaching the right candidates.
A data-driven approach like leveraging targeted advertisement can be a great way to improve this ratio. Additionally, recruitment marketing strategies along with automated email campaigns can be immensely helpful too.
Finding out the primary sources from which your top candidates and applicants are coming up is invariably important. Not only can you figure out where your target candidates are usually found, but it would also help you crack the recruitment marketing game. Keep tracking if it’s your website's careers page, certain job posting websites, third-party job ads or social channels that are bringing in more candidates.
Secondly, you should also track the sourcing channel's effectiveness. For each channel that you utilize for sourcing candidates:
Tracking your top sources of hire help you analyze the channels which are not producing positive ROIs for advertisement spending, and which job posting sites are delivering results. Hence, you can optimize your hiring budget while improving the results of hiring too.
No matter how quickly you hire, how good the quality of talent is, or how much you optimize the hiring budget – if the talent isn’t staying in your company for at least more than a year. The attrition rate tells you about the rate at which your company loses employees over a given time period. A high attrition rate is often expensive for all companies regardless of their scale and headcount. Organizations also measure ‘first-year attrition’ because that’s where the hired employee isn’t delivering maximum value to the organization as per their potential. The first year is a lot more about learning the job and understanding the company culture.
Although a variety of reasons might force people to leave their employer, the attrition rate still tells you about the quality of the recruitment process. You will find out if the right roles, responsibilities and expectations are being conveyed by the hiring team or not.
Tracking metrics, analyzing the hiring process and improving it, are all aimed at one goal – acquiring the best talent for your organization. Recruiting teams have a plethora of tasks from posting jobs, and sourcing passive candidates to engaging with the candidates, assessing them via interviews and consistently maintaining the recruitment pipeline. It can very easily be overwhelming for you to do it all manually.
Wouldn’t it be absolutely satisfying if you were allowed to focus on the human side of recruiting, which is conducting interviews and evaluating candidates?
Nurturebox enables you and your hiring teams to comprehensively automate candidate sourcing, engagement and talent pipeline management. Safe to say - the three most hectic tasks of a recruiter’s alley. And not to underestimate – automating candidate sourcing will significantly improve your time to hire and quality of hire while cutting down costs associated with hiring. So as per both human efforts and business optimization metrics, automating your candidate sourcing is a smart decision.