Recruiters are responsible for successfully hiring new tech talent for the organization but how would you know if your recruiting team has done a good job? How can you assess whether a better candidate could be hired from the shortlisted candidates or maybe in the lesser pay? There are many aspects to be considered to determine whether Talent Acquisition was successful or not. This is where recruitment KPIs (Key Performance Indicators) came into play. KPIs are set to evaluate the success rate of a job. High-level KPIs usually focus on the overall performance of the organization but low-level KPIs are set to measure the success rate of departments such as sales, marketing and HR.
What are the recruitment KPIs?
Recruitment KPIs are specific metrics that measure the effectiveness of Talent Acquisition. Recruitment KPIs, also known as talent acquisition KPIs are very crucial as they are used to analyse not only recruitments but also the hiring process used by the recruiters. To get accurate results, companies often develop proper metrics, consisting of various KPIs for conducting a detailed evaluation of every recruitment done. Such talent acquisition metrics allow hiring managers and executives to assess the strength, efficiency and skills of recruiting teams. Indirectly, these recruitment KPIs also audit the performance of recruiters during the recruitment process and identify the evaluate them.
Numerous KPIs exist to measure different aspects of recruitment but following 5 recruiting KPIs are the most important KPIs for recruiting. These 5 top recruiting KPIs covers every important aspect of the recruitment process, thus delivering an accurate rate of success for your recruitment.
Below are the top 5 Recruitment KPIs for measuring talent acquiring success in the organization.
1. Cost per hire
Hiring is like any other investments done by the company in exchange for a service. In an ideal situation, every company would desire to hire the best talent available but it is not practical due factors like budget and time constraints. Cost per hire is the amount spent on every recruitment. It is one of the top recruiting KPIs as it would straight away indicate whether the return on investment is profitable or not. Recruiters need to be sure they do not spend more than allotted cost during the hiring process.
This cost includes all expenses that are directly or indirectly associated with the hiring process such as sourcing cost, third party agency fees, employee referral program costs, Marketing cost, Ad Postings Cost. This budget would vary with the position haring is done for. For instance, if hiring is done for an office head position than this cost would also include several other allowances such as travel cost and compensations. Here recruiters have to make several decisions such as they have to find possible ways to cut the cost of hiring without sacrificing the quality of your hire or while hiring the correct candidate if investing a bit more amount can result in significant improvement in the quality of hire.
It is one most common recruiting KPIs as well because the cost per hire is easily quantifiable and can be easily controlled as compared to other recruitment KPIs making it easier for recruiters to maintain their efficiency.
2. Time per hire
Similar to cost, time is yet another investment made by the organization during the recruitment process. Time to hire is the time required for the complete process of recruitment starting from job posting till hiring is done. This time can range from days to even a couple of months, depending on the frequency of open positions and their significance in the organization. Time consumed in ad postings, receiving applications, shortlisting, interviews, task assignments and final hiring formalities like negotiation are all separately monitored to identify the time taken at each stage so that if any stage takes unexpectedly takes more or less time then it could be assessed right away. It also helps in identifying if there are any bottlenecks present in the hiring process, any tasks that could be eliminated or can be performed parallelly to reduce the time taken and speedup the process.
By already having an estimate of how much time it will take in the hiring of a new employee, Recruiters can forecast the completion time of every stage and can construct their entire recruitment strategy accordingly. They will be able to calculate when the recruitment campaign should be started to get the new hire at the right time. In this way, you can prevent HR teams from getting overwhelmed and ensure that the quality of hiring does not get affected.
Despite being one of the easiest recruitment KPIs to measure and keep in check, it is among the most important KPIs for recruiting. Time becomes a very important factor in certain cases for instance if an employee replacement is required for an ongoing project on an urgent basis or a talented candidate, present in the queue has been approached by another company and he or she must be assessed before the competitor make a more pleasing offer. In such situations, the time required for hiring needs to be as short as possible to get the hiring done in time before any delays in projects. Such a delay in the hiring process can also affect your company’s brand and, more importantly, the quality of your hires. Even if your competitors are not involved, your best candidates could still leave in between application process if they feel that their skills or time is not respected.
Hence, the time taken for hire is one of the top recruiting KPIs if you are trying to increase your recruitment efficiency.
3. Quality of Hire
Quality of hire is the most important KPI for recruiting. Measuring the quality of the hire can determine, whether the right person is hired for the position or not. The success of hiring can be determined from this single recruiting KPI because the quality of a recruit has clear priority over other recruiting factors like time taken during hiring or cost of hiring. For instance, if a candidate is ready to join work right away and is willing to work in lesser pay, despite that, his quality of work will be assessed first before making any decision.
So far mentioned KPIs like cost and time were straightforward metrics. They are quantifiable but the quality of hire is not that simple. The Quality of hire is a very subjective matter. It would significantly vary from organization to organization, position to position and even from project to project. As a result, the factors considered while evaluating the quality of hire also vary a lot even within the same organization. Performance reviews, hiring manager satisfaction, feedback from project lead and performance evaluation of hired employee are some core components used for measuring the quality of hire.
Although every hire would be different and it can be very difficult to decide if an employee is a right fit for a job before he works on the project for a significant time but recruiters can set some criteria from the previous hiring to estimate if someone could be right for your company or not.
Examining the quality of hire can also reveal many insights about your recruiting strategy. It can also help recruiters determine the ideal source of their best candidates. After assuring the quality of hire, it can be easily determined what kinds of candidates have been your strongest performers, what is their source and what screening methods surfaced them.
4. Rate of Job Acceptance
The rate of accepted job offers is another important recruitment KPI for measuring recruitment success. Recruitment is a two-way process so it is a likely possibility that the candidate does not accept the offer made by the company. There can be several reasons behind the disapproval such as a good offer from a different company or offered a raise or promotion from his current employer. As far as denial is due to external factors, the recruitment team have no control over but it must be not due to any reason concerning your organization.
A refusal should not be the result of cultural difference, unsatisfactory compensations, or unsuccessful negotiation from your side. A low rate of job acceptance will not only cost more time and resources but it is also alarming sign for recruitment strategy. This would indicate there are certain problems in the recruitment process that you will have to resolve.
This is also one of rare recruiting KPIs where it helps you in optimizing your assessment process which is the final stage in recruitment. You can alter the assessment process according to the rate of acceptance from the candidates applying for the position. If candidates leave halfway through the assessment or not accept the job, you can review the length and redundancy in the process.
Monitor your acceptance rate and work on maintaining it by carefully examining every candidate’s motivations and their expectations regarding pay, work environment, culture, job scope as early as possible in the hiring process. If a candidate is talented enough to be a quality contribution in the organization than try to cater him according to his needs try to convince them during negotiation.
5. Adverse Impact
We always want the hiring process to be unbiased for every candidate. to be aware of any biasedness One recruiting KPI for evaluating the rate of diversity is adverse impact. Adverse impact is for measuring the negative consequence during job screening in the hiring process. It is one of the most sensitive recruitment KPIs.
To avoid any intentional or unintentional biases, certain rules are set to keep the recruiting process equal for all. This recruitment KPI primarily aim to satisfy the candidates from a protected class, such as women, or people from a specific race, from specific demographics or differently-abled.
Recruiters and HR managers would strongly agree that workforce diversity has proven correlations with increased employee performance. It is now mandatory for recruiters to make sure that unbiased selection methods to be used while assessing a protected group. Calculating adverse impact also helps in maintaining diversity in the organization.
To evaluate adverse impact, you can divide the applicant success rate of your protected class by the applicant success rate of your non-protected class. This number can help you identify if your recruitment process is more inclusive and diverse. If the adverse impact is identified, the recruiters must check their recruiting process to find the source of it. Also, make sure that your application process is not accidentally biased.
Some other notable Recruitment KPI
5 recruiting KPIs mentioned above are the most important KPIs for recruiting but along with these fundamental KPIs, some other notable KPIs can also be measured if you have the required resources, budget and time for more evaluations.
Such recruitment KPIs Includes,
- Qualified candidates applied for every opening
- Application completion rate
- quality of sources of candidates
- Candidate satisfaction
- Hiring manager satisfaction
And many others.
Recruitment KPIs are not only used for keeping the performance of recruiters in check but It also motivates recruiters to perform better and acquire the best possible talents for their company. In recent times, Talent acquisition professionals are competing for head-to-head in hiring the best talent for their company, these KPIs helps them in self-evaluation as well as help them in getting better insights necessary for time-to-time changes in the recruitment process.