12 Recruitment KPIs To Determine Hiring Success
Recruitment KPIs = Informed Decision-Making: Recruitment KPIs help track the effectiveness of your hiring process, from sourcing candidates to onboarding.
The Difference Between KPIs and Metrics: While KPIs are specific indicators that align directly with business objectives, metrics provide broader data on various aspects of the recruitment process.
Recruitment KPIs for Continuous Improvement: Regularly reviewing and adjusting your recruitment KPIs allows you to stay agile and responsive to changing business needs.
Have you ever made a hiring decision that you came to regret? If so, you know how important of a decision it is and how valuable any piece of information can be in helping you make the right call.
With that in mind, it’s time to discuss recruitment KPIs and how they can help you monitor the success of everything from your decision-making to your use of recruiting software.
What Are Recruitment KPIs?
Recruitment KPIs are basically a pulse check for your hiring process. They help you identify what is working and what is not working, where you can improve, where there are gaps, and if you are hitting your goals.
It can be tracking how long it takes to fill a role or the quality of your onboarding process, each touch point allows you to adjust as needed for a smoother recruitment process.
Benefits Of Recruiting KPIs
Using KPIs is not only essential for process improvements but has various benefits, including:
Better decision making
Recruitment channels can be costly, and with many options available, it is hard to figure out which one to choose.
Here is where KPIs come in handy. It helps you identify where your best qualified and most high-value candidates come from, so you can focus on that channel vs others and invest your money to get the best candidate in your pipeline.
Improved processes
The recruitment process involves different stakeholders and inputs. KPIs allow you to identify any bottlenecks in the process and improve the flow of the overall process. This is notably a big help when conducting a recruitment audit.
Cost control
KPIs allow you to identify where your recruitment budget is best invested across different parts of the recruitment process and consider both internal and external factors.
Aligning with the business
KPIs allow you to track specific metrics around hiring talent, from diversity to filling specific roles/projects to ensure you are on track with business needs.
What’s The Difference Between KPIs And Metrics?
KPIs and metrics both track performance but they serve different purposes.
KPIs are specific and align directly with your business goals, helping you track success in essential areas. Metrics are wider measurements that provide data on specific aspects of the operation but are not always tied to strategic business goals.
In short, all KPIs are metrics, but not all metrics are KPIs.
Role of KPIs in the recruiting process
In the recruitment process, KPIs are like your main checkpoints - they help you track the most important parts of hiring that are directly aligned with your business goals.
For example, KPIs might cover things like time-to-fill, quality of hire, or candidate experience.
Role of metrics in the recruiting process
Metrics are more day to day data that give you a larger picture of what’s happening in your hiring process.
For example, how many resumes were screened? How many people moved down the recruitment pipeline? Metrics provide insights that can help fill gaps that might exist in your recruitment process.
Examples of KPIs and Metrics
KPIs:
- Time-to-fill - the average number of days it takes to fill a position from when it is posted to when an offer is accepted.
- Quality of hire - measurement of retention of new hires within a period of time (usually a year) and performance rankings of the new hire.
- Cost-per-hire- the total cost of recruiting and hiring divided by the number of hires
- Candidate experience - feedback from candidates on their experience throughout the recruitment process.
Metrics:
- Interview-to-offer ratio - how many were interviewed vs how many received offers
- Number of applications received - total number of applications for a specific job
- Offer acceptance rate - the percentage of offers accepted by candidates
- Source of hire - which channels candidates are coming from - job boards, referrals, or agencies
The 12 Most Important Recruitment KPIs
At this point, you’re probably wondering which KPIs are must-haves and which ones are secondary to measuring your performance on the recruiting front. Let’s take a look at the most important ones.
Time to hire
Time to hire reflects on the candidate's experience, as well as the company’s ability to fill a role. Companies that take too long to fill a role need to take another look at their hiring practices, what they look for, and any bottlenecks that might exist.
On average, it takes 45 days to fill a role, anything beyond that would begin to impact the company and the candidate's experience negatively.
Tips to reduce time to hire:
- Make sure you work with hiring managers to narrow down what is important in that role and review the job description carefully to uncover what are the deal breakers and where you can be flexible when screening candidates.
- Streamline your interview process and avoid going beyond 2-3 rounds of interviews.
- Use recruiting software features and emerging tools, such as AI, for scheduling interviews, communicating with candidates, and providing feedback.
Cost per hire
Cost per hire is an important number to know for budgets and understanding where the money goes in the hiring process.
Tips to minimize your hiring costs:
- Utilize internal staff for referral programs to minimize using external agencies and channels. Referral programs are quite effective if implemented correctly.
- Think about long-term brand building - build an employer brand that brings highly qualified candidates your way without having to source.
Quality of hire
Quality of hire looks at the value the new hire brings to the team, including their retention rate, how well they perform in the role and overall cultural fit for the team. It is essential if you want to ensure maximum ROI on hires.
Tips to improve your quality of hire:
- Train your hiring manager to effectively interview and screen candidates
- Create a solid interview structure that allows you to ask the right questions of the candidates, provide assessment where possible, and allow for enough time to interview.
- Ensure your onboarding experience is effective, including making sure hiring managers set clear expectations for the new hire. Spend time to mentor in the beginning where needed, do regular check-ins, and provide the new hire with all the needed resources, information, and access.
Offer acceptance rate
The offer acceptance rate measures how many job offers were accepted by candidates.
It tells the company how well you are positioned in the market compared to the competition and if your employer brand is attractive - aka people want to work for your company.
Tips to improve your offer acceptance rate:
- Do a competitive analysis of your benefits offerings and improve where you can to ensure you remain competitive in the market.
- Make sure your company understands what each generation is looking for and be able to provide that. For example, the Gen Z generation often looks for flexibility vs Baby Boomers are more likely to look for good pay and stability.
- Be able to communicate the company values, mission, and overall culture during the hiring process.
Candidate satisfaction
Candidate satisfaction refers to the candidate's experience during the interview and hiring process. It is essential for all candidates to have a positive experience, whether they get hired or not, as it reflects on the company brand and can be expressed easily on platforms such as Glassdoor.
Tips to ensure your candidate experience is a good one:
- Communicate timelines and processes to candidates throughout each step of the process
- Keep the process simple, provide them with helpful information and what to expect at each step of the process.
- If a candidate is not hired, provide feedback on why that is - this is very much valued by candidates.
Source of hire
Source of hires tells where the most qualified candidates come from - platforms such as LinkedIn and Indeed, referrals, or social media.
It helps you understand where to invest and where to put focus, helping optimize recruitment marketing strategies and developing an approach to recruiting SEO for your job ads.
Tips to optimize source of hire strategies:
- Identify and create a comprehensive strategy for using the most effective platforms/sources so the team can focus on utilizing those
- Explore different channels, experimenting with ways to tap into different talent pools. For example, for roles that require security clearances, it is helpful to utilize platforms that can help you source already cleared candidates, which helps speed up the recruitment process.
Retention rate
Retention rate is how long employees stay with your company over a certain period of time. It speaks to your culture, job satisfaction and progress, the effectiveness of onboarding processes, and your leaders’ skills as people managers.
Tips to improve employee retention:
- Prioritize the hiring, onboarding, and first 90 days for a new hire as a key time to optimize their experience.
- Create opportunities for people to learn, grow, and get promoted.
- Train your managers to be great people leaders, not just managers.
- Foster a culture of recognition, teamwork, and continuous learning.
Diversity hiring
Diversity hiring looks at your company’s ability and track record of bringing on board people from different backgrounds. It helps promote innovation, creativity, and various other aspects of your teams.
Tips to ensure you are hiring diverse individuals:
- Train your managers on bias training when hiring
- Expand your reach to platforms, communities, and organizations that can give you access to a diverse talent pool.
- Don’t only hire for diversity, ensure that data and your hiring teams’ consensus line up with it being a suitable pick as well.
Application completion rate
Application completion rate measures how many candidates actually complete your application process.
For example, if your company’s application process includes various steps, complicated application fields to fill, and unnecessary documentation, it can deter candidates from completing the application. A low rate tells you that you probably have some issues with your application.
Tips to ensure your application process is smooth and increase candidates’ submission rate:
- Keep it simple! Don’t ask candidates to add their resumes and then have them manually resume-related fields right after.
- Avoid asking unnecessary long-answer questions or essay-type questions.
- Ensure your application process is mobile-friendly. Candidates will often use mobile phones to complete the application.
Interview-to-offer ratio
Interview-to-offer ratio measures the number of interviews conducted compared to the number of offers extended. It helps you understand the efficiency of the interview process.
If you are hosting many interviews, but no offers are made, there could be an issue with your sourcing, interviewing style or complexity of the interview.
You're probably wondering, what's a good ratio? According to CareerPlug, the average interview-to-hire ratio in 2023 was 36%.
Tips to increase this ratio:
- Make sure hiring managers and other relevant interviewers are trained on proper and effective interview skills.
- Ensure your recruiters are pre-screening candidates effectively and passing along only those that are fully qualified.
- One of the benefits of recruitment software is that it allows you to manage processes involving multiple stakeholders with ease, but all of those stakeholders need to understand how to use it.
First-year attrition rate
This metric measures how many employees leave in their first year. If you have a lot of people leaving in the first year, it is likely that there are gaps in your onboarding, job satisfaction, culture, or managers’ skills in people leadership.
Tips to make sure people stick around:
- Continuously improve your onboarding experience.
- Train your managers to be great people leaders
- Provide mentors and coaching to new hires
- Engage new hires effectively from the first 90 days
- Check-in regularly in the first 90 days to ensure they have the support and resources needed to succeed in the role.
Time in recruitment stage
This metric tracks how long candidates stay in each stage of the recruitment process.
For example, how long does it take for candidates to move from an initial screening call to an interview with the hiring manager. It helps identify bottlenecks in the process and improve candidate experience.
Tips to keep the candidates moving through the pipeline effectively:
- Set clear timelines and expectations for each stage with candidates and hiring managers.
- Use tools such as AI to automate scheduling, follow-ups, and feedback.
How To Set Your Recruitment KPIs
Identifying these KPIs as a top priority is all well and good, but you’ll need to understand how to set them in place and begin monitoring them to understand the story of your recruiting funnel better.
Here are some basic steps to get you started.
Align KPIs with business
Recruitment KPIs go beyond just tracking numbers. It is ensuring that they are aligned with the company's overall future strategy for growth and business continuity.
For example, if your business is looking to expand its use of a new technology, your recruitment efforts need to shift to focus on talent that can provide experience and knowledge of using that specific technology to support this new area for growth.
KPIs need to align with different departments across the board because every department is impacted by recruitment efforts in one way or another. Rather than tracking random numbers, make sure you are tracking what needs to be tracked for future growth of the company.
Involving key stakeholders
Involving everyone from HR, to senior leadership, to hiring managers, and recruiters will help you refine the process and each one provides important insights from different perspectives of the company, allowing you to prioritize skills and experiences needed for a specific role.
Everyone needs to be on the same page, working together, not in silos.
Defining clear and measurable recruitment KPIs
Clarity is key here. Make sure your KPIs are SMART - specific, measurable, attainable, relevant, and time-bound.
When hiring, be specific, for example - hire 5 software developers with Appian experience in the next 2 months with a salary average of 130k. It helps you track progress and gives clarity of what success will look like.
Regular review and adjustment
Just like continuous improvement is needed for the recruitment process, to hiring, to onboarding, and KPIs. Adjust all as needed to ensure business needs are being met.
Keeping a pulse on where the business is headed, if anything changes, and where improvements might be needed, this will allow you to stay agile in the process and refocus your energy where needed.
Recruitment KPI Dashboards
Dashboards give you a real-time snapshot of key metrics, such as time-to-fill, cost-per-hire, etc., all in one place. It allows us to spot trends easier, identify bottlenecks, and make decisions based on data in a fairly quick way.
The key is to focus on the metrics that matter the most to your company and tweak them as you go along.
Integrating automation features directly into your dashboard tools can also be helpful.
Automation tools that we discussed earlier, such as candidate tracking, resume screening, and sending updates, can reduce the heavy lifting on the recruiters’ side and also ensure real-time data accuracy.
This will allow for quicker decision-making, reporting, and other insights, while at the same time freeing your team’s time to focus on relationship building and other more important tasks.
Simplify recruitment reporting
Keep it simple when it comes to reporting. A dashboard can either clarify things or complicate them. Be mindful of putting too much information that might not be valuable for a particular scenario.
The goal is to provide a clear and easy-to-read picture of relevant insights to your team, leadership, and stakeholders. A simpler dashboard makes it easier to digest the information, identify what is working, and focus on things that need attention.
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