Without guided efforts, your recruitment strategy is like taking a shot in the dark. In today’s talent landscape, that simply won’t cut it. Understanding and measuring vital recruiting KPIs removes hiring process uncertainties, helping you understand what clicks and what misses the mark with candidates.
This quick guide covers everything you need to know about how to measure and apply these robust measurements and elevate your hiring process.
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This Article Covers:
- What Are Recruiting KPIs?
- Top KPIs to Track
- Using a KPI Dashboard
- Generating Robust KPIs
- FAQs
- Next Steps
What Are Recruiting KPIs?
Recruiting key performance indicators (KPIs) are metrics that assess recruitment and hiring processes effectiveness. These KPIs provide valuable recruitment life cycle insights, helping organizations monitor and improve their talent acquisition strategies. Organizations can optimize their hiring outcomes by making data-driven decisions and aligning objectives.
Top KPIs to Track
Choosing which KPIs to track depends on your business goals and objectives. Let’s consider each one by one:
| Recruiting KPI | Formulae |
|---|---|
| 1. Time To Hire | Day the candidate accepts the offer – Day the candidate enters the hiring pipeline |
| 2. Qualified Candidates per Open Position | Number of Candidates Approved by Hiring Managers / Total Number of Shortlisted Candidates |
| 3. Application Completion Rate | (Number of Job Applications Received / Total Number of Job Applications Started) X 100 |
| 4. Source Quality | (Number of Hires From a Specific Source / Total Number of Hires) X 100 |
| 5. Cost per Hire | Total Recruiting Cost / Total Number of Hires |
| 6. Interview To Offer | (Number of Job Offers / Number of Candidates Interviewed) X 100 |
| 7. Offer Acceptance Rate (OAR) | (Number of Offers Accepted / Number of Offers Extended) X 100 |
| 8. First-Year Turnover Rate | (Number of Employees Who Left Within a Year of Hiring / Total Number of Employees Who Left During the Same Period) X 100 |
| 9. Candidate Net Promoter Score (NPS) | (Number of Promoters – Number of Detractors) / Total Number of Respondents X 100 |
| 10. Hiring Manager Satisfaction | New Hire Rankings or Ratings by Hiring Managers |
| 11. Hires to Goal | Hiring Goal / Number of Hires) X 100 |
| 12. Adverse Impact | (Number of Hires From the Protected Group / Total Hires From a Non-Protected Group) X 100 |
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1. Time To Hire
Time to hire is the duration it takes to shortlist, interview and hire prospects after they submit their applications. Understanding this timeline lets you plan effective recruitment campaigns and unearth bottlenecks hindering the process.
Time To Hire = Day the candidate accepts the offer – Day the candidate enters the hiring pipeline
Why This KPI Matters
Measures how quickly your organization moves from initiating the hiring process to securing candidates. Faster time to hire often indicates streamlined recruitment processes.
For example, suppose you notice that candidates begin their application forms but rarely finish them. In that case, evaluating the length, accuracy and redundancy of your necessary information becomes essential. Streamlining this aspect significantly enhances your recruitment process efficiency.
The longer a position remains vacant, the more you potentially stand to lose in terms of productivity and higher recruitment costs. Talented applicants may drop out of the process due to prolonged delays, making it vital to locate time-consuming aspects and shorten them to be as efficient as possible.
For example, suppose you notice that candidates begin their application forms, but only a few finish them. In that case, evaluating the length, accuracy and redundancy of the information you require becomes essential. Streamlining this aspect can significantly enhance the efficiency of your recruitment process.
2. Qualified Candidates per Open Position
It’s not just about the number of applicants but the caliber of those who meet your requirements. Qualified candidates per open position reveal the likelihood of finding the perfect fit and setting your organization up for success.
Qualified Candidates per Open Position = Number of Candidates Approved by Hiring Managers / Total Number of Shortlisted Candidates
Why This KPI Matters
This KPI assesses the quality of candidates entering the pipeline. A higher ratio indicates a more efficient screening process. The more applications, the more choices you have for a better hire. However, you’re wasting time and effort if candidates aren’t up to mark.
If you struggle to source or engage qualified candidates, it’s time to examine your approach. Perhaps your job postings lack the robustness required, precise descriptions and clear expectations.
Misaligned candidates also imply you aren’t posting the job requirements in the right places or have unrealistic expectations for the role.
Tracking this KPI helps you gauge if you’re reaching the right audience. If your qualified candidate ratio is low, redo the job ads and improve your efforts to reach the right prospects.
3. Application Completion Rate
It isn’t uncommon to find applicants starting an application and then stopping midway. People get busy or self-reject, thinking they aren’t the right fit for the job.
But a word of caution: you’re likely missing out on top talent if they’re consistently abandoning the application midway. A lengthy or confusing process discourages potential talent from completing the process.
Application Completion Rate = (Number of Job Applications Received / Total Number of Job Applications Started) X 100
Why This KPI Matters
Measuring this KPI helps identify whether it’s time to reevaluate your job application process. Making it more user-friendly and mobile-responsive helps attract and retain top-tier candidates who might otherwise slip through the cracks.
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4. Source Quality
While you have different means and methods to find and attract candidates, they won’t always yield results. It’s up to you to identify and invest in talent sources that help you build a reliable talent pool and ensure you’re investing in the best sources.
Source Quality = (Number of Hires From a Specific Source / Total Number of Hires) X 100
To determine source quality, take stock of the number of quality hires coming from a particular source or how far they move through the hiring stages.
Why This KPI Matters
All your best hires are unlikely to come from a single source. Therefore, it’s vital to determine which channels perform the best and to what degree.
For instance, if the top candidates consistently come from LinkedIn, you should focus your recruiting efforts on posting accurate job ads on that platform and reduce investing in underperforming channels.
If social media sites generate more candidates than job boards, analyze the weaknesses in job postings.
Tracking sources gives you valuable insights into what candidates actively seek when they apply to your company, enabling you to position your brand creatively.
5. Cost per Hire
How much does it cost to fill a position? The following formula will reveal your company’s average hiring cost:
Cost per Hire = Total Recruiting Cost / Total Number of Hires
Why This KPI Matters
Recruitment can be costly if you don’t allocate a specific budget at the outset. SHRM’s recent benchmarking report found that the average cost per hire can reach up to $4,700. Additionally, recruiting costs continue to rise the longer a position remains open.
This KPI measures every recruitment expense, like posting job ad campaigns, rewarding employee referral bonuses, organizing job fairs and more. Calculating cost per hire analyzes recruitment efficiency for optimal use of the budget.
6. Interviews To Offer
Interviewing candidates is an important talent evaluation stage that requires significant planning and resources. When you spend significant time and effort conducting interviews to determine overall compatibility, the question arises: Are these efforts paying off?
Interview To Offer Ratio = (Number of Job Offers / Number of Candidates Interviewed) X 100
Why This KPI Matters
The interviews-to-hire KPI measures the number of people to interview to make a hiring decision. In other words, this KPI determines how many qualified applicants you need to interview before you extend an offer.
7. Offer Acceptance Rate (OAR)
A recent study by CareerPlug identified the following top reasons why potential hires decline job offers:
- Poor experiences during the interview stage.
- The employer took too long to respond.
- The candidate found better opportunities elsewhere.
- The compensation or benefits offered didn’t match the candidate’s expectations.
While these scenarios are common, they’re preventable and emerge as opportunities to improve the hiring process.
Offer Acceptance Rate = (Number of Offers Accepted / Number of Offers Extended) X 100
Why This KPI Matters
The offer acceptance rate (OAR) is the proportion of offers extended and accepted by selected candidates. A high acceptance percentage indicates the team’s success in filling up a pipeline with qualified talent, delivering seamless hiring experiences and securing candidates with the right skill sets.
Tips to boost the offer acceptance rate:
- Ensure that the intended offers are competitively on par with industry standards.
- Be transparent about job responsibilities and, if possible, compensation early in the process.
- Conduct fair and consistent interviews.
- Facilitate open communication throughout the recruitment funnel.
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8. First-Year Turnover Rate
The first-year turnover rate indicates the number of new employees who decided to quit within 12 months.
First-Year Turnover Rate = (Number of Employees Who Separated Within a Year of Hiring / Total Number of Employees Who Left During the Same Period) X 100
To calculate the first-year turnover rate, divide the number of new employees who left within a year by the total number of employees who separated simultaneously.
Why This KPI Matters
Imagine investing considerable time and money to secure talent, only to hire misaligned candidates who leave almost immediately after onboarding.
High turnover is costly and counterproductive and often points to larger organizational issues. Some possibilities for early exits can be limited growth opportunities, unrealistic expectations or toxic work culture.
Check first-year turnover to determine how well candidate perceptions match the reality. It’s a matter of concern when this rate is high. If your company faces high first-year turnover, consider outlining clear expectations during hiring and consistently delivering those expectations during onboarding.
9. Candidate Net Promoter Score (NPS)
Candidate job satisfaction is a robust metric gauging aspects like candidate experiences, engagement levels and perceptions. A low candidate job satisfaction implies misaligned expectations, poor communication or __ experiences during the hiring process.
Candidate Net Promoter Score (NPS) = (Number of Promoters – Number of Detractors) / Total Number of Respondents X 100
It’s advisable to provide a realistic job preview to highlight the pros and cons of the job to prospects, thus mitigating the risk of lower candidate job satisfaction.
Why This KPI Matters
- Gain valuable insights into candidates’ experiences to understand how candidates perceive the human aspects of the recruiting interactions.
- Measure recruitment strategy effectiveness, indicating whether candidates are likely to recommend your company to others based on their experience.
- Identify areas for improvement in hiring activities to make informed changes that enhance overall success.
10. Hiring Manager Satisfaction
Measuring candidate satisfaction levels and how happy and satisfied hiring managers are with employee performance is essential.
Hiring Manager Satisfaction = New Hire Rankings or Ratings by Hiring Managers
When hiring managers aren’t happy with new hires, it can indicate some potholes in the recruitment process or the selection criteria are irrelevant. Develop surveys or connect with hiring managers for more context about the challenges or shortcomings of the recruitment outcomes.
Why This KPI Matters
Calculating hiring manager satisfaction helps assess whether hiring expectations meet reality. This KPI emphasizes the importance of a smooth partnership between recruiters and hiring managers in selecting the right talent.
11. Hires To Goal
In a broader sense, hires to goal refers to the ratio or percentage of successfully hired candidates compared to the predetermined hiring targets. The formula for calculating this ratio is:
Hires to Goal = (Hiring Goal / Number of Hires) X 100
Why This KPI Matters
- Performance Benchmark – Hires to goal is critical for assessing how well actual hires align with predefined recruitment targets, providing a clear performance roadmap.
- Resource Optimization – Direct recruitment efforts toward achieving specific hiring objectives without unnecessary expenditure, ensuring a streamlined and cost-effective talent acquisition process.
- Strategic Decision-Making – Adjust strategies based on hiring outcomes, contributing to more effective talent acquisition planning.
12. Adverse Impact
Embracing DEI promotes equal opportunities and enhances innovation, productivity and overall organizational success. Today’s talent market is the most diverse and value-driven yet, with job seekers who are likely to prefer employers who take tangible actions to create an inclusive and equitable workplace.
Adverse impact lets you identify a bias against a protected class, measuring if that protected class is less than an 80% hire rate.
Adverse Impact = (Number of Hires From the Protected Group / Total Hires From a Non-Protected Group) X 100
To find the adverse impact, divide the applicant success rate of Group A (your protected class) by the applicant success rate of Group B (your non-protected class). This number can help you identify if you need to make your recruitment process more inclusive and diverse.
A low adverse impact indicates that your recruiting team treats all groups fairly and without bias on any specific demographic. However, a high calculation suggests potential discrimination.
Why This KPI Matters
Calculating adverse impact helps address the following:
- Ensure pipeline diversity remains at acceptable levels.
- Remain compliant with anti-discrimination laws.
- Focus on enhancing your company’s employer reputation.
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Using a KPI Dashboard
How do you measure recruitment success? Well, it depends on your business goals and objectives. Are you looking to increase the size of your organization, or are you hiring for a few key positions?
Whatever your goals are, defining them and tracking recruitment efforts with dashboards is a crucial step.
Dashboard showing different recruitment KPIs. Source
Recruitment dashboards are reporting tools that display real-time recruitment KPIs and reports with drill-down capabilities to convey how the recruitment funnel performs. These visualizations facilitate quick decisions and ensure that recruitment activities align with business objectives.
Typical recruitment dashboards provide a bird’s eye view of the end-to-end recruitment cycle, capturing applicant data across different stages, recruitment budgets, recruitment marketing campaigns and other key insights.
These numbers will help you make sound decisions to reduce costs, source candidates from the best channels and enhance talent acquisition strategies.
To sum up, here are the top reasons why having a recruitment dashboard is necessary:
- Gain Valuable Insights: The visual nature of the dashboard empowers you to identify trends, patterns and potential issues in your recruitment process.
- Assess the Hiring Funnel: Use the dashboard to track and analyze how candidates progress at each hiring stage. By monitoring the conversion rate, you can identify if you’re attracting many unqualified candidates and take necessary actions to improve it.
- Refine Recruitment Strategies: Optimize your recruitment spending by identifying areas for improvement, uncovering top talent sources and attracting candidates who are likely to stay longer within your organization.
- Expand Sourcing Options: Gain an overview of all active talent-sourcing channels. Compare different channel performances and identify top-quality sources or test other avenues.
- Identify Bottlenecks: Access to real-time candidate data helps you quickly spot issues that arise during the recruitment process and address them to maintain a smooth hiring process.
Generating Robust KPIs
From reaching the perfect prospects with targeted job ads to interviewing top-notch candidates and sealing the deal, recruitment demands intelligent investment.
Investing in powerful recruitment and staffing software helps you generate robust recruiting KPIs.
AI Screening Solutions
Leverage an AI screening solution powered by machine learning algorithms to screen qualified candidates based on different parameters. Calculate qualified hires per open position within a few clicks.
Zoho Recruit’s built-in AI assistant screens applicants to find top matches. Source
Assess your existing ATS and recruiting system and ask your vendor about AI capabilities that enhance initial candidate screening.
Our features and requirements checklist, curated by our analysts, is a good starting point to learn more about the technical and functional capabilities.
Predictive Hiring Assessments
Systems embedded with predictive models and algorithms leverage existing datasets from HR software and performance management systems to company-specific generate hiring criteria based on company-specific requirements.
If you’re considering upgrading your recruiting tech stack, the following systems are excellent options for using scientific selection methods backed by AI-based hiring criteria:
- Talent Assessment Tools: Best for predicting a candidate’s potential fit and performance in a particular role with psychometric assessments, cognitive tests and job simulations.
- Behavioral Assessment Tools: Ideal for analyzing potential fit for a particular job role or team based on behavioral tendencies and personality traits via questionnaires and surveys.
- Talent Intelligence Software: Best for making data-driven workforce decisions based on multiple data sources from data analytics and artificial intelligence models.
Predictive analytics create robust hiring assessments that can help boost KPIs like turnover rate, hire quality and cost per hire by finding candidates with the right values, behaviors and habits needed to thrive in your company.
Online Company Reviews
Online career sites and platforms like Glassdoor are windows that potential hires peer through to get an insider view of the organization. In today’s digital age, the internet blurs boundaries and redefines how candidates look for jobs, allowing job seekers to review potential employers before applying for the job.
According to a recent study by CareerPlug, negative candidate experiences drove 28% of candidates to post negative reviews online, discouraging future candidates from applying. However, the same study found that 57% of candidates left glowing reviews after having a positive experience.
Monitoring these platforms unveils a treasure trove of data, allowing you to gauge key performance indicators like candidate-job satisfaction level based on the conversations on these sites.
Video Interviews
Incorporating video interviews in the recruitment process can be a cost-effective and flexible approach. Using a virtual interview system approach also boosts investment returns as it’ll save you and your candidates precious time commuting.
Video interviews directly impact critical KPIs like cost per hire, interview-to-offer ratio, hiring manager satisfaction and time to hire.
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FAQs
Before we wrap up this guide, we’ll delve into some common questions about hiring metrics to assist you with potential challenges you may encounter while reassessing your recruitment strategy.
1. What is a good KPI for a recruiter?
Below, we’ll list the top hiring KPIs based on recruiting function. However, note that the groups are general and can vary depending on the organization and specific context.
Staffing Agencies: These organizations focus on finding top talent that meets client expectations in a predetermined timeline and assigned resources.
- Time to hire
- Qualified candidates per open position
- Source quality
- Cost per hire
- Hires to Goal
Recruitment Consultants: These individuals identify key areas to improve and increase efficiency across recruitment funnels.
- Application completion rate
- Interview to offer
- Offer acceptance rate (OAR)
- Candidate net promoter score (NPS)
- Adverse impact
- Cost per hire
- Hires to Goal
Managers: These individuals are responsible for recruitment strategy effectiveness, assessing the impact on organizational performance and ensuring a positive return on investment (ROI).
- Time to hire
- Cost per hire
- Hires to Goal
- Application completion rate
- First-year turnover rate
- Hiring manager satisfaction
2. How are metrics different from KPIs for recruiting?
Metrics refer to specific measurements or data points used to track and assess various aspects of the recruiting process. Recruiting metrics provide quantitative information about specific recruiting activities or outcomes.
On the other hand, KPIs are a subset of these metrics specifically chosen to reflect the key focus areas and success of specific recruiting functions. In other words, KPIs are strategic metrics that align with organizational goals and provide insights into performance, effectiveness and efficiency.
3. How can KPIs measure DEI efforts?
KPIs play a crucial role in measuring and monitoring the progress of diversity, equity and inclusion (DEI) efforts in recruiting. One important KPI in this regard is calculating adverse impact, which monitors the potentially discriminatory impact of recruitment processes on protected groups.
As the term implies, this KPI enables identifying and rectifying any adverse impact on diverse candidates. Organizations can assess whether their selection methods are fair and unbiased by utilizing data to track DEI.
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Next Steps
Recruiting KPIs provide valuable insights into your overall recruitment cycle health. When you know how your decisions and actions impact your hiring results, you can find specific ways to strengthen your hiring processes and achieve your business objectives. A robust recruiting system streamlines KPI tracking, automates data collection and generates reports supporting data-backed hiring decisions. Our free requirements template is an excellent place to start if it’s time for a software upgrade.
Which recruiting KPIs do you think are the most important for your business? How do you track them periodically?