Recruitment Metrics: 8 Common KPIs and How to Calculate Them
How many recruitment metrics is your team tracking? Nine? Nineteen? No idea? A quick search for the best recruiting metrics and KPIs to use will quickly lead you down a rabbit hole. But it’s important for talent acquisition leaders to be well versed in some of the most common recruitment performance indicators. So we’ve gathered eight of the best recruitment metrics, including how to calculate them:
1. Qualified Candidates
Think of qualified candidates like the top quality leads your sales team pursues. A candidate who is determined to be a good fit for a job after a phone interview can be labeled a qualified candidate. As you make offers to these applicants, you can compare the number of qualified candidates to offer acceptance rates over time.
This recruitment metric provides a strong indicator of how close your team is to achieving their hiring goal for a given period. Measuring qualified candidates can even help you predict your ability to achieve hiring goals down the road–something your company’s senior leaders will be eager to see.
Calculating Qualified Candidates:
Qualified Candidates = Total Candidates Per Opening Who Move Past the Phone Screen Stage
2. Time to Fill
Your time to fill metric simply adds up the total number of days an open job goes unfilled, and your average time to fill looks at all unfilled positions over a set time period. To make this recruitment metric more robust, you can single out the days to close, counting just the days from your first contact with the candidate until they sign the offer.
Time to fill offers a clear picture of the efficiency of your talent acquisition strategy. But there are many factors that can worsen this recruitment metric. Are your recruiters reaching out to qualified candidates immediately after they apply? How long does it take to schedule interviews? Breaking down your total time to fill will help identify areas for improvement.
Time to Fill formula:
Time to Fill = Total Number of Days Job Is Available and Unfilled
Average Time to Fill = Total Number of Days of Open Jobs / Total Number of Jobs Open
3. Offer Acceptance Rate
This recruitment metric tracks just how many of the offers you extend to candidates are accepted, and it usually kicks in after the application and interview processes have finished. Offer acceptance rates rarely hit 100% but by tracking them over time you can see just how effective your talent acquisition strategies are.
If, for example, your offer acceptance rate is low or trending down, this provides a good excuse to review the incentives you offer candidates. Are your salaries and benefits comparable to industry peers? Do candidates meet with, and get offers from, specific team members who they’ll be eager to work with? Additional metrics that look at candidate satisfaction can help explain the underlying trends in your offer acceptance rate.
Offer Acceptance Rate formula:
Offer Acceptance Rate (%) = ( Number of Acceptances / Number of Offers ) x 100
Offer-to-Acceptance Ratio = Number of Offers / Number of Acceptances
4. Hires to Goal
Your hires to goal is the metric your recruitment team should have at the back of their mind at all times, as it’s the total hires you need within a set time period to reach a predetermined hiring goal. Whether your firm decides to set monthly, quarterly or annual targets, you should always have a hiring goal.
By dividing the total number of actual new hires by your hiring goal, your team can clearly see whether they’re meeting expectations. And your hires to goal should take into account other recruitment metrics, like the time it takes to source candidates and move them through the funnel. If the hiring goal isn’t reached, those components can be reexamined to find bottlenecks that may be limiting your total new hires.
Hires to Goal formula:
Hires to Goal = Total New Hires / Hiring Goal
5. Quality of Hire
Your quality of hire results should tell you the value that new hires bring to your firm. But value is a subjective idea, and measuring quality of hire can take into account everything from productivity to cultural fit. By setting the standards of quality your talent acquisition team tracks, you will end up with individual and company-wide quality of hire metrics that also measure the success of your efforts.
Your average quality of hire, combined with factors like your turnover rate, will highlight how well your team sources quality candidates, and connects them with hiring managers. It will show whether your onboarding process actually brings new hires up to speed, and even track the maturity of your talent acquisition strategy.
Quality of hire formulas:
Quality of Hire (%) = (Job Performance + Ramp-up Time + Engagement + Cultural Fit) / N
(All scored out of 100, N = number of indicators)
Overall Quality of Hire (%) = [Avg. Quality of Hire score + (100 – Turnover Rate)] / 2
Overall Quality of Hire (%) = (PR + HP + HR) / N
PR = Average job performance rating of all new hires
HP = % of new hires with acceptable ramp-up time within acceptable time frame
HR = % of new hires retained after one year
6. Cost Per Hire
The cost per hire recruitment metric adds up all the expenses that go towards hiring a new employee, and demonstrates the value of your recruitment methods. Contrary to popular wisdom, measuring cost per hire doesn’t have to be a race towards zero. There will always be some costs associated with hiring, from advertising and fees to the salaries for your own talent acquisition staff.
Cost per hire is a great way to measure the economic value of your recruitment resources. Maybe you’re spending a large percentage on job boards, but most of your qualified candidates are coming from social networks and employee referrals. Breaking down cost per hire will help you find and eliminate unnecessary costs, or reallocate resources in more efficient ways.
Cost per Hire formula:
Cost per Hire ($) = [Total External Costs] + [Total Internal Costs] / Total Number of Hires
7. Diversity Hiring Metrics
Diversity metrics are important, and not just from a legal standpoint. Equal opportunity regulations prohibit discrimination in hiring based on race, color, religion, sex, pregnancy, national origin, age, disability or genetic information. But hiring a diverse workforce has demonstrated benefits, from increased innovation to lower turnover.
Simply adding up the total number of new hires or total employees who qualify as “diverse” won’t tell you much. Talent acquisition leaders can track diversity based on levels of and changes in minority representation, changes in pay disparities, retention of underrepresented staff, sources of diversity hires, and more.
8. Retention Rates
It wouldn’t make sense to track recruitment metrics like quality of hire or candidate quality without also measuring your retention rate. After all, what good will it be to hire those candidates if later they decide to leave? Your retention rate tracks the total employees who stay with your firm over a given time frame, out of the total number of employees you had when that period began.
And while your retention rate tells you how many employees remained, you can also track turnover rates, to measure how many leave voluntarily in the same period. As your retention rate goes up, your turnover rate will go down. Low retention rates may be discouraging, but they also present an opportunity to review your hiring techniques, and can lead to alternative sources of candidates who are more likely to stay.
Retention Rate formula:
Retention Rate (%) = (Total Employees Still Employed at End of Period / Total Employees at Start of Period) x 100