7 Key Hiring Metrics Every Company Should Closely Monitor

A data-driven approach is key to business success in every function, and candidate recruitment is no exception. In fact, if you believe that your people are what make your company, it’s perhaps more important to analyze your hiring practices than any other business activity you undertake.

According to the Society for Human Resource Management (SHRM), a typical recruitment process takes 36 days. This is a long time, given that the best candidates are off the market in a third of that time. Moreover, each job posting attracts 250 resumes on average, and this is whittled down to around five for the final interview. This is a lot of applicants to study qualitatively.

However, logging some standard metrics throughout the process can throw up a wealth of data to help you make improvements. Careful monitoring of your recruitment process can help you significantly improve the quality of hire, ROI for your department and employee lifetime value (ELV) for your company. It can also help eliminate bias during the recruitment process.

However, figuring out which metrics actually matter can be a bit of a maze. You don’t want to overwhelm your candidates and recruiters with excessive data demands. Here are seven key hiring metrics to help you make good hiring decisions:

1. Source of hire

Perhaps the most important thing you want to keep a track of is your recruitment channels. According to LinkedIn Recruitment, over 60% of candidates use online job boards. Businesses, on the other hand, tend to swear by candidate referrals. Over 48% of companies believe that to be their number one source for quality hires. A lot depends on your industry and the role itself.

For standard mid-level hires, online portals and referrals work fine. However, for highly specialized roles, you may want to consider partnering with a headhunter or staffing agency to source the right expertise. They’re also a safe go-between to approach personnel embedded in competitor organizations.

In any case, you want to keep a close eye on the effectiveness of each channel. If you find that a source is churning out particularly good candidates for a type of role, you can keep returning to it in the future.

2. Time-to-hire

Time-to-hire is the amount of time that has passed from the moment a vacancy opens up to the moment it’s filled. You have to bear in mind that every day a position remains vacant is a day when certain people in your company are working beyond the scope of their remit to account for the missing hire. The longer it takes you to hire someone, the more inefficiency it creates.

It comes as no surprise to know that companies with more streamlined hiring processes have a shorter time-to-hire. You should assess this metric in combination with candidate quality data to ensure you’re not compromising on the quality of hire.

3. Cost per hire

Hiring costs money, and return on investment is as important in HR as it is in any other business function. Cost per hire is the total amount of money you’ve invested into filling a particular position. It includes everything from recruiter fees to job ad placement costs, technology costs, and travel expenses.

Don’t forget to account for the monetary value of time spent by recruiters and hiring managers in assessing all the candidates for the role.

Precisely tracking cost per hire can help you stay on budget throughout the recruitment process and ensure you don’t run out of resources at a crucial juncture.

4. Candidate experience

This is a key metric for any recruitment department. It’s often overlooked or underestimated, but the fact is candidate experience can make or break your recruitment strategy.

Companies are jostling for talent today more than ever – more than 69% of organizations are struggling to fill their vacancies. In this kind of labor market, creating a positive experience for your applicants can go a long way towards keeping them engaged throughout the hiring process. Unnecessarily long processes or disrespectful hiring practices can not only lose you quality candidates, but it can also mean bad word-of-mouth publicity. Glassdoor contains a host of candidate data for most companies – a few negative reviews can mean a number of potential candidates simply won’t apply.

Make it a point to source feedback from your applicants, ideally after every interview round. Keep the survey short and simple. Doing this is a great way to identify bottlenecks in your hiring process and understand why applicants drop out.

5. Completion rate

Your applicant completion rate is the number of applicants who made it all the way through to the end of the hiring process. While there isn’t a standard rate to benchmark against, if only 10% of your candidates choose to stick with you until the end, you know there is an issue. If you have multiple positions open for the same role, this only exacerbates the problem.

There are a number of reasons why an applicant might drop out in the middle of the process. Keep a track of the drop-off rate at every stage of the recruitment process to understand where your applicants are losing enthusiasm.

6. Offer acceptance rate

Once a candidate has been interviewed, vetted and found to be a good fit, you want to do everything you can to close the deal. However, sometimes, candidates may choose to decline your offer. This can often leave a bad taste in the mouth for a recruiter, given all the collective time and energy spent on that candidate. It’s important to measure this metric, and if possible, understand the reasons behind the refusal.

Recruiters often assume that they’ve been turned down for more money. However, there can be a bunch of other factors at play, including a poor interview experience, unmet expectations and perceived organizational culture.

7. Quality of hire

This metric measures a candidate’s performance on two fronts. First, it looks at their performance within their first year at the company, including their adjustment time and quarterly reviews. It also measures their lifetime value. An employee’s lifetime value indicates the average return on investment for that employee for the duration of their employment.

Companies often berate their hiring departments for a lapse of judgment every time an employee leaves quicker than expected. However, some industries and roles are naturally prone to high turnovers. ELV is a better metric to judge the result of specific recruitment and their net contribution to the company. 

By measuring these metrics, you can ensure that your company’s hiring process is getting a little better with each new hire. Don’t be afraid to experiment with your metrics either - track the ones that make sense for your organization.

The global talent shortage is only expected to get worse before it gets better. Granular monitoring and analysis can help you stay ahead of the curve and capture the best talent on the market.