Recruiting metrics are crucial in weighing the quality of the recruit, and the overall recruitment process. As an HR leader, you need to track essential recruiting metrics to ensure you are acquiring the cream of the crop. If you spend time researching “all” recruiting metrics, there wouldn’t be enough time to do the actual hiring and selection.
In this blog post, I will list the 4 most important ones for you.
But before we go into details, let’s define first, “What are recruiting metrics?”
Recruiting metrics are measurement tools used to track and enhance a company’s hiring process. Recruiting metrics are important in gauging how the present recruitment trends will affect the business in the long run. When you are tracking the important metrics, you provide the company with assurance that the your hires are high in quality. The 4 essential recruitment metrics you should definitely track:
1. Time to hire or time to fill
Recruitment is not as easy as it seems. There are a lot of factors to consider. The time to acquire new employees and also the capabilities of the recruitment team. From the time the position was posted, how many days passed before the vacancy was successfully filled?
In 2017, research conducted by the Glassdoor Economic Research indicated that the time spent to hire new employees across industries in the U.S. was around 23.8 days. Will you go beyond the average?
Time to hire measures the pace of the hiring process. Tracking the entire duration will help HR leaders spot complications that slow the hiring process. Moreover, it will also help identify vacant positions that are difficult to fill.
Compare the time to hire across various designations, and carefully plan on how to lower the average time spent. HR leaders should design an appropriate plan of action to overcome prevailing difficulties during the hiring process.
2. Cost to acquire
The cost to acquire is the average budget used on turning a potential applicant into an employee. This recruitment metric is important in tracking the company’s total expenditures.
If the time to hire is lower, the cost to acquire will be lower too. Lacey Brandt, the CFO of Workable, shared that the average cost to hire new employees is around $3,000 to $5,000.
According to the Society of Human Resource Management, the standard formula to calculate the total cost to acquire new employees is to divide the total recruiting expenses by the sum of the newly hired employees.
3. Retention rate
If you think searching for the right candidate is already difficult, well, keeping the right employees is even harder. Each time an employee bids goodbye, it could mean an immediate loss for the company. Thousands of dollars could go down the drain in lost sales and opportunities because you are headed toward a long process of hiring and training new employees.
The retention rate of an employee is calculated by dividing the sum of employees still working at the moment by the sum of employees at the beginning of the recruitment period. Then, the quotient is multiplied by 100. Since the rate is amplified 100 times, this translates into a significant loss for the company. The cost would be roughly around 3 to 4 times bigger than the employee’s salary.
The retention rate is also a reflection of a company’s working environment and culture. Studies indicate that companies with a lively atmosphere and a variety of rewarding programs influence an employee’s retention rate. Of course, if they consider their workplace to be engaging and a conducive learning environment, they are more likely to stay.
4. Quality of hire
Lastly, one of the most important — if not, the most important — is the quality of hire. As a head of the recruiting function, it is your duty to identify the quality of the applicants.
Nowadays, Recruiting teams favor quality over quantity. New employees should show potential, and they should bring something new to the table. The real struggle is how to precisely assess the quality of hire.
For some, the quality of hire is a checklist of their needed requirements and qualifications. Companies establish a list of specifications that a qualified applicant must have. These important points will be the company’s gauge on whether or not an applicant is fit for the position.