Twelve crucial recruitment KPIs that every hiring team needs to track

Recruitment KPIs (Key Performance Indicators) are metrics that allow HR professionals to measure the various parameters of the hiring and selection process. KPIs offer insights into the efficacy of recruitment strategies. Using these KPIs can help make the right decisions to initiate and upgrade effective HR processes.

This blog enlists 12 such recruitment KPIs’ examples that are crucial for successful talent acquisition strategies.

This KPI for recruitment is used to understand if your efforts at finding qualified candidates are working efficiently. The number is determined by the percentage of candidates that the hiring manager feels is qualified versus the number of candidates processed through the first phase of screening.

This KPI can be expressed in the equation below:

Now, a question that may arise is how are qualified candidates determined?

The most straightforward approach would be to collect feedback from those in charge of hiring.

Their response will depend on whether the candidate had the required experience and skill for the role, if they were a fit for the company culture, and other factors hiring managers use to decide whether to hire an applicant or not.

The more candidates your hiring managers deem qualified, the better your selection process is.

It is vital to understand why potential candidates are not completing the applications. While an organization may be unable to fix candidate errors, it can resolve the matters within its control.

Other causes for incomplete applications could be that the application forms are too long and drawn-out or are too complicated. If the process isn’t straightforward and intuitive, you will likely lose out on talent.

High application abandonment rates could signify that your application process is too complicated. Often, companies have a drawn-out registration process, which can be a deterrent.

The equation to determine application completion rate is:

To find your application completion rate, take the number of submitted applications divided by the total number of candidates who started an application.

More focus on candidate experience and user-friendliness can help improve these numbers.

This recruitment KPI helps identify the effectiveness of the sourcing channels being used. You will have to run the numbers for each source to understand which source is performing better.

Understanding the efficiency of each sourcing channel helps HR professionals decide which channels work best and which channels need more attention. It helps them develop more effective sourcing strategies.

Low source channel efficiency does not necessarily mean that the channel doesn’t work. It may mean that you have to make changes in how you leverage a particular channel.

Just as it sounds, the time to hire KPI reflects how much time it takes to source, shortlist, interview, and hire new talent. This also has to include the time it takes them to accept the offer.

Once you have streamlined your recruitment process, this number will likely be quite stagnant. Knowing this information helps HR professionals decide when to start the hiring process to fill a position and decide what strategies work best to hire a candidate within that period.

This helps ensure that existing employees are not burdened with workloads because new hires haven’t started production on the target date.

The recruitment process isn’t merely about filling an opening. It is vital that the new recruit can effectively execute the role and fit into the company’s culture.

The quality of hire recruitment KPI indicates the success of getting the right person for the role.

Measuring this KPI is not as straightforward as the others. It largely depends on what your organization deems valuable. You will have to define the parameters you are looking for in an individual.

These could be factors like:

• The learning curve for the new hire to reach optimum productivity.
• The ease with which the recruit fits into the company.
• The hiring manager’s and the reporting manager’s satisfaction with the recruit’s performance.

Generally, if you are happy with the hire and they are able to execute the job well, the quality of hire is where you want it to be.

Thorough background checks of a candidate’s profile and experience can help increase the chances of increasing your quality of hire. It also helps to have an effective onboarding process and an impactful training.

It takes a certain amount of investment to be able to track and retain quality employees. Having said that, your costs do have to be justifiable.

This information is vital in budgeting and forecasting costs. Organizations must balance the cost of hiring talent and the output that the talent produces.

The numbers may vary according to the type of position that needs to be filled and the rarity of talent. However, it is essential to know your average cost per hire despite any expected variations.

This information also helps HR professionals understand where they can cut back, avoid unnecessary expenses, and identify areas where the money could be better spent.

Interviewing candidates is one of the most time-consuming and resource-intensive stages of recruitment.

This KPI involves understanding how many interviews were required for choosing the right candidate. This information allows HR professionals to set targets for the number of applicants they should shortlist and the number of applicants required for each round of interviews.

Once a candidate has been through an interview process, they are then given an offer. The candidate decides whether they accept that offer or decline it.

This is one of the most important recruitment KPIs. Candidate experience refers to how a candidate feels regarding the recruitment process. A more positive experience is likely to result in hiring better talent.

The best way to collect this information is to have surveys or feedback at specific intervals of the recruitment process.

“How likely are you to refer a friend to work in this organization?” and “Was the application process complicated?” are pertinent questions to ask.

The equation can be formed by subtracting the negative (detractors) responses from the positive (promoters).

This information is useful to improve the entire recruitment process. The process can be improved on the go as well. Incorporate feedback from one candidate into the process for the next candidate, and you will soon have the best possible process in place.

Lower attrition rates are important to maintain budgets and keep hiring costs low. Measuring attrition rates is vital to understanding what can be done to retain employees.

High attrition rates could mean that the candidates hired are not an ideal fit for your organization or that your company isn’t a great place to work.

The first-year attrition rates can be calculated by using the formula below:

If these numbers are alarmingly high, it is time to step back and look at the entire recruitment process and maybe even your work culture.

This metric is perfect to understand how popular job openings at your organization are. It is an obvious indicator of how desirable these job openings or working for your company are. However, keep in mind that external factors can skew this KPI.

Trends in job markets, national and international economies, and new government regulations can all impact the number of jobs available as well as the number of people seeking employment.

Having said that, it is generally better for an organization to receive more suitable applicants than fewer.

If more suitable candidates are applying, your job description and where you have advertised are working the way you intended. This information can help you decide to either change your strategy or invest more in your current one.

This KPI for recruitment is a combination of predictive information and real-time data about your hiring decisions. You can tweak this KPI to match your digital recruiting tactics.

• Use a combination of analytical tools to gather and analyze user data.
• Measure your online candidate engagement, source-channel cost, etc.
• Use social listening tools to understand what applicants think of you as an employer. The more comments or interactions you are getting, the better the engagement. Google Analytics also comes in handy to measure your conversions from job posts to candidate applications.

Recruitment KPI dashboards are designed to provide users with insights into their recruitment process. It gives HR professionals a clear idea of which areas need more focus and which are doing well.

The earlier part of this blog highlights which KPIs need to be measured. Now, we will delve into how to use reporting dashboards.

There are three types of dash-boarding tools you can use:

Spreadsheets

You could choose to use software like MS Excel or Google Sheets to create visual representations of your KPIs. Most of these tools have templates that only require users to enter the data and generate visual reports.

The obvious disadvantage is the manual input required and the increased probability of errors in entering the data.

HRM software

When choosing an HRM software, you want to choose one that has proven value, is renowned for reliability, is easy to use, is easy to integrate with your existing systems, and provides good maintenance plans.

Business dashboard software

This is the most capital-intensive option. They can also be rather complicated and require some technical knowledge.

Once you have the right tools, ensure that the dashboards are easy to understand. It is a good idea to make them visually appealing. You can use charts and graphs to ensure that the data isn’t crammed all into one page. Summarize the information and then delve into specifics as you go further into the report.

• Ensure that the data is presented in a way that is easy to comprehend. While you may be a genius with numbers, the goal is to get the information across to the right people quickly, so that the right decisions can be made.
• Accuracy is vital. Reports can take a lot of time to create. Ensure that the data collected is processed accurately. Inaccurate reports can lead to poor business decisions.

Once you have all the information available on your dashboard, you need to act on your findings. Prepare a new strategy or tweak your existing recruitment strategy using the information you have garnered from the recruitment KPIs.