Recruiting new employees can feel like navigating a labyrinth blindfolded without a robust measurement system to track and analyze your efforts. Without guided efforts, your recruitment strategy is a hit or miss. In today’s talent landscape, that just won’t do. The solution is leveraging essential recruiting KPIs to illuminate your path and ensure each hire hits the mark.

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This Article Covers:

• What Are Recruiting KPIs?
• Top KPIs to Track
  • Time To Hire
  • Qualified Candidates per Open Position
  • Application Completion Rate
  • Source Quality
  • Cost per Hire
  • Interview To Offer
  • Offer Acceptance Rate (OAR)
  • First-Year Turnover Rate
  • Candidate Net Promoter Score (NPS)
  • Hiring Manager Satisfaction
  • Adverse impact
• Generating Robust KPIs
• Monitoring KPIs with an Actionable Dashboard
• FAQs
• Next Steps

What Are Recruiting KPIs?

Recruiting key performance indicators (KPIs) are measurable metrics used to evaluate and assess the effectiveness and efficiency of recruitment and hiring processes. These KPIs provide valuable insights into the recruitment life cycle, 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

There are several recruitment KPIs to track depending on your business goals and objectives. Let’s consider each one by one:

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 = Days Taken Since the Job Was Posted Till the Candidate Accepted the Job Offer

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.

The longer a position remains vacant, the more you potentially stand to lose in terms of productivity and incur higher recruitment costs. Talented applicants may drop out of the application process due to prolonged delays, making it vital to locate lengthy processes and shorten them to be as efficient as possible.

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

Having multiple prospective candidates applying for a specific position is always good. The more applications, the more choices you have for a better hire. However, you’re wasting time and effort if the candidates aren’t qualified.

If you struggle to source or engage with qualified candidates, it’s time to examine your approach. Perhaps your job postings lack the robustness required, precise descriptions and clear expectations.

Misaligned candidates can also imply you aren’t posting the job requirements in the right places to connect with your target audience or have unrealistic expectations for the role.

Tracking this KPI helps you gauge if you’re reaching the right audience. If the ratio of qualified candidates is low, you should 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 don’t fit the job.

But a word of caution, you’re likely missing out on top talent if the number of applicants abandoning the application midway is high. There are two possible reasons for abandoning the application. The process is either too cumbersome or it’s confusing.

Application Completion Rate = (Number of Job Applications Received / Total Number of Job Applications Started) X 100

Measuring this KPI helps identify whether it’s time to reevaluate your job application process. Making it more user-friendly and mobile-responsive can help 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, not all will yield results. It’s up to you to identify and invest in those 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.

While there may be a few outliers, all your best hires are unlikely to come from a single source. Therefore, it is vital to determine which sources 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 sources.

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

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.

So, the real question is, 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

This KPI measures every expense associated with recruitment, from posting job ad campaigns to the relevant boards to rewarding employee referral bonuses, organizing job fairs, and more. It’s also important to factor in the time spent interviewing applicants.

6. Interviews To Offer

Interviewing candidates is an important talent evaluation stage that requires significant planning and resources. Recruiters spend most of their time interviewing applicants to determine if their experiences, skill sets, aptitude levels and personalities are compatible with the job requirements.

But are these efforts paying off?

Interview To Offer Ratio = (Number of Job Offers / Number of Candidates Interviewed) X 100

The interviews-to-hire metric conveys how many people you need to interview to make a hiring decision. In other words, how many qualified applicants do 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

The offer acceptance rate (OAR) defines the percentage of accepted offers. A robust OAR indicates the team’s success in filling up a pipeline with candidates, creating an efficient recruitment process, delivering seamless hiring experiences and securing candidates with the right skill sets.

To boost the offer acceptance rate, ensure the offers you extend are competitively on par with industry standards. Be transparent about job responsibilities early in the process, conduct consistent and fair interviews and facilitate open communication throughout the recruitment funnel.

8. First-Year Turnover Rate

Imagine investing considerable time and money in the recruitment process, only to hire a misaligned candidate who leaves almost immediately after onboarding.

High turnover can be costly and counterproductive to expensive recruitment activities and point to larger organizational issues. Some possibilities include the employees being unhappy due to limited growth opportunities, unrealistic expectations or toxic work culture.

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.

If this calculation is high, it’s definitely a matter of concern. You may want to revamp your recruitment and onboarding processes or improve your company culture to boost retention rates.

9. Candidate Net Promoter Score (NPS)

Candidate job satisfaction is a robust metric to gauge the alignment between the job responsibilities and expectations set during the hiring process verses reality. A low candidate job satisfaction implies misaligned expectations or partial job descriptions.

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.

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. To get in-depth information, you can gauge hiring manager satisfaction with short surveys or interviews.

11. Adverse Impact

Embracing DEI promotes equal opportunities and also 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 that 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.

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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 will help 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.

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

Advancements in hiring science and predictive analytics capabilities empower data-driven hiring. Software solutions embedded with predictive models and algorithms can leverage existing datasets from HR software and performance management systems and generate hiring criteria based on company-specific requirements.

Suppose you’re considering upgrading your recruiting tech stack. In that case, the following systems are excellent options if you want to use scientifically-validated 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 may boost KPIs like turnover rate, hire quality and cost per hire by finding candidates with values, behaviors and habits needed to thrive in your company.

Recruiting Chatbots

Technological advancements enabled a far more creative and strategic use of machine learning and AI algorithms beyond simple resume screening.

Advanced web design and machine learning algorithms blend to create AI-powered chatbots on websites and recruiting portals. These digital assistants engage with candidates, answer common queries and provide a seamless experience.

These recruiting chatbots guide candidates through the application process and replace phone interviews with automated questionnaires to determine the right fit.

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. Job seekers are likely to check review sites 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.

These review platforms include information about the employer brand, workplace culture, compensation and benefits, work-life balance and more. 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 spent 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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Monitor KPIs With an Actionable 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.

Recruitment dashboards are reporting tools that help visualize recruitment KPIs and evaluate performance. They display real-time information to facilitate quick decisions and ensure that recruitment activities align with business objectives.

A recruitment dashboard is a collection of key metrics and reports designed to convey how the recruitment funnel performs, capturing data on applicants across different stages, recruitment budget, campaigns and other key insights to provide a bird’s eye view of the end-to-end recruitment cycle.

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.
• Analyze 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.

FAQs

Before we wrap up this guide, we’ll delve into some common questions about hiring metrics to assist you in addressing any 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

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

Recruitment 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
• 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 can 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 helps monitor 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

Tracking recruiting KPIs can help you get valuable insights from the recruitment process to make smart, data-driven decisions. 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.

To streamline and optimize your KPI tracking, consider leveraging specialized recruitment software that automates data collection, analysis and reporting. Our comparison report is an excellent place to start if it’s time for a software upgrade. All you need to do is add your company-specific requirements to find your top options.

Which recruiting KPIs do you think are the most important for your business? How do you track them periodically?