Being able to recruit the right people in a successful, efficient and cost-effective way is a critical part of the HR function. But how can you tell whether your recruitment activities are up to scratch? By measuring your recruitment activities over time, you can build up a detailed picture of what works and what doesn’t work so well for your business.
Here I look at some of the key hiring KPIs for measuring your recruitment.
Context is everything
How you recruit for a new CEO will be very different to the way in which you recruit dozens of employees for a new call centre. Or, for a tech company, employer brand and referrals might play a bigger role in recruitment than for, say, the retail sector. All recruitment differs according to the industry you’re operating in and the roles that you’re hiring for. How many applications you expect, how long it takes to fill a vacancy, and so on – it all comes down to context.
That’s why there’s no one-size-fits-all approach to measuring recruitment success. The best hiring KPIs for you might be very different to the business across the street. Context is key. So, instead of starting with the KPIs themselves (and we will get to them), start by putting your recruitment into context. What are your key goals around recruitment? Are you aiming to become the number one employer brand in your industry? Or do you need to cut recruitment costs? The most meaningful recruitment metrics for you are those that tie in to your overall recruitment goals.
That’s why I always start with strategy and goals, not data or metrics. Only once you work out what you want to achieve, and what questions you need to answer in order to deliver those goals, can you work out what exactly you should be measuring.
Building an effective recruitment pipeline
Creating a recruitment pipeline is a bit like building an effective sales funnel. In sales and marketing, you don’t run one ad campaign, then sit back and wait for the customers to roll in. It’s a continually evolving process. Likewise, in recruitment, you don’t advertise a job, recruit someone, then rest on your laurels. There’s constant work to do to build an effective recruitment pipeline, including:
- Creating a strong employer brand (therefore making it easier to attract strong candidates)
- Generating leads (including working out the most effective recruitment channels for you)
- Attracting quality candidates (as in, how many of your applicants are potentially employees?)
- Converting leads into hires (getting the best candidates to accept your offers)
- Evaluating the success of hires (ensuring the people you hire are contributing to the organisation)
Understanding your recruitment effectiveness means measuring each of these steps.
So what are some of the most helpful hiring KPIs?
Here are some of the key metrics for measuring recruitment effectiveness. Remember, though, that the most meaningful metrics for you are linked to your recruitment goals. So you will probably want to focus your efforts in a few critical areas, rather than measuring absolutely everything listed below. After all, if you spend all your time measuring, you won’t have any time to recruit!
- Recruitment site analytics and social listening. You can measure the external perception of your employer brand by analysing the feedback on recruitment sites like Glassdoor, LinkedIn, Monster or Indeed and you can track the conversations people have about your brand on social sites like Twitter or Facebook.
- Employee Net Promoter Score (eNPS) and staff engagement. Measuring staff engagement through eNPS surveys, pulse surveys and other tools will help you understand whether the employee experience matches up to your on-paper employer brand.
- Time to fill. This will vary from job to job (it can take a very long time to find the next CEO, for example), but measuring this across the company will give you an idea of key benchmarks for various levels. If you find you’re not hitting these targets, it may be a sign that something is not working as well as it should – maybe your employer brand, or maybe your recruitment channels.
- Submit-to-interview ratio. Of the candidates submitted to the hiring manager for consideration, how many are being selected for interview? If the percentage is low then it might be a sign that the manager isn’t happy with the quality of candidates.
- Number of interviews to offers. As a good rule of thumb, every three interviews should result in one offer. A ratio of higher than 3:1 could indicate a problem with the quality of candidates.
- Offer acceptance rate. What percentage of offers made to candidates are accepted? Again, the ideal number varies from industry to industry, so you should establish the benchmarks that make the most sense for your business.
- Cost per hire. Think companies like Google have to spend a lot on attracting the right candidates? Of course they don’t (their costs are in sifting through the thousands of applications they are getting). Tracking how much you have to spend to attract talent is a good way to assess your recruitment effectiveness and employer brand.
- Source of hire. This tells you which of your recruitment channels delivers the most bang for your buck. This will help you focus your efforts more effectively in future.
- Quality of hire. Asking managers how satisfied they are with new recruits is a good way to identify whether your recruitment processes are delivering the talent that the organisation needs.
- Applicant satisfaction. How satisfied were new hires with the recruitment experience? Did it take too long to receive the formal offer in writing, for instance? Surveying new recruits will help you pinpoint ways to streamline the recruitment process.
New ways to boost recruitment effectiveness
The traditional metrics listed above are all tried-and-trusted ways of monitoring your recruitment success. But now, the predictive capabilities of artificial intelligence (AI) is helping recruiters be even more strategic in their activities.
That’s because AI tools can understand more about us humans than ever before: our personality traits, our intelligence, our likes, our dislikes, our reliability – even whether we’re telling the truth or not. In light of this, hundreds of AI-based tools (apps, platforms, chat bots, etc.) are coming onto the market to help companies streamline their recruitment.
ENGAGE Talent, for example, has an AI engine with more than 100 million passive candidates. Using predictive insights, the system monitors potential candidates and delivers alerts when an ideal candidate is likely to be ready for a job change. Or a chat bot-based system like Talla can handle the grunt work of recruitment by answering candidates’ questions or conducting surveys – freeing up recruiters to focus their efforts elsewhere.
Whatever metrics you choose, measuring your recruitment effectiveness will help you to do more of what works and identify areas for improvement – and, importantly, it will help to demonstrate HR’s unique, value-adding role in the organisation.
Where to go from here
If you would like to know more about measuring HR effectiveness, check out my articles on:
Or browse the KPI Library to find the metrics that matter most to you.