Recruitment is a crucial business process. Thus, ensuring that the process runs smoothly is essential for every organization. To measure the effectiveness and efficiency of the process, managers use specific recruitment metrics called KPIs or Key Performance Indicators. Here is a list of some of the most commonly used KPIs in the industry.
Time-to-Hire (TTH)
It is the duration between posting a job opening and the candidate’s acceptance. Time-to-Hire is an important metric as it gives you a direct idea about the efficiency of the hiring process. According to the Society for Human Resource Management (SHRM), the average time-to-hire is 36 days. However, an ideal TTH varies depending on the industry and the job position. For example, the TTH for IT professionals is usually shorter than for executive-level positions.
Cost-per-Hire (CPH)
Cost-per-hire is the total cost incurred in the recruitment process divided by the number of new hires. Cost-per-Hire covers expenses such as job postings, recruitment agency fees, job fair participation, and background checks. According to SHRM, the average cost-per-hire in the United States is $4,129. Again, CPH varies depending on the recruitment strategy used and the job position.
Source-of-Hire (SOH)
Source-of-hire identifies the recruitment channel that led to the candidate’s application and eventual hiring. SOH includes sources such as job boards, employee referrals, social media, and career fairs. Tracking the source-of-hire helps determine the most effective recruitment channels for specific job positions. According to Jobvite, employee referrals have the highest conversion rate, with 45% of referred candidates getting hired.
Applicant-to-Hire Ratio (AHR)
This is the number of applicants who progressed to the final stages of the hiring process divided by the number of hires. AHR measures the effectiveness of the screening and selection process. A low AHR indicates that the job requirements are too restrictive, while a high AHR may indicate that the recruitment process needs to be more selective.
Offer Acceptance Rate (OAR)
This is the number of applicants who progressed to the final stages of the hiring process divided by the number of hires. AHR measures the effectiveness of the screening and selection process. A low AHR indicates that the job requirements are too restrictive, while a high AHR may indicate that the recruitment process needs to be more selective.
Quality of Hire (QOH)
Quality of hire is the overall performance and productivity of the new hire. QOH measures the effectiveness of the recruitment process in selecting the right candidate for the job position. It is measured using performance reviews, sales revenue, and customer satisfaction ratings. According to LinkedIn, 46% of talent leaders say QOH is the most vital metric to track.
Diversity Hiring
Not exactly a metric, it is the number of candidates recruited from diverse backgrounds, including race, ethnicity, gender, and age. Diversity hiring promotes inclusion and diversity in the workplace. According to SHRM, companies with diverse workforces have 35% better financial results than those without. Diversity hiring can be measured using metrics such as diversity in job applicants and new hires, retention rates of diverse employees, and the percentage of diverse employees in leadership positions.
These metrics give you an idea of how effective the hiring process in your organization is and the compatibility of the resource hired with your organization. Continually monitoring these metrics enables you to remove bottlenecks and optimize your hiring process.
