Here’s a question for you. How successful are your recruiting and hiring efforts? Many business owners only have a vague idea of how to answer this question.
In order for your business to thrive, you need to do more than just fill positions. You’ve got to fill them with the right people, at the right time, and within budget. And you probably want to retain those talented employees for a decent chunk of time too.
To help you measure your organisation’s recruitment and hiring success, we’ve composed a list of our top five recruiting metrics that your business should start using today.
Time to Fill
Time to fill is probably the most common recruitment metric companies use to determine the effectiveness of their recruiting and hiring processes. You can track this metric in a few different ways:
- Elapsed time from start of search to accepted offer
- Time from start of search to new hire start date, separated by milestones such as applications reviewed, interviews completed, and offer extended
- Hours spent on each requisition
However you measure it, time to fill is great for identifying inefficiencies and delays in the search and interview process.
Quality of Hire
Though you want to identify talent and bring on new employees as quickly as possible, that’s far from your only concern. In order to determine the success of your recruitment process, you must also assess the quality of the employees you hire.
There’s a lot of room for subjectivity in this metric, which can make it tricky to measure. We recommend using two concrete tools that will help you come up with an objective result.
First, give hiring managers and supervisors a standardised survey that rates satisfaction with the new employee’s performance after a specified period of time, such as one month or six months after hire.
Second, calculate your employee retention rate. Here’s a simple formula.
Start with a given period –≠ say the first quarter of the year. Then gather these numbers:
- The number of people you employed at the start of the period
- The number of terminations you had during that period
- The number of employees remaining at the end of the period (A-B=C)
Then calculate your turnover rate using this formula:
C ÷ A × 100 = Retention Rate
So let’s say you employed 25 people at the start of the quarter, and terminated 5 during the quarter, leaving 20 employees.
20 ÷ 25 × 100 = 80% retention rate.
You can compare your rate to the averages in your industry according to your government’s data. Generally speaking, 80% is a pretty good rate. And hopefully, your employees stay on board for at least a year.
Cost per Hire
Cost per hire is the average amount of money your company spends on making a hire. Calculate it by adding up all of your recruiting expenses in the last year and dividing that figure by your total number of hires.
So what’s a good cost per hire? That depends. If you use a recruitment agency, you should plan to spend about 20-30 percent of the final salary, or about £5,000 (€5,800). If you advertise yourself on LinkedIn or other recruitment sites, you might spend around £200-300 (€232-348).
Your new hire’s satisfaction is just as important as the hiring manager’s. You want to know how the new employee experienced the application and interview process. To measure this, administer a standardised satisfaction survey to each new hire within their first 30 days on the job. You can use that information to gain insight into the candidate experience and make adjustments when necessary.
Recruitment and hiring are essential elements of any organisation. In order to know if your efforts are effective, you must measure your success. We hope that these five metrics will help you to ensure that you have an efficient, cost-effective, and rewarding experience for both the company and your applicants. By measuring recruitment success consistently and regularly, you can focus on improving your hiring practices. This should lead to better hires and less time and money spent on finding and retaining them.