Tracking Hiring Milestones and Recruiting KPIs - Part 2
In last week’s blog post on Part 1 about KPI's, we covered five crucial recruiting metrics that will help take your HR team to the next level. In addition to those five, however, we’ve compiled a few more that will allow you to be smarter about where you are focusing your recruiting efforts and judge the effectiveness of those efforts.
Qualified Applicants per Requisition
Qualified applicants per requisition is a good indicator of the effectiveness of your sourcing channels. It takes into account not simply the total number of applicants for a position, but, more specifically, the number of qualified applicants. One source may produce hundreds of applications, but perhaps only ten of the applicants actually made it beyond the screening questions or the minimum requirements, while a different source may produce only a few applicants, but a higher percentage of them become qualified candidates.
Once you know which sources provide the greater percentage of qualified applicants, you can focus your energy and resources on these channels. This saves companies from wasting time or money on expensive job boards when perhaps they receive their best candidates from employee referrals or social media sites.
The way that you determine what a qualified applicant means will vary based on the specific requirements that you establish for each requisition, but it is important to establish an average over all requisitions for a specific time period. The metrics to pay attention to are the number of total applicants, the number screened in, the number hired, the ratio of screened in to applied, and finally the percentage of the total hires from each source. Ultimately, qualified applicants are the only ones that matter and the ones that you will want to keep in contact with for future opportunities.
Today, with technology changing and systems being put in place to help with Big Data, and the ability to monitor every aspect of the recruiting process, companies now have the ability to monitor and measure recruiter efficiency.
Recruiter efficiency takes into account several metrics, but really comes down to how effective a recruiter is at finding the most qualified candidate in the shortest amount of time, and ensuring that they are someone who will not only accept the company’s offer, but will become a valuable asset to that company.
This metric is very obviously tied to the bottom line, and thus becomes a highly scrutinized metric all the way up to the executive level. The level of recruiter efficiency can be directly tied to the cost of hire for any given position, and thus to the overall performance of a company's recruiting strategy.
The following factors should be considered to determine one recruiter’s efficiency versus another’s:
- Open requisitions assigned to them
- Pending requisitions
- Requisitions on hold
- Requisitions in approval
- Requisitions filled
- Average days to fill
A successful recruiter will know the best sources for each requisition, will be able to realistically portray the company’s needs, and provide the organization with employees that will become top performers and contribute to a high retention rate.
Cost per Hire
For most companies, everything still comes down to the bottom line, which is why “Cost of Hire” remains one of the most important metrics to track in HR’s recruiting efforts. It is crucial to know exactly how much it is costing your organization to hire each position, and where you may be losing money. HR needs to be able to show executives cost-effectiveness when it comes to a recruiting strategy.
It is not uncommon to hear that the cost of hiring someone is more expensive than a full year’s salary for that position, and there are many articles that back up this claim (How much does it cost companies to lose employees?, The Cost Of Hiring A New Employee, You make $70k but cost your boss $88k, etc.). While not all of the costs are related directly to recruiting a new hire, there are many recruiting decisions that impact the overall cost. That is why it is crucial to know exactly how much it is costing your organization to hire each position, and where you may be losing money.
Cost of hire takes into account factors, which of course will vary based on the position being hired for.
The most common ones are the following:
- Advertising and job board subscription costs
- Relocation assistance
- Referral bonuses
- Travel expenses
- Agency fees
- Recruiter time and labor
- Additional staffing expenses
- Applicant Tracking
- Artificial Intelligence
- Candidate Relationship Management
- Career Development
- Career Path
- Change Management
- Continuous Feedback
- Core HR
- Data Integrity
- Employee Engagement
- Employee Information
- Employee Lifecycle
- Employee Performance Management
- Employee Referral
- Financial Management
- HR Technology
- Hrsmart Quizzes
- Human Capital Management
- Human Resources
- Learning Management
- Performance Management
- Performance Reviews
- Project-Based Hiring
- Small Business
- Social Media
- Succession Planning
- Talent Acquisition
- Talent Management
- Talent Relationship Management
- Trade Shows
- Unified Talent Management