To put it crudely, the recruitment process can be a pain in the butt. When you think about it, it’s just a complex and lengthy marketing strategy that’s supposed to help companies attract the best talent and eventually find the one who best fits the company-culture. However, it is one of the most resource-heavy processes.
If you asked a bunch of recruiters and HR professionals what their biggest hiring headache was, their answers would vary depending on size of the company or the roles they were hiring. But, most of them would gravitate to these recruiting challenges:
1. Attracting the right candidate pool
2. Effectively engaging qualified candidates and successfully converting passive ones
3. Speeding up the hiring process
4. Using data to streamline hiring decisions
5. Building a strong employer brand
6. Ensuring a positive candidate experience
7. Building a completely efficient recruiting process
What is a recruitment funnel?
To find the right people and successfully convert them as employees can be a tough process. Recruitment funnels help shape strategies that results in a successful talent acquisition. The recruitment funnel should consist of all the necessary steps, starting with:
1. Setting up the application process
2. Attracting candidates
3. Interviewing shortlisted candidates
4. Hiring candidates that suit the role
5. Onboarding the candidates
Why you need to track it
By simply glancing at these steps, one can glean the complexity of the recruitment process. Therefore, in order to successfully convert candidates as full-time employees, balance the recruitment efforts to results ratio, it is necessary to ensure that the recruitment funnel is up to the mark.
The recruitment funnel breaks down the recruitment process into the stages enumerated above, which are further broken down into tasks. Tracking and managing these tasks is the job and the challenge of the recruiter. Measuring these recruitment metrics can be made easier with the help of the right digital tools.
How recruitment metrics measure funnel effectiveness
The right digital tools can help recruiters and organizations automate and streamline the hiring process, and also supplies valuable recruitment data. Just as employers regularly measure employee engagement and performance, it is also necessary to employ digital recruitment tools to track the recruitment funnel. Lack of surveillance would lead to a less efficient recruitment cycle that isn’t geared for the future of talent acquisition.
A recruitment dashboard gives recruiters a one-view or the digital recruitment platform and the ability to track each stage of the recruitment funnel. This helps in streamlining the recruitment process and eventually land the best candidates that will fit the role.
Want to know the essential recruitment metrics that top recruiters use? Following are the five recruitment metrics you should be measuring.
Top 5 recruitment metrics you must be measuring
1. Quality of hire
The quality of hire is defined as the value a new hire adds to the company. Specifically to the organisation’s long-term success. 40% of talent acquisition leaders rank quality of hire as their top priority. But it is also the most difficult recruitment metric to measure, and the main reason for that is the span of time it will take to asses the quality of performance and results the new hire will bring during their tenure. This may take several months to even years.
Some of the ways quality of hire is measured are by calculating retention rate, satisfaction of the hiring managers, the time it takes for the employee to ramp up to full productivity, job performance, engagement, and cultural fit which is measured by the 360 ratings of the new hire’s colleagues and managers.
In order to understand how successful a recruitment process is in general, quality of hire can be scaled by averaging the scores of all hires and including the retention rate.
The formula for calculating it is:
New hire retention = (number of new hires who remained employed for the measurement period) / (number of new hires at start of measurement period) x 100
In addition to that, recruiters can also continuously optimize the selection process by measuring candidate performance to role-related skills. By focusing on one element, recruiters can obtain metrics that indicate a better quality of hire.
2. Source of hire
Today, 79% of job candidates use social media in their job search (Glassdoor). So, the next essential recruitment metric recruiters should be measuring is the source of hire. A source of hire shows what percentage of an organisation’s overall hires entered the recruitment pipeline from each recruiting channel, such as job boards, referrals, and social media channels.
Digital recruitment platforms display these recruitment metrics on dashboards for easy visualization. As a valuable metric of recruitment, it helps recruiters understand expenses incurred and stop working on channels that are not bringing any candidates. Instead, the recruitment funds can be directed towards more successful channels.
3. Time to fill
Time to fill is the amount of time it would take to locate and recruit new employees to fill a position. It represents the number of calendar days until the company fills the open position. Generally, the process usually begins with either:
- Submitting the requisition for approval
- HR or finance approving the requisition; or
- An advertisement for the job opening
This is an essential recruitment metric because hiring employees is infamously a lengthy process. It gives recruiters a clear indication on the measures that can be undertaken to optimize the hiring process.
4. Cost per hire
Cost per hire is an essential and most common used recruitment metric. It refers to the total cost of hiring a new employee, including the expense of the recruitment process, equipment, travel costs, administrative costs and benefits. It gives a complete insight into the efficiency of the recruitment process. It’s measured as:
Cost per hire = (internal recruiting cost + external recruiting cost) / total number of hires in a given time frame.
5. Recruitment funnel effectiveness
The recruitment funnel as a whole is also measurable as a metric. Recruiter analyse and measure every step of the hiring process. With the recent boom in affordable and intelligent recruitment softwares, candidate assessment and recruitment is more streamlined and efficient.
A good rule of thumb while measuring recruitment funnel effectiveness is for recruiters to check for their yield ratio per step. The calculation is based on the number of applicants that have cleared each stage of the recruitment funnel over the total number of applicants. By following this method of measurement, recruiters can identify which stage of the process requires refinement for better recruitment.
New age recruitment technology expedites the hiring process by leaps and bounds. The analytics of recruitment is what determines the effectiveness of the process. Recruitment metrics provides layers of helpful insights that can be used to improve an organization’s hiring strategies.
There are various other metrics to measuring recruitment aside from the essential five listed above. But measuring everything may not be the right strategy for every company. Organizations must always be mindful of measuring only what’s important to its business goals. Applying strategy and measuring the right metrics can mean everything for human capital and organizational growth.