The top Recruitment KPIs to track in 2024 include time to fill, cost per hire, Candidate Experience, Candidate Net Promoter Score (cNPS), source of hire, and quality of hire. Tracking these metrics can help optimize recruitment processes and operations, leading to improved candidate quality, increased retention rates, and reduced costs. Prioritizing Candidate Experience KPIs can also lead to a positive experience for candidates and build an attractive Employer Brand.
Let's set the scene: it's 2024. Businesses are slowly but surely recovering from the post-pandemic slump, and the hiring scene has shifted to a candidate-centric environment. However, the uncertainty and instability of the current world order is forcing companies to cut budgets and lay off hundreds of employees.
Despite this, recruiters and talent acquisition specialists are facing increasing challenges in hiring and retaining the right people, with 75% of companies reporting challenges in finding qualified talent. Often, they are forced to do more with less, as talent acquisition teams shrink due to market instability.
As the saying goes, "you cannot improve what you don't measure." Therefore, 2024 is the perfect time to begin optimizing recruitment operations with actionable KPI metrics.
What are Recruitment KPIs?
Recruitment Key Performance Indicators (KPIs) are measurable metrics used to track and evaluate the effectiveness of a company's recruitment process. They provide insight into how well the company is attracting, screening, and hiring applicants. These metrics are usually determined by the time and money spent on various stages of the process or the quality of the outcome.
Having a recruitment KPI framework in place helps companies make data-driven decisions and optimize the process from start to finish to attract, hire, and retain top talent.
KPIs to Track in 2024
Time to Fill
Recruiters often talk about time to fill and time to hire metrics. They also often use them interchangeably. However, each metric encompasses a different time period within a recruitment process and allows companies to measure and improve in different ways.
Time to fill refers to the number of days it takes from the time a hiring process begins (i.e. from the day the job ad is posted) to the day the chosen candidate accepts their offer and signs the contract.
Calculating time to hire focuses more on the candidate journey: from the day they enter the recruitment funnel, through being shortlisted and interviewed, until they finally accept the job offer.
Measuring your time to hire and time to fill can show how quickly your recruitment process is bringing in new hires. This can help your talent acquisition team figure out which parts of the process might be slowing things down or making your best candidates lose interest and leave for other opportunities.
Is the Aim to Keep Time to Hire as Low as Possible?
Yes. But not at all costs.
A shorter time to hire can positively impact your Candidate Experience. Candidates who receive timely feedback and updates during the recruitment process are more likely to have a positive experience, which can lead to a better Employer Brand and higher Candidate Net Promoter Scores (cNPS).
However, it is also crucial to balance a quick time to hire with other KPIs, such as the quality of hire and Candidate Experience. Rushing the recruitment process can result in hiring the wrong candidates or creating a negative Candidate Experience, which can be detrimental to the organization in the long run.
According to a 2022 Society for Human Resource Management (SHRM) report, the average time to fill across industries is 42 days. The same report indicates that the average time to hire is around 24 days.
Yet, on average, 55% of candidates expect it to take no more than 2 weeks from the first interview with a company to a job offer. So if you find your time to hire to be significantly higher than the 24 days outlined in the SHRM report above, you should probably analyze your hiring funnel more closely, as it could be contributing to a negative Candidate Experience.
Cost per Hire
Cost per hire measures the cost of filling a vacancy within your organization. This includes all potential recruitment costs, such as:
- Advertising the new role
- The necessary time to identify the right candidate (e.g. a percentage of the recruiter’s monthly salary)
- Onboarding the new employee
- Providing the necessary equipment
For example, the average cost per hire in the US is $4,700. Let’s say that you hire an average of 10 open positions a month, giving you a monthly cost of $47,000 on hires alone. This should already be a good enough reason to start monitoring the cost per hire metric in your recruitment efforts.
Moreover, by calculating the total cost of recruitment and dividing it by the number of hires made, recruiters can get a clear picture of the amount of resources required to fill a position. This information can be used to optimize the recruitment budget, make more informed decisions and allocate resources more efficiently.
Monitoring cost per hire allows you to ensure that you have enough budget for significant hiring expansions when they occur. For example, if significant roles within the organization need to be replaced or expanded, you can be confident that you have the financial capacity to hire the right person for the job.
Let’s state the obvious: a lower cost per hire indicates that you’re hiring more people while spending less on recruitment. Keeping an eye on this can help you identify trends and patterns that could optimize your overall hiring efforts.
For example, if your average cost per hire is quite low, yet you’re not attracting the right candidates or the retention rates are dropping, you might find that increasing your investment in advertising on job boards and social media, such as LinkedIn, might positively impact your other KPIs.
Candidate Experience
Candidate Experience is an important aspect of the recruitment process. It refers to the overall experience a candidate has as they move through the stages: from the first time they encounter the job opening to the final decision. As a KPI, measuring Candidate Experience encompasses many factors, such as:
- Ease of application
- Quality of communication with the recruiter or hiring manager
- Interview experience
- Access to feedback at every stage, especially if the candidate is unsuccessful
The way the candidate perceives the recruitment process is an effective way to get an insight into the overall performance of your hiring efforts.
Listening to the candidates will help you easily identify parts of the process that are not working: are there too many stages? Is the communication not adequate enough? Are you losing candidates due to poor time management or expectation setting?
Since recruitment is becoming more and more candidate-centric, an unhappy candidate can result in more damage to the organization than you think.
69% of candidates believe that company reputation is important when deciding whether to accept a job offer or not. And leaving applicants with a bad Candidate Experience will have a negative impact on their reputation as an employer.
Companies who prioritize and measure Candidate Experience as part of their recruitment strategy are 70% more likely to improve their overall quality of hires. As 2024 continues to shine a light on companies with great Candidate Experience, it is a KPI that will get many companies hiring more efficiently in the long run.
Candidate Net Promoter Score (cNPS)
Candidate Net Promoter Score (cNPS) is a metric that measures how likely candidates are to recommend applying for a job at the company to others based on their recruitment experience. It is calculated by subtracting the percentage of detractors (candidates who would not recommend the company) from the percentage of promoters (candidates who would recommend the company).
A high cNPS indicates that the organization is providing a positive Candidate Experience and can help build a strong Employer Brand.
Tracking cNPS can also provide valuable insights into the recruitment process and help recruiters identify areas for improvement. For example, if the cNPS is low, it may indicate that the organization needs to improve communication with candidates or provide more transparency during the recruitment process.
By tracking cNPS, recruiters can make data-driven decisions to optimize the recruitment process and provide a positive Candidate Experience.
Source of Hire
Talent Acquisition teams nowadays have access to various channels when advertising a job opening. From job sites, recruitment agencies, LinkedIn and other social media to employee referrals, all to find just one new employee.
Source of hire is the metric that measures the effectiveness of your recruitment channels. It is measured by factors such as:
- Number of hires by source
- Cost per hire by source
- Retention rate per source
Knowing the most effective sourcing channel and comparing the number of high-quality candidates from each potential source can ensure that you focus on these when you begin the recruitment process. Source quality also enables your HR teams to know where to spend their time and resources building a reliable pipeline of great talent.
This shows that not all sources will yield the same results, and you should have a good grasp of your performance with each channel to make sure you are not wasting time or money.
Quality of Hire
Quality of hire is the metric that measures how effective the recruitment process is in hiring top-quality talent. The factors that indicate the quality of hire include:
- The new hire’s job performance
- Retention rate
- Cultural fit
- Employee satisfaction
A high quality of hire score is the ultimate proof for the effectiveness of your hiring efforts, from start to finish. It reflects on your team’s ability to attract, engage and hire the right people for the organization, both in terms of performance and cultural fit.
In order to improve the quality of hire, you may have to take several factors into account. For example, you might have to start as early as the job descriptions. All to ensure they are accurately reflecting the requirements and responsibilities of the position.
You might also need to streamline the recruitment process to ensure that candidates are being evaluated based on a consistent set of criteria.
Additionally, prioritizing your Employer Branding efforts to create a positive image of the organization and attract top talent will also have an impact on the quality of your hires.
By measuring and improving the quality of hire metric, companies can ensure that they are hiring the right candidates who will be successful in their roles and will fit well within the organization. This can ultimately lead to improved business outcomes, as well as a more positive work environment for all employees.
How Can Tracking Recruitment KPIs Optimize Processes?
Tracking recruitment KPIs can be incredibly valuable for organizations looking to optimize their recruitment processes and operations.
By monitoring metrics such as time-to-hire, cost-per-hire, and quality-of-hire, you can identify areas of inefficiency or bottlenecks. For example, if time-to-hire is particularly long, it may indicate that the recruitment process needs streamlining or that job postings are not effectively targeting the right candidates.
Similarly, if the cost-per-hire is high, it may be a sign to consider alternative sourcing channels or to reassess the job requirements.
By tracking these KPIs, organizations can make data-driven decisions and continually refine their recruitment strategies. This ultimately leads to improved candidate quality, increased retention rates, and reduced costs.
Additionally, tracking Candidate Experience KPIs, such as cNPS and job offer acceptance rates, can help create a positive Candidate Experience and build an attractive Employer Brand.
In Short
- Time to fill and time to hire are important metrics to track, as a shorter time can positively impact Candidate Experience, but rushing the process can result in hiring the wrong candidates.
- Cost per hire measures the cost of filling a vacancy within an organization and can help optimize recruitment budgets.
- Candidate Experience encompasses factors such as ease of application, quality of communication, interview experience, and feedback access.
- Candidate Net Promoter Score (cNPS) measures how likely candidates are to recommend the company based on their recruitment experience.
- Source of hire measures the effectiveness of recruitment channels and can help companies focus on the most effective sources.
- Quality of hire measures how effective the recruitment process is in hiring top-quality talent, and can be improved by accurately reflecting job requirements, evaluating candidates based on consistent criteria, and prioritizing employer branding efforts.
- Tracking recruitment KPIs can ultimately lead to improved candidate quality, increased retention rates, and reduced costs, while prioritizing Candidate Experience KPIs can lead to a positive experience for candidates and build an attractive Employer Brand.
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