Hiring a new employee involves a certain level of risk.
When you have just a few weeks to find, interview, and hire an individual for an open position, you’re taking a gamble on who you believe is the best fit.
While you may have certain processes you follow or certain qualities you look for throughout the recruitment process, there is always a chance you make the wrong choice. If you hire the wrong individual, you’re trapped facing a long and costly process to get a replacement.
In fact, one bad hire could cost the company 30% of that employee’s yearly earnings.
This is a cost most organizations are going to want to avoid.
Luckily, with the help of recruitment analytics, you and your HR team can make more educated decisions about the candidates you’re connecting with,
Recruitment analytics help you optimize your hiring process for greater success. Through tracking, measuring, and strategizing, you’re able to refine your recruitment process so you’re getting in touch with the most qualified candidates.
However, recruitment analytics is a rather broad topic. There are dozens and dozens of metrics and numbers you can measure. Unfortunately, not every metric will be helpful to you and your company.
To make the most out of recruitment analytics, you need to know what Key Performance Indicators (KPIs) really matter. Let’s take a look at some of the best recruitment KPIs to monitor, as well as how you can find them and apply them to your hiring process.
1. Number of Qualified Candidates
Hiring the right individual for your open position begins with getting qualified candidates to apply for your job opening. While Number of Qualified Candidates may sound like a basic KPI, it’s an important one.
There are a number of unique factors that might contribute to whether or not a candidate is considered qualified. However, in this sense, only count the number of candidates that fit your needs enough to move on to the first interview or screening.
Number of Qualified Candidates = Number of Candidates Moving to First Interview
Measuring your number of qualified candidates can help you understand the strength of your job description, as well as the sources you’re hosting that job description on.
Let’s think about the following examples.
Say you post a new job description for an open position on a number of job-seeker websites. After a few days, you have a healthy pool of applicants to look through. Unfortunately, as you start to dig deeper, you find that none of your applicants really fit your needs.
This might tell you that your job description isn’t clear enough about what you’re looking for and you should consider making some revisions.
On the other hand, let’s say you’ve posted a job posting just on your company website.
You’re getting a few applicants and they all seem highly qualified. However, you’re not seeing a lot of candidates applying.
This might signal that you need to diversify where you’re posting your job description. While the content is strong, you’re just not getting a high enough reach.
You can break down the Number of Qualified Candidates even further to measure what specific source those qualified individuals are applying through. By identifying the platforms that provide you with the best candidates, you can optimize that site in the future for better results.
In the long term, knowing the Number of Qualified Candidates you need to make a successful hire can help set you on track for a timely recruitment process in the future. Knowing how many qualified applicants you need to eventually fill your open position can help reduce
2. Application Completion Rate
Job applications need to be thorough in order to gather the information recruiters need to make educated decisions on
Unfortunately, if the application is too lengthy or complex, a high-quality candidate may abandon the application before finishing. In fact, 60% of job seekers quit fitting out an online application in the middle of the process.
When your job application isn’t user-friendly, you could be missing out on connecting with the job candidates you need. That’s why
Application Completion Rate = (Number of Applications Completed / Number of Applications Started) x 100
While some recruiters might think that a long and thorough application will help deter low–quality candidates from applying, it can actually have a negative effect all around.
Highly skilled and in-demand candidates know that their time is valuable and that there are a number of prospects out there. If they feel an application wastes too much of their day, they’ll move on to a different employer.
If you find that you have a low Application Completion Rate, it might be a sign that your application process isn’t user-friendly or you’re asking too many questions.
To make it as easy as possible on your applicants, consider what information you really need to move a candidate to the next step of your recruitment process. If you don’t need their references or long-form answers to dozens of questions, don’t put them in the application.
You may also want to consider that your Application Completion Rate might be low if you’re not using an optimized application system. If your application doesn’t work well on mobile devices, you could be creating a negative application experience for up to 78% of people.
3. Offer Acceptance Rate
Each time we extend an offer, we hope that it is accepted. Unfortunately, this isn’t always the case.
A candidate may be going through multiple interviews and find a company that offers a better fit, or the organization’s benefits package may not meet their needs. For whatever reason, candidates don’t always accept the offers they’re given.
While we can’t always expect a perfect Offer Acceptance Rate, knowing when and why individuals choose to pass up one of your offers can help you refine your recruitment and interview process.
The Offer Acceptance Rate is found by dividing the Total Number of Offers Accepted by the Total Number of Offers Given. Then, multiply by 100 to find the percentage.
Offer Acceptance Rate = ( Number of Offers Accepted / Number of Offers Given) x 100
Ideally, you would have a high Offer Acceptance Rate. However, if your Offer Acceptance Rate is low, this might signal that there is some disconnect between you and your candidates during the interview process.
One of the biggest reasons an individual might turn down a job offer is that the final offer didn’t meet their expectations or needs. The salary offer might have been too low, or it didn’t come with additional benefits like paid time off or retirement options.
To avoid this kind of disconnect, it’s important to be up-front with applicants about what you’re able to offer before reaching the final stages of the hiring process. By discussing benefits and salaries early on, you can avoid any kind of miscommunication that might result in a declined offer.
Another popular reason candidates turn down offers is due to inefficient hiring, which can reflect badly on the company’s culture. If your process is messy, your communication is lacking, or they have an otherwise negative interviewing experience, they may take it as a red flag about the entire organization.
As the first introduction to the company’s culture, it's important your HR team has clear processes, systems, and flows to keep their interview process running smoothly.
4. Recruitment Funnel Effectiveness
Recruitment Funnel Effectiveness is one metric that follows you through the entire recruitment process. By analyzing your recruitment funnel as you go, you can get an overview of how well applicants are moving from applicant to potential new hire.
Recruitment Funnel Effectiveness considers that your hiring process works like a funnel. At the top, you cast a wide net to gather as many applicants as possible. As you move through the funnel, the mouth becomes smaller and smaller, only spitting out the candidates who fit your company best.
However, Recruitment Funnel Effectiveness breaks down the funnel into different steps and analyzes how many candidates begin that phase and how many people successfully complete it to move to the next phase.
Recruitment Funnel Effectiveness is best represented by a yield ratio. To find this ratio, take the number of applicants who entered the recruitment phase by the number of applicants who successfully completed the phase.
Number of Applicants Who Entered Phase
Let’s break this one out into an example.
Say you have 500 applicants submit resumes to an open job position. Of those 500 applicants, you choose to bring the 50 most qualified to a phone screen.
Your ratio for this phase of the recruitment funnel would be 500:50, or 10:1.
At the next phase, you narrow down those 50 phone screenings to 10 second round interviews. Your ratio for this phase is 50:10, or 5:1.
Of those 10 second round interviews, you decide on 3 to move to the next phase. Your ratio is 10:3.
Finally, of the three individuals you gave a final interview
If the offer accepts, your final ratio for your recruitment funnel would be 1:1.
While there are no magic ratios that you want to have throughout your funnel, seeing how many individuals are entering and leaving each phase can help you better understand the different phases of your recruitment process.
It can also help you identify any issues, helping you pinpoint problems without needing to completely overhaul your system. Breaking down each phase’s conversion rates can help you see where you may need to expand, add another interview or screening, or even bring on more applicants.
5. Sourcing Channel Cost Per Applicant
Posting your job description on a variety of platforms can help you increase the number of applicants you get for the job. When you have a healthy pool of applicants to choose from, you’re more likely to find a strong fit.
However, many job sites and platforms require that you pay to list your opening. While some provide free options, boosting your post can help you stay in a prime location to get more attention.
Costs for these listings should all be included in your cost-to-hire metric, but you always want to go a bit further to see what channels are bringing you the best results. By looking at how much you’re spending compared to how many high-quality applications you’re getting, you can save time and money.
This is why Sourcing Channel Cost Per Applicant is the final KPI on our list.
Sourcing Channel Cost Per Applicant can be found by dividing your total ad spend per platform by the number of successful applicants from that platform.
Sourcing Channel Cost Per Applicant = Ad Spend Per Platform / Number of Successful Applicants Per Platform
Let’s say you spend $500 to post a job for 30 days on a career site. During the time the posting is live, you get 100 high-quality applicants.
Your Sourcing Channel Cost Per Applicant for this platform would be $5 per applicant.
Now, let’s say you spend $300 to post a job for 30 days on another career site. This site also brings 100 high-quality applicants.
Your Sourcing Channel Cost Per Applicant for this platform would only be $3 per applicant.
This KPI would tell you that the second platform is a better deal, helping you save time without compromising the quality of your candidates.
When finding your Sourcing Channel Cost Per Applicant, you also need to consider that some platforms work on a Pay-Per-Click model. This means you’re paying for the clicks to your application – not necessarily for actual applicants.
To determine your Sourcing Channel Cost Per Applicant for Pay-Per-Click models, you’ll want to use your total spend, including the cost of clicks that ultimately did not apply.
Finding Your Recruitment KPIs
While these five KPIs can get you off to a good start, your recruitment process will have unique needs you’ll want to keep track of. By assessing which metrics, analytics, and data
However, these KPIs are a great place to start. Let’s recap the five recruitment KPIs you should consider tracking:
Number of Qualified Candidates
Application Completion Rate
Offer Acceptance Rate
Recruitment Funnel Effectiveness
Sourcing Channel Cost Per Applicant
Want a quick cheat sheet to remember how to find these metrics? Download the free PDF!