Hiring the best candidates is necessary for the growth of every business. The recruitment process basically involves shortlisting, choosing, and getting in touch with qualified talent for employment. It’s imperative for any organization to have an effective hiring procedure, not just to quickly get done with the hires, but also to reduce the costs.
A good recruitment process gives a company the ability to connect with higher-quality talent, have a better competitive advantage, and attain faster levels of growth. The question is, how can you correctly evaluate your company’s existing recruitment process? These are the relevant recruiting metrics you need to do that.
1. Cost per hire
Any company that is managing a recruitment budget should have an idea of the cost per hire. Such metric determines the average amount of money you spend on hiring a new employee. This may include expenses for buying new equipment, onboarding and administrative costs, and employee benefits and perks. These examples vary depending on the recruitment or multi-job posting channels you use, the level of position, as well as the size of your company. You need to take into account both the internal and external costs to get the total recruitment cost.
2. Time to fill
This metric gives you the details on how long it takes for you to seek and hire a new employee. It is not only affected by how quickly your recruitment department performs but also your job opening’s supply and demand ratios. This is typically measured by companies who are just starting or currently developing a new business plan as it offers a realistic view of the time it takes for you to get a replacement for a position that will soon be vacant.
3. Time to hire
For this metric, you need to know the number of days between the time you reach out to an applicant and the time he or she accepts the job offer. Often called ‘Time to Accept’, this KPI can give you a clear view of the performance of your recruitment department. Strongly influenced by the recruitment funnel, a shorter time means you get to acquire the best talent with the lower possibility of other companies snatching them up. Furthermore, it also establishes your reputation when it comes to recruiting. The faster your hiring process is, the better or more candidates you can attract.
4. Quality of hire
Applicants who pass your screening process and proceed to the next stages will be calculated in this metric. Compared to just assessing the number of your applicants, looking at their qualifications is deemed to be more valuable. It gives you a clearer view of how talented the people you’re attracting. That in mind, focusing on this KPI allows you to determine if you’re attracting unqualified people, helping you set better strategies on how to improve your funnel. You just need to divide the number of applicants who passed your screening process by the number of candidates who move to the last stage of the process.
5. Retention rate
Next key metric to look into is your retention rate. Obviously, the higher your retention rate is, the fewer resources and the lesser time you need to provide. That also means you are fostering employee loyalty within your workplace. In fact, the cost for replacing an employee can range around 30% to 400% of their salaries. Aside from losing money and resources, lower retention rate can also slow down your entire team’s productivity and affect the completion of your deliverables. When evaluating this metric, the duration you should base it on is at least a year or longer.
6. Hiring manager satisfaction
Last metric that is vital to look into is the satisfaction rate of your hiring manager. As a matter of fact, numerous companies also use this KPI to measure the quality of hire. The best and easiest way to measure this metric is through surveys. Questions in the survey must cover the satisfaction with the performance of new hires and the satisfaction with the competency of new hires. In case you’re planning to use this to also measure your quality of hire, be sure to take other KPIs into consideration.
Having effective recruitment will certainly allow you to streamline your hiring procedure, from contacting your candidates to training the new hires. Plus, you also get to establish a fair and transparent hiring process that can lower the risks of legal issues your business is likely to face. Rather than constantly wondering what’s wrong with your recruitment, start checking on the metrics above to get a clearer view.