Which recruiting KPIs should you be measuring against?
by Heat Recruitment
Assess these four key recruitment metrics and re-evaluate your hiring process
It’s easy to get caught up in the number of applicants applying for an open vacancy – especially when you’ve paid to advertise it. Yet there are so many other insightful key performance indicators (recruitment KPIs) which should be measured. Tracking the length of the recruitment process and number of qualified candidates applying for each role can be helpful, but going beyond this surface level is where you’ll start to discover areas to improve.
Here are four recruitment KPIs that could be making or breaking your current recruitment strategy.
Recruitment KPI #1: retention rate
Hiring the perfect candidate is no easy feat, but getting them to work with your company for a prolonged period of time is even more difficult. If you only measure one recruitment metric, make it your retention rate. It’s one of the most accurate ways to identify a disconnect between employees and employer; a high retention rate is appealing to prospective candidates too. Besides, recruiting a new member of staff requires a considerable investment of time and money which could be easily bypassed by upskilling in-house talent instead.
To work out your retention rate, you can use a simple formula. Calculate the number of workers employed over a set period of time, divided by the number of workers employed at the beginning of that time period. Then, multiply that number by 100 to turn it into a percentage.
Retention rate formula: Number of individual employees who remained employed for entire measurement period / Number of employees at start of measurement period) x 100
Recruitment KPI #2: Sourcing channel effectiveness
When you’re paying to place job adverts on different platforms, it’s essential that you know which ones you’re gaining the most traction from. Go further than just comparing the number of applicants filtering through to you from each channel – look into the conversion rates and which have been responsible for the majority of your successful placements.How to compare sourcing channel effectiveness: Choose a timeframe to monitor, eg. three months. Then, count the number of candidates generated from each channel during that timeframe and compare your results.
Recruitment KPI #3: Offer acceptance rate
Unfortunately, your preferred candidate won’t always be the one to accept your job offer. On one hand, you should keep track of how many candidates turn down an offer you’ve made them – but it shouldn’t be your sole focus when measuring your offer acceptance rate. Perhaps what’s more important is why you’re being turned down.
Ask for feedback, suggest a compromise and – most importantly – keep track of responses. Candidate feedback surveys can be useful for this, and many recruiters will implement this as part of their standard hiring process.
Offer acceptance rate formula: offer acceptance rate = Number of offers accepted / Number of offers – turned into a %
Recruitment KPI #4: Referral to hire rate
An incentivised employee referral scheme can be a great way to encourage your team to recommend potential candidates to fill an open vacancy, streamlining the hiring process and saving both time and money. However, if these referrals aren’t turning into successful placements within the company then it’s time to reassess the scheme.
Calculating your referral to hire rate is straightforward and will give you a good indication of whether changes need to be made. First, work out the total number of referrals you’ve received, then divide it by the number of instances that led to a new employee joining the team. Finally, multiply your answer by 100 to calculate the percentage of them that led to a successful hire.
Referral to hire formula: (Total number of referrals / Number of referrals that turned into hires) x 100 = % of referrals that became new hires
Are your conversion rates not quite as high as you’d hoped? We’re here to aid your search for the perfect candidate.