Proven Strategies to Set Up Recruitment KPIs from Experts

How do you know if your recruitment efforts are effective and efficient? How do you measure the performance of your recruitment team and strategy? Seasoned recruitment agencies use recruitment KPIs for this very reason.

Recruitment KPIs or key performance indicators help you evaluate the success of your recruitment process and activities. They are based on data and metrics that reflect your recruitment goals and objectives. By tracking and analyzing recruitment KPIs, you can gain insights into the strengths and weaknesses of your recruitment process, identify areas for improvement, and optimize your hiring outcomes.

In this article, we will explain what recruitment KPIs are, how they differ from recruitment metrics, what factors influence them, how to set them up, and what are some of the most important ones to track.

Recruitment KPIs vs. Metrics

Before we dive into the details of setting up recruitment KPIs, let’s clarify the difference between recruitment KPIs and metrics. Although these terms are often used interchangeably, they are not exactly the same.

Recruitment metrics: They are quantitative measures that provide information about various aspects of your recruitment process, such as time to hire, cost per hire, source of hire, etc. Recruitment metrics are useful for tracking trends and patterns in your recruitment data, but they do not necessarily indicate whether you are achieving your desired results.

Recruitment KPIs: On the other hand, recruitment KPIs are specific metrics that are aligned with your recruitment goals and objectives. They are used to evaluate the effectiveness and efficiency of your recruitment process and activities, and to determine whether you are meeting your targets or not. Recruitment KPIs are usually expressed as percentages or ratios that compare actual performance with expected performance.

Suppose you want to improve the quality of your hires, which is one of your main recruitment goals. One of the metrics that you can use to measure this aspect is the first-year attrition rate, which is the percentage of new hires who leave within the first year of employment. However, this metric alone does not tell you whether you are hiring quality candidates or not.

You need to compare it with a benchmark or a target that reflects your desired level of quality. For instance, if your industry average first-year attrition rate is 15%, and you set a target of 10% or lower for your organization, then this metric becomes a KPI that shows how well you are achieving your goal of improving the quality of hire.

To further illustrate the difference between recruitment KPIs and metrics, let’s look at the comparative table below.

Recruitment KPI Factors

• The size and type of your organization: Depending on whether you are a small business, a large corporation, or a non-profit organization, you may have different recruitment needs and challenges. For example, a small business may prioritize hiring speed and cost efficiency over hiring volume and diversity, while a large corporation may have the opposite preference. Similarly, a non-profit organization may have different criteria for defining quality of hire than a for-profit organization.
• The industry and market conditions: Depending on the industry and market conditions that you operate in, you may face different levels of competition and demand for talent. For instance, if you are in a high-growth industry with a shortage of skilled workers, you may need to focus more on attracting and retaining top talent than on reducing hiring costs. Conversely, if you are in a low-growth industry with a surplus of qualified candidates, you may need to focus more on optimizing your hiring process and reducing turnover than on increasing hiring volume.
• The stage and scope of your recruitment process: Depending on the stage and scope of your recruitment process, you may need to track different aspects and outcomes of your hiring activities. If you are at the sourcing stage, you may need to track metrics such as number of applicants per opening, source of hire, sourcing channel effectiveness, etc.
• If you are at the screening stage, you may need to track metrics such as number of qualified candidates per opening, selection ratio, screening time, etc. And if you are at the hiring stage, you may need to track metrics such as offer acceptance rate, offer rejection reasons, time to hire, etc.

Setting Up Recruitment KPIs: What You Should Know

Setting up recruitment KPIs can be a challenging task, especially if you are new to data-driven recruitment. Here are some of the frequently asked questions and answers that can help you get started:

How do I choose the right recruitment KPIs for my organization?

The first step is to define your recruitment goals and objectives, and align them with your organizational strategy and vision. Then, you need to identify the metrics that are relevant and meaningful for measuring your progress and performance towards those goals and objectives. Finally, you need to select the metrics that are most critical and impactful for your recruitment success, and turn them into KPIs by setting targets or benchmarks for comparison.

How many recruitment KPIs should I have?

There is no definitive answer to this question, as it depends on your specific recruitment needs and priorities. However, a general rule of thumb is to have a balanced and manageable number of KPIs that cover the key aspects and stages of your recruitment process. Too few KPIs may not give you a comprehensive picture of your recruitment performance, while too many KPIs may overwhelm you with data and distract you from the most important issues. A good practice is to have around 5 to 10 KPIs that are aligned with your recruitment goals and objectives, and that are easy to track and communicate.

How do I measure and calculate my recruitment KPIs?

The next step is to collect and analyze the data that you need to measure and calculate your recruitment KPIs. You can use various sources and methods to gather the data, such as surveys, interviews, tests, assessments, feedback forms, etc. You can also use various tools and software to process and organize the data, such as spreadsheets, databases, dashboards, etc. To calculate your recruitment KPIs, you need to apply the appropriate formulas or equations that correspond to each KPI.

How do I monitor and report my recruitment KPIs?

The final step is to monitor and report your recruitment KPIs on a regular basis, and use them to evaluate and improve your recruitment process and activities. You can use various formats and channels to present and share your recruitment KPIs, such as reports, charts, graphs, tables, etc.

You can also use various platforms and media to communicate and distribute your recruitment KPIs, such as emails, newsletters, meetings, presentations, etc. The key is to make sure that your recruitment KPIs are clear, accurate, relevant, timely, and actionable.

Recruitment KPIs You Should Have & How to Measure Them

Now that you know how to set up your recruitment KPIs, let’s look at some of the most important ones that you should have and how to measure them.

• Time to hire: This is one of the most common and essential recruitment KPIs that measures the average number of days it takes to fill a vacancy from the moment a candidate applies or is sourced until they accept the offer. It reflects the efficiency and speed of your hiring process, as well as the competitiveness and attractiveness of your employer brand.
  To measure it, you need to subtract the date of application or sourcing from the date of offer acceptance for each candidate, and then take the average of all the differences.
• Cost per hire: This is another common and essential recruitment KPI that measures the average amount of money it costs to hire a new employee. It includes both internal costs (such as salaries, benefits, overhead expenses, etc.) and external costs (such as advertising fees, agency fees, travel expenses, etc.) It reflects the effectiveness and budgeting of your hiring process, as well as the return on investment (ROI) of your recruitment efforts.
  To measure this recruitment KPI, you need to add up all the costs associated with hiring a new employee, and then divide it by the number of hires in a given period.
• Quality of hire: This is one of the most challenging but also one of the most important recruitment KPIs that measures the value or contribution that a new hire brings to the organization. It can be assessed by various indicators such as performance ratings, productivity levels, engagement scores, retention rates, etc. It reflects the impact and outcome of your hiring process, as well as the alignment and fit of your talent acquisition strategy with your organizational goals and culture.
  To measure the quality of hire, you need to define the criteria and metrics that represent quality for your organization, and then collect and analyze the data that corresponds to those criteria and metrics.
• Offer acceptance rate: This is a recruitment KPI that measures the percentage of candidates who accept your job offer out of those who receive it. It reflects the attractiveness and competitiveness of your employer brand, as well as the effectiveness of your offer negotiation and communication skills.
  To measure it, you need to divide the number of candidates who accept your offer by the number of candidates who receive your offer, and then multiply it by 100 to get the percentage.
• Diversity of hire: This recruitment KPI measures the representation and inclusion of different groups of people in your workforce, such as gender, race, ethnicity, age, disability, etc. It reflects the diversity and equity of your hiring process, as well as the social responsibility and reputation of your organization.
  To measure the diversity of your hire, you need to collect and analyze the demographic data of your candidates and hires, and then calculate the percentage or ratio of each group in relation to the total number or population.
• Candidate satisfaction: This is a recruitment KPI that gives you the level of satisfaction and engagement that candidates experience during your hiring process. It reflects the quality and professionalism of your candidate experience, as well as the loyalty and advocacy of your employer brand.
  To measure it, you need to solicit and analyze the feedback and ratings from your candidates at various touchpoints of your hiring process, such as application, screening, interview, offer, etc.

Conclusion

Recruitment KPIs are essential for measuring and improving your recruitment process and performance. They help you align your recruitment goals and objectives with your organizational strategy and vision, evaluate your recruitment effectiveness and efficiency, identify areas for improvement, and optimize your hiring outcomes. However, setting up and tracking recruitment KPIs can be a daunting task without the right tools and software.

With a solution like Manatal, you can boost your recruitment KPIs within a few clicks. Manatal’s Reports & Analytics feature allows you to easily monitor and analyze your recruitment data and metrics, such as time to hire, cost per hire, quality of hire, offer acceptance rate, diversity of hire, candidate satisfaction, etc. You can also customize your reports and dashboards according to your preferences and needs, and share them with your team members and stakeholders.

If you want to learn more about Manatal’s innovative features and see how it can help you set up and boost your recruitment KPIs, you can start a 14-day free trial with Manatal today.