Data-Driven Hiring 2024

7 metrics every recruiter should measure

Recruiting is no longer just a matter of intuition and gut feelings. In today's data-driven world, organizations harness the power of metrics and analytics to make informed hiring decisions. 

Let us explore what are the "Metrics for Recruiting Analytics", and how these metrics offer insights, improve efficiency, and drive smarter recruitment strategies.

In today's fiercely competitive job market, data-driven decisions have evolved from optional to indispensable in talent acquisition.

We use a data-driven approach, and I want to share with you the recruitment metrics that we measure and that really work. They help us evaluate the recruiting process and hire the right people.

Let's start by highlighting the recruitment metrics that every recruiter should measure and which are the most important for most hiring managers.

1. Time to Fill 

Time to fill is the days between when a job requisition is approved and the day the candidate accepts an offer.

This metric is valuable for business planning, as it gives managers a realistic estimate of the time required to find and hire a new employee when someone leaves the company.

SHRM’s survey finds the average time to fill is 36 days. But remember, this is a general number, and the actual time can differ based on the job type, the industry, and other factors.

Don't rely solely on this average time to fill. Consider the unique aspects of each job opening.

2. Time to Hire

Time to hire represents the number of days between when a candidate applies or is approached and when the candidate accepts the job.

Time to hire shows how quickly a candidate moves through the various hiring stages.

If you want the best candidates, hiring them quickly before someone else snatches them up is important. A long and drawn-out hiring process can leave a bad impression on potential hires. Identifying and resolving any delays in your hiring process can make it more effective. 

With the time-to-hire metric, you're measuring the time it takes to hire a candidate after receiving applications. 

3. Source of Hire

Source of hire is the recruiting metric that shows where your new employees are coming from.

Calculate this metric by dividing your recruiting source yield by number of applicants from the recruiting source. Use this metric to determine which sources, job boards or websites are most effective for hiring for your business.

Having a clear understanding of which channel works and which doesn’t, you’ll be able to double down on the channels bringing you the most ROI and decreasing spending on those that aren’t. 

4. First-year Attrition

The first-year attrition rate refers to the number of employees who resign or are let go during their first year of work. Candidates who leave in their first year of work fail to become fully productive and usually cost a lot of money. 

To avoid spending unnecessary costs on hiring candidates who are not the right fit for your company, it's important to understand the attrition rate metric. A high attrition rate means that you will constantly be stuck in a hiring cycle, which can cost the company a lot of money. Mastering this metric can help you make more informed hiring decisions and reduce turnover.

First-year attrition Rate Calculation: 

Calculate: the total number of employee separations within a 12-month period.
(Number of separated employees who worked at the company for less than 1 year/ Number of all separations) x 100 = turnover percentage

To many business founders, this metric is one of the most important to track. Because if recruiting teams are submitting low-quality talent, hiring managers are wasting valuable time and resources.

5. Recruitment Funnel Effectiveness

This is a metric for measuring the effectiveness of the candidate selection process, which shows the ratio of candidates at different stages of the recruiting funnel.

Calculation: 
% Recruitment Funnel Effectiveness = (Number of candidates who successfully pass each stage) / (Number of candidates in the previous stage) * 100 %

This metric helps companies determine where to improve their hiring process. Also, it makes the journey for candidates smoother.

6. Cost-per-hire

SHRM’s formula for cost per hire is the sum of all recruiting costs divided by the number of hires in a given time period.

Calculation: 
Cost-per-hire = (total internal recruiting costs + external recruiting costs) / (total # of hires in a given time frame)
 

• Internal recruiting costs are the expenses connected to the company's staff and the costs of running the recruitment process. This includes paying recruiters, bonuses to employees who refer candidates, and the time hiring managers spend on it.
• External recruiting costs are expenses that come from outside the company. This covers things like advertising, technology tools, event costs for recruiting, fees for hiring agencies, relocation expenses for candidates, and activities to promote the company's brand as an employer.

This metric is crucial for understanding the efficiency of hiring processes and informing budgeting decisions. You can compare your costs against available benchmarks to determine if your cost per hire is high, low, or average.

7. Offer Acceptance Rate

The offer acceptance rate compares the number of candidates who successfully accepted a job offer with the number of candidates who received an offer.

Calculation: 
Offer acceptance rate (%) = (number of offers accepted / number of offers made) * 100 %

Your offer acceptance rate (OAR) is a good indicator of your recruitment process's success. An OAR of 90% indicates a well-functioning process.

Factors like salary, benefits, and work flexibility influence candidates' decisions to accept or decline job offers. A low acceptance rate may indicate problems in the hiring process.

You must use recruitment metrics to gauge recruitment success and find improvement areas. Simply implementing a recruitment strategy isn't sufficient — you need to assess its effectiveness.

Alisa Lagovska is Head of Recruitment at Jooble.  Alisa is a recruitment specialist with 11 years of practical experience in hiring and launching recruiting processes in outsourcing, retail, logistics and IT. Alisa joined Jooble in 2019 as a recruiter, and after 9 months she became Recruitment Team Lead. Alisa manages a team of 11 people. Among her responsibilities are hiring new employees in tech and non-tech positions, managing the launch of all recruitment-related internal processes, and onboarding and adaptation of new team members.