Every company irrespective of its size needs to hire professionals to perform different activities. But there can be hundreds and thousands of applicants who have applied to your company. Now it becomes quite impossible for the HR of a company to check everyone’s performance and CV one by one and then select the deserving candidates.
But recruiting the right people for the company is also very important. A company, no matter how big or small it is, will not survive without the right employees. So, to make this recruiting process easier, more efficient, and less hectic, recruitment metrics have been introduced. It will help the company to select the best candidates with less time and effort.
In this article, we will discuss some of the most important recruitment metrics that companies need for effective hiring. You can also learn more here to best overseas recruitment agencies in Dubai.
What are Recruitment metrics?
Recruitment metrics are a typical set of measurements that most companies use to improve and manage their process of recruitment. These are the measurements that are used for the optimization of the hiring process of a company or organization and keeping track of successful hiring.
Why are Recruitment Metrics important?
These metrics are very important for a company to follow. As the quality of employees decides the quality of service the company will provide, they can not compromise with it. They need to strictly track the recruitment metrics for future growth and success.
As a recruiter of a company, he/they must keep track of the recruitment metrics. Thus they can measure the success rate of new hiring.
Now as you are aware of what is recruitment metrics and how important they are for a company, let us now discuss the most important recruitment metrics that companies can keep track of to measure their
Source of Hiring: Source of hiring is the recruitment metric that shows you the data of from where the employees came. This will help you analyze and see where most of your employees came from.
Source of hiring provides the insights that companies can make use of to reduce marketing costs for new hires and decide which recruitment process to run and which tools to use. This metric also helps you in keeping track of how effective different recruitment channels are.
Time to fill: The time to fill recruitment metric shows the time required from the day a job requisition is approved to the day the candidate received the offer letter. This is often measured in days.
Time to fill metrics often gets influenced by the demand to supply ratios for specific jobs. Many other factors like company demand or time taken by the recruitment team affect this metric.
Reducing time to fill has its added benefits. This will give your company a competitive recruitment advantage as you will reach deserving candidates and offer jobs to them before your competitors do.
Time to hire: It is another metric associated with time. Do not confuse it with the first one. After the candidates receive the offer letter, there are multiple stages of recruitment that a candidate needs to go through depending upon the job profile or company recruitment process.
A shorter and straightforward hiring process will take less time and also help in keeping good candidates. As these candidates get multiple offers from different companies, if your company takes them through more cumbersome and time-consuming hiring procedures, then there are high chances they will be snatched by other companies. So, think about how to reduce the time to hire metric.
Applicants per role: It is a metric that you can use to measure how interested job seekers are in a particular role. A recruiter’s role is to bring exposure to the organization. Using this metric you can measure how interested people are in this role by checking the number of applicants applied per role. You can also check the number of applicants that didn’t apply for that role once they have reached a decent consideration level.
The attrition rate of employees: Attrition when an organization loses employees. The attrition rate indicates the number of employees the company lost during a given time period. Another similar metric is first-year attrition.
First-year attrition is an important recruitment metric that indicates the hiring success of an organization. There are multiple recruiting and hiring costs that a company needs to bear. If an employee leaves the company it is a loss of money and resources that the company has invested in him.
First-year attrition also indicates something that a company needs to take into consideration. It is maybe the company is failing the expectations that it promised to fulfill at the time of hiring. There can also be a mismatch between the job description and the actual job behind the attrition. You can learn more here about the best overseas recruitment agencies in Dubai. And Know how to increase the attrition rate of employees.
The attrition rate can also be called Employee retention rate. This means if the retention rate is decreasing, the company is losing a quality workforce and needs to bring changes in company policies to make them stay. And if the retention rate is good, then it can assure you that your employees are satisfied.
A decent retention rate also reflects a positive image of the company which helps it to attract and recruit talented candidates in large numbers.
Quality of hiring: Quality of hiring is mostly measured by the performance of the selected candidates. It is usually measured in ratings. Candidates who have received high-performance ratings in first-year performances indicate the success of the hiring team. And similarly, low-performance ratings reflect the opposite.
It costs a lot of money for the company to hire every candidate. If the candidate is adding value to the company by his performance then it’s good. Otherwise, when a candidate fails to provide the performance the company has expected from him, it is considered a bad hire which can cost the company more than one can expect.
Success ratio: A success ratio is an important metric that can be calculated by taking the Quality of hiring values as input. It is the ratio of the number of new hires who are performing well to the total number of new hires.
A higher success ratio indicates that the hiring team of the company has done a good job. But if the number is low, then the company needs to do some refinement in the overall hiring process.
Job satisfaction of the employees: This is a very important recruitment metric to track if the company is able to provide the satisfaction the company has promised at the time of recruitment.
Low job satisfaction of the candidates indicates that there is a lack of management systems inside the company. The hiring department should provide a realistic overview of the job profile, about what the candidates can expect from the job.
This will lead to presenting a realistic job description in front of the candidates where the candidates can analyze the positive and negative aspects of the job. This will lead to more candidate satisfaction and ultimately improve their performance.
Cost of Hire: Cost per hire is a recruitment metric that measures the cost-effectiveness of the overall recruitment process. Having cost of hire data can help the hiring departments to identify the areas that are not that cost-effective and require improvement. This data will also work as a guide for the recruitment budget.
The SHRM’s formula of identifying the cost per hire is to sum all the recruitment costs and divide them by the number of hired candidates.
The overall cost of hire can be divided into multiple categories. They re
- Internal recruitment cost: Internal recruitment cost is the amount of money spent on internal staff for the whole recruitment process. This includes the HR recruiters’ salary, the overall interview costs including physical structures that were rented for the interview.
- External recruitment cost: External recruitment costs is the amount spent on external factors agency fees, advertisement, and technology costs. This can also include traveling and relocation costs.
Analyze the amount it cost hiring candidates for specific roles and all the budget that was spent in each of the external and internal processes. You can also compare your costs against different benchmarks so that you can determine the cost-effectiveness of the whole process. Analyze where it costs more and where less.
Offer Acceptance rate: It is basically the ratio of the number of people who accepted the offer letter against the total number of letters offered to the candidates. A higher acceptance rate indicates that candidates love to be associated with your company. Whereas lower rates indicate your lack of management and candidate satisfaction.
Salary, compensation, benefits, and many other factors determine whether candidates want to accept your offer or not. If they are not accepting the offer, it means they are going to join your competitors. If you do not want to lose hands with talented and enthusiastic candidates, there are many areas that you need to improve in your company. You may also have to increase salary and compensations and add other job benefits to retain them. Click and learn more here to best overseas recruitment agencies in Dubai., Learn their ways of effective recruitment and apply them to your company.
Effectiveness of different sourcing channels: The effectiveness of the sourcing channels helps in measuring the conversions these channels are generating. You can compare the percentage of applications to the impression percentage and analyze how effective these channels are.
One thing you can do is to set goals for different channels and analyze which channel is performing better and which channel is a waste of time and investment.
Google Analytics is one of those tools that you use to measure how many people visited your website looking for jobs and how many of them reached out to you with their application forms. That is how you can measure conversions.
Analyze the data and see which channel is effectively generating good results and increase attention on that channel.
Time to get productive: This is a time metric that calculates the time it takes for a newly hired candidate to reach the level of productiveness that the company expects.
It is the time between the first day of joining to the point where the applicant starts to add value to the company. It depends on how the training team is guiding the new candidates. To reduce this time, you need to hire better trainers and organize regular training sessions.
According to the research of Oxford Economics, it takes 28 days on average for an employee to reach the optimum production level.
Link recruitment metrics with business outcomes: This is very essential for businesses to link their business outcomes to recruitment metrics. The business outcomes come with reduced costs and an increase in revenue, and also many other goals.
These data will show how the candidates your hiring team has appointed have contributed to generating revenue for the company. And also helped to improve the position in the competitive market. With the information provided by the recruiting metrics, one can understand which functions are performing well and which of them need improvements.
The overall benefit of recruiting metrics are:
- They help in increasing the profitability and performance of the company by hiring top talents.
- Attract and retain highly skilled professionals.
- Increase retention and productivity of the candidates.
- Improve cost-effectiveness in different operations.
- Improves the quality of hire.
- Increase offer acceptance rate and make your company more reliable and trustworthy.
With more effective hires, a company will reach higher growth and success. Skilled and passionate employees are the most important asset for a company and with these metrics, the hiring process will be more efficient and easy.
These metrics are mainly data-driven. So make sure your hiring team is collecting the actual data. You can learn more here about the best overseas recruitment agencies in Dubai. And implement their procedures for better results.
Sunny Chawla is a Managing Director at Alliance Recruitment Agency. He specializes in helping client for international recruiting, staffing, HR services and Careers advice service for overseas and international businesses.