In order to understand the effectiveness of your recruiting efforts, you need to understand how your team performs against certain recruitment analytics. Collecting and reviewing this data regularly will help you create an effective recruiting capacity model as well as become a better advocate for your team. Without further ado, here are the top metrics that should be part of any recruiting dashboard.
Time Requirement Metrics
The first set of metrics recruiters should track cover the time requirements of filling a position. While time to fill is the most talked about, the other sub-metrics within this category help provide a more well-rounded picture of the recruiting timeline.
Time to Fill
The time to fill metric looks at the time between opening a position and receiving an offer acceptance. As with most of the metrics on this list, this will vary based on country and job function, so it should be pulled based on multiple factors. A SHRM study from 2017, found the average time to fill across industries and roles is 36 days.
Time to Hire
A sub-metric of time to fill, time to hire tracks the time between an individual application to that applicant accepting an offer. This metrics allows your team to gain a more in-depth understanding of the actual time a candidate waits from applying to receiving an offer. In 2021, time to hire took an average of 42 days.
Time to Start
Another metric that varies widely by country and job function is time to start. Time to start takes things one step further and tracks the time between an individual application and the day they report to work for the first time. A 2021 study from LinkedIn found that time to start can vary widely by job function, with engineering averaging 49 days and administrative roles averaging only 33 days.
Offer to Start
Offer to start takes a step back from time to start and only tracks the time between extending and offer to start date. When combined with Time to Fill, tracking this allows the recruiting team to set realistic expectations with hiring managers around when to expect someone to start as well as allows the recruiting team to work backwards to figure out when to start working on hires with set start dates. In the US, providing 2 weeks notice is standard practice, leading to offer to start times to average between 3 and 4 weeks.
Now that you have a clear picture of how long it takes to fill an open position, you need to track the percentage of applications that progress throught the interview process.
Applications to Interview Ratio
The applications to interview ratio tracks how many applications a specific opening receives compared to how many applicants are offered interviews. This metric can show the quality of the job description as well as the hiring board and should be tracked overall and by source. In 2021, the average application to interview rate was 20%.
Applications per Hire
Application per hire tracks how many applicants you receive for each open position. Determining a baseline for this metric will help you asses the quality of applicants received from each source as well as the quality of your job descriptions. In 2021, companies averaged 58 applicants per hire across industries.
Offer Acceptance Rate
Your offer acceptance rate, or what percentage of offers are accepted by candidates, can be a good indicator of the strength of your job descriptions or may signal a deeper issue related to compensation or other benefits. SHRM, puts the average acceptance rate at 91%.
Source of Hire
Most companies post jobs across multiple job boards and sites, with varying costs for each. Tracking the source of each hire can help justify or rule out more expensive options. This should be tracked on a departmental basis as the ideal source for engineering hires will likely vary from the ideal source for marketing hires.
While these metrics may fall more within the realm of finance, it is important for recruiting to keep an eye on them as well.
Cost per Hire
The cost per hire metric is typically generalized on a monthly or quarterly basis to cover all hires made within that timeframe. This important metric helps asses the effectiveness of your recruiting team and is typically calculated as follows:
Cost per hire = total recruiting costs/number of hires in given time frame
When calculating total recruiting costs, be sure to include
- Recruiter salaries
- Interview costs
- Employee referral bonuses, when applicable
- External fees - agencies, job boards, events, etc
- Candidate costs - travel, relocation, signing bonus, etc
To create a clear picture of cost per hire, this should be calculated for multiple breakouts including:
- Company overall
- By department
- Seniority level
- Source of hire
- By region
According to SHRM, the average cost per hire across industries is $4,425, with a median price of $1,633.
Cost per Vacancy
When prioritizing roles for the recruiting team, it is important to understand the cost per vacancy of each role. This is typically a generalization based on the value of different roles to the company and is stated as the cost per day of having the position open.
To create this value, you will first need to categorize each role into different buckets such as important, necessary and critical. It is important to note that thought should be put into which roles should be placed in each bucket rather than defaulting more senior positions to be more critical. Once the buckets have been established, assign a value multiplier to each, e.g., important = 0.1 , necessary = 0.5, critical = 1.0. From there, you will use the below calculation to determine a rough cost per vacancy:
Cost per vacancy = (Annual revenue/# of employees/#of workdays in a year) x value multiplier
For example, a company with annual revenue of $25 million, 150 employees and 260 working days per year would determine the cost per vacancy as such:
Base number = ($25 million/150/260) = $641.03
Important = $641.03*0.1 = $64.10
Necessary = $641.03*0.5 = $320.52
Critical = $641.03*1.0 = $641.03
These numbers help provide a generalized view of the impact each open role has on your company’s bottom line. In addition to helping prioritize roles, cost per vacancy can be used to help advocate for additional spend to find candidates for certain roles that either have a high cost per day or have been open for a long time.
Establish Your Own Benchmarks
In the early days of establishing metrics, you may have to look at industry standards to create a benchmark against which to measure. However, over time, you will be able to track each of these metrics against your own data, creating deeper meanings and leading to more valuable insights. Data from individual openings should be aggregated together to create recruiting benchmarks per month or quarter, for different role types and for different regions rather than relying on a single metric for each of these KPIs.
If you’re ready to automate your recruiting metrics and create a stellar recruiting dashboard, TruePlan can help. Schedule a demo to find out more.