As we move into 2021, hiring and recruiting is a more demanding field than ever. Organizations need to be more and more strategic, and that calls for a metrics-driven approach that lets HR achieve its goals while managing precious resources. For the recruiters and managers on the ground, that means taking unwieldy amounts of data and turning them into recruitment metrics you can use to build your talent funnel.
So how do you start wrangling that data? Let’s walk through some of the crucial recruitment metrics you should be using to manage and maximize your recruitment and hiring.
Cost Per Hire
In recruiting, as in just about everything else in life, everything comes down to money. The cost per hire is the total amount of money spent to fill an open position. This can include costs like advertising and posting jobs, recruiter and consulting fees, travel, staff, or recruiting events, divided by the total number of hires.
The equation: $ Total internal costs + $ Total external costs / # of hires
You should know how much it costs, on average, to fill an open position at your company. This gives you a straightforward bottom-line cost to present to your organization, giving all stakeholders a clear idea of what it really takes to fill an open position. This metric helps in the all-important process of allocating resources to recruitment. It also gives you targets to improve upon, year over year
Time To Hire
The time spent in filling a position is just as important to know as the costs associated. It’s nearly impossible to make a strategic plan if you don’t have a solid sense of how long it takes your organization to fill an average position. Not every hiring process will adhere to a magic timeline (as we’re sure you know all too well) but knowing the average time it takes from posting a job to getting an accepted offer will help you understand your process and set improvement goals.
The equation: Days to hire employee 1 + Days to hire employee 2 (etc.) / # of hires
The time-to-hire is a good test of how your team is moving through the process. Are they identifying good candidates quickly or is that part lagging? Are good candidates found quickly but languishing in a long limbo through the recruiting funnel? Time is always a good place to build efficiency.
The Diversity 10-10-5-45 Rule
Diversity is an essential initiative for just about every organization. A productive workforce reflects the many faces and perspectives in society, and it’s a place where many companies are struggling to make progress. To make diverse recruitment a lasting part of your process, make sure you’re tracking it just like you would other recruitment metrics.
The 10-10-5-45 rule is a baseline goal for increasing racial and gender diversity in an organization:
- 10% of employees should be Black/African-American.
- 10% of employees should be Hispanic/Latinx.
- 5% of employees should identify as gender nonbinary.
- 45% of the remaining employees should identify as women.
The diversity rule isn’t set in stone, but rather an aspirational goal to get your workforce more in line with the general population. Ultimately, you want your team to be as close to the overall U.S. population as possible, to improve representation.
Quality Of Hire
A new hire isn’t just a jumble of costs and timelines—they are, ideally, a productive new member of your team. There’s no textbook way to measure the quality of a hire, but that means you get the flexibility of coming up with a score that reflects the needs and values of your organization. To start measuring the quality of a hire, talk with leaders in your organization and hiring managers to determine what qualities make a “good” hire. It can include things like job performance, cultural fit, engagement, etc. You’d assign a number value for each quality, then calculate. An example of how that might look:
The equation: Job performance score + engagement score + cultural fit score / # of factors
This is not necessarily information to be shared with the employee or put in their “file” so to speak, or shared with names attached. Rather, it gives you data points for comparison as you hire more people and track how it’s going.
Employee referrals are one of the best ways to fill an open position. People who know the company—and potentially understand the job in a way that a job ad can’t necessarily convey—bring in qualified candidates. It can help cut down on the costs and time spent on recruiting, if you get a high-quality applicant faster and earlier in the process than you otherwise might. To see if your employees are referring good candidates, track the number of referrals during a particular time period or a set number of job openings and see how many of those referrals yielded second interviews, a job offer, or whatever criteria you want to use. As a strategic goal, you can look to improve employee referrals by publicizing the program, or offering incentives.
Virtually any organization can become data-fluent by using these recruitment metrics and information to influence strategy and decisionmaking. The information is already out there, but knowing how to put it into a usable form will help you build a leaner, meaner recruitment machine.