Busy recruiters experience a slew of time pressures, which is why recruitment metrics often fall by the wayside. But recruitment metrics are a critical way to determine return on investment and assess the success of your initiatives. Here are recommendations to get you started, how to measure each metric, and which metrics you should focus on.  

As a critical organisational function, recruitment requires set metrics and KPIs to track return on investment and the effectiveness of your initiatives.

Here are the important metrics to get savvy recruiters focus on. But as we explain, while there are many different metrics you can track, choose the metrics in line with your recruitment and organisational goals.

Average daily revenue per employee

Start by calculating the average daily revenue per employee. This metric reveals the average revenue each of your team members contributes to the bottom line. We can use the final figure to plug into other calculations to determine averages.

Calculate your annual revenue, divided by your total number of employees, divided by 365 days in a year. This gives you the average daily income per employee. You can then use this metric in calculations such as time to hire and cost per hire.

Annual revenue / total number of employees / 365 = average daily income per employee.

Time to hire

Lengthy hiring processes can be frustrating for both candidates and hiring managers. If this is a challenge in your organisation, measuring time to hire at regular intervals will enable you to make more informed decisions and measure the effectiveness of your initiatives.

Calculate time to hire from the day you launch your recruitment advertisements, to the day you receive an acceptance.

Average daily income per employee x time to hire (days) = $ dollar value

Improving this metric means you are bringing key skills into your organisation sooner to produce results. Not to mention, increased satisfaction from hiring managers and candidates alike.

Annual employee turnover

Annual employee turnover is a useful metric to measure retention. However, this metric can be challenging! As not all turnover is necessarily bad for your organisation. (You may like to measure total employee turnover vs. regretted losses.)

Total number of employees left position / total number of employees = percentage %

Total number of regretted loss / total number of employees = percentage %

If you are challenged by retention, track annual employee turnover at different intervals.

Average number of applications per role  

Do you know how many applications you are receiving per role? The right Candidate Management System makes this process easy, as you can obtain the number of roles you have advertised during the year, and calculate the number of applications you received for those roles.

Number of applications received / number of roles advertised = average number of applications per role

Organisations with strong employer branding tend to see a higher volume of quality applications.

Quality of applications 

This metric is also known as “qualified applications”. If you want to attract high-quality candidates, you must assess performance by measuring quality of applications. Calculate this metric by assessing the number of candidates shortlisted for each position

Total (shortlisted) candidates per vacancy who move past initial screening screen stage = quality of applications

Total number of shortlisted candidates per year / number of roles advertised = quality of applications

Cost per hire

How much is recruitment costing your organisation, from preparing your recruitment advertisement, to receiving an acceptance?

In the following recruitment metric, internal costs represent time investments from internal recruiters and hiring managers (using the average hourly income calculation we shared previously).  External costs represent your recruitment advertising costs and any recruitment outsourcing costs.

Internal costs + external costs / total number of hires = $ cost per hire

You can also use the ISO standard for cost per hire. ISO is the International Organization for Standardization [sic], an international standard-setting body to calculate cost per hire, which offers another level of complexity.

Employee engagement and satisfaction

How many members of your organisation are psychologically committed to their jobs and likely to be making a positive contribution or showing up with the enthusiasm and motivation to be highly productive?

A staggering 76% of the Australian workforce self-nominates as disengaged or actively disengaged, lacking almost anything resembling commitment (Gallup, State of the Global Workforce, 2017).

There are a number of different tools and providers you can use to measure employee engagement and satisfaction. Determine which measurement tool is right for your organisation’s goals, budget and needs, and conduct 6-month or 12-month benchmarking to measure the impact of your initiatives.

Conduct an annual employee engagement survey.

Employee Net Promoter Score

You may be familiar with a Net Promoter Score (NPS). NPS is a quantitative measure that provides an index ranging from -100 to 100 that reflects the likelihood of people to recommend an organisation’s products or services to others. NPS helps organisations gain an understanding of overall satisfaction, advocacy and loyalty.

In your Employee Engagement Survey, include a question around eNPS, that is, Employee Net Promoter Score. This asks people about their likelihood to recommend your organisation as a place to work to others.

Respondents are asked, “On a scale of 0 to 10, where 0 is extremely unlikely and 10 is extremely likely, how likely are you to recommended [company/product/service] to other people?”

From their answer, they are classified into three categories: detractors, passives and promoters.

This is a useful metrics to take a “temperature check” of the overall satisfaction and engagement of your workforce.

Quality of hire 

According to LinkedIn’s Global Recruiting Trends 39% of talent leaders agree that quality of hire is the single most valuable metric to track performance. 60% of talent leaders report identifying quality hires as their top challenge of 2019, yet only 2% have a framework to measure quality. Often, the discussion of quality of hire is confused with selection practices and not an employee’s performance once onboard.

Start by determining the characteristics of a great employee first, using post-hire data. Then, look at how to predict those characteristics among candidates. There are a number of ways to measure quality of hire. Here is on that we recommend.

A quality hire is, essentially, a great team member. But what makes a great team member? Measure:

• Inspiration – can they inspire others and their team?
• Experience – are they fulfilled in their role and do they want to stay? (Retention)
• Fit – do they fit or add to your organisation’s culture?
• Results – are they producing results expected of the role?*
• Integrity – are they trustworthy act on their words

*When assessing their ability to produce results, take “ramp-up time” into account, allowing your new hires to learn, develop and get up to speed (potentially, over the course of their probationary period).

Use insights from your new hire, hiring managers and team members.

Measure: inspiration (20), experience (20), fit (20), results (20) and integrity (20) = % of 100

The best ways to asses quality of hire include:

• work sample tests
• structured interviews
• general mental ability tests
• peer ratings.

Indicator metrics 

As mentioned, there are many metrics you could choose to measure. Some organisations track:

• applicant source
• first-year hire retention rate
• offer acceptance rates
• recruitment advertisement views
• recruitment advertisement conversion rates (views to applications)
• social media engagement
• and/or other metrics.

These metrics can act as a “trigger” or alarm and provide deeper insights into your strengths and areas for improvement. From these metrics, you may need to investigate other metrics further, secure external expertise, and/or adjust your strategy.

For example, low advertisement view rates can result in a low volume of applications; which would indicate you need to adjust your recruitment advertising strategy. Or, low social media engagement overall could indicate your employer branding and recruitment marketing strategy could need some work.

It is essential to track recruitment metrics to identify areas you are performing well and areas for improvement. You do not need to measure all these metrics, only the ones that suit your recruitment and organisational goals.

Decide what the most important recruitment metrics are based on your organisational goals. (For example, do your goals focus on revenue, applicant conversions, retention or brand awareness?)

Great recruitment marketing equates to a strong return on investment through high-quality applicants, better hires, reduced time to hire and cost per hire, increased acceptance rates and improved retention. So choose the right metrics in line with your recruitment goals, and start measuring them today!

For assistance with reporting or measuring recruitment metrics, speak to our knowledgable Employer Branding Specialists, email us at info@employmentoffice.com.au, or call us on 1300 366 573.