“The competition to hire the best will increase in the years ahead. Companies that give extra flexibility to their employees will have the edge in this area.” – Bill Gates
Recruiting high-quality job candidates takes a lot of time and money. Recruitment can be a significant investment, from getting your job postings in front of the right people, interviewing qualified applicants, and onboarding the right hire. In this blog, get to know how KPI is supportive of recruiters.
What is KPI in recruitment?
KPI metrics can help you measure the effectiveness of your hiring process and your recruiting team. By using KPIs, you can determine how close you are to reaching your recruiting goals and making more strategic decisions.
As with any significant time- and financial investment, you want to be sure your money and energy are being spent –especially when resources might be scarce due to the sudden economic downturn.
According to some popular statistics, about 70% of companies are experiencing challenges when sourcing and hiring skilled candidates. At the same time, 45% of employers are anxious about the right skills and particular roles. Tracking recruiting metrics helps you provide a data-driven evaluation of your hiring process. Search recruiting metrics will tell you which aspects of your recruiting process work well.
It will help any organisation establish its best-recruiting practices and spot bottlenecks that need to be dealt with. This is why HR professionals use recruitment metrics.
How recruitment effectiveness can be measured?
Recruitment metrics can answer any of your queries if you’re required to know the hiring process’s quality, cost, and productivity at a macro level.
Questions that we answer often:
- How good are we at spotting the right candidate, and how long does it take us to hire them?
- How many qualified candidates do we need to hire, and how do we move them from one stage to the other?
- Do we engage the best candidates and get them to accept our job offers?
- How much money do we spend per hire?
- How efficient is our hiring process, and which steps or stages are most productive?
9 ways to measure recruitment effectiveness in the UK
It is important to warrant that the talented job seekers fit into the organisation’s purview of functioning, not just skill-wise but also culturally. The right use of HR dashboards and Analytics would help with the hiring process. Here are the best metrics to know,
Time to fill
The company’s time to fill is one of the most common KPI recruitment statistics it monitors to gauge its recruiting effectiveness. Various metrics can be used to track this metric, including time from search kick-off to accepted offer or hours spent on each requisition. It is beneficial to uncover inefficiencies in the interview process when using the time to fill.
Quality of Hire
It measures the hire’s performance and helps the organisation to identify the hiring quality by ROI. ROI is calculated as the Net Benefit divided by the total cost invested by the organisation. Candidates who score a high performance reflect on a successful hiring process. However, the opposite holds for low performers.
Source of Hire
Using the proper channels for hiring also contributes to the success of the recruitment cycle. Not all hiring happens through job boards and social media platforms. A few examples are job boards, the company’s career page, social media, sourcing agencies, and referral systems. Identifying the effectiveness of the recruitment source is essential as it helps to plan a budget. Also, utilise the right source for effective hiring.
Candidate Job satisfaction
As much as the hiring manager’s positive feedback is essential, the selected candidate must be content with the role. This helps to map the employee’s goals with the organisations’ goals.
Cost per hire
The metric is all about allocating a budget for workforce resourcing and ensuring that each hire attributes to the business’s bottom lines. It is the most important metric and is calculated as the total cost per hiring divided by the number of hires. Again, we need to consider the total cost involved, internally and externally.
Hiring Manager Satisfaction
It is identifying how satisfied the hiring manager is with the employee’s performance. It is also critical to business performance and can be measured using Net Promoter Score (NPS). The Net Promoter Score is a simple but powerful customer loyalty metric. It is a tool to measure client satisfaction with one single question. Also, it indicates your company’s growth potential or product.
Recruitment Process Effectiveness
AI-powered business tools, Lead Generation Software and candidate assessment methods, the recruitment tunnel effectiveness is measured as yield per step, and this tunnel should give refined results. The metric needs to be calculated from the sourcing stage to the hiring stage. The yield ratio can be calculated by identifying the number of candidates who completed the hiring stage.
Recruiter Conversion rate
The conversion rate determines the overall success of a recruiter. It is measured by the total recruitment cost divided by the number of hires. Here we need to include the internal and external fees for completing the hiring process to get a clear idea of how successful the conversion rate has been.
We always want to be aware of our biases when hiring a new team member. One great way to do this is by measuring adverse impact. Adverse impact lets you identify discrimination against a protected class, measuring if that protected class is hired at a less than 80% rate. To find negative impact, divide the applicant success rate of Group A (your protected class) by the applicant success rate of Group B (your non-protected type).
What are the new ways to boost recruitment effectiveness?
The traditional metrics listed above are all tried-and-trusted ways of monitoring your recruitment success. But now, the extrapolative capabilities of artificial intelligence (AI) are helping recruiters to be even more strategic in their activities.
That’s because AI tools can understand more about us humans than ever before: our personality traits, our intelligence, our likes, our dislikes, our reliability – even whether we’re telling the truth or not. In light of this, hundreds of AI-based tools (apps, platforms, chatbots, etc.) are coming onto the market to help companies streamline their recruitment to make the entire process more effective.
The new trend in the global market has AI-driven software that makes the selection process much more seamless and reduces human effort. The right tools blended with human interfacing make the whole process more actual and holistic, and accessible for recruiters to focus elsewhere.
The recruitment industry will go through a paradigm shift in 2021 as there will be a need for competence with as many lesser risks involved in the business. To bring out the best from your KPIs, you can use real-time recruitment dashboards that will let you track and visualise the metrics that are the most valuable for your hiring methods.
Recruitment as a job is like ‘finding a needle in the haystack’, and AI only makes looking for the needle easier. For example, AI-powered preselection software uses predictive analytics to calculate a candidate’s likelihood of succeeding in a role. It enables recruiters and hiring managers to make data-driven decisions rather than intuitive ones.
Whatever metrics you choose, measuring your recruitment effectiveness and gearing up with the global trends will help you do more. Also, it helps to identify what works along with areas for improvement. Significantly, it will help demonstrate HR’s unique, value-adding role in the organisation.