Understanding and focusing on the right metrics and key performance indicators (KPIs) can truly set you apart in today's talent acquisition market.

If you're looking to refine your hiring strategy, we've got you covered with this overview of the most important recruiting metrics. Let's take a few minutes to highlight the essential recruitment metrics worth tracking, including definitions, measurement techniques, and insights into their vital role in developing a refined and effective hiring strategy.

1. Time-to-Fill (TTF)

Time-to-fill measures the average duration from posting a job opening to the candidate's acceptance of the offer.

How to Measure: Calculate the total days between job posting and acceptance, then divide by the number of hires.

Why it Matters: Time efficiency is crucial. A streamlined TTF identifies bottlenecks in your hiring process, enabling you to secure top talent swiftly and stay ahead of the competition. It’s also important to understand and measure the TTF for the different kinds of roles you are hiring for. For example, an executive search is often an exhaustive 6-month process, while engineers are generally only on the market for 2-3 weeks, requiring a speedier process and shorter ideal TTF.

2. Quality of Hire (QoH)

Quality of hire assesses the overall effectiveness of your recruitment process by evaluating the success and impact of new hires.

How to Measure: Gauge performance metrics like productivity, reviews, and onboarding success for a set period post-hire. There's no one-size-fits-all approach to calculating QoH, but we have plenty of advice on finding the right mix of data points for your organization.

Why it Matters: Beyond filling roles, QoH ensures that new hires align with organizational goals. This metric promotes continuously improving your hiring criteria and the entire candidate experience throughout the recruitment funnel. Also, while there is no such thing as a bad time to start digging into your QoH, it can be especially impactful during hiring slowdowns and lulls.

3. Source of Hire

Source of hire pinpoints where successful hires originate, whether from job boards, referrals, social media, or other channels.

How to Measure: Track hires' origins through an applicant tracking system, surveys, or in-depth analytics.

Why it Matters: Strategic investment is critical, especially with shrinking budgets and limited resources. Identifying successful sources allows you to allocate time and resources where they have the most significant impact.

4. Candidate Satisfaction

Candidate satisfaction measures how candidates feel about their overall hiring experience.

How to Measure: Utilize surveys, post-application feedback, and Net Promoter Score (NPS) to gauge satisfaction levels.

Why it Matters: Positive candidate experiences strengthen your employer brand, turning applicants into advocates and attracting top-tier talent. Being alerted to poor candidate experiences is similarly vital in identifying breakdowns in your hiring processes and providing the data to support improvements and adjustments.

5. Offer Acceptance Rate

Offer acceptance rate is the percentage of candidates who accept your job offers.

How to Measure: Divide the number of accepted offers by the total number extended, then multiply by 100.

Why it Matters: Analyzing acceptance rates can provide valuable insights into the effectiveness of your talent brand and the appeal of your job offers. This data can help you refine your value proposition and create a compelling pitch that resonates with top candidates. By measuring and understanding the appeal of your company and its offerings, you can attract and retain the best talent in your industry.

6. Cost Per Hire

Cost per hire calculates the total expenses associated with recruitment and divides it by the total number of hires.

How to Measure: Add up recruitment costs (advertising, technology, personnel, etc.) and divide by the total number of hires.

Why it Matters: It's important to stay budget-conscious while making hiring decisions. By keeping a close eye on the cost per hire, you can determine which channels are most cost-effective and optimize your resource allocation accordingly. This allows you to make informed decisions about where to allocate your hiring resources to get the most value for your money.

7. Retention Rate

Your retention rate is the percentage of employees who remain with the organization over a specific period.

How to Measure: Divide the number of employees at the end of the period by the number at the start, then multiply by 100.

Why it Matters: Maintaining a high employee retention rate is crucial for any organization. It not only indicates a healthy work environment but also saves significant costs associated with recruiting, onboarding, and training new hires. If you're seeking guidance on how to enhance your retention rates, we've got you covered.

8. Applicant Drop-off Rate

Your applicant drop-off rate is the percentage of applicants who abandon the application process before completion.

How to Measure: Divide the number of applicants who abandon the process by the total number of started applications, then multiply by 100.

Why it Matters: Identifying and reducing drop-off points enhances the candidate experience and ensures a robust talent pool. You’ll lose fewer candidates in your hiring process and foster a stronger brand reputation on review websites for job candidates such as Glassdoor and Blind.

9. Cost of Vacancy (COV)

Cost of vacancy calculates the financial impact of leaving a position unfilled for a certain period, including lost productivity, revenue, and potential opportunity costs.

How to Measure: Multiply the average daily revenue generated by the position by the number of days the position remains vacant.

Why it Matters: Vacant positions can disrupt workflow, affect team morale, and result in missed business opportunities. Understanding your cost of vacancy emphasizes the urgency of efficient hiring processes. The longer a job is open the more money, time, and effort is allocated. For example, we found that the COV of an unfilled software engineer position for 35 days is $20,623.27. That's a lot of incentive to fill the role!

In Closing

By mastering these essential metrics, you'll be fully prepared to navigate whatever today's recruitment landscape throws at you. As you assess your metrics and adjust your tactics accordingly, you'll be amazed by the positive impact these metrics can have on your recruitment efforts.

Investing in recruiting data gives greater insight into your department's impact, and can help inform progress on goals that matter, ultimately leading to better outcomes for any organization.