Big data is now a concept that permeates nearly every business function and informs nearly every decision. Data-driven decision making has become essential to recruiting the right talent in 2018. Using strategic recruiting metrics as a daily discipline enables us to look objectively at our recruiting processes, gain critical insights, and leverage this knowledge to make continual improvements. As HR professionals, we are even stronger business partners when we implement KPIs practically and present empirically-based solutions from the data we utilize.

There are dozens of recruiting metrics worth considering, but the long list of choices has led to indecision for many in HR. The following are eight metrics we consider to be fundamental to most organizations’ hiring objectives. Here, we provide an explanation of each KPI, how it is calculated, and the potential benefits each delivers:

1. Application Completion Rate: At the top of the recruitment funnel, this metric is used by nearly all HR departments today. It expresses as a percentage the number of applications started versus the number of applications completed. The converse of the completion rate is the abandon rate. A significant abandon rate of 20 percent or more (or a completion rate of 80 percent or lower) may indicate a sub-par application experience. Weaknesses in the application process must be uncovered, or they can severely diminish the quality of the candidate pool. Questions this metric can help answer include:

• Do we have unnecessary data fields that make our application too long, deterring candidates from entering our recruitment funnel?
• Is there a malfunction in the application process causing attrition at a certain point?
• Is our application mobile-friendly, or are people dropping off on certain devices?

2. Recruitment Source Ratio: Recruiters are using an increasing number of channels and specific sources each year. Twenty years ago, we used internal postings, referrals, and newspaper listings. Today, we have LinkedIn, multiple job boards, career websites, social platforms, and the company career page, just to name a few sources. The recruitment source metric is expressed as a ratio of the percentage of budget versus percentage of hires. This enables us to do the following:

• Compare the effectiveness of each channel and source.
• Allocate future investments in accordance with ROI.
• Correlate high quality hires with their recruitment sources.

3. Hires to Goal Ratio: This metric enables you to compare your hiring managers’ and recruiters’ performance against expectations. It is a KPI that your team must keep track of on a weekly basis in order to meet their individual goals. Hiring goals should account for the amount of qualified candidates in the funnel and how long it takes candidates to move through the progression toward an offer. This metric can be calculated as the number of new hires divided by the hiring goal for a department or for the organization as a whole. This metric tells us:

• Our performance as a team against our own expectations.
• How members of our team are individually performing.
• If we are not performing well, a poor ratio suggests we need to find bottlenecks in the recruiting process that are limiting our capabilities.

4. Cost Per Hire: A great employee is not a great hire at any cost. For every role, we use historical data (adjusted for inflation) on the cost-per-hire to benchmark hiring costs. We calculate this metric by dividing total recruitment costs (total internal and external costs) by the total number of hires. Internal costs of hire include the expenses for a recruiting staff, salaries, training, and benefits. External costs include fees for advertising, agencies, and consulting. This KPI allows us to:

• Grade hiring manager performance from a fiscal perspective.
• Continually improve the cost-efficiency of hiring practices.
• Reduce the internal and external costs that are driving up this metric.

5. Quality of Hire Score: This is the measure of the first year-performance of an individual employee. Overall quality of hire for a given year is an indication of our average performance and overall hiring success. Quality is a subjective idea, and each organization has its own way of calculating this metric, which is most often an aggregate performance rating derived from a variety of sources. These may include specific job metrics, performance reviews, and even cultural fit.
Quality of hire and overall quality of hire can be calculated in several ways, including these two:

• Quality of Hire (%) = (Job Performance + Ramp-up Time + Engagement + Cultural Fit) / N (All scored out of 100, N = number of indicators)
Overall Q of H (%) = [Avg. Quality of Hire score + (100 – Turnover Rate)] / 2
• Quality of Hire (%) = (# of hires considered satisfactory) / (Total # of hires)

Regardless of how this metric is formulated, it can help us:
• Benchmark and compare performance across years, recruiters, and positions.
• Understand whether talent scarcity (economic/supply & demand factors) or other factors are the reason for changing trends.
• When correlated with recruitment sources, we can measure channel and specific source quality.

6. Candidate Job Satisfaction Score: Every strategy your HR department and organization employs to attract candidates sets the expectations of new hires going into their roles. High candidate job satisfaction scores tell us that employee perceptions align with the expectations we set for them as candidates. These are predictive of strong employee retention and engagement. This KPI can be compiled using a Net Promoter point system, which is a bit too involved to explain here. This metric can help us:

• Track whether the expectations we set during the recruitment process match the reality of the positions and the employee experience.
• See when we need to provide a more realistic job preview, including the positive and negative aspects of a job.
• Rethink our interview process and the information we convey.

7. First-Year Retention and Attrition Rates: Short-term employee attrition is a business killer, as we delineated in The 15 Costs of Making the Wrong Hire. Attrition-related expenses after one year include training, compensation, business disruptions, lost productivity, and opportunity costs, and can easily double the salary alone. First-year retention is expressed as the percentage of employees who stay after one year and attrition is its converse. These metrics tell us:

• Which positions are the most difficult to keep staffed.
• How we are performing year-over-year in retention.
• After further investigating, whether we have a problem with managed attrition (terminations) or unmanaged attrition (resignations).
• Correlated with other recruiting metrics, how to avoid future attrition.
• If we need to improve the employee experience and employee engagement.

8. Recruitment Funnel Effectiveness: Our recruitment funnels have become increasingly complex, with job seekers entering the funnel through more channels and taking more steps in the process than ever before. This makes it essential to measure the effectiveness of all the steps in our funnel, from applicant screening to final interviews. For each step, we calculate a yield ratio by dividing the number of applicants who successfully completed the step by the total number of applicants who entered the step. For example, if four final interviews lead to two offers, the yield ratio for final interviews is 2:1. This KPI can help us:

• Optimize each step so that the ideal number of candidates gets through.
• Determine if we need to narrow or expand the number of candidates getting through a step.
• Identify inefficiencies, unintended attrition points, and bottlenecks are in the funnel.

Does your organization use a recruiting metric that we haven’t mentioned? Tell us why that metric is important to your overall recruiting strategy on Facebook!