Recruiting | 7Min Read

Recruiting KPIs: Everything Recruiters Need to Know For 2023

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Nowadays, the recruitment industry is evolving rapidly. Gone are the days when recruiters and HR used to hire candidates manually. Recruiting automation software becomes a lifesaver for hiring teams. It transformed the recruitment workflow like never before. The fruitful features of the recruitment software ease the hiring process and enhance the positive candidate experience. 

With this enormous change, the assessment and improvement of digital recruitment increased as it provides the solution to make the recruiting process more efficient and effective for both - the recruiters and the applicants. The analytics features help recruiters to make data-driven and accurate decisions. 

Hence, Recruiting KPIs metrics become an essential aspect of the hiring process as it provides deeper insights and point out the room for improvement. The features of reports and analytics in recruiting CRM software become vital for hiring managers and corporate HRs to understand the issues in their recruitment cycle. 

Let’s first understand what recruiting KPIs are and which are the most vital recruiting KPIs metrics recruiter should consider enhancing the recruiting process.

What are Recruiting KPIs?

KPI is a Key Performance Indicator. Hiring managers can utilise Recruiting KPIs metrics to measure and calculate the performance of the hiring process. They use recruiting KPIs metrics to know how efficient their hiring is. It Provides data to recruiters and corporate HRs on the areas of improvement and shows the value and ROI for specific recruitment actions.

Let’s see the top 15 recruiting KPIs for 2023 that corporate HRs, recruiters, staffing and recruitment agencies can use to leverage maximum benefits.

Top 15 Recruiting KPIs for 2023

1. Time to Hire 

The hiring time is a vital and frequently used metric by hiring managers to check the time it takes to hire suitable talent in the recruitment workflow. 

Formula: the day they accept the job - the day recruiter reaches the candidate

Suppose the day recruiter opened a particular position on day 1, and they reached the candidate on day 11. Afterwards, if the most suitable candidate accepted a job offer on day 28, then the hiring time would be 28-11= 17 days. Hence, the time-to-hire would be 17 days. 

Time-to-hire ratio = 11/28 x 100 = 39.28%  (on the 11th-day candidate contacted divided by the day (28th) the talent accepted the offer multiplied by 100)

It is a determining factor which measures the hiring time of the recruitment process. According to the SHRM report, it takes 36 working days for a company to hire talent.

Hire talent

The ultimate goal of this recruiting KPIs is to reduce the time to hire and improve the process by finding which hiring tasks take a lot of time, how recruiters can eliminate that particular task with automation, and which could be the possible solution to lessen it.

2. Sourcing Channel Efficiency 

The company must recognise the most effective sourcing channel to hire the most talented people. The sourcing channel metric gives an insight into the effectiveness of every sourcing channel and gives the best sourcing channel in the recruitment process, and invests more time and money in it. 

Formula:  total number of hires via the channel / total number of applications via channel x 100

For instance, if you get 100 applications via Glassdoor and 9 hires, then your sourcing efficiency would be 9/100 x 100 = 9%. 

The final goal of sourcing metrics is to reduce the cost of hiring by determining the most efficient channel and investing more in it. Also, it provides a specific channel which not performs well, and investment can be reduced in such channels.

3. Submit to Interview Ratio

The submit-to-interview ratio assesses the prescreening quality and effectiveness of recruiters’ efforts. The average value of this ratio in staffing agencies is 3:1. 

Formula: The ratio of candidates submitted to hiring managers: the number of given interviews.

If the submit-to-interview ratio is high, then it might be possible due to poor screening,  perhaps the recruiter’s lack of understanding of the hiring manager’s need. The final goal of this stage Is to measure the hiring manager’s satisfaction and the recruiter’s sourcing effectiveness and achieve a higher standard of submitting to the interview ratio. 

4. Interview-to-Offer Ratio 

To measure this metric, calculate the number of interviews your hiring team conducts with candidates to extend one offer. 

As per NACE (National Association of Colleges and Employers), the average interview-to-offer rate is 42.1% - approximately 42 of every 100 candidates interviewed received an offer.

interview to offer rate

Formula: (No. of candidates who received the offer letter/No. Of Interviewed Candidates) x 100

For example, if a hiring manager chooses to interview 37 applicants and extends 19 offers, then it would be expressed as (19 / 37) x 100 = 51.35 %.

5. Offer Acceptance Rate

This is a crucial metric as it indicates the percentage of offers accepted by the applicants. If the candidates don’t accept the job offer, then it might be some problems with the company’s reputation, compensation, and benefits strategies. 

Formula: number of accepted job offers/number of all offers x 100

For instance, if 7 applicants accepted the job offer and the number of all offered candidates is 16, then the offer acceptance rate would be 7/16 x 100 = 43.75%. 

The final goal of this metric is to find and define why the offer acceptance rate is low. The reasons could be poor candidate experience, dissatisfaction with the salary or benefits, or a better offer elsewhere. This way, recruiters can improve the candidate interaction and engagement problem in the recruitment cycle

6. Cost Per Hire

The cost per hire metric includes internal and external expenditures such as; posting a job on various social media channels and job board platforms, referral campaign fees, the expense of job fairs or virtual hiring events, online assessment and interview scheduling and spending for onboarding and training new employees. 

Formula: Internal recruiting costs + external recruiting costs  / total number of hires

The goal of this metric is to calculate the hiring cost and try to reduce it as much as possible by cutting the cost of the hiring tasks, which are not necessary to spend more amount. Also, focus on spending the amount on effective sources. 

7. Quality of Hire

The hiring quality is a metric to determine the contribution of the new hires in the company. Also, it measures and determines the value a new hire brings to an organisation. Industry experts agree that the quality of hire can be calculated effectively by considering pre-hire and post-hire performance distinctly. 

Pre-hire quality is measured based on the pre-screening part of the recruitment process, such as resume reviewing or skill and qualification checking, and then attracting candidates who could be suitable for the open role. 

Formula: Pre-hire quality= (no. of managers who are extremely or very satisfied with candidate pool / total number of surveys filled out) x 100

Whereas Post quality hires assess the quality of the hired employees and their contribution to the firm. Also, it collects data on the company’s turnover and retention rate.

Formula: Post-hire quality= (no. of workers who leave within a year of hire date/total no. of workers who leave during the same period)

According to LinkedIn, 40% of companies agree that the quality of hire metric is their top priority. The goal of this metric is to improve employee-friendly workplaces and increase their productivity and job satisfaction rate, at the same time enhancing the retention rate. 

8. Hires to Goal

This recruiting KPI metric is essential for employers to Reach the definitive hiring goal of the organisation. Hence, the recruitment team must know the company goals for a particular time. Hires to goal is the total number of hires the company requirements for a set time period to reach a predetermined hiring goal.

Formula: (New hires in the particular period/ hiring goals in that period) x 100

The ultimate goal is to measure the goal completion rate via the hired talent and assess their contribution to the firm. Also, it is essential to make better hiring decisions. 

9. Candidate Net Promoter Score (NPS)

How can employers measure whether they are providing good candidate experience or not? This crucial metric measures the experience of the applicants during the hiring process. It provides an understanding of how candidates are likely to recommend you based on their recruiting experience. 

Constant interaction and engagement are important for recruiters to keep candidates in the talent pipeline and eventually hire them if they are the right fit for the company. According to Linkedin survey, 89% of talent say being contacted by their recruiter can make them accept a job offer faster. 

job offer faster

Formula: Candidate NPS= % of promoters -  % of detractors 

Based on the survey, the question of such a survey could be like this: On a Scale of 1-10, how likely are you to recommend a company, product, or service to a friend or a colleague? 

In a survey, the people who recommend the company positively are the promoters and people who don’t recommend it are the detractors. So, if the promoters are 55% and the detractors are 45%, then the NPS will be 55% - 45% = 10%. The ultimate goal of this metric is to increase the NPS and find the problems in candidate engagement and mitigate them with a tech-based solution.

10. Recruitment Site Analytics and Social Listening

This KPI is customisable and differs from company to company. Companies are using website analytics tools and social listening online tools such as Sprout Social or Hootsuite to collect and analyse information on the efficiency of the sourcing channel visitor demographics.  

Formula: (no. of the candidates from a social platform/total no. of online applicants) x 100

11.  Retention Rate

The retention rate depicts that employees are not only staying in the firm for a long time but also are productive and have a higher engagement rate which eventually increases the company's revenue. It is frequently calculated yearly basis. 

The metric tracks the total number of workers who remain at the client’s company over a specific time out of the workers at the start of the same period. Hiring managers can utilise this metric to calculate turnover rates and measure the number of employees who leave in the same period.

Formula:  Total employees still employed at the end of a specific period / Total employees at the start of the same period) x 100

12. Application completion rate 

This metric calculates the number of candidates who initiated the application process for the open position and move forward and submit it for consideration. 

Formula: No. of submitted applications/total no. of candidates who started an application 

For example, if 155 candidates started filling out applications and 137 candidates submitted applications, then Application Completion Rate would be 137 / 155 = 0.88.

13. Cost per application rate

Cost per application KPI is calculated by dividing the cost of job advertisement and personnel marketing expenses by the number of total application recruiters received. 

Formula: (cost of Job Ad + recruiting expenses) / numbers of applications received 

For instance, if recruiters received 37 applications and the cost of advertisement is 300$, then the cost per application ratio would be $300 / 37 applications = 8.1. This means that per application costs 8.1$ to the recruiters. 

14. Rejection rate 

If hiring managers want to calculate the ratio of rejection in the recruitment process, then this metric will help them figure it out. It is performance-based recruiting metrics that indicate how many candidates are categorised as ‘not suitable’ by the recruiters. 

Formula: No. of rejected candidates / Number of applications received X 100

For example, if a company receives 155 applications and 68 candidates get rejected, then the rejection rate would be 68 / 155 x 100 = 43.87 %. This metric will tell you how effectively the job Ad has reached the targetted audience and which sourcing channel brings the most suitable talent. 

15. Drop-off per stage ratio

One study mentioned in Glassdoor states that most companies have an 80% candidate drop-off during their hiring process. This metric is crucial to create a useful future prediction of the hiring process. The main purpose of calculating this metric is to measure how many candidates drop off at every recruitment stage. 

Formula: Number of applications started: Number of applications finished

Recruiters need to determine all the recruitment stages and must update the status of every applicant regularly and move them to the appropriate stage. Moving candidates to the next stage, withdrawing their application, or even rejecting a candidate for a particular reason, hiring managers will have vital data to analyse.

Final Thought on Recruiting KPIs

Tracking the recruitment KPIs can be immensely helpful for corporate HRs and hiring managers to improve the recruitment process in a better way and retain talent in the organisation. These metrics enable them to get valuable feedback insights and make data-driven decisions. 

Also, it provides a valuable understanding of how your decision and behaviour would affect the hiring process. Hence, the Recruiting KPIs are vital as they enable employers to analyse multiple hiring metrics and find solutions to improve the recruitment process to a higher standard.

Want to learn more about the recruitment metrics you can track in the iSmartRecruit platform? See what kind of job analytics and insights you can extract from our dashboards, book a demo by clicking below.

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