Improve your hiring process with key recruiting metrics

To run a successful business, particularly once it gets to a certain size, you need to ensure you’re bringing in top talent, whether on a permanent or temporary basis. But you also need to know that your process for bringing in that top talent is both efficient and cost-effective. This is where the importance of having clearly defined recruitment metrics comes to the fore, helping you to improve your entire hiring process.

Recruitment metrics are the numbers – the essential data – that let you know whether your recruitment strategy is working or not. In a tangible sense, these metrics cover things such as time-to-hire, cost-per-hire, source-of-hire, application-to-hire, and attrition rate.

Tracking these recruiting metrics is essential for your business as this will help you to optimize your hiring process, save on labor costs, improve overall hiring efficiency and improve each candidate’s experience, increase staff retention and reduce turnover, and streamline your entire hiring process without compromising on quality.

Read on, as we’re now going to take a deep dive into the recruiting metrics mentioned in this intro, how you can harness them to improve your recruitment processes, and actionable steps you can take in changing your hiring process for the better.

Essential recruiting metrics for business success

There are a whole host of metrics for recruiters to consider, so we’ll narrow things down and hone in on a few that are most important when it comes to creating a successful hiring process.

Time-to-hire: This is the average amount of time it takes to fill a vacant role.
Cost-per-hire: The total cost of filling a position, including advertising the role, any agency fees, possible relocation costs, and internal costs e.g training.
Source-of-hire: The channel through which applicants come to you e.g via online job boards, social media, the company website, third-party recruiters, job fairs.
Application-to-hire: The number of applicants Vs the number of hires.
Attrition rate: The rate at which employees leave the company e.g every two years or every six months.

And it’s just good practice, in general, to make data-driven decisions when hiring, as it will allow you to carefully recruit for specific skills and experience, choose who you want to work for your business, rate the performance of workers, and ensure high fulfillment rates for all shifts across your business.

The Indeed Flex Marketplace allows you to do all of the above, and so much more, so it’s certainly worth considering. In fact, with the right solution in place, you can manage your entire workforce all from the one platform, making hiring decisions that much easier, and rooted in facts and figures.

But let’s now focus fully on those main recruitment metrics we’ve mentioned and really drill down into each of them.

Time-to-hire: Streamlining your recruitment timeline

A shorter time-to-hire cycle can reduce the cost of recruitment and minimize the impact of unfilled positions on overall productivity within your business.

Conversely, a prolonged hiring process can increase your recruitment costs, as it means advertising roles for a longer period of time, and incurring more agency fees. Unfilled roles can also have an impact on productivity, as no one is undertaking the work that would usually be done by the person who’s vacated that role. So, again, the quicker a position is filled, the better.

You also need to consider the impact of the time-to-hire recruitment metric on candidates you’re looking to bring on board. A speedy process will undoubtedly lead to a happy candidate. However, a lengthy hiring process could lead to them becoming frustrated and disengaged, or even withdrawing from the recruitment process altogether.

So, it’s important to keep your time-to-hire down to a minimum, in terms of costs, impact on your business, and overall candidate experience.

Cost-per-hire: Optimizing your recruitment budget

Cost-per-hire, unsurprisingly, entails all of the costs attached to recruiting staff – from advertising jobs on job boards, to agency fees, to money spent on job fairs, to relocation fees. Simply put, a lower cost-per-hire indicates a more efficient recruitment process, and ultimately saves your business money.

But where do the costs come from? What costs should you consider when looking at this all-important recruitment metric?

Well, there are a few, but chief among them are:

Advertising costs: Expenses for posting roles on job boards, social media platforms, and any other platforms.
Agency fees: Fees paid to recruitment agencies or headhunters, to help you both refine and speed up the search.
Background checks: Fees for conducting background checks on candidates, such as DBS checks.
Onboarding costs: Expenses related to onboarding new hires, including training, new equipment, and administrative costs.
Employee referral bonuses: Rewards given to employees who refer successful candidates.

Keep these costs down and you’ll have a more streamlined and far less expensive hiring process.

Source-of-hire: Identifying your most effective recruitment channels

Source-of-hire relates to where your applicants are coming from – where they’re finding the jobs you post.

Are they finding you through job boards, like Indeed and Glassdoor?
Are they finding you through posts or adverts on social channels, like LinkedIn or Facebook?
Are they coming to you via a more direct route: through your website, a referral from a current staff member, or a job fair you attended?
Are they coming to you through recruitment agencies or headhunters?

It’s one of the key recruiting metrics to track as it will help you to determine the most effective recruitment channels, and where you should be putting your focus… and money.

By tracking your source-to-hire properly you can refine your recruitment strategy based on data-driven insights rather than a vague notion of what does and doesn’t work.

What may help you, in getting to know the numbers behind source-to-hire, is choosing a platform that can give you easy access to real-time data, allowing you to make those data-driven decisions.

Attrition rate: Measuring employee retention and hiring success

In terms of recruiting metrics to track, attrition rate may not seem like one that stands out, given that it relates to what happens after individuals are recruited, but it’s actually incredibly important. It helps you to work out if your approach to recruiting new staff is working, and if your interview and pre-vetting processes need to be tightened up or amended in some way. In a nutshell, it’s the metric that quantifies the rate at which employees leave your organization, whether voluntarily or involuntarily.

The one you need to be mindful of is voluntary attrition – employees quitting of their own accord.

To work out your company’s attrition rate, simply divide the number of employees who leave your company during a certain period, by the number of overall employees during that same period. You can read this for more details.

You can also benchmark your attrition rate against others in your industry, to work out whether it’s high, low, or about average.

A high attrition rate may indicate underlying issues such as poor company culture, poor communication, being overworked, low/inadequate pay, or lack of career growth opportunities.

Poor company culture is something that needs to be addressed more broadly. But with things like pay, role responsibilities, and career growth opportunities, it pays to be up front with candidates, right from the start, so they know what to expect.

Overall, you can reduce your attrition rate by considering your retention strategies. These strategies should look to address the root causes of high attrition. This can be done by improving employee engagement (perhaps with regular ‘temperature check’ surveys or social events), offering competitive compensation, and providing opportunities for professional development within your organization.

Harnessing recruiting metrics for process improvement

Recruitment metrics are essential in helping to drive positive changes in hiring practices across an organization, leading to better outcomes.

By tracking and analyzing key performance indicators (KPIs), companies can gain valuable insights into the effectiveness of their recruitment strategies and identify areas for improvement.

This, in turn, leads to:

Data-driven decision making: Allowing you to make evidence-based choices.
Improved efficiency: Ironing out inefficiencies in the recruitment process will reduce costs.
Enhanced candidate experience: By focusing on metrics that measure candidate satisfaction.
Strategic planning: Allowing you to develop more effective recruitment strategies and allocate resources efficiently.
Compliance: …with the relevant employment laws and regulations.

It’s important to regularly analyze your KPIs, to see how you’re performing in terms of your overall recruitment strategy, and to enable you to make the necessary adjustments if things aren’t quite working for your business.

Data-driven strategies for reducing time-to-hire

So now it’s time for some actual practical tips, based on the key recruitment metrics mentioned throughout this post – starting with time-to-hire.
By following these tips, you can streamline your entire hiring process – speeding things up and reducing overall costs.

They can roughly be split into four stages:

1. Application stage

Simplify application forms: Reduce the number of questions, make them simple, and make them precise – to ensure you attract the right candidates.
Use Applicant Tracking Systems (ATS): automate the screening and filtering of applications – resumes and covering letters.
Conduct initial screening calls: do this by video call or phone, to quickly assess if a candidate is suitable.

2. Interview stage

Reduce the number of interviews: Combine multiple interviews into fewer rounds.
Panel interviews: Conduct panel interviews so multiple stakeholders can assess candidates in a single session.
Behavioral interviews: Focus on behavioral questions to assess candidates’ skills and experience more effectively.

3. Decision-making stage

Come to a consensus: Establish clear decision-making criteria in choosing candidates, and make sure hiring teams are on board with them.
Act fast: Avoid any delays in making hiring decisions.
Be ready to negotiate: And do so promptly, to avoid losing candidates to competitors.

4. Onboarding stage

Pre-onboarding: Send new hires any necessary information, paperwork, and tasks to complete in advance.
Structured onboarding programs: Implement well-structured onboarding programs to help new hires settle in quickly.
Mentorship programs: Assign mentors to new hires to support and guide them in their new role.

Once you’ve implemented all of the above, over a significant period of time, look to compare your time-to-hire with industry benchmarks, to identify best practices and make any necessary adjustments to your hiring practices.

Industry benchmarks for time to hire can be found on the Society for Human Resources Management (SHRM) website, Glassdoor, or HR Metrics.

Optimizing recruitment spend through cost-per-hire analysis

And following a similar pattern, as above, we’re now going to outline some strategies which will allow you to reduce your cost-per-hire, as a recruiting metric, without compromising on quality and/or bringing in unsuitable candidates.

We’re going to split these strategies (or tips) into four stages again:

1. Start with the job description

Clear and concise: Make sure job descriptions are clear, concise, and accurately reflect the job requirements and expectations.
Accurate compensation: Advertise accurate salary ranges, right for both the market and the seniority of position, to attract qualified candidates and avoid wasting time on unsuitable applicants.
Highlight benefits: Beyond the salary, clearly outline the company’s benefits package to, again, attract top talent.

2. Recommendations – use employee referrals

Existing networks are key: Encourage employees to refer qualified candidates.
Incentivize referrals: Offer rewards or incentives to employees who refer successful hires.
Look for recommendations in general: If sourcing candidates through a platform like LinkedIn, look for recommendations and endorsements from peers.

3. Negotiate fees

Agency fees: Negotiate lower fees with staffing agencies or recruiters, right from the start.
Job board costs: Explore cost-effective job posting options. There are a number of platforms out there – choose those that suit you/your budget.
Cost of checks: Are all background checks strictly necessary for the role(s)? Ditch those which aren’t.

4. Consider internal talent

Develop from within: Invest in employee development and training to promote internal staff and save on hiring externally.
Clear progression: Create clear career paths for staff members, to retain top talent and reduce external hiring needs.

The long-term benefits of more cost-effective recruiting strategies are clear and obvious. They’ll ultimately lead to greater profitability, allow you to allocate financial resources to other areas of the business, improve your reputation as an employer, and improve employee satisfaction and retention.

By implementing the right strategies, companies can reduce cost-per-hire while maintaining high standards.

Refining recruitment channels based on source-of-hire insights

Next up, among the recruiting metrics – how best to allocate your resources in terms of the most effective recruitment channels to use to attract candidates. Determining the most effective recruitment channels requires careful analysis and consideration of various factors.

Once again, four top tips:

1. Work out your target audience

Identify your ideal candidate: Clearly define their characteristics, including experience, skills, and qualifications.
Research to find them: Determine where they’re most likely to look for jobs, such as specific job boards, social media platforms, or industry-specific websites.
Pitch at the right level: do you want a graduate, someone at entry level, a fairly experienced individual, a senior, a manager, or a head of department?

2. Choose your channels

Spread your efforts: Don’t rely solely on a single recruitment channel. A broad approach can help reach a wider range of candidates.
Test and refine: Experiment with different channels to identify which ones are most effective for your specific needs.
Change according to the role: Don’t think that the same approach will work for each role you advertise – people with different skill sets and different levels of experience will be found in different places.

3. The power of social media

Use your company profiles/page: Maintain an active company page on platforms like LinkedIn and Facebook to attract job seekers. It’ll cost you nothing and could prove incredibly effective.
Share, share, share: Encourage employees to share job postings on their personal social media profiles.
Go viral: Got a social media exec or manager within your organization, or even a whole team? Could they create a funny TikTok video showcasing the role or your company overall?

4. See what you’ve already got

Skills assessment: Assess the skills and experience of your current employees to identify potential internal candidates.
Career development: Invest in employee development and training to create an internal talent pipeline.
See who puts their hand up: See if anyone, internally, naturally comes forward as a result of hearing about a role.

Outside of these four tips, you may want to consider other means of finding new, untapped talent pools. This could include advertising jobs on niche job boards, partnering with local colleges, or using gig work or temp employment platforms, such as Upwork or our very own platform – Indeed Flex.

Addressing attrition: Using retention data to improve hiring decisions

And now we’ll look at attrition rate as one of the key recruitment metrics. When it comes to recruitment metrics to track, this is an interesting one, as it’s all about what happens after you’ve recruited staff i.e. how long they stay with your organization.

By considering your attrition rate carefully, and using data to inform your hiring practices, you can drastically reduce high turnover and the costs associated with that.

Here are our top four tips for using attrition rate data for better results:

1. Identify high-attrition roles

Zone in: Analyze attrition rates for different positions within the organization.
Make a note: Identify roles with consistently high turnover rates. This will also tell you where you might be short-staffed and need to address it.
Find the common factor: What’s contributing to high turnover in these roles? Is it job satisfaction? Pay? Workload?

2. Review compensation and benefits

Make comparisons: How does your company’s compensation and benefits package compare to those of your competitors, and industry standards?
Act on that information: Implement changes to make your compensation and benefits more competitive, if necessary.
Recognize hard work: Beyond compensation and benefits, look to recognize and praise those who do well, for example by rating the individual performance of workers.

3. Measure employee satisfaction

Regular check-ins: Conduct employee satisfaction surveys to identify areas of concern.
Act on feedback: Address issues that are contributing to high turnover rates.
Show that you’ve listened: Implement initiatives to improve employee morale and engagement.

4. Listen to departing employees

Conduct exit interviews: Hear what employees have to say, and gather insights into their reasons for leaving.
Look for any patterns: Identify common themes when it comes to those reasons.
Do something about them: Address underlying issues that are repeatedly coming up, through a change in policy, processes, or management style.

Ultimately, employee retention and reduced attrition rates lead to long-term cost savings and organizational stability. Reduced turnover results in lower costs in terms of recruiting, hiring, and onboarding new staff. And it keeps valuable knowledge and expertize within the company too. When it comes down to it, engaged employees are more likely to be productive, innovative, and committed to the company’s goals, which is better for all concerned.

Best practices for implementing a metrics-driven hiring approach

And now to round things up, here’s a step-by-step guide for integrating recruitment metrics into the hiring process.

Determine the relevant recruitment metrics right from the start: Focus on the main ones we’ve discussed – time-to-hire, cost-per-hire, source-of-hire, attrition rate. You may also want to look at application-to-hire and quality of hire too.
Set benchmarks: Do this for each metric, based on industry standards or your company’s historical data.
Applicant Tracking System (ATS): Use an ATS to track applicant data, candidate movement through the hiring process, and time-to-hire.
Regular data collection: Collect data on a regular basis to ensure accuracy and consistency, especially in relation to cost-per-hire and source-of-hire.
Analyze trends: Look for trends and patterns in the data to identify areas for improvement. Could you get better agency rates? Are some job boards performing better than others? Do some roles cost more to recruit for? How long is each hire staying with the company, on average?
Use data visualization tools: Use charts and graphs to visualize data and make it easier to understand, and easier to share with others.
Set SMART goals: they need to be specific, measurable, achievable, relevant, and time-bound, for your particular recruitment process.

Alongside all of this, you’ll need to keep a constant eye on the data, by regularly reviewing your recruitment metrics to assess the effectiveness of your strategies. You’ll then need to make adjustments, based on your analysis, to improve the efficiency of your hiring process, from beginning to end.

If you want to learn how Indeed Flex can help you with your hiring process, including keeping tabs on key recruitment metrics, offering real-time data, fill in this form and one of our Staffing Experts will be in touch.