Many small and medium tech companies without established HR processes fail to measure the hiring cost and recruitment KPIs. Their management is misled into thinking that finding a new team member won’t affect the corporate budgets much.
In reality, in-house IT recruitment is pretty expensive and can undermine your financial stability if not measured property. The cost of replacing an employee can amount to 6-9 months of their salary, while the losses resulting from disrupted processes, low morale, and increased workload are ever higher.
How to start measuring recruitment efficiency? Adopt recruiting analytics and track core recruitment metrics, which we will talk about below.
Why Measure Recruitment KPIs and What Happens If You Don’t
Recruitment KPIs shed light on the efficiency of your hiring process. They help you notice bottlenecks and problems you would not know about without continuous tracking and analytics. For example, you may learn that the recruitment team spends too much time hiring for a junior-level role, which means something is wrong with their strategy. You may also detect a low offer acceptance rate or an insignificant number of candidates, which may signify issues with your brand image.
Without measuring essential recruiting KPIs, your hiring efforts are disorganized and likely to cause losses. You will also face longer time-to-fill and miss out on top talent due to the messy recruiting process. While not noticeable right away, an unoptimized hiring and application process will weaken your company in the long run.
Benefits of measuring recruitment KPIs
- Increased recruitment transparency
- Data-driven decision making
- Optimized expenses
- Higher quality of hires
- Improved candidate experience
- Enhanced planning
7 Recruitment Metrics to Track When Hiring in Tech
Recruitment teams and agencies use dozens of KPIs to track applicants and measure the quality of hires. You don’t need them all. We recommend focusing on the following indicators, which should be enough to make your recruitment efficiency more transparent and measurable.
1. Average Time to Hire
Explanation: The average time it takes you to fill a position, from the day you post a job to the day a candidate accepts an offer. You can also measure the time to hire for a specific candidate, but average indicators are more informative.
Formula: Time to hire (days) = Total Hiring Days for All New Hires / Number of Hires
Tips on improving the KPI:
- Build recruitment pipelines
- Use specialized tools to speed up application processing
2. Offer Acceptance Rate
Explanation: The percentage of offers your potential hires accepted, which shows your company’s popularity as an employer and the value of your proposition.
Formula: Offer Acceptance Rate = (Number of Accepted Offers / Total Number of Offers) × 100
Tips on improving the KPI:
- Consider increasing benefits and perks
- Invest in your brand image
- Compare your offer against the competitors’
3. Cost Per Hire
Explanation: The cost of hiring a new employee to evaluate the ROI of your talent sourcing and hiring efforts.
Formula: Cost per Hire = Total Recruitment Costs / Total Number of Hires
Tips on improving the KPI:
- Negotiate better rates with a recruitment agency
- Keep a talent base to find suitable candidates with less sourcing efforts
- Review expenses on recruiting channels and tools
4. Quality of Hire
Explanation: The value your company gets from hiring a new employee measured based on the combination of multiple recruitment KPIs, like productivity, manager feedback, etc.
Formula: Quality of hire = Combination of Your Recruitment Goals and Metrics (e.g., productivity, training time, performance metrics, manager feedback) / Total Number of Indicators
Tips on improving the KPI:
- Focus on early candidate assessment and soft skills
- Enhance the onboarding process
- Measure post-hire performance
- Implement an accurate feedback collection mechanism
5. Application Completion Rate
Explanation: The percentage shows what share of applications started by candidates are finalized. The metrics can help you understand whether the application process is streamlined and easy enough.
Formula: Application Completion Rate = (Completed Applications / Total Number of Started Applications) × 100
Tips on improving the KPI:
- Invite people to test your application process
- Avoid unnecessary steps and gather only critical information
- Create a version for mobile
6. Recruitment Channel Efficiency
Explanation: The share of hires from different channels you use allows you to compare them, adopt strategies for improvement, or seek alternatives if necessary.
Formula: Recruitment Channel Efficiency = Applications via the Channel / Total Hires from the Channel
Tips on improving the KPI:
- Focus on hiring channels that deliver measurable results
- Consider implementing a referral recruitment program if you still don’t have one
7. Turnover Rate
Explanation: The percentage of candidates who leave your company for different reasons. Most businesses measure the turnover rate for the first year of hire to check the effectiveness of their hiring and onboarding efforts.
Formula: Turnover Rate (for a specific period) = (Number of Employees Who Left / Total Number of New Hires) × 100
Tips on improving the KPI:
- Get to know candidates, their goals, and preferences before hiring them
- Make job descriptions and offers realistic and avoid setting too high expectations
In addition to the listed common recruitment KPIs, you should measure the overall effectiveness of your recruitment funnel. Split your hiring funnel into clear stages to track how well each performs, from the long list of candidates to hiring the chosen ones. If you are unsure how to do it, contact Sunvery for help with cost-effective hiring and recruitment KPIs tracking.
How to Start Tracking Key Performance Indicators
Recruitment KPIs tracking must become continuous if you want to spot fluctuations and develop a successful optimization strategy. Follow these steps to set recruitment tracking in your organization:
Step 1. Analyze your goals
Most core recruitment KPIs are suitable for every organization. However, you may have some unique needs to consider. For example, companies like a growing tech startup may need to minimize time per hire while those working on complex products are ready to wait longer. Don’t get obsessed with industry standards. Understand your needs and keep reevaluating them from time to time.
Step 2. Focus on specific recruitment KPIs
Select 5-7 KPIs that reflect the characteristics you want to measure out of the dozens possible. The ones we mentioned on our list are the most universal, but you may consult with a recruitment agency to build a custom monitoring strategy.
Step 3. Select tools for tracking
Although you can do everything manually, we recommend adopting professional tools to facilitate the process. Consider applicant tracking systems (e.g., Greenhouse, Lever, or iCIMS), recruitment analytics platforms (e.g., HireVue, Jobvite, or SmartRecruiters), recruitment marketing solutions, candidate relationship management platforms, and other tools. Despite raising expenses, such software will considerably optimize the work of your recruitment team.
Step 4. Calculate and monitor the indicators
Measure and track the KPIs to determine trends, bottlenecks, and how changes in your hiring strategy affect these indicators. Set up reporting intervals, like once per month, to keep the finger on the pulse.
Optimized and Transparent Hiring with Sunvery
Since we know that building recruitment funnels, hiring suitable candidates, and measuring recruitment KPIs can be challenging, Sunvery can do all these and much more for you. Sunvery is a tech recruitment & staffing agency that covers the full spectrum of hiring services, from recruitment consulting to tracking and optimization. Committed to transparency and predictability, we provide our clients with weekly recruitment progress reports and continuous performance tracking.
Just contact us and tell us your hiring needs and issues so we can help you solve them.