Recruiting KPIs: The Metrics of Successful Recruiting

The recruiting process is one of the most frequently overlooked areas of day-to-day operations in many companies. While in other sectors, such as marketing, every expense for CPC advertising, pixels, and other advertising measures are planned down to the last cent, the opposite is often the case in recruiting.

Important key points such as effectiveness or success can also be measured in recruiting. Because not only are the costs for the last advertising campaign important; the expenses for hiring employees, from job posting to the first day of work, are also relevant. However, not every company measures and analyzes recruiting KPIs.

If you're wondering what exactly recruiting KPIs are, how to measure them and how they can help you with your work, then this article is just right for you! We explain everything you need to know about KPIs in recruiting and give tips on how to use HR metrics in your business.

Table of Contents

1. What are Recruiting KPIs?

2. Why Recruiting KPIs are important?

3. Which Recruiting KPIs are important?

4. Which Recruiting KPIs fit my company?

5. How do I measure Recruiting KPIs correctly?

6. Which software is suitable for measuring recruiting KPIs?

7. Summary on Recruiting KPIs

What are Recruiting KPIs?

In short, recruiting KPIs are metrics that measure and summarize the performance of recruitment-relevant processes. This allows the processes of recruitment to be accurately analyzed and assessed. The numbers and insights gained from KPIs make it evident where the recruitment process is running smoothly or where it is stalling, where most costs are incurred, and how much time is taken to fill a specific position.

Why are Recruiting KPIs important?

Primarily, recruiting KPIs serve to analyze the effectiveness of the recruitment process and uncover any weaknesses. As with many other aspects of business operations, numbers in recruiting are more meaningful than one's own gut feeling. So if you have the feeling that your own recruiting is going well, you should ideally be able to prove this with good KPIs. If the recruiting KPIs, however, reveal a discrepancy between desire and reality, you can use the right recruiting metrics to understand where there are problems in the hiring process.

For this reason, every company that recruits new workers through a recruitment process should set up HR metrics. It is important, however, not to rely solely on the numbers. Because even though data and statistics at first say more than subjective perception or a general feeling, the context should not be ignored. Often a picture emerges from the combination of recruiting KPIs and one's own experience that summarizes the performance of one's own recruiting.

Which Recruiting KPIs are important?

Irrespective of the industry, every company should collect a few recruiting KPIs, which are meaningful and can provide a good picture of HR performance.

Cost-Per-Hire: This value is especially important with respect to the financial aspect of the recruiting process. How much did you spend on recruiting a new employee? How high were the costs for advertising on social media, job boards, or elsewhere on the internet until the candidate became an employee? How high are the personnel costs of the recruiting team? In the case of cost-per-Hire, a lower value signifies good performance, as the costs can be kept low. A good value in a growth phase is usually between EUR 3,000 and EUR 6,000.

Time-To-Hire: This recruiting KPI is about the time gap between advertising a job and making a hire. To be able to deliver optimal performance here, you should always communicate with candidates as quickly as possible. Generally, it is better to reduce the time gap between announcing and filling a position.

Good values in growth phases are usually:

• Junior – Mid-Level profiles: <2 weeks
• Senior – Lead: 2-4 weeks
• Executives: 3-6 weeks

If the values differ greatly or if positions are not filled at all, this usually has internal reasons, in that the right environment is not created to fill the position.

Quality-of-Hire: Even if you have found a candidate for the open position, the evaluation process does not end. What if it turns out that the newly hired employee does not deliver good performance? This is where the Quality-of-Hire comes into play, which assesses the quality of the successful applicant. Assuming management acts consistently and separates from poor placements, it should be clear after 90 days whether the quality of the placement was right or not.

In addition to these values, which are the cornerstone of recruiting metrics, there are many other aspects that can be measured. However, these are rather secondary factors that are only of greater importance in certain cases. The above-mentioned recruiting KPIs are, however, always relevant without doubt and can provide a good picture of the performance of recruiting across all industries.

For HR managers or data and statistics fans, these values ​​may also be relevant: 

• Cost-of-Vacancy: What does it cost to leave the open position unfilled? Is there even a financial disadvantage if the position is not filled?
• Time-of-Vacancy: How long does the position remain vacant? Are there certain positions that are vacant longer than others?
• Rejection rate: To how many applicants did you have to reject very early in the application process, perhaps because they do not bring the right qualifications?

With these HR metrics, you can clearly understand the operational consequences of an unfilled position. As an HR department, you get a good overview of the costs caused by an unfilled position and can therefore decide which position should be filled as quickly as possible. Meanwhile, the rejection rate can convey how hard it is to find a suitable candidate for a certain position.

Which Recruiting KPIs fit my company?

As different as the prerequisites for companies in various industries can be: The demand for KPIs in recruiting overlaps in many industries. The factors mentioned earlier, such as Cost-to-Hire, Time-to-Hire and Quality-of-Hire should always be collected. No (serious) company can afford to fill a position excessively expensive, let a lot of time pass between job posting and hiring or not adequately fill the position.

However, it is necessary to filter out only necessary recruiting KPIs and measure them. Because unused numbers and evaluations only make more work. Therefore, each company must define for itself which KPIs are elemental for performance analysis. While some companies can certainly benefit from collecting the cost of vacancy, this value in other companies may not be as meaningful.

How do I measure Recruiting KPIs correctly?

To be able to measure the recruiting performance, of course, a good collection of data is necessary. It is always worth feeding the collected values ​​into a HR software and thus making a clear picture over the efficiency of the recruiting process. Tables, graphics, and other visual elements help to illustrate the numbers.

Despite all numbers and statistics, it can sometimes be difficult to define certain recruiting metrics precisely. While it is comparatively easy to measure values ​​like Time-to-Hire, it can look very different again with the Cost-of-Vacancy. How do you calculate what an unfilled position costs you? There is no easy answer to this, but a few approaches to measurement can still be found.

Depending on the industry, you could simply calculate how much additional cost has been incurred by the lack of a qualified employee. If, due to a shortage of skilled workers, you have to outsource certain tasks, you can compare the costs for the outsourcing against the usual salary of an internal employee. This gives you a good overview of the financial consequences of an unfilled position. Alternatively, you could simply calculate what an employee would have cost during the duration of the open position.

Which software is suitable for measuring recruiting KPIs?

Now that you know the importance of recruiting KPIs, it's time to get down to the nitty-gritty: measuring KPIs. In the previous section, we already explained what to consider when measuring KPIs in recruiting. But how do you measure the numbers specifically?

There is a suitable solution for each category here. On OMR Reviews you will find a variety of SaaS solutions that cover almost every area. Below, we introduce you to a few solutions with which you can effectively measure recruiting KPIs.

• Especially for factors like Time-to-Hire or the rejection rate, a applicant tracking software is perfectly suited. This allows you to collect the data from all applicants and clearly display it. It is immediately clear when contact was first made with a candidate or when the last communication was. With a tool like onlyfy one Bewerbungsmanager, Lever or Greenhouse (which is particularly suitable for reporting), even job ads and postings can be linked. Especially for companies that post many positions simultaneously, this results in better organization.
• For those who want to analyze recruiting metrics like Cost-to-Hire, a traditional HR software is much better. This allows you to determine for each employee how much the process from job posting to recruitment has cost. A suitable solution is, for example, Zoho People or also Greenhouse. If you want to know more about HR software, then our article with the ten best HR softwares is right for you.
• Alternatively, of course, you can also evaluate the data and figures with a program like Excel. But to be honest, this is not an optimal solution. Entering the data quickly becomes cumbersome and is also visually anything but appealing. Therefore, going for the specialized SaaS solution is definitely worth it!

Summary of Recruiting KPIs

Recruiting KPIs are an important indicator of a successful recruiting strategy. With the metrics obtained from the analysis of recruitment processes, the effectiveness and success rate of your own recruiting can be measured quite easily. This allows deficits to be uncovered and areas where things are not going well optimised.

Taking these data is not as complicated as it looks at first glance. With a bit of basic knowledge, you can quickly identify the most important features of an effective recruiting strategy. So in the future, you will know immediately why the application process in your company is progressing slowly and where improvements can be made.