Time to fill, time to hire, candidate acceptance rate, cost per hire….these are all common terms that you hear consistently in the talent acquisition space, but what do they actually mean and which ones should you truly care about? Recruiting metrics are an essential part of any data-driven hiring strategy, but the number of data points that recruiters could measure seems endless. To ensure that your hiring team is leveraging the right data, let’s break down the 7 most important recruiting metrics you should be tracking.
1.) Time to Fill
What it is: Time to fill is the amount of time it takes to source and hire a new candidate. This is typically based on the number of days between advertising an open role and hiring the right candidate.
The average: 36 days
Why it matters: Time to fill helps recruiters and hiring managers better understand how long it takes to fill open roles or replace churned employees. Calculating this metric also empowers you to lead a more efficient team.
2.) Time to Hire
What it is: Not to be confused with time to fill, time to hire shows how quickly a candidate moves through the various stages of hiring…from an initial phone screen to sending an offer. This can vary across role types as a pretty straightforward recruiting process can reduce time to hire, but roles that require multiple rounds of interviews, team panels, assessments, etc. will dramatically increase this metric.
The average: 36 days
Why it matters: Time to hire significantly impacts candidate experience. A long time-to-hire not only raises the cost of your hiring, but it can also cause you to lose top candidates. Many job seekers lose interest in a job if the hiring process is too lengthy. In fact, the top 10% of talent tends to be off the market in 10 days!
3.) Candidate Diversity
What it is: One tool that can help measure candidate diversity is anonymous candidate surveying, particularly at the start of the employee lifecycle. By surveying a candidate at the completion of their job application, you can anonymously collect data on their gender, race, ethnicity, background, and other characteristics.
The average: Check out 15 surprising workplace diversity statistics here
Why it matters: Now more than ever, candidates are prioritizing diversity in the workplace, and organizations that are in tune with their diversity metrics are better equipped to attract and retain top talent. In fact, according to McKinsey, companies with a diverse workforce are 35% more likely to outperform those without diversity initiatives.
Check out our blog on 7 questions candidates ask when evaluating diversity.
4.) Turnover Rate
What it is: Turnover rate is the rate at which your organization loses employees in any given time period. Most businesses measure this after one year.
The average: 57%
Why it matters: Replacing top talent is costly. In fact, bad hires are a multi-billion dollar problem for companies. On average, it costs $128K to replace one bad hire (with an average salary of $100K). A high turnover rate can be avoided with a great interview process. This way you can ensure that hiring teams are being transparent about roles and responsibilities and that the right candidate is being hired for the role.
5.) Cost Per Hire
What it is: Cost per hire is the total amount you spent on recruitment annually, divided by the total number of hires you made. It’s best to look at this on a per role basis and to also analyze the funds you spent both internally and externally. For example, internal costs can include employee referrals while external costs can include paid advertising.
The average: $4,425
Why it matters: Cost per hire is an important metric so you can reduce your overall spending. You can determine where you are finding winning candidates efficiently and areas where you are less effective. This helps guide the amount of investment to recruit for specific jobs and helps develop future hiring budgets.
6.) Candidate Acceptance Rate
What it is: The number of candidates who accepted an offer versus the number of candidates who received an offer.
The average: 64%
Why it matters: If acceptance rates are below industry benchmarks, it’s a sign that you need to take a serious look at your offers and your candidate experience. You might find that your salaries aren’t competitive, your candidate experience leaves something to be desired, or maybe your hiring process moved too slowly. To get to the bottom of things, you should always follow up with candidates who reject your offers.
7.) Application Completion Rate
What it is: The percentage of applicants who start, complete, and submit an application for an open role.
The average: 10%
Why it matters: Top candidates know they have options, and they won’t deal with an unintuitive application page or an unnecessarily lengthy format. Many candidates don’t expect applications to take longer than 15 minutes. This is a very simple metric to improve. Find out what’s turning people off about your application process and fix it.