5 essential recruitment KPIs for 2023

Tracking recruitment KPI’s and optimization of the processes taking place should come as one of the main goals that an organization pursues at all times: during both ups and downs. Indeed, for a company to grow properly, it is necessary to constantly analyze whether the existing areas of operation need improvement – not just to make new confessions.Today, we’ll present which Key Performance Indicators (KPIs) in recruitment are worth measuring and which you can improve.

Recruitment KPIs – table of contents

1. KPIs in recruitment – what metrics should you measure?
2. KPIs in recruitment – summary

Recruitment KPIs- what metrics should you measure?

The indicators listed below are, of course, not all the metrics to study the effectiveness of the processes in place, but they are undoubtedly the most relevant. Any company that emphasizes improving and optimizing the work of the HR department should dutifully take them into account at the very beginning.

1. Time to hire

The first of the recruitment KPIs discussed best shows the effectiveness of the HR department and the activities carried out. Time to hire refers to the period that has passed from the beginning to the end of the recruitment process – that is, from the first publication of an ad to the decision to hire one of the candidates and their acceptance of the offer (not signing the contract).

According to LinkedIn’s data, on average this process takes about 40 days (more in technical and financial industries, less in sales or customer service)1 – so if the indicator in question is at a similar level, one can conclude that the HR department is functioning very effectively. However, one should also take into account the fact that the short time to acquire a new employee can also result from the attractiveness of the offer, the competitiveness of the company in the market or the fit of the open position to the competencies possessed by job seekers at the time.

2. Cost per hire

The second important recruitment KPIs derive from collecting all the expenses related to the search and hiring of employees that took place (from the publication of the ad to the payment of bonuses for any referrals), and then dividing that amount by the number of people hired. This way you get information on how much it costs on average to hire one person.

As in the case of time to hire – the lower the value this indicator takes, the better for the company because less money can be spent on the process of acquiring an employee. High values of this indicator require looking for ways to ensure that the various stages do not generate such high costs (e.g., improving the job advertisement to reduce advertising costs). The average cost of hiring worldwide is, according to the Society for Human Resource Management (SHRM), about $4,500.

3. The acceptance rate of the offer

The offer acceptance rate is one of the key recruitment KPIs, as it allows us to examine whether the offer we have prepared is attractive to job seekers and responds in the right way to the expectations set by the labor market.

To calculate it, divide the number of accepted job offers by the amount of total offers made, and sometimes also by the number of open vacancies. Taking this ratio into account, you can take steps to change various elements of the offer (salary, benefits, duties of the position, etc.) to ensure that the number of accepted offers is as high as possible.

4. Recruitment channel effectiveness (recruitment source effectiveness)

Conducting activities related to attracting new employees is usually carried out using different types of channels, which each time generate costs. For example, in the case of portals geared towards this purpose, it will be the cost of publishing an ad and post-hiring commissions, while in social media channels, we will pay attention to the advertising budget allocated to job postings.

However, not each of the sources used will necessarily yield the expected results in the form of, first, the delivery of applications, and second, the delivery of valuable applications. For this reason, investigate carefully how many relevant resumes each channel brings in and compare it with the expenses incurred to receive them, to examine its effectiveness.

5. New hire turnover

Last but not least, we’d like to mention new hire turnover as one of the recruitment KPIs showing how many new hires resign within 3 months, six months or a year. It’s worth studying this figure it can reveal issues concerning the company’s operations.

Of course, it’s not a fully meaningful metric – people can eventually get tired for lack of appropriate skills or a mismatch with the team, as well as resign for serious personal reasons. However, it is worth investigating the reasons for quick quits and checking whether there are strictly internal reasons behind them you can eliminate.

Recruitment KPIs – summary

Every company should strive to make tracking recruitment KPIs – one of the most essential processes in the organization – as efficient and, in practice, profitable as possible. For this reason, it is a good idea to keep track of all the KPIs indicated above, juxtapose them with each other, and then examine the results achieved about the values you set at the outset that you wanted to achieve.

You should place particular emphasis on looking for correlations between individual metrics that could indicate that improvements are needed in a selected area (e.g., elements of the offering). This way, we can ensure that sourcing processes are conducted in a way that achieves the desired results.