6 Hiring Metrics Every Managers Should Have on Their Dashboard
Effective hiring is critical for a smooth running company. The way to know if what you are currently doing is working is by tracking metrics.
Stay on top of these 6 critical measurements. They give you important insight into what is successful and what needs improvement.
Candidate Quality Ratio
This metric is also called the ratio of qualified applicants to total applicants. Tracking this ratio lets you monitor how many candidates that you spend time on in the recruiting process are actually a good fit.
It refers to those chosen for an interview. According to experts, the goal is to get a minimum of three-quarters of your candidates selected for an interview. If your rate is less, it means the ones chosen for you to review aren’t measuring up to the needs and desires of you or your hiring team. For hiring managers, this means you have now become the “quality metric” for your hiring practice. Try to empower your recruiting team to be the “quality metric” of all candidates submitted. If the candidates that you are seeing do not measure up to your expectations, spend some time recalibrating with your team. Set expectations, but more importantly, establish a standard for your minimum criteria. The better this metric gets, the more efficient your time is spent as a hiring manager in the hiring process.
Time to Fill
The industry-accepted calculation for this metric is: Time to Fill = Total Number of Days Job Is Available and Unfilled. At Cerca Talent, because our focus is to find the right candidate as soon as possible, we measure this in two different ways.
Candidate Sourcing Time
It makes a major difference in a company’s efficiency when the time to fill a job, from starting a job requisition to hiring a qualified candidate, is short. The standard, according to Recruiter.com, is 10 to 14 days for presenting a qualified slate of 3 candidates. The experts recommend tracking how long it takes to present a slate of three qualified candidates and how many slates are assembled.
For difficult roles in Clinical Research or Clinical Diagnostics, the areas that Cerca Talent specializes, you might find that the 10 to 14 day window is consistently too short of a timeframe. This is especially true in some highly technical environments. Continue to track this metric to see how your organization manages different areas of your business.
Candidate Processing Time
The processing time refers to how long it takes from introduction of the candidate who is ultimately hired to the time when they ultimately accept the position. Many people will say that processing time is the time it takes from approval for hiring a candidate to the actual time she starts working in the new position, but this time has many variables associated with it and does not provide a usable statistic that can be managed. According to ERE Media, a variety of circumstances add to this time period. For example, if the new hire needs to relocate, it can add weeks to the process. Make this a simple metric that can allow for gains in efficiency and effectiveness in the actual interviewing process. Measure this retrospectively with each hired candidate and work to improve your interviewing process. This makes for a better candidate experience and can even improve the quality of hire, if done correctly.
Quality of Hire
According to research done by the Aberdeen Group, the most critical hiring metric is Quality of Hire. While this measure can be difficult, find a systematic way to do this at your company based on the desires for new employees. Your Quality of Hire (QoH) metric could be based on the first two years of performance reviews, or for commercial teams, it could be a calculation based on their performance to goal. For a long term QoH metric, one could look at the number of promotions a new employees receives over a one, two or three year time period.
According to the Recruitment Metrics and Performance Benchmark Report done by Staffing.org, there are definite benefits from frequent measuring the quality of those hired. The more often it is done, the happier managers are with the quality.
Cost of Hire
As the inforgraphic here shows, a bad hire is expensive. According to a Harris poll, over 40% of people responding said it was more than $25,000, and a full 25% said it was more than $50,000. Cost of hire is an important metric! Within leadership roles or commercial teams, this number can skyrocket due to lost revenue or mismanagement of revenue generating personnel.
This metric includes:
- Advertising agency fees
- Employee referral bonuses
- Employee relocation costs
- Third party recruiter fees
- Travel expenses for applicants and staff
- Sign-on bonuses
- Recruiter salary and benefits
- Lost revenue for open territories
- Lost revenue from mismanaged employees or customers
Tracking these six metrics helps any organization, large or small. It tells you right away how effective your talent acquisition efforts are. When you know the numbers, you can pinpoint where change needs to happen, speeding up improvements to the hiring process.