There are a variety of ways you can measure the success of your recruitment efforts, and it can quickly become overwhelming.
You may be asking yourself: What do the numbers actually mean, and now that I have the metrics, how do I implement change?
We’ve broken down the eight most important recruitment metrics you should focus on, including the business impact of each metric and how to calculate them.
Table of Contents
- Applicants-Per-Opening
- Application Completion Rate
- Cost-of-Vacancy
- Time-to-Hire
- Offer Acceptance Rate
- Cost-Per-Hire
- Quality-of-Hire
- Employee Retention Rate
What Are Recruitment Metrics?
Recruitment metrics are measurements that provide data on candidate behavior during and after the application process. The goal is to help recruiting teams find ways to improve their recruiting methods.
To develop accurate measurements, companies often create benchmarks by comparing their numbers against competitors or industry averages. Gauging how you perform in relation to similar businesses is a good way to get started with recruiting metrics if you don’t have enough data of your own yet.
Recruitment metrics provide insights that enable teams to pinpoint slow or inefficient workflows, determine whether job postings attract qualified candidates and weigh short- and long-term costs. As a result, teams can find ways to simplify the recruiting process, reduce expenses and locate candidates ready to contribute to a company’s success.
See the five steps you can take to ensure budget for employer branding efforts.
8 Most Important Recruiting Metrics
1. Applicants-Per-Opening
What Is Applicants-Per-Opening?
Applicants-per-opening is the number of people who complete an application for an open role.
Why Track Applicants-Per-Opening?
The number of people who apply for a job is an indicator of your recruitment marketing efforts. If you have a low number of applicants or a high number of unqualified candidates, you need to rework where and how you attract candidates. Look into which platforms are performing well and adjust where you allocate resources and pursue recruitment marketing efforts that are yielding the best candidates.
How to Track Applicants-Per-Opening
You can track applicants-per-opening by adopting applicant tracking software, such as Workday, Lever and Greenhouse. If applicants reach out to recruiters outside of an applicant system, you can record entries in a spreadsheet like Microsoft Excel or Google Sheets.
What Is the Average Number of Applicants-Per-Opening?
The average number of applicants per open role is 118. But that number is highly dependent on the industry, open role and physical location of your company.
You should research your industry average as a benchmark to check against until you have enough statistics of your own to compare from candidate to candidate.
How to Calculate the Average Applicants Per Job Opening
Total number of applicants in a set period of time [divided by] Total number of open roles in the same period of time
Start by gathering the total number of applications completed from each source where candidates applied, including job boards, referrals or social media platforms.
Your applicant tracking system should have most of this information, but you’ll also want to check with your hiring team to see if individuals have reached out to candidates outside of the ATS.
Once you’ve gathered all the data, add it up and divide by the total number of open roles.
2. Application Completion Rate
What Is the Application Completion Rate?
The application completion rate compares the number of people who start filling out an application with the number of people who actually submit a completed application.
Why Track the Application Completion Rate?
This recruitment metric is a strong indicator of the complexity of the application process.
Consider that 60 percent of sales candidates quit in the middle of a job application if they feel the process is too complex or time-consuming. While you may think you’re weeding out unqualified candidates with a more thorough application, you’re actually weeding out top candidates who know their worth. Instead, collect only the basic information you need to qualify candidates and remove any sections that could be handled later in the interview process.
How to Track the Application Completion Rate
Applicant tracking software with performance metrics is what many recruiters use for tracking the application completion rate. Freshteams, JazzHR and Breezy HR are a few options.
What Is the Average Application Completion Rate?
The average application completion rate is 10.6 percent, according to Recruiter.com. That percentage drops drastically if an application takes more than five minutes to complete or it contains more than 25 questions — which, really, should be more than enough. In fact, 92 percent of job applicants don’t finish an online job app, so it’s essential to make your process as seamless as possible.
Keep the questions to a minimum and target only the information you really care about. Remember that most candidates have LinkedIn profiles full of supplemental information, and if they’re writers or digital creatives, they are sure to have a portfolio that can provide more context than any application question.
How to Calculate the Application Completion Rate
Number of applications completed [divided by] the number of applications started [multiplied by] 100
To calculate the application completion rate, you’ll want to gather the number of applications completed across all sources (such as job boards and referrals) and divide that by the number of people who started applying for a job but did not complete the application. This information can typically be found in your ATS. Then you’ll multiply that number by 100 to get your percentage.
3. Cost-of-Vacancy
What Is the Cost-of-Vacancy?
The cost-of-vacancy is the amount of money a company loses each day a position is left unfilled.
Why Track the Cost-of-Vacancy?
Every year, companies lose money due to vacancy costs. Unfilled roles also mean that other team members have to take on the work of the missing person, which quickly leads to employee dissatisfaction and higher turnover.
It can be difficult to decide if you’ve found the best possible candidate or if you should hold out for someone with more experience, but this metric will help you weigh the cost. Having well-defined candidate personas before a role becomes vacant will help your team know when the right candidate comes along and how to seek them out.
How to Track the Cost-of-Vacancy
Sometimes teams prefer to take a calculator and crunch the numbers themselves, but you can make things easier by plugging data into an online calculator.
What Is the Average Cost-of-Vacancy?
This statistic is highly dependent on individual company sizes and revenue models, so it’s better to compare this one over time against your company’s own recruiting metrics.
How to Calculate Cost-of-Vacancy
Payroll and benefits savings [minus] Revenue lost to vacant role
Determining the exact cost of an unfilled position is extremely difficult since it’s hard to account for productivity loss, decreasing morale and employee burnout in terms of financial loss. Because of this, consider your cost-of-vacancy as the baseline amount of money you’re losing to an open role.
You’ll need to gather some information before calculating both your payroll and benefits savings as well as the revenue lost to the vacant role. Once you have your data, enter it into Built In’s free online calculator tool.
4. Time-to-Hire
What Is Time-to-Hire?
Time-to-hire — or time-to-fill — measures the number of days between when a job is first posted and when a candidate accepts an offer for the role.
Why Track Time-to-Hire?
Every day a role goes unfilled costs the company hundreds if not thousands of dollars. A recruiter’s biggest priority is to hire the best candidate in the shortest amount of time, but there are a lot of moving parts that contribute to time-to-fill.
Time-to-hire can be broken up into different stages to see what areas of your recruitment process need more attention.
For example, if your application completion rate is low — another metric on this list — you should look into how you can create a more attractive and simplified application process so that more candidates are moving through your initial stages of the pipeline quicker.
How to Track Time-to-Hire
You can calculate this recruitment metric through a spreadsheet, noting the day a candidate enters the application process and the day they accept an offer. However, HR software like Workable, monday.com and Rippling should be able to track this metric.
What Is the Average Time-to-Hire?
The average time-to-hire is 43 days. Like many recruitment metrics, time-to-fill is heavily dependent on the industry, role and job market. While sales can take an average of 38 days to fill a role, engineering takes an average of 49 days to fill a role.
That’s a substantial difference between time-to-hire, and you can get even more specific for certain roles within the industry. It will take much longer to hire a senior level role than it will to hire an entry level role, so do your research before a role opens up so your team knows what to anticipate.
How to Calculate Time-to-Hire
Day candidate accepts offer [minus] Day the candidate entered your pipeline
To calculate time-to-hire, take the day a candidate accepts your offer and subtract the day they entered your pipeline, with the day the job is posted being equal to one.
For example, say the job is posted on day one, and a candidate accepts your offer on day 40 after entering your pipeline on day 16. Your time-to-hire would be:
40 - 16 = 24 days
See the five steps you can take to ensure budget for employer branding efforts.
5. Offer Acceptance Rate
What Is Offer Acceptance Rate?
Offer acceptance rate is simply the percentage of candidates that accepted an offer versus the total number of people to which an offer was extended.
Why Track the Offer Acceptance Rate?
Once you’ve expended your time and resources pursuing a top candidate, the last thing you want is to lose them at the finish line. If you do, you’ll likely have to start the process all over again, doubling your cost to hire.
Your offer acceptance rate is a helpful insight into how well your jobs, perks, benefits, compensation and hiring process compares with that of your competitors. If you have a low acceptance rate, research what your competitors are doing to determine what the top candidates are looking for in an employer.
As your acceptance rate improves, so too will your cost-to-hire and time-to-hire as you won’t be wasting resources on candidates that won’t accept your offer.
How to Track the Offer Acceptance Rate
Recruiting software often has features for tracking and analyzing the offer acceptance rate. A few examples are JazzHR, Breezy HR and Zoho Recruit.
What Is the Average Offer Acceptance Rate?
The average offer acceptance rate in 2022 was 81 percent. This statistic will also vary by industry, role and location, so research the average for your specific situation to compare.
How to Calculate Offer Acceptance Rate
Number of offers accepted [divided by] Total number of offers extended [multiplied by] 100
To calculate offer acceptance rate, divide the number of people who accept an offer by the total number of offers extended to candidates. Then multiply that number by 100 to get your percentage.
6. Cost-Per-Hire
What Is Cost-Per-Hire?
Cost-per-hire measures the amount of money a company spends to hire an individual employee. Different from the cost of an unfilled position, cost-per-hire is the actual amount a company spends on a new hire from the point a role opens up to the point a candidate accepts their offer.
Why Track Cost-Per-Hire?
Cost-per-hire incorporates every expense your company incurs to make a hire. This includes but is not limited to:
- The cost of posting open roles to third-party job boards
- The cost of outsourcing resources for marketing and employer branding
- The time recruiters spend networking with candidates
- The time recruiters spend reviewing applications and scheduling interviews
- The opportunity cost associated with an unfilled role
Measuring this recruiting metric can help recruiting teams locate where they’re spending the most money and whether they can develop more efficient processes for lowering expenses.
Another point to consider is that while hiring more efficiently is a top priority among recruiters, the cost of hiring a bad employee may outweigh the cost of waiting for the right person.
How to Track Cost-Per-Hire
Applicant tracking software can provide data on your cost-per-hire metric. Workable, HireRoad and Recruitee are some examples of software that tracks cost-per-hire.
What Is the Average Cost-Per-Hire?
The average cost-per-hire was around $4,000 in 2022. That means you’re spending more than $4K on a new hire before they even show up for their first day.
Not only that, but every industry has its own differences. Software engineers are notoriously hard to hire and expensive to recruit for. It can cost up to 25 percent of an employee’s first-year salary to recruit for a position, so be sure to discuss costs with hiring managers to inform your recruiting strategies.
How to Calculate Cost-Per-Hire
Total internal recruiting costs [plus] Total external recruiting costs [divided by] Total number of hires
When calculating cost-per-hire, you’ll need to do some initial calculations. Add up every single internal cost related to hiring. Then, add up all of your external recruitment costs, such as job board fees, costs for external recruiters and anything else done outside of your team.
Add those two costs together and divide that number by the number of people hired within a certain period. For this particular metric, it’s easier to measure this over the course of a year, but you can also break it down by months, especially if you want to measure certain growth periods.
7. Quality-of-Hire
What Is Quality-of-Hire?
Quality-of-hire measures the number of employees who add value to your organization.
Why Track Quality-of-Hire?
Finding top-notch hires can provide a major boost to a company’s performance while new hires who underperform can create more problems for the business. To make sure you fill roles with the best candidates, you need to measure the quality-of-hire. But how can you measure the quality of a human being?
For the purpose of this article, rather than measuring the quality of individual employees, we’re looking at the number of quality employees hired. This will give insight into the recruitment process and should lead to an examination of where and how the highest quality hires are sourced and how well your onboarding and training prepare new hires for their roles.
How to Track Quality-of-Hire
There’s no single tool for tracking the quality-of-hire since many factors go into determining whether a new employee is effective at their job. Productivity tools and surveys asking questions about employee engagement are a couple of technologies that can help gauge the quality-of-hire.
What Is the Average Quality-of-Hire?
There is no generally available statistic for the average quality-of-hire, and even if there was it would be difficult to compare as this metric is the most subjective of them all and will vary by the person who is calculating it.
For that reason, it would be beneficial to set some guidelines among hiring managers and recruiters at your company to determine what they mean by ‘satisfactory’ and ‘quality’ so that your metrics are consistent each time you measure quality-of-hire.
How to Calculate Quality-of-Hire
Number of hired candidates considered satisfactory* [divided by] Total number of hired candidates [multiplied by] 100
*Satisfactory employees should be determined by direct managers.
To calculate the quality-of-hire, you’ll identify a certain period of time to measure, whether it be weeks or months. Then within that time period, take the number of candidates hired who are considered by their managers to be satisfactory, and divide it by the total number candidates hired within that period of time.
8. Employee Retention Rate
What Is Employee Retention Rate?
Employee retention rate measures the percentage of people who stay at a company within a set period of time.
Why Track the Employee Retention Rate?
While some turnover is par for the course, high turnover should raise major red flags for an organization as a whole and especially for its recruitment efforts.
Retention starts with recruitment. The best way to set up your company for continued success is to always hire the right people for each role. You’ll also want to make sure they are continuously satisfied and engaged with their work throughout their time with your company.
There are unlimited factors that affect employee retention, but here are a few things recruiters should consider:
- Compensation
- Perks and benefits
- Company culture
- Onboarding and training
- Flexibility and work-life balance
- Career growth and learning opportunities
- Recognition and celebration of accomplishments
Also, keep in mind that when people leave a company, it can take months to fill the role and bring the new hire up-to-speed, meaning other team members are divvying up an additional 40 hour work week on top of their own. Not only does that lead to decreased productivity, it also leads to decreased satisfaction, which can lead to a snowball effect of high turnover.
How to Track the Employee Retention Rate
Built In’s free employee retention calculator makes it quick and simple to calculate this recruiting metric.
What Is the Average Employee Retention Rate?
The average employee retention rate was 52.8 percent in 2021, the height of the so-called Great Resignation. Even so, companies should aim for a rate of 90 percent. This stat will vary by industry and the type of people you’re recruiting.
For example, the accommodation and food services industry has a turnover rate of 86.3 percent, well over the average. Demographics also produce differences in employee turnover and retention, with Millenials and Gen Z members being most likely to look for a new job.
How to Calculate Employee Retention Rate
Total number of employees at the end of a set period of time [divided by] Total number of employees at the beginning of that same period of time [multiplied] by 100
To calculate employee retention rate, first divide the total number of employees at the end of a set period of time by the total number of employees at the beginning of the same period of time. Then multiply that number by 100 and you will have your retention rate percentage.
For example, if you measure employee retention rate, and you have 50 employees on January 1 and by January 31 you have 40 employees (some of the original 50 left, and you’ve added a few new hires). This is how you would calculate employee retention for the month of January.
40 ÷ 50 x 100 = 80%