4 Recruitment Metrics Every Talent Leader Should Care About


Given the way we build things today, the game-changing product you just rolled out will have competition by midnight. This is why most companies understand that their biggest and truest differentiators are their people. This is also why HR leaders everywhere rightly argue that talent is a strategic function, requiring the direct attention of the C-table.

Which begs the question, how can HR leaders demonstrate the value of recruitment, a function that directly affects the growth of the organization? The founding pillars of this evaluation, of course, continue to be cost, quality and speed. But they essentially break down to the following four metrics every HR leader should be running regularly.

1. Time-to-Fill

Perhaps the most critical question companies ask of their HR leaders is how long does it take to fill an open position? Also called Turnaround Time and Time To Offer, this metric is calculated as the days that pass from the date a position opens till the date a candidate accepts an offer (including weekends and holidays) for the same. 

How does tracking TTF help?

Simple. Every day a position is left unfilled, a particular business need is left unserved or the company is not growing as fast as it should. But, specifically, tracking this metric on a regular basis helps hiring teams achieve three things:

  • Identify positions hardest to fill, detect bottlenecks and improve the process.
  • Evaluate overall hiring efficiency and timeliness by benchmarking against industry averages.
  • Efficiently manage work by redistributing to existing employees until someone is hired.

How can you reduce your TTF?

Curiously, TTF is impacted most by processes that begin before a job requisition is even created, such as the job profile and requirements definition process. Here are other things that help:

  • Identifying and reaching out to relevant candidates who are potentially open to new opportunities. Belong’s predictive technology, for example, enables recruiters to identify and engage candidates who are most likely to be ready for their next job. In fact, some of our customers report their sourcing time has reduced by half since using Belong.
  • Ensuring your first communication is designed for response. (Check out our blog post on 5 things that make a great passive hiring email).
  • Coordinating with hiring managers to get their reviews on candidate interviews quickly.

2. Efficiency Metrics

Efficiency metrics are ratios obtained by comparing the number of people across various stages in your hiring pipeline - number of people who are shortlisted, interviewed, offered the job, and who accepted and joined.

How does it help?

  • Gives you an immediate overview of your pipeline health
  • Helps identify at which stage the maximum drop-off’s are happening, and therefore the bottlenecks
  • Hence helps hypothesize and gain insights into where the process could use improvements

Here are the three most tracked efficiency metrics, with example hypotheses based on the numbers. 

Offer to Acceptance Ratio: It is the ratio of number of offers made to number of offers accepted. A low ratio could be attributed to a number of reasons - low compensation, job market fluctuations, poor benefits etc. But the best practice is to ask the candidate so their responses can be used to identify issues and improve.

Shortlists to Offer Ratio: This is the number of people shortlisted for each role or vertical versus the number of people who were finally offered.

A low number definitely indicates a need to improve your internal processes. A further drill-down of each stage like reached out, interviewed and offered can indicate where the bottlenecks lie. Consider this example.
Now let us take a closer look at shortlisted to interviewed.
The Marketing team has reached out <50% of the candidates who were shortlisted. This may be because the job requirement hasn't been communicated properly, resulting in a large number of people dropping off after the first round.

Interviewed to Offer Ratio: Number of people who were interviewed, regardless if they made it to only the first round or final round, versus the number of people who were offered a position. Consider the same example as above. Here is the graph comparing the number of people interviewed and offered.hiring-metrics-22-12-15-04.png

Engineering team has the highest interviewed to offered ratio while the Design team has the least. Considering the drop-offs that are occurring for Design at the interview stage, there's a possibility that the sourcing and the top end is going wrong or that the candidates are dropping off due to bad experiences. If it's the latter, feedback from the candidates can help identify kinks in the system and eliminate them.

3. Recruiting Cost Ratio

The Recruiting Cost Ratio is a simple yet direct indicator of the efficiency and productivity of your recruiting function. It helps you determine your average spend on recruiting activities in relation to the compensation being offered to your new hires. The calculation is as follows:

The breakdown for each of those is as follows:

Total Recruiting Cost = External Costs + Internal Costs

  • External costs = everything spent outside the organization towards recruitment like third-party agencies, marketing or advertising, etc.
  • Internal costs = the costs required to maintain the hiring team (including salaries, recruitment software), employee referral bonuses, etc.
  • Total Compensation Recruited = the sum of base annual compensation of all external positions filled.

If your RCR percentage is low, it indicates an efficient recruitment process. For instance, say you hired 2 engineers and 1 designer for an annual compensation of $100,000 and $85,000, respectively in 2015. Your total recruiting cost for 2015 was $37000. 
Now, compare it against the industry average. If average RCR is 12%, then your hiring process is expensive and inefficient.

While analyzing RCR can tell you where your processes are inefficient, the cost components must be clearly defined first. For example, some companies count new-hire signing bonuses as a staffing expense. (After all, it's a one-off expense you incur to convince somebody to join you.) Several more companies miss including travel or relocation expenses even though these are flexible costs directly associated with recruiting. Therefore, in order to get an accurate picture of your recruiting performance, each cost area must be calculated and included separately.

4. Turnover Rate

Turnover rate is the percentage of people leaving the company within a given period of time. It is usually calculated annually, but if you are just building the company, it is good practice to compute it month on month.

The formula is as follows:


For instance, if the company has 100 people at the beginning of the year and 210 at the end, with 30 people leaving during the year. The Turnover rate would be as follows:


A comparison against the industry average turnover can help identify where a company stands. A lower turnover rate indicates a high probability of well-fit, well-adjusted employee recruits. Turnover rate can be calculated for the company overall and the individual teams. A comparison of these numbers will answers questions like:

  • Is my hiring process bringing in people with the best fitment for my company?
  • How happy/engaged are my employees?
  • Which month/year had the highest turnover and why did it happen?
  • Which teams have the highest and lowest rate of attrition?
In summary, it is natural for your team to be pressed for time, given the functions they handle and the information they process. But tracking these fundamental metrics will empower any recruiting team to make better decisions.

After all, the end goal is to build more than an efficient, smooth process that runs independently. It is to build an organization that outdoes itself every day.

Did we miss anything? Let us know in the comments.
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