It can be difficult to translate recruitment work into numbers and figures that can be communicated to the CEO or senior management.
To help you get to grips with something as difficult to define as 'key recruitment figures', we take a look at five KPIs, Key Performance Indicators, that are important to keep track of.
KPI 1 : Staff Turnover
The first key figure is staff turnover, or retention. This KPI simply measures the percentage of staff still in the company after a given time interval. For larger companies in particular, some turnover of staff is normal, as some retire and some posts are not always permanent.
The formula for calculating staff turnover is:
Number of employees at the end of a certain period
/ Number of employees at the beginning of a certain period
= Staff turnover
For example, you can check staff turnover for a quarter, an entire year, or calculate the total number of new employees left after a certain period.
TIP
Read the article: 8 tips to increase employee retention
KPIs 2 and 3: Time to Fill and Time to Hire
It is good to measure the time interval from a vacancy arising to it being filled. Two metrics that make this measurement easier are looking at time to fill and time to hire.
Time to fill measures the time from the first job ad going live until a candidate accepts a job offer. Long periods of fill may indicate:
- Problems choosing an ad channel
- Poorly structured pipelines of potential candidates
- Slow internal processes, for example finding time for interviews, inefficient screening process, feedback between recruiters and time for decision making
Time to hire refers to the time between you first contacting a candidate and that person accepting the job offer. It isolates more specifically the candidate who was hired and shows how quick your organisation is to identify and get the right candidate.
KPI 4 : Cost per Recruitment
Or cost per hire, as it is also called, looks at how much it actually costs to hire someone for a vacancy. The idea is to take all direct costs (advertising costs, time spent by HR and recruiters) and divide by the number of recruitments:
Total expenditure on recruitment / Number of recruitments
= cost per hire
The formula can be modified slightly to examine, for example, the cost of using an external recruitment agency, looking only at the cost of advertising or simply looking at the cost of human resources used by HR and recruiting managers. It is much more difficult to quantify lost productivity, i.e. what the company has lost in terms of money in lost productivity by not filling the position, and it is instead recommended to start more simply by getting an idea of the direct costs of hiring.
KPI 5 : Qualified Candidates per Vacancy
How many of those who applied for a vacancy were qualified enough to go on to interview? Qualified here means candidates who have progressed to a certain stage in the recruitment process.
By not only keeping an eye on how many applications are received, but also making a quality assessment of them, you can, among other things:
- Derive quality search from specific ad channels – these are worth spending more of your ad budget on in the future
- Many applicants, but very few who meet the requirements? It may be a sign of unrealistic expectations (there is no such thing as a featherweight sumo wrestler!) or that the ad does not reflect the position
- Get an idea of how many applicants you need in a process to find a suitable candidate and set recruitment targets accordingly
Using Key Figures Correctly
Key figures are a good basis for getting a more concrete overview of how things look over time. Partly to be able to measure and follow up on your own work, but also to be able to communicate the results of your own good work to others in the company. Hopefully, you now have a slightly better basis to start measuring the results of your recruitment work and, over time, identify areas for improvement. Good luck!
