Trends like artificial intelligence, diversity, cloud-based HR tech, or gig economy have forever changed the way HR processes are being managed in today’s competitive environment.
One of the most challenging facts about recruitment is related to this competitive market: 43% of HR professionals revealed they have trouble finding the right employee due to the “competition from other employers”.
As talented employees are one of the top ingredients for delivering high-quality work, companies need a robust recruitment program to help them attract performant workers. Every successful hiring strategy takes into account specific metrics that reveal how well this process is performing. This article covers six of them so you can start measuring and improving your hiring program.
“Nothing we do is more important than hiring people. At the end of the day, you bet on people, not strategies.” – Lawrence Bossidy
6 HR Metrics to Have in Mind
- Cost per hire. According to a U.C. Berkeley Institute for Research on Labor and Employment study, the average cost per hire is $4.000, and recruiting a highly skilled employee might reach $7.000. In general, the cost per hire indicates the expenses of salary, benefits, and recruitment – which includes the cost to post on job boards, recruiting contracts, or interviewing.
- Time to hire. This represents the average time between a position opening up and the candidate being hired. Time to hire is an essential efficiency metric of the recruitment process and provides valuable information regarding the company’s capabilities to fill a job position.
- Recruitment yield ratio. This is another number that highlights the efficiency of your recruitment strategy. It measures the percentage of candidates that move from one stage of the hiring process to another. In this way, you can learn more about the best sources of candidates, as well as track each step of the recruitment process.
- Sourcing channel. Similar to the recruitment yield ratio, this metric can be leveraged to get a better understanding of the most effective job boards or media channels used to post job openings. In the long run, this metric can yield benefits like less time and money spend on posting job openings and also help you cross-check the cost to hire or turnover rate.
- Offer/acceptance ratio. A metric that confirms the effectiveness of your recruitment strategy. It can also raise some important questions that may help you analyze and change specific aspects of your HR system. Some questions may sound like: Why did certain candidates choose other companies over yours? What’s your culture and how do you show it? What are the obstacles in attracting and retaining talent?
- Turnover costs. Retention issues can be identified with the help of this metric. According to a recent report, the cost of replacing employees is somewhere between 25 – 250% of the person’s annual salary. Companies lose productivity when a worker leaves and it also causes disruption for other employees. The recruiting and hiring costs of replacing employees are not cheap, even for workers that had low productivity and poor performance results.
“Hiring people is an art, not a science, and resumes can’t tell you whether someone will fit into a company’s culture.” – Howard Schulz
Conclusion
The HR landscape is a complex one today as the world is getting more and more digital-oriented. Candidates’ needs are more cultural, they demand more from their companies. That’s why creating and managing a strong recruiting process is vital in order to hire the best people for your business.
