Data, Data, Data
Nowadays, data is everywhere you look. Data powers entire industries and informs choices from business strategies to which restaurant you’ll eat at. It’s the mantra of today’s information-based world: data makes the world go round.
That goes for recruiting too. Good recruitment data is essential. It guides your decisions, shapes your outreach strategies, informs your ad spend… the list goes on.
But not all data is created equal. We’ve broken down the key metrics you need to track, from time-to-hire to ROI, to ensure that you’re optimising your recruitment at every opportunity with the right data.
Metrics for Success
1. Time-to-hire
Time-to-hire measures the time from when your vacancy goes live to when your chosen candidate has accepted the position (not their start date — that data can be skewed by holidays or sickness).
This metric reveals the efficiency of your recruiting process, helping you anticipate gaps in your workforce. From there, you can use this data to inform company policies such as notice period: if your time-to-hire is two months, but your notice period is only one month, you may want to adjust your notice period to avoid a long gap.
You can also target time-to-hire as a metric to improve your recruiting: the quicker and more effective your hiring process, the less time your organisation has to compensate for that empty role. You can improve your recruiting speed with tools like an ATS or methodologies like a consistent recruiting pipeline.
2. Time within ATS/CRM
Highly related to time-to-hire is the length of time that your candidate was a contact within your applicant tracking system (ATS) or customer relationship management system (CRM) before they accepted the position. If you find that all new hires are also new contacts, you may want to invest more time in nourishing and growing your contact database.
Candidates within your database represent your talent pool. If a new hire was originally a long-term contact that didn’t quite fit any of your earlier vacancies, and you were able to directly source that candidate when the vacancy was posted, both your time-to-hire and recruiting costs will shrink.
3. Speed-to-competency
Once that candidate has been recruited, you need to track speed-to-competency. This metric refers to how long it takes for a new employee to complete training, get certified and be up to speed on their role. Naturally, this metric will depend heavily on the role and industry in question; within those categories, it provides strong insight into the effectiveness of hiring and training practices. HR departments can use this data to improve their onboarding process.
In addition, if speed-to-competency drags on, HR may want to revise their recruiting approach — that’s an indicator that your candidate might not be the best fit for that role. This valuable insight can improve every subsequent hiring, helping you find higher-quality candidates that are the right person for the right role.
4. Turnover and retention
Yes, turnover and retention are in fact recruitment measures. Many recruiters don’t think to examine this data, as they feel their process ends once the employee is onboarded. But measuring turnover is essential: it not only feeds into how often you need to recruit, it informs whether that person was a good fit in the first place.
When people walk out the door after three months or less, you’ve lost money. It’s far better to hire the right people and keep them longer. HR also can track attrition rates to clarify whether they need to pour more effort into retention — thus saving on recruiting costs by removing the need to recruit in the first place.
5. And of course: cost-per-hire and ROI
For many recruiters, cost-per-hire is the most important metric. It’s the amount you spend on recruitment, including recruiter salaries, adverts or an ATS, divided by the number of people you’ve hired.
You can translate cost-per-hire into a measure of return on investment (ROI). ROI looks at the benefits of your investment, divided by the cost-per-hire, to give you a clear sense of the impact of your recruitment spend.
These metrics are crucial. They provide insight into your recruiting process as a whole and highlight where you can improve. After all, as costs go down, ROI goes up.
ROI provides essential business numbers to report to finance and operations managers and so prove the results of the money you’re spending. For instance, if you invested in an ATS, you can prove the ROI of that ATS by showing how it improved recruiting and lowered cost-per-hire.
Best Practices for Data Monitoring
Not all data is created equal — and neither are all data monitoring practices. HR professionals who do everything by Excel will waste time and money on manual, labour-intensive data tracking when they could spend that time out in their community.
Applicant tracking systems can measure all of these metrics and more by automating data monitoring and other routine processes. You’ll be able to spend less time on reporting and more time truly engaging with candidates and employees. At the same time, you’ll benefit from clear, powerful insights and data to help you track the right metrics.
Want to learn more about what an ATS can do for you? Check out our free eBook, “The Pocket Guide to Applicant Tracking Systems.”
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