The company’s chiefs, also referred to as the C-Suite, comprise the organization’s top management. They are also referred to as the company’s firefighters as they help battle all the major and minor challenges of the company. While they do not actively partake in the hiring process, their valuable insights do affect the outcome.
In a Fortune/Deloitte survey, 57% of CEOs, CFOs, and COOs of various global organizations admitted that attracting and recruiting talent is one of the biggest challenges for any company. Recruiters must thus keep them in the loop about hiring by apprising them of certain metrics.
Such key performance indicators help the chiefs understand their hiring process, gauge its efficiency, and also take the proper steps to reduce hiring discrepancies.
Need for Recruitment Metrics
Recruitment metrics are KPIs that provide statistical or calculated insights about the efficacy of hiring. This is imperative to set up an airtight application process that helps retain candidates, bring in the best talent, and eventually build the best workforce. They also help in:
- Improving the odds of accurate recruiting.
- Providing insights about the interview process, like the time taken, overall outcomes, and efficiency.
Research by Ideal shows that HR costs make up close to 28% of a company’s annual expenditure. Thus, optimizing and reducing the time/costs spent on hiring is very critical; it must function like a well-oiled machine.
5 Recruitment Metrics to Share with the C-Suite
Here are 5 KPIs that can help the bosses understand this concept:
1. Quality of Hire
What is “Quality of Hire”?
Mathematically, the quality of hire is the ratio of the percentage of applicants who accept the offer by the rate that does not leave, finally divided by two. The number received from this calculation shows a perfect representation of the efficiency of the hiring team.
Why Track the Quality of Hiring?
This matrix is not just a mere number; there is a wealth of information in the numbers leading to the results. It shows a detailed overview of the overall hiring yield and the cost of acquiring talent.
It helps the chiefs understand if the company resources are getting wasted when the recruiting teams submit a group of low-quality talent. Further, this allows the bosses to understand overall company performance as more viable candidates reach the required positions.
How to Improve?
Here are ways to better your ‘quality of hire’ value:
- Give a better overview of the job role. Most dropouts happen when the candidates notice a difference between the initial ask and the final offer.
- Use innovative AI tools to reduce leaks in the hiring pipeline.
- Make objective hiring decisions with the assistance of respective team heads.
2. Time to Fill
What is “Time to fill”?
This is a measure of the time it takes to fill a position in the company, calculated from the date of posting the ad, reaching the recruiter, etc., until the role is officially signed to the company.
Chiefs must compare this value to the average ‘time to fill’. For example, filling a position in support might be easier than core technology.
Why Track the Time to Fill?
This data helps understand how long it typically takes to hire a single candidate. It showcases the company’s ability to meet sales goals as active hiring goes hand-in-hand with targets in a product-driven company.
A decreased ‘time to fill’ usually represents a cost-effective hiring process, and it’s also a robust performance indicator of the hiring manager’s productivity.
How to Improve?
Here are a few ways to better your time to fill value:
- Use recruiting software with automation and tracking to reduce time and human errors.
- Conduct group screening as they are a massive time-saver.
- Pick the most effective shortlisting processes to save time.
3. Diversity Representation of Hires
What is “Diversity Representation”?
Attention to diversity in the organization is a much-needed change of the 21st century.
Be it a balance of genders or providing opportunities to those from a suppressed section of society, they all play a significant role in overall company growth. This matrix shows the ratio of various groups of people in the company to provide a balanced workplace.
Why Track Diversity Representation?
Based on research by McKinsey, companies that consider gender diversity monumental were 21% more likely to have superior profitability. Such diversity and including a wide range of cultural backgrounds also provides varied perspectives in the workplace.
Attention to diversity representation also improves the range of hiring, talents on each team, and company experience. A slight nudge to diversity representation can also lead to a ripple effect of social change.
How to Improve?
Here are a few ways to improve the diversity of your company:
- Conduct a diversity hiring audit and understand what the workforce lacks.
- Pick one metric per season of hiring and aim to reach it.
- Ensure better candidate sourcing from various sources. Some hiring software draws data from many job boards, making this easier.
4. Interview to Hire Ratio
What is “Interview to Hire Ratio”?
This value represents the percentage of candidates entering recruiting and those who ultimately get hired. This value is determined by calculating the average number of interviews a hiring manager requires to make an offer stick. For example, if the ratio is 4:1 – it means one hire for every four sessions taken.
Why Track the Interview to Hire Ratio?
The smaller the ratio of interviews to hire, the better the acceptance rate. This helps save the company time, money, and human effort. It provides first-hand insights into the effectiveness of the interview process and the people behind them.
How to Improve?
Here is how you can achieve a better interview to hire ratio:
- Ideally, 3:1 is considered a good value. Start by determining how much you are off the average.
- Improve the interview processes. You might consider hiring a professional if needed.
- Use digital solutions for interview scheduling and screening.
5. Offer Acceptance Rate
What is the “Offer Acceptance Rate”?
This KPI compares the candidates given a job offer and those who accept the same. It is a valuable metric that helps determine the keenness of the average workforce to join the company.
The number also helps optimize the application drop-off rate, thereby making changes that only attract the best candidates.
Why Track the Offer Acceptance Rate?
If you have a low acceptance rate, this represents a hesitance from candidates towards the company, which opens the doors for introspection on details like offers, company branding, and the company culture of the people in charge of hiring.
How to Improve?
Here is how you gain better acceptance rates:
- Start by making the application process as straightforward as possible.
- A better onboarding process or a mentorship program can also incentivize acceptance rates.
The C-Suite needs to rely on KPIs that provide a larger picture of the hiring process.
Compare these metrics to those of other companies or the industry standard to better gauge the exact position of the company. This data also helps the C-suite better understand the current recruiting trends. Lastly, celebrate the KPIs that show progress and rework those that fail.