Do you ever consider how you measure your hiring success? Tracking your progress is not just important – it’s crucial. After all, how do you know whether (and where) you’re improving if you can’t gauge the effectiveness of your recruitment strategies? Measuring success can mean the difference between a thriving company and one that falls behind.
But the process of quantifying success in hiring isn’t always simple. It’s often fraught with challenges and requires a clear understanding of goals, along with a methodical approach, and a keen eye for detail. And perhaps that’s why lots of companies are falling short when it comes to measuring success. Stats from Geckoboard, a software company helping businesses put data first, suggest that 70% of businesses don’t have insight into their company’s performance on a daily basis.
That’s where Key Performance Indicators (KPIs) come in. KPIs have emerged as indispensable tools for monitoring progress and offer measurable values that demonstrate how effectively your company achieves its business objectives.
In this blog we’ll take a closer look at the importance of being able to measure your company’s success and how KPIs play an integral role in taking your business to the next level.
What are KPIs?
Key Performance Indicators – KPIs for short – are quantifiable metrics that help organisations track their performance over time. They’re essentially benchmarks that measure how effectively a company is achieving its business objectives and strategic goals.
Developing effective KPIs requires a deep understanding of your company’s objectives, the ability to identify key factors influencing these objectives, and the capacity to measure these factors accurately. They could be financial, such as net profit margin, or operational, like customer satisfaction rates. For recruitment/hiring, KPIs could determine things like your time to fill rate, cost per hire, candidate satisfaction, and staff retention.
But regardless of the type, KPIs will provide valuable insights into your company’s progress and help identify areas for improvement. Ultimately, tracking KPIs is not just beneficial, but vital for assessing performance, identifying areas of improvement, and setting the course for future growth.
Developing Effective KPIs
Once you’re ready to identify the most effective KPIs, it’s important to get everyone involved! It’s a collaborative and strategic process and needs effort from your entire team.
1. Identify your recruitment goals
Before you can develop KPIs, you need to understand what your recruitment goals are. Do you want to reduce the time it takes to fill a position? Increase the quality of candidates? Improve diversity in your hires? Your KPIs should align with these goals.
2. Choose relevant KPIs
There’s no end of KPIs you can track. But are they relevant to your company and its objectives?
Harvard Business Review discusses the hazards of measuring the wrong things in this article, which recommends: “To determine which statistics are useful, you must ask two basic questions. First, what is your objective? In sports, it is to win games. In business, it’s usually to increase shareholder value. Second, what factors will help you achieve that objective? If your goal is to increase shareholder value, which activities lead to that outcome?”
When it comes to talent acquisition, choose KPIs that reflect your recruitment goals and the factors that influence them. E.g., if your goal is to improve the quality of hires, consider KPIs like performance ratings of new hires, turnover rates of new hires, or hiring manager satisfaction.
3. Use quantifiable metrics
KPIs must be measurable. They should provide clear, quantifiable data that you can use to assess your recruitment process. For instance, ‘Time to Fill’ provides a tangible number of days it takes to fill a position, while ‘Cost per Hire’ gives a specific monetary amount spent on each new hire.
4. Regularly review your KPIs
The recruitment world and your company’s needs can change over time, so it’s important to review your KPIs regularly. This allows you to adjust your metrics as necessary to ensure they continue to provide valuable insights.
5. Track with tech
There are various HR technologies available that can help you track your KPIs efficiently. These tools can automate data collection and provide easy-to-understand dashboards, making it easier to analyse your recruitment performance.
6. Create a data-driven culture
For KPIs to be truly effective, they need to be part of a data-driven culture. Encourage your hiring team to understand the importance of these metrics and use them in their decision-making process.
The Importance of Tracking KPIs
So why track KPIs? It’s essential part of any business’ success for several reasons:
Performance measurement: You’ll get an objective assessment of your company’s performance by using KPIs. By tracking them, you can see whether you’re meeting your goals or still have work to do.
Decision making: KPIs will provide you with data-driven insights that can guide business decisions. They help you understand which strategies are working and which ones need tweaking.
Goal setting: By tracking KPIs, you can set realistic and informed goals for your team. It gives you a clear picture of what’s achievable.
Accountability: KPIs create accountability within your team, as everyone understands what they’re working towards and how their efforts contribute to the company’s overall success.
KPIs are really powerful tools and by developing and tracking them regularly, you’ll drive your team towards achieving your business objectives more efficiently and effectively.
KPIs for Talent Acquisition
So, what should you be tracking when it comes to your hiring process? Here’s the vital KPIs you should prioritise for talent acquisition.
1. Metrics for sourcing candidates
Sourcing is the first step in talent acquisition where you look for potential candidates. Some of the metrics that can help you track the effectiveness of your sourcing efforts include:
Source of Hire: This metric will tell you which recruitment channels are bringing in the most hires. It can help you identify the most effective sources and allocate resources accordingly.
Candidate Pipeline: This refers to the number of qualified candidates you have at various stages of the hiring process.
To track these metrics, you can use a recruitment software or applicant tracking system (ATS) that automatically records and categorises every candidate’s source and tracks their progress through the hiring pipeline.
2. Metrics for candidate screening and assessment
Once you’ve sourced candidates, the next step is screening and assessment. Key metrics here include:
Screening Efficiency: This measures how quickly and effectively your team can screen incoming applications.
Assessment Score Averages: This metric gives an overall view of the quality of candidates you’re attracting.
Again, tracking of these metrics can be done through your ATS (or similar HR software), which can record screening times and assessment scores.
3. Metrics for candidate experience
The candidate experience can significantly impact your brand and future hiring efforts. Important metrics here include:
Application completion rates: A low completion rate may indicate a complicated or lengthy application process.
Candidate satisfaction scores: Ensure candidate surveys which as about their experience are a standard part of your process.
These metrics can be tracked through surveys sent out post-application or post-interview, and through analytics on your application platform.
4. Metrics for diversity and inclusion
Diversity and inclusion have become increasingly important in the workplace. Key metrics here include:
Diversity of Candidates: Track the demographics of your applicants to ensure a diverse candidate pool.
Diversity of Hires: Look at the demographics of your new hires to see if your hiring practices are fair and inclusive.
You can track these metrics through self-reported demographic data collected during the application process.
5. Metrics for quality and time of hire
Finally, the ultimate goal of talent acquisition is to hire high-quality candidates quickly. Key metrics can include:
Time to Fill: This measures the time from when a job is posted until it’s filled.
Quality of Hire: This can be measured in various ways, such as performance ratings, turnover rates, and hiring manager satisfaction.
Your HR software or ATS can help you track these metrics by recording the dates of key hiring events and collecting performance data.
Best Practices for Implementing KPIs
We know that KPIs are essential for any effective recruitment strategy, but what’s the best way to implement them?
Well firstly, don’t go it alone! A successful KPI implementation requires the active participation of your team. Start by clearly communicating the importance of KPIs and how they contribute to the overall goals of your organisation. Providing training sessions to help everyone understand what each KPI entails and how to track them accurately is a great way to get everyone on board. And, although it won’t happen overnight, work to develop a culture of transparency where employees feel comfortable discussing their progress and any challenges they’re facing. Reward and recognition are important here and will provide motivation for encouraging individuals to meet or even exceed their KPI targets.
And then remember to track and analyse KPIs effectively. You’ll need the right tools. Consider investing in a robust HR software or ATS that can automatically track various metrics – from sourcing candidates to the quality and time of hire – it’ll make your life so much easier! Next, regularly review these metrics to spot trends and patterns. Remember, the goal isn’t just to collect data, but to get insights that will improve your talent acquisition process. Take time to thoroughly analyse your data.
Finally, remember that KPIs aren’t set in stone. Your business needs and objectives will evolve, so your KPIs should too. Regularly review them to ensure they’re still relevant and contributing to your overall goals. And if a particular KPI is no longer providing useful insights, don’t be afraid to adjust or replace it. Similarly, if your business objectives change, your KPIs should reflect those changes. Making necessary adjustments will ensure your KPIs remain a valuable tool for driving performance and improvement in your talent acquisition process.
KPIs play an important role in measuring hiring success. Further data from Geckoboard revealed that without setting targets and monitoring KPIs regularly, 77% of businesses remained small in scale, reporting less than $100k in revenue annually. So, they really are the key to ensuring business success.
KPIs offer tangible proof of the effectiveness of your recruitment strategies and provide actionable insights for improvement. By adopting best practices for implementing KPIs, you can optimise your hiring process, attract top talent, and stay ahead of the competition.
Are you ready to make KPIs an essential part of your hiring strategy? Your future success depends on it. At Solutions Driven we’re more than just recruiters. We’re the trusted advisors of lots of businesses, helping to improve their end-to-end recruitment process to ensure they’re meeting their targets. Get in touch to find out how we could help you too.