3+1 steps to finding the right recruitment KPIs (with worksheet)

Written by: Zsofia
Blog
02 October, 2018

To the question, “What is the goal of your recruitment department?” most talent acquisition leaders will probably generally answer, “To hire the best people as fast as possible, against the lowest costs.” Performance will be measured with KPIs, such as time-to-hire, cost-per-hire and quality of hire.

Notice something similar in these metrics? They all require that the person be hired first. Then you can start measuring.


Wait: Do you know why recruitment analytics are important? And do you know what we mean with the data maturity model? When in doubt, check this article about why you should start with recruitment analytics today.


You can only calculate these traditional “recruitment” metrics once you know

  • How much money you’ve spent in the hiring process and how many people you have hired (cost-per-hire)
  • How long it took to hire the candidate (time-to-hire)
  • How the person performed after they had been hired (quality of hire).

So, your team goes through the complete selection and recruitment process, and they hire the person, only to find out that something went wrong somewhere in the process.

These KPIs, in fact, represent the results of your recruitment efforts. As such, they’re not directly linked to the steps of the recruitment process. They don’t tell you what exactly needs to be adjusted in the process.

Let’s assume, for instance, that your time-to-hire is too high. What’s your next step?

Do your recruiters need to spend less time on screening CVs? As a result, they will possibly have to compromise on the quality of the applicant they forward to the next step.
Or do you have to reduce the number of low-quality applications? How would you go about that? Time-to-hire will not point you in the right direction.

Don’t get me wrong. You should know how much time and money you need to fill a vacancy. However, there is another, better way to use these KPIs—one that allows you to make predictions for the future.

If you want to steer your recruitment process and respond to developments on-the-go, then you’ll want to look for proactive recruitment KPIs.

Free download: worksheet to find your recruitment KPIs

Proactive recruitment KPIs

Proactive recruitment KPIs allow you to intervene in the early stages of the recruitment process and to adjust things if needed. They go off as an alarm when things are going wrong. They help you prevent spending too much money and time on channels and actions that don’t work.

This is what you want your recruitment KPIs to be like. They will help you use your talent acquisition data proactively. This allows you to improve your recruitment processes in a time- and cost-efficient way.

Here are 3+1 steps you can follow to find these KPIs.

1. Review the business goals and align these with your recruitment goals

Start with self-reflection. Go back to the basics and think about organisational and departmental goals. We like to refer to this step as “getting the cards on the table.” It’s a reality check of where you are and where you would like to be as an organisation.

If you want to contribute to achieving the business goals (and why wouldn’t you?), make sure your recruitment goals are linked to the goals of your company.

Think about the following:

  • What are the current organisational needs and challenges?
  • How does your department answer to these?
  • What are the challenges within your team?
  • How are your current KPIs helping you achieve your goals?

Common recruitment challenges are:

  • Low qualified candidates
  • High employee turnover
  • Shortage of applicants within specific areas (e.g., metropolitan)

Take a look at the future, too:

  • What are the most important internal and external trends that affect your organisation?
  • Do you foresee any organisational changes that might affect recruitment needs?
  • Does your organisation have to adjust to any external trends?

The findings in this step make up the basis of your future recruitment plan. So, make sure to invest enough time and involve everyone whose opinion should count.

Tip: Organize a session with a diverse team from different departments to get a real understanding of your recruitment goals.

It’s important that you dig deep. You’ll learn where you are and where you want to be. Let’s see now how you can get there.

2. Get to know your target group

Knowing your target group is your ticket to receiving quality applications.

There are several individuals that might be a good fit for a specific vacancy. Just like they are likely to have similar skills and educational background, they are also looking for similar traits in their future jobs. They ask the same questions when deciding whether or not to apply for a specific vacancy.

This is what you want to figure out. What information do they need in order to make an educated decision about a vacancy?

If their main questions are not answered before applying, they will send their application assuming certain things about the vacancy.

Chances are those assumptions don’t hold up. The applicants will find out about their unrealistic expectations either during the interviews (if you’re lucky) or after they have been hired.

Both cases result in time loss. The latter even damages your quality of hire and might affect your image as an employer. This is certainly an important consideration for consumer brands.

The needs of your target group should therefore be the focal point of your recruitment strategy.

Take some time to define which target groups you are focusing on.

Think about their context:

  • What do they need to know about a position or an organisation to decide whether it’s a good fit for them?
  • What does your target audience expect from their job? What do they need to know about the company/position based on their needs?
  • With this in mind, what do you have to offer as an employer (currently)? How can you respond to their future needs?

Then, take some time to think about your current employees.

  • Why are they leaving?
  • How can you address the reason for their leaving at early stages in the application process?

Don’t be afraid to address the possible issues. Do they need to respond to calls outside working hours? Are they expected to work during the weekend?

Make it clear in the vacancy text. If they know the possible downsides and still apply to the position, you have one committed applicant who is likely to stay longer with the company.

Make sure the information you display on your job pages is relevant for your target audience. Relevancy is about delivering:

  • The right information
  • To the right audience
  • At the right time.

If you get these right, you enable a candidate to get a realistic view about both the company and the job. A well-defined target audience (also referred to as buyer persona) will help you do this.

3. Set your recruitment KPIs and plot it to the recruitment funnel

Once you’re done with the steps above, you’ll have a clear vision on your recruitment goals and target group(s).

It’s time to start the real fun now and set up measurable goals and KPIs! This will help you keep track of your recruitment process.


What is a KPI? A key performance indicator is a measurable value that demonstrates how effectively a company is achieving key business objectives.

Why use KPIs? They keep recruitment activities focused. You will be able to monitor the progress of your recruiting efforts and judge whether you’re on the right track.

At the end of the business period, you’ll be able to quantify how your recruitment department contributed to business. This also gives you serious bargaining power during budget discussions in the next period.


 

The main talent acquisition goal should be ambitious and connected to the business goals.

Every journey starts with a single step, so create sub-goals that mark the way to your main recruitment goal.

How to plot the recruitment KPIs to the talent journey

Traditional KPIs such as time-to-hire, cost-per-hire and quality of hire, mainly focus on the last part of the funnel: the hire. It’s important to define additional KPIs that belong to the earlier phases of the funnel: reach (also referred to as awareness), engagement and application.

recruitment_funnel

The recruitment funnel

 

This approach helps you understand where exactly the process needs adjustment. Which part of the recruitment process is underperforming or performing really well?

After all, if you have a goal to reduce the time-to-hire by 20%, you also need to reduce the time-to-reach, time-to-engage and time-to-apply.

Start at the beginning. Define suitable metrics and KPIs in each phase.


The difference between metrics and KPIs

KPIs: A key performance indicator is a measurable value that demonstrates how effectively a company is achieving key business objectives. It measures the success of a strategy and is usually a ratio, e.g., acceptance rate, engagement rate, quality of applicant.

Metrics: A metric is also a quantifiable value. It indicates how effectively you’re achieving your strategic KPIs. It measures the success of a tactic that plays a role in achieving a strategic goal. It can be an absolute number or a ratio, e.g., sessions, users, pageviews.


Steps to finding the KPIs for each step of the talent journey

  1. Sketch your talent journey.
  2. Think about the needs of your target audience in each step of the journey. What information do they need in order to make an educated decision about applying to the position? Use the information you collected about your target groups.
  3. Define metrics for each step of the journey to measure how each step of the journey performs.
  4. Use the metrics to define the final KPIs.
  5. Quantify your KPIs.

 

By having a data exchange in place with the ATS, we keep track of what happens in all these phases.

How to use these metrics and KPIs

Use these KPIs to continuously optimize your recruitment process.

These numbers will indicate if a certain part of your funnel is underperforming. Here are a few examples:

Are you receiving too little traffic in the awareness phase?

You might need to drive more traffic to your recruitment website or vacancy pages.

How you can do this:

If you want to get more organic traffic (organic traffic: users find you via a search, e.g., via Google), there are some basic rules your career website needs to comply with. Google will index (take note of) a page that has a good URL structure, great user experience on all devices, and short loading time. Make sure to add structured data to your pages and you’ll be ready for Google for Jobs as well.

Enhance your visibility within the sources/channels that are important for your target audience (potential candidates). In order to improve the quality of applicant/hire, getting more visibility is often a first condition.

Are candidates not engaging with your content?

Possible reasons:

You might not be showing the right information or the right tools at the right places on your recruitment website. Or your tone-of-voice might be off. (You might need to rethink your target audience’s needs – see point 2.)

Is all relevant information easily accessible and easy to find?

Important! Always think about mobile users. The vast majority of users will interact with vacancy websites primarily via their mobile phone.

Is your application rate too low?

Ask these questions to yourself:

  • Is your apply button placed in a visible place?
  • Is the button text clear enough?
  • Are you providing enough information for the candidate to make an educated decision? (This might be another reason to get back to point 2 about the target audience.)
  • Does your career website contain an intuitive application process, and is this optimised for mobile visitors?
  • Is your application form adapted to the target group? You might need to create, for instance, different forms for a side job in the supermarket and another one for a highly qualified position in the headquarters. That’s because a cashier position probably doesn’t require a CV while candidates applying for an office job probably need to submit a CV and a motivation letter.

Use metrics that are easy to compare with industry averages, such as percentages. Create your own benchmark that you’ll use as a point of reference.

A recruitment KPI example

Quality of applicant as recruitment KPI – a way to measure employer branding

Even though branding and company image seem to be difficult metrics to link to business goals, it is possible.

The Dutch supermarket chain Jumbo has a recruitment goal to hire 1 out of 3 applicants in 2020, which is centered around image. Their main KPI is the quality of applicant. Here’s why.

One of their most important target groups are students. Jumbo has proven the more often they reject candidates during the recruitment process, the less likely (the parents of) their candidates are to do their groceries in their supermarket.

Rejections damage brand reputation, which is inversely proportional to revenue. The less rejections, the more revenue. (Notice how well they linked their recruitment goal to a business goal?)

Which drivers are important for your organisations?

+1: Make the recruitment KPIs part of your team’s daily work

Once you’ve defined the right KPIs, it’s important that you get insights into these metrics. Configure your analytics setup and make the progress visible in a data dashboard that is easy to read for every team member.

Tip: Use the data to motivate your team, for example, by displaying the dashboard in the office space. This will make your team more aware of the data available and the progress on goals.

Summary: Steps to finding the right recruitment KPIs

1. Review your business objectives and set recruitment goals
2. Get to know your target audience
3. Set your recruitment KPIs and goals and plot it to the talent journey
+1: Start using the metrics in your daily work

Download this practical template to find your recruitment KPIs.