Workforce Insights For Business Leaders

Part I
7 Hiring Metrics You Cannot Afford To Ignore

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Workforce Insights For Business Leaders

Part I: 7 Hiring Metrics You Cannot Afford To Ignore

Companies are spending an average of $3,500 for every new hire

brought into the organization about three times the amount spent on
training per employee.
Source: Josh Bersin CEO & President, Bersin & Associates.

Hiring the right Talent is costly for businesses, and when you think about the amount of time and
money spent just looking for that perfect candidate, its imperative to keep tabs on expenditure,
recruiting effectiveness and not hire blindly.
How are you currently measuring your organisations recruitment efforts?
(hint: if youre like the majority of companies, you will be focussing on the 2 most common metrics)

1. Time-to-fill?
A measurement of how long it takes an organisation
to fill a vacant position.

2. Cost-per-hire?
does not take into account of length of time to
make a successful hire and the quality of the
hire. What good is a very low cost-per-hire if
revenue producing positions remain unfilled for
long periods of time?

A measurement of total cost incurred per hire.

Costs include advertising fees, agency fees,
employee referrals, travel expenses, relocation
expenses and internal recruiter costs. Keeping
track of cost-per-hire helps with budgets but it

Efficiency of recruiting has always been dependent on these two commonly measured metrics, but
as businesses operate and take a more results-based, data-driven approach to decision making, you
need metrics that do more than just measure time and cost.
Here are 5 other metrics you will need to track on top of time-to-fill & cost-per-hire in order to
measure recruiting effectiveness:

Workforce Insights For Business Leaders

Part I: 7 Hiring Metrics You Cannot Afford To Ignore

3. Source of Hire
How to measure?

Tracking source of hire helps the organisation

better understand the quality of their sources and
determine which channels is the most effective.
This helps hiring managers identify which is the
most effective sourcing channel(s) to recruit high
quality Talent and justify sources they should no
longer use.

Percentage of new hires from a particular source

with highest performance and tenure rates.

4. Quality of Hire
How to measure?

In order to save money and improve productivity,

you need to move beyond costs/time and into
measuring the quality of new hires. Quality
hires translate into higher performance which
drives more revenue, and higher profits for the
organisation.

There is no standard formula for defining quality

of hire as every firm defines quality in its own
unique way. You will need to sit down with the
management to determine what makes a quality
hire.
Usually, data from performance appraisals is
used but its crucial to keep in mind that such data
is based on subjective feedback i.e managers
satisfaction and feelings towards the candidate.
Quality of hire can be based on performancerelated factors like adaptability, consistency and
involvement or result-focused like contribution
to sales growth, increased value to share-holders
or exceeding set targets and expectations.

5. Workforce Productivity
How to measure?

Though you might have a fast time-to-fill, hiring

managers will soon realise that recruiting
candidates who are slow to reach the expected
performance level is the result of a poor hiring
process.

The average number of days that it takes for

a new hire to reach the minimum or expected
output for the job role.

New employees typically show less productivity

compared to experienced staff, but they should
steadily increase their speed and performance
over time.

Workforce Insights For Business Leaders

Part I: 7 Hiring Metrics You Cannot Afford To Ignore

6. New Hire Termination

How to measure?

A quick termination rate indicates a fail

somewhere in the hiring process as it means
increased expenses to make new hires and puts
a negative impact on the organisations business
performance.

New hire termination represents the number of

new hires who were terminated within a year of
joining. This can be measured by the ratio of new
hires terminated within the first year compared
to the total number of new hires made.

7. Vacancy Rate
How to measure?

Every extra day a critical position is vacant

translates into a dip in business performance.
There could be delays in important projects or
missed opportunities because of these unfilled
positions. Ideally, if your organisation is executing
on effective hiring strategies, the vacancy rate
should be close to zero or as low as possible.

The ratio of vacant job positions in the

organisation compared to the total number of
job positions.

Really, your ultimate goal should be recruiting the best people to achieve business goals and
gain the highest ROI possible for the organisation. HR and business leaders should look beyond
basic metrics and start monitoring critical metrics related to business impact like quality of
hire, performance, and tenure rates.

Coming up next, as #2 in the series of Workforce Insights For Business Leaders:

Talent Retention Metrics

Workforce Insights For Business Leaders

Part I: 7 Hiring Metrics You Cannot Afford To Ignore

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Workforce Insights For Business Leaders

Part I: 7 Hiring Metrics You Cannot Afford To Ignore

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