Which Metrics Matter?
There is constant debate over which job performance metrics should take priority. Should time-to-fill take precedence over turnover rate? How do I know my sources of hire are accurate?
According to CareerBuilder and SHRM, tracking a group of metrics gives you a better picture of your recruiting efforts. The most important are:
- Number of Positions Filled: This is the number of open positions for which candidates were hired during the fiscal year. “Hired” means the candidate accepted the position during the fiscal year but may not have started until the following year. This would occur mostly with those candidates who accept positions during the last month of the organization’s fiscal year. This metric helps determine employee turnover and total costs spent annually on new employees.
- Cost-per-Hire: Cost-per-hire represents the costs involved with a new hire. These costs include the sum of advertising, agency fees, employee referrals, travel cost of applicants and staff, relocation costs, and recruiter pay and benefits divided by the number of hires. This metric can show which types of positions cost more to fill, and it can help to decide where costs can be cut in the recruitment process.
- Time-to-Fill: Time-to-hire is the number of days required to fill a vacant position. This is counted from the day the position becomes vacant until the date a candidate starts in the job. This metric is often an indicator of your company’s ability to recruit new candidates. Time-to-hire reflects circumstances beyond a recruiter’s control such as the difficulty of recruiting for a hard-to-fill position or a hiring manager’s unavailability. However, it also shows areas of improvement.
- Referral Rates from Different Sources: Referrals often produce higher quality candidates. Whether the candidate has been referred using an employee referral program or from various job boards, it is important to track this information so you can be aware of the source directing your recruits to your company.
For online resumes or job postings, this is often tracked using a third-party vendor or outside source. However, you can manage this information manually by taking note of the source where your recruit viewed your job posting. This information can prove valuable, as the next time you post a job, you can track which mediums worked best in the past.
- Annual Turnover Rate: Annual turnover rate is the rate at which employees enter and exit your client as an employee. Typically, the more loyal employees are to a company, the lower the turnover rate. A 100% turnover rate from year to year means that as many employees left the company as were hired. To calculate annual turnover, first calculate turnover for each month by dividing the number of separations during the month by the average number of employees during the month and multiplying by 100. The annual turnover rate is then calculated by adding the 12 months worth of turnover percentages together.