Employee Recruiting Metrics

Employee recruiting metrics and economics can be confusing. But, a good grasp of how to measure the success of employee recruiting activities goes a long way to improve the hiring process.

Unfortunately, money can be wasted on various recruiting activities. Advertising is expensive, on-line postings can be a time drain, and headhunters might just drain your bank account. The primary question is:

How to get the best return on investment for recruiting activities?

To measure the return, start monitoring a couple of different activities and costs. The first key metric is cost per hire (cph). This number tells how much is being spent to bring a new employee on board.

The second key metric is time to fill (ttf). This tells how long it is taking to fill open positions.

There are other employee recruiting metrics and it can get complicated. But this is a good place to start.

Cost Per Hire

Cost per hire tells how much is being spent on each new hire. This number is critical for both planning and tracking purposes. Once the cost is known, you can plan budgets for future hires. And, by tracking actual numbers for each hire, you can measure how effective each of your employee recruiting efforts have been. You will know which employee recruiting sources are working the best.

Here is a list of just the major expenditures you should track to determine your cost per hire:

• Advertising Fees
• Job Posting Fees
• Recruiting Agency Fees (Headhunters and Search)
• Employee Referrals
• Travel Expenses
• Relocation Fees
• Internal Recruiter Costs
• Administrative Costs

Each of these is a hard cost and should be straight forward to record with the exception of internal recruiter and administrative costs. For those two metrics it is necessary to make a few calculations. The easiest way to determine these costs is to determine the total amount spent on recruiting staff and the people who support them. Next, divide that number by the number of people hired during the year. This is a rough calculation for this component of the cost per hire.

You can add all of these costs together to determine how much you have spent on a single hire. Or you can add the total spent over a year and then divide by the number of people you hire to get your average cost per hire.

This might seem intimidating but is actually pretty easy. Most of these numbers are already being tracked. Every time a check is written for an ad or posting it is recorded as part of the accounting system. Create a specific account for recruiting to track employee recruiting metrics.

With the hard data in hand, it is possible to see which employee recruiting activities and sources deliver the best return. Use the data to help refine the employee recruiting strategy.

Time To Fill

The next key employee recruiting metric is time to fill. It is critical to understand how long it is taking to fill open positions. Every day a position is open the company is either losing money or not addressing a key business issue. (That is why you hire people after all)

Th faster positions are filled, the better the business is served. Track how long each job takes to fill.

The good news is that this is a very easy employee recruiting metric to determine. Record the date the position comes open. Next record the date the position is filled. The difference is the time to fill.

This data is critical in measuring the productivity of your recruiting staff as well as determining which employee recruiting sources are working best.

Are recruiting efforts delivering good hires in a reasonable time for a good return on investment?

Armed with just the two employee recruiting metrics cost per hire and time to fill these key questions can be answered. Get into the habit of tracking all employee recruiting efforts. With each subsequent campaign you should be getting a better return on investments of time and money.  And you can refine the recruiting strategy.