Evaluate your hiring success: Metrics to measure

Hiring success is the biggest predictor of business success. So, it pays to get it right.

Here we delve into what it means for a hire to be successful and what metrics to measure.

Metrics to measure to gauge hiring success

1. Time to fill & percentage filled on time

Traditionally, time to fill refers to the number of days that elapse between publishing the job ad and hiring your candidate. Although, in our opinion, more important than time to fill, is the percentage of jobs that are filled on time. (Not just the quickest!)

While it is the more popular metric, time to fill is influenced by supply and demand for any given job. It’s a number that will very much reflect market conditions.

In a candidate-short market, time to fill, even for entry-level positions, will be higher than in a candidate-rich market. That’s why we look at the percentage of jobs filled on time as a measure of hiring success.

Talk to a recruitment specialist knowledgeable about what to expect from the market to set a timeframe to fill your position.

If you fill the position within the set timeframe, your recruitment process is performing its function. If you are consistently taking more time to fill jobs than what is estimated for the market, this is a sign you should revisit your job ad and recruitment process.

2. Cost per hire

Cost is a significant factor in recruitment, affecting the scope of a campaign and the tactics you will use.

There is a simple calculation that will help you determine whether your recruitment costs are justified.

To use the formula, first, calculate your recruiting costs. This is the sum of all external and (the often forgotten) internal costs.

External costs could include:

• Advertising costs
• Recruiting software
• Agency fees
• Candidate expenses
• Training expenses for the new hire

Internal costs could include:

• Time spent by the recruiter or hiring manager to make the hire
• Employee referral bonus
• Interview costs
• Onboarding time following the hire
• Lost productivity

The formula to measure this cost per hire is:

Total recruitment cost ÷ Number of hires = Cost per hire

There is no set maximum or minimum spend on a hire, however, it should make sense with your business budget.

3. Hire and hiring manager satisfaction

This is the first metric used to assess the quality of the hire. The second is first-year attrition. Both are intended to track performance, expectations and fit between the candidate and the new job.

Tracking the satisfaction of both the candidate and the hiring manager can be done in the same way you calculate a Net Promoter Score.

To gather information for an NPS, conduct surveys and one-on-one meetings with your new hire. This will uncover information like if the new hire felt supported through the recruitment process, if the job description matched their expectations, and if they feel they ‘fit’ in their team. This survey should also track the hiring managers’ happiness with their new recruit’s performance.

Any serious concerns that arise from NPS surveys should be managed as this will undoubtedly impact first-year attrition.

Perform your check-ins monthly until the hire passes their probation period. Then, use NPS check-ins (or a stay interview) every couple of months until the candidate reaches their one-year anniversary in the position.

4. First-year attrition

Employee attrition is the second metric used to assess the quality of the hire.

If your candidate leaves in the first year on the job, the information gathered in your NPS surveys should highlight the cause.

If the hiring manager terminates the contract, this may indicate:

• Poor performance.
• A poor fit in the team.

If the candidate leaves the business, this may be due to:

• A mismatch between the job description and the actual responsibilities of the job.
• Being oversold on the position, the business or future opportunities in the company.

This is a costly mistake and flags that your recruitment process needs some tweaks to lower your turnover.

Evaluate your hiring success

To make a final determination on your hiring success, you will need to pull all metrics together in one place.

Ask yourself, does your new hire:

• Perform well in your business?
• Have long-term prospects in your business?
• Fill a business need?

If you have answered ‘yes’ and your budget and timelines made sense, it’s likely a hiring success.