Every HR leader wants some talent metrics in place. But how about in real practice?
According to research, 75% of HR leaders acknowledge metrics are important to the success of their organizations. But 51% have no formal talent metrics plan in place. Nearly 40% say they don’t have the resources to conduct sound metrics.
The truth is that there’s a striking gap between the large number of companies that recognize the importance of metrics and talent analytics and the smaller number that actually have the means and expertise to put them to use and are actually getting a lot of useful information out of their data. But data is just information captured by recruiting system or software already in place. It doesn’t tell any story. Compare data against goals or thresholds and it turns into insight. These metrics or KPIs reflect critical factors for success and help a company measure its progress towards strategic goals.
But the question we hear frequently is “We do have metrics in place. But why does it fail?”
- The first cause is that the metrics that recruiting team use are mostly tactical or operational and executives outside of recruiting have little interest in seeing these operational results.
- Secondly, current recruiting metrics tells you “what happened last year,” which again has little value for executives who want to know what’s going to happen next year.
- Thirdly, after the recruiting metrics are calculated, they are reported and read by people who pays little attention to them.
Make sure your metrics are actionable, so when it indicate a problem, they should be accompanied by an action plan on how the data will be used to actually increase the business impacts of recruiting.
Here is a list of 5 metrics that can help you evaluate the success and understand the faults and weaknesses of your recruitment program so that you can correct them. Keeping tabs on these metrics will ensure you are informed as to how your business is doing on the talent management front and when the metrics are headed in the wrong direction, there needs to be an action plan with someone assigned to make sure that the data is applied in order to actually improve recruiting results.
1. Qualified Candidates per Hire
The Number of Candidates who Make it Past the First Stage of your Hiring Process
This relatively simple number tells you how many of the candidates you sourced, or who applied for your job has the skills and experience required to warrant an early conversation. Qualified candidates are similar to ‘qualified lead’ in sales and shows your interview funnel is filling up with relevant job applicants. This KPI gives you a spot check on the health of your sourcing strategies, as well as the effectiveness of your employer brand.
2. Time per Hire
Measured from sourced/applied to the acceptance of the offer by the candidate
The Time per Hire metric is about tracking the speed with which a suitable candidate moves through your hiring process once he/she has already been sourced or have applied. If you’re trying to gain insight into the recruiting team’s process and throughput or efficiency, Time per Hire does this best. You can also average this out across all roles and get a sense of the true average speed of your interview process.
3. Cost per Hire
Cost Per Hire = External Costs + Internal Costs / Total Number of Hires
Cost per Hire is consistently ranked as one of the top most helpful HR metrics. It helps you to link your recruitment endeavors to cost savings from an organization point of view and it also helps to ensure these efforts are not only feasible for the business, but on par with your industry and location. Apart from external and internal costs one should also consider the time spent throughout the hiring process of potential employees.
4. Internal vs External Hire
Internal vs External Hire is an important metric to monitor. If the majority of your hiring is external, you might not be attending to the potential of your existing personnel. Organizations should have a leadership and development program that encourages existing employees to learn and grow within the company.
5. High Performer Turnover
Total High Performer Turnover = Total High Performer Terminations/Avg. High Performer Headcount
Most everyone is familiar with overall turnover rate, and there is a lot of information on the web and in various sources and research about the impact of turnover. The real key, in good times or bad, is how many high-performing employees are leaving the company. According to one belief, high performers are more likely to stay at an organization, given that there is a clear line drawn from performance to rewards. On the other hand, high performers are more likely to leave when they feel under-rewarded or when there are greater external opportunities. Not only does turnover of high performers lead to costs due to lost productivity, recruiting, and training, but also to losses of overall organizational knowledge and leadership.