Recruitment and retention are some of the primary roles that human resource (HR) managers perform. For that, they need a system to know if their strategies are working, how well they are working and what they can improve. That’s what key performance indicators (KPIs) are for.
KPIs are measurable HR metrics used to demonstrate how well the core departmental objectives are being adhered to and achieved. Therefore, the use of the right recruitment KPIs is crucial for great results.
Here are five essential metrics that HR managers should use to assess their performance:
Number of Qualified Candidates
For this, recruitment KPI, the first step is to define a qualified applicant for a certain job. Then you need to compare the number of applications to the number of candidates that made it to the interview phase.
This KPI tells you how well you are at filtering the applications to find the best fit for the vacancy.
First-Year Retention and Turnover Rate
Retention rate refers to the number of employees that stay with the company for over 12 months. It further tells the ratio of satisfied workers.
This KPI represents how effective your hiring process is in gathering the perfect candidates for a job. If a recruit leaves the job or is fired within the first year, then that causes a financial drain on the company.
The same goes for the turnover rate. If you are losing too many employees too quickly then you will have to reevaluate working conditions and the reasons for leaving.
Related Blog - Employee retention techniques for HR managers
Cost per Hire
As the name implies, this term refers to the total cost of hiring an employee for a vacant position. This includes:
Internal costs such as development, training costs, and salaries.
External costs such as referral fees and advertising fees.
This KPI helps in determining your annual recruitment budget. It also helps you to identify the areas where you can improve your processes to reduce recruitment costs.i
Application Withdrawal Rate
If you notice that applicants withdraw their applications mid-way that might be due to lengthy and ambiguous application forms. Candidates can also drop out after applying because you take too long to reach out.
If this percentage is high, it could increase the chances of you missing out on top talent. You can use this KPI to identify problem areas and improve your recruitment funnel.ii
Interview to Offer Ratio
This ratio indicated the difference in the number of candidates interviewed and the ones that were given an offer letter. If your interview-to-offer ratio is high, then it could mean that your job post descriptions and screening processes could use some improvements.
You can significantly save hiring managers’ time and company resources by refining these steps. It could also bring down your cost per hire.iii
Related Blog - Hiring Challenges in the Remote Working Era
In Summary
HR managers can improve recruitment processes by understanding KPIs. The indicators in this post are only five of the many that you can modify to suit your industry and business strategy. If you would like to learn more about Global Resourcing, Talent and Reward Management then enrol in one of our Masters and MBA programs in Human Resources Management from SNATIKA You can upgrade your knowledge and become qualified for a senior role in your department.
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