Company recruiting metrics were once fairly simple. They consisted of reactive data that measured such factors as the time to hire, the cost per hire, and the number of hires made in a given period. This was considered a one-size-fits-all approach for companies across the board.
The problem is, those metrics didn’t really work. They never told a company the full story when it came to recruiting productivity and the impact of recruiting on the company’s bottom line. With better technology, however, “we’re now able to provide more strategic results and reports that are directly linked to better outcomes,” says Viet Nguyen, head of customer talent advisory for the talent-acquisition company Gem. “Recruiting is no longer a tactical and reactive function, it becomes a strategic arm of the business.”
In a presentation at From Day One’s virtual conference on acquiring skilled talent in the year ahead, Nguyen spoke about which recruiting metrics matter to whom–and how often you should be reporting them. He laid out just how granular these metrics should get and how those details can pay off for the overall company.
To make the transition toward strategic reporting, Nguyen suggested that companies shouldn’t get hung up on the past. “This is a trap that’s easy to fall into with reporting,” he noted. “What you really want to do is use historical data to predict the future.” Recruitment leaders should also know their organizational goals from the get-go, be prepared to make internal comparisons, and report on the why, not the what. “It’s a step toward solving the problem as opposed to reporting on the what, which isn’t nearly as productive as you could be,” said Nguyen.
As far as what metrics are most helpful for C-level leadership, Nguyen highlighted the business impacts of recruiting–“how it affects revenue, productivity and innovation”–as well as the importance of full transparency around metrics that impact business results. He added that leadership should leave space for additional comments, ideas or changes. “The last metric should be what’s top of mind for [the C-level] in that moment,” Nguyen said.
One report that company leaders should consider is the time to fill a position and how you’re pacing against it. “This report gives executives an idea of how recruiting is tracking against the original plan,” according to Nguyen. The longer a role stays open, the more likely it is to negatively affect that area of the business. “So having an idea of when goals can be filled is incredibly important to allow the rest of the business to forecast effectively,” he said.
Another potential report is “cost of vacancy,” which is the payroll-and benefit-savings minus revenue lost to a vacant role. “Simply put, it's the cost of a role remaining open longer than intended,” Nguyen said. This metric should be tracked over time; it will help demonstrate how recruiting impacts the bottom line of the business, as it can be tied back to revenue.
Nguyen delved deep into the topic of diversity, suggesting that companies set realistic diversity hiring goals, figure out what diversity goals look like “at the top of the funnel,” and commit to long-term investments in diversity over short-term fixes.
He shared a highly-detailed report that tracked applicants' race and gender alongside metrics like when they submitted their application, if they had phone or onsite interviews, and if an offer was extended. “Diversity is something that's top of mind for executives, so they'll want to get into the details,” he noted.
Nguyen focused sharply on pass-through rates, which he called “the single best metric recruiters have to debug a pipeline.” He added, “the pass-through rates will make it abundantly clear where there's a problem in the interview process, interviewer quality, candidate quality, or a combination of the three.” In this case there’s no single metric to put into use; ideally companies need to set specific goals and mentor team members on how to read pass-through data.
A “source of hire” report is simpler but still a valuable asset. “Looking at this report will tell you which sources are providing the highest volume and the highest quality of candidates,” said Nguyen. “By understanding these two metrics, recruiters and sourcers will know which channels yield the highest ROI for their time.”
Finally, a capacity report will tell hiring managers how many total hours their team needs to dedicate to interviewing in order to hit hiring targets. “Every hour their team spends interviewing is an hour they're not spending on their primary business responsibilities,” said Nguyen. He suggested this report utilize historical data from the company, set the total hours expected of a hiring team, and allow the hiring manager to distribute hours across their team.
Understanding how much time a hiring team spends on interviewing should translate into improved candidate experience. Companies can bolster recruitment data with candidate-experience surveys and by asking for—and recording—rejection reasons.
Only 25% of companies make recruiting data available to their entire recruiting team. Fully 70% of hiring managers believe their recruiting organizations need to be more data-driven. These data points show there are lots of missed opportunities in fostering a transparent, data-driven recruiting culture that’s deeply connected to the company’s business goals. As Nguyen summarized: “Anchor your reporting to position recruiting as a strategic partner.”
Emily Nonko is a Brooklyn, NY-based reporter who writes about real estate, architecture, urbanism and design. Her work has appeared in the Wall Street Journal, New York magazine, Curbed and other publications.