Recruitment metrics are often used to show recruiting performance and validate recruitment KPIs. There seems to be a somewhat standard set of expected metrics that most recruiters try to track and report. These are cost per hire, time to fill, and quality of hire – in other words, cost, speed, and quality. Each of these seems valid and important at first glance but can be argued to be useless or, at best, limited in usefulness. Any useful measures have to be meaningful to the organization’s leaders and tell whether or not the function is making a difference to the organization's effectiveness. Do these really do that?
I ask recruitment leaders a straightforward question: What is the ultimate purpose of the recruitment function? Do the measures you report answer that question?
In my mind, the purpose of recruitment is to find, attract, and influence people with the skills the organization needs.
What metrics tell us how well talent acquisition attracts, finds, and influences the right talent?
Cost-Per-Hire
It is not cost. The cost to recruit a candidate relative to their potential output is usually relatively small or may be irrelevant. We have to ask whether cost is more important than the contribution the person can make. Using an old analogy, whatever it costs to hire a star athlete is trivial compared to their overall contribution to the team and the sport. The person who invents a new product, procures a patent, fixes a major problem, comes up with a great idea, or solves a problem is almost certainly worth far more than the cost of hiring them. To focus on cost-per-hire hinders focus on the more significant need of finding the best person possible for the role.
The metric’s simplicity is also its greatest limitation. Cost-per-hire aggregates all recruitment expenses, such as advertising costs, recruiter salaries, agency fees, and other expenditures, into a single figure. This aggregation masks significant variations in hiring different types of roles. For instance, the cost of hiring a senior executive in a specialized field is vastly different from hiring an entry-level customer service representative.
My research also found that the cost per hire for a particular role rarely varies greatly (other than accounting for inflation). The costs hover around a mean, making the exact figure virtually meaningless. As a rule, junior people cost less to hire than more senior people.
Organizations such as SHRM provide benchmarks for what it costs to hire a new employee. While this is interesting, how can you impact the cost your organization incurs? Can you significantly influence this number, and perhaps more importantly, does it matter?
Time to Hire
Speed by itself is never an adequate measure of success for a recruiter. Recruiters can quickly present candidates to managers, but the candidates may not be the kind needed or even meet the work requirements. Speed needs to be qualified with words like qualified, meets all requirements, or fits the job description. Further qualified: Is it speed to present, speed to find, speed to screen, or speed to get to an offer? Suddenly, this metric becomes complex and gets bogged down in details that may not be important.
We also need to consider that finding the best or the right person may take time but be worth it in productivity or innovation. Speed is relative to need and ultimate goal and is not relevant in and of itself.
Quality of Hire
So then it must be quality that matters?
No, not because I don’t think quality is important. I believe it is not possible to define it in a way that can be meaningfully connected to the recruitment process.
The challenge is defining what we mean when one candidate is “better” than another. Who defines quality, and how can it be tracked?
it is plagued by inconsistencies and a lack of standardization. Different organizations—and even different departments and managers within the same organization—may define and measure quality in various ways, leading to unreliable data that is difficult to act upon. For example, one department might prioritize technical skills and experience, while another might emphasize cultural fit and adaptability. These differing criteria can result in a fragmented understanding of what constitutes a "quality hire," making it challenging to apply the metric consistently across the organization.
One of the major problems is that the ultimate quality of a candidate may only be determined months or even years after they are hired and even then, it is a matter of opinion. I have been in many situations where one manager thinks an employee is great, and another manager feels the opposite.
If we use the quality definition that is the hallmark of manufacturing, it is not about perfection; it is about reducing the variations in skills between candidates. Taken to the extreme, this means hiring people who are almost clones of each other. If it were possible to do this, it might lead to greater productivity, but I don't believe this is what we want. Robots could be used instead.
Some of the other measures that purport to measure quality have significant flaws.
Time to Productivity
While this metric tries to assess the effectiveness of both recruitment and onboarding processes, it is inherently flawed due to its generic nature. Time to productivity does not consider the specific challenges associated with different roles or the varying degrees of support required to integrate new hires successfully. For instance, a new employee in a highly technical position may need more time and training to become fully productive compared to someone in a more straightforward role. Moreover, this metric assumes that reaching full productivity results from the recruitment and onboarding process, overlooking team dynamics, the manager’s support, and what level of training was provided. Too many variables would have to be eliminated to say that the recruiting process alone causes, or even has any real impact, on performance.
Turnover Rate
And finally, I see turnover rates used as a measure. Whether someone leaves is much more likely to be caused by the manager, economics, the corporate culture, or some other factor than it is because of the type of person recruited. I believe that the ultimate responsibility for turnover lies with the hiring manager and not with recruitment.
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