Top 20 HR Metric Trends to Get You Set for 2023
Published on December 7th, 2022
Top 20 HR Metric Trends to Get You Set for 2023
It’s that time of the year again. Gather round managers and leads! Its time to get back to the good ol’ old drawing board and rework on our strategies. It's time to take a step back and reflect on the global events that have changed the recruitment landscape.
As we move into 2023, refine your recruitment plan keeping in mind the needs of a workforce that has been reshaped forever by the global pandemic. Attract skilled candidates from a competitive marketplace using these simple yet effective indicators of your recruitment process.
What are HR Metrics?
This can be defined as a standard of measurement to gauge the effectiveness of your recruiting process. These indicators will help you identify key issues within an application process and tackle loop holes such as an unfriendly screening process or an unresponsive recruitment team. You will also be able to track the success of your hiring process and hire employees who have the potential to fetch a better return on investment (ROI). So, without further ado, here are the top trends to lookout for in the upcoming year.
HR Metric Trends for 2023
1. Source of Hire
Source of hire lets you know where exactly applicants/new hires found the open requisition. Be it social media, job portals, referrals, internal hires or company’s career page, knowing which channel works and which doesn’t can help you decrease your spendings on low-value channels. For example, if most of your successful hires are not coming from LinkedIn but from your career page or instagram ads, then that’s where you should be focusing.
2. Effectiveness of the Sourcing Channel
After thoroughly establishing your “ideal” channels, you should sort them out based on their effectiveness. Compare factors like impressions, reactions/likes, the number of clicks and number of successful applications to judge the effectiveness of each channel. What if more people are reacting to your post on Instagram or Facebook, but the ones on instagram are applying for the job?. The easiest way to track these parameters is to use the analytics tools on the respective platforms.
3. Percentage of Open Positions
The percentage of open positions is the ratio of total number of open positions and total number of positions in the organization. This metric can help you track the changes in the labor market. A higher percentage of open positions in a specific department indicates that the positions are high in demand and/or there’s a low supply of workers for those positions.
4. Applicants per Opening
Applicants per opening is a measure of the job’s popularity. Higher the applicants means higher the demand for the job. However, not every candidate who applies for a job can be deemed qualified. You can create specific job descriptions and set ‘tough’ criterias to source more suitable candidates.
5. Time to Hire
Time to hire is the period in between the moment a candidate applies for a job to the moment a candidate accepts the job. And you have to agree that no one likes a long and exhausting recruiting process. This metric is an indicator of the performance of your recruitment team. A shorter hire time enables you to hire better candidates and reduces your chances of losing potential candidates. Since this metric is dependent on your recruitment funnel, you can set-up a straight-forward recruitment process to enhance candidate experience.
6. Cost per Hire
Cost per hire can be defined as total recruitment cost divided by total number of hires. Total recruitment cost can be further divided into total internal and total external costs. Total internal cost includes everything from hiring manager cost to compliance cost, administrative costs, training and development costs and salaries. Total external costs include sourcing costs, marketing costs, background verification costs and travel expenses.
7. Selection Ratio
Selection ratio is the number of hired candidates divided by the total number of candidates applied. This HR metrics is similar to the applicants per opening. It typically lies between 0 and 1. If the ratio is close to zero, it implies that there are many applicants for any one position. In contrast, if the ratio is close to one, most applicants will need to be hired to fill the available positions.
8. Offer Acceptance rate
OA rate is the ratio of the number of offers accepted to the number of offers made. A low offer acceptance rate indicates potential compensation problems. On the other hand, high offer acceptance rate indicates good candidate experience, competitive offers and an effective recruitment funnel.
9. Candidate Drop-Off Rate
Candidate Drop-Off rate is a good way to measure your response time to potential candidates. About 66% of the candidates wait less than 2 weeks to hear back from the recruiter. However, there can be other factors for a high candidate drop-off rate such as:
- Long and tedious application process (if your candidate drops off mid-application)
- Long wait time between application and first contact (if your candidate drops off post application and before screening)
- Lengthy pre-employment test (if your candidate drops out during a take home assignment)
- Too many interview rounds (if your candidate drops out before or during the several rounds of interviews)
10. Quality of Hire
Quality of hire is perhaps the most important HR metrics. It is measured by a candidate’s performance rating. Candidates who receive high performance ratings are indicative of hiring success, while low performance ratings are indicative of bad hires. Quality of hire can be used to measure another metrics- Success Ratio. Success ratio is the number of hired candidates considered satisfactory divided by the total number of candidates hired.
11. Time to Fill
Time to fill is the measure of the number of days to fill an open position, from the date of posting a job. This metric is great for business planning and offers a realistic view for the manager to assess the time taken to source, attract and hire a talent either for a new role or as a replacement for a departing employee. Time to fill is influenced by several factors like the supply and demand ratio, and the speed of your recruitment department.
12. Recruitment Funnel Effectiveness
Recruitment Funnel Effectiveness includes your whole recruitment process from sourcing a candidate to appointing an employee. It can be divided into 7 steps:
Setting up an effective recruitment funnel can help recruiters manage every hiring step effectively. Since there are many steps involved in a recruitment funnel, we can specify a yield ratio for every step in the funnel. Yield ratio can be calculated using a simple formula:
Yield Ratio= Number of applicants who passed the stageTotal number of applicants who entered the stage
13. FYA (First-year Attrition)
This metric is also an indicator of hiring success. It is the measure of the rate at which employees leave your organization in a year. Attrition can be classified into two types; Managed attrition (when the contract is terminated by the employer) and Unmanaged attrition (when employee leaves on their own accord). Managed attrition is often a bad indicator of bad first-year performance.
14. Percentage of Probations Passed
This percentage allows you to calculate the efficiency of your recruitment process. Research suggests that 1 out of 5 candidates either leave the organization during the probation period, or extend the probation period. If the passed percentage is low, it could mean that you are not hiring the right candidates. Whereas a high percentage could mean that you have an effective recruitment funnel.
15. Hiring Manager Satisfaction
Hiring manager satisfaction expresses the satisfaction of the hiring manager with the hiring process of the company. If the manager is satisfied with the hired employee, it is more likely that the employee will fit well in the team and perform well. Hiring manager satisfaction can help recruiters to:
- Optimize the quality of job descriptions and ads
- Enhance the quality of the incoming applications
- Improve the collaboration between the recruiter and the hiring manager.
16. Candidate Job Satisfaction
Candidate job satisfaction is a measure of a candidate’s perception of the company’s hiring process. It can help you decipher whether the expectation set during the recruiting process matches with reality. A high candidate job satisfaction highlights the effectiveness of the management and job descriptions. On the contrary, a low score is an indication of unrealistic expectations or incomplete job description. A low score can be tackled by providing a realistic job description.
17. OPL Cost
OPL or Optimum Productivity Level cost is the total cost involved in getting your employees up to speed. This cost includes logistics cost, onboarding cost, training cost, supervision cost and co-workers’ cost during the on-job-training. If OPL cost is too high, it could indicate that the quality of your hire is not optimal.
18. Time of Productivity
After spending time and resources to get your hired employee up to speed, you need to track how long it takes to get them to maximum productivity. According to a study done by Oxford Economics, the average time a new employee takes to reach their OPL is 28 weeks. If the employee is from the same industry, they might take even less time to reach OPL, while employees from other industries can take up to 32 weeks. University grads, school leavers and unemployed candidates can take 40, 53 and 52 weeks respectively.
19. Adverse Impact
Adverse impact is an HR metrics that indicates the presence of biased and unfair practices. Tracking it helps you ensure that your recruitment practices can contribute to building a diverse and inclusive workspace. To keep adverse impact to a minimum, you should keep the selection rate of protected groups to about 80%. For example, if 10% of female applicants and 30% of male applicants pass an interview stage, dividing 10 by 30 you get an impact ratio of 33.3%, which is less than 80%. Similarly, you can measure adverse impact of all protected groups including race, sex, age (40 and over), disability, caste, creed, religion and veteran status.
20. HR Performance
Last but definitely not the least, HR performance metrics. After you are done evaluating your recruitment funnel, it is time to measure the performance of your recruiters. This can be done by calculating the following metrics.
Response Rate= Number of emails repliedTotal number of emails delivered x 100%
Interview Conversion Rate= Number of candidates interviewedTotal number of applications received x 100%
Higher the rate, better the performance. Additionally you can also set internal recruitment metrics benchmarks and compare them against industry benchmarks.
So, there it is folks, our top 20 HR metrics for 2023. Keep tabs on these KPIs, ensure you have a quality driven and candidate driven recruitment process, and don’t miss out any chance to make your candidates’ experience better. Stay tuned for more.
Never Miss The Updates
We cover all recruitment, talent analytics, L&D, DEI, pre-employment, candidate screening, and hiring tools. Join our force & subscribe now!
Stay On Top Of Everything In HR