Hiring candidates in a perfect world goes something like this:
First step: Post the job opening for the position you need to fill.
Second step: Fill that position with a qualified candidate.
Third step: Pop the champagne bottles because you are on fire!
Here’s the reality: Measuring the success of your hiring efforts requires more than answering the question, “Is this position filled or not?”
With so many factors to consider, you need to track the right hiring metrics to truly understand where you’re winning and where you’re not.
1. Cost Per Hire
Understanding how much it costs you to recruit one person can be very helpful. It can help you isolate and test different parts within your recruitment pipeline, so that not only do you find out which techniques are bringing you the best candidates, but you also find out where to make cost savings for your business.
Human Resources cost-per-employee = Overall HR costs • number of employees.
Benefits cost-per-employee = total costs of an employee benefits • number of employees.
Training cost-per-employee = total costs of employee training • number of employees.
Measuring staff turnover helps you understand whether your retention strategies are working. You can go one step further than measuring overall employee turnover, too. For example, you might want to track the turnover of different demographics and roles. This can help you adjust your retention strategy in a more targeted way.
If you can’t measure it, you can’t improve it. – Peter Drucker
Unscheduled absence rate (Absence days/FTE) is a key HR to measure absenteeism. It tracks the percentage of workers who are absent in a given period. This metric also provides a benchmark over time: absence levels can differ from month to month, but over longer periods of time you want the rates to be relatively low and stable. Growing absence rates indicate a worsening work climate and increased stress levels. An absence rate of about 1 to 2% is normal (because everybody gets sick a few days a year)
4. Job Satisfaction and/or Engagement
It is good to know how your employees are feeling at work. This could help you to understand whether or not your employees are giving 100% – happier employees tend to produce better results. There is a lot of debate on how to track job satisfaction and/or engagement. One simple method is to conduct a survey asking employees whether they look forward to coming to work most days.