How To Leverage Metrics To Improve Hiring Efficiency

Talent acquisition (TA) teams are facing mounting pressure to identify top talent at greater speeds than ever before. AI adoption is growing, and companies can no longer afford to create bottlenecks that risk business productivity—or let competitors snap up high-potential candidates first.

However, hiring efficiency isn’t just about speeding up the process. It requires companies to uncover the best opportunities for improvement, whether that means automating workflows or implementing human interactions at the right times. This starts with tracking hiring metrics that offer rich insights into your performance.

This article will explain how to leverage hiring key performance indicators (KPIs) to accelerate recruitment and reduce associated costs. It will also provide actionable solutions for boosting hiring efficiency, including tips from industry experts.

Key hiring metrics to track

There’s an abundance of recruitment metrics that can help you understand your recruitment success. However, each one will tell a different story about your hiring efficiency. Here’s what you need to know about eight hiring metrics that can be powerful KPIs to track.

Time to fill

Time to fill tells you the number of days that pass between the initial job requisition and the job offer acceptance. This hiring metric directly outlines your ability to secure talent before competitors, as well as the level of risk you face when a position opens up.

Slow hiring naturally leads to productivity roadblocks within your operations. It delays important projects and leads to customer discontent. Plus, it can cause recruiting expenses to stack up. If you identify that your time to fill is at or above 47.5 days—the average across industries—or increasing over time, you need to make improvements.

Time to hire

Time to hire can similarly help you identify inefficiencies in your hiring process. However, it does so from the candidate’s perspective.

This metric measures the average amount of days between the candidate’s application and the job offer acceptance. If this time frame is long, your company may need to analyze where your recruiting team is spending too much time—whether it’s reviewing applications or evaluating interviewees—to prevent candidate disengagement.

Cost per hire

If you want to understand the cost-efficiency of your recruiting processes, you need to track your cost per hire (CPH). This metric tells you the average spend required to fill an open position, accounting for all internal and external recruiting expenses. These include:

• Recruiter salaries
• Referral bonuses
• Applicant tracking software subscriptions
• Training expenses
• Background check costs
• Job ads

Over time, CPH tells you how changes to your recruitment process, like automated resume screening or outsourcing, impact your total costs. As a result, you can optimize your resource allocation by prioritizing high-impact, low-cost initiatives.

Employee turnover rate

There’s no better way to cut hiring costs than by reducing the need to hire. According to Gallup, replacing an employee can cost:

• 200% of their salary for leadership and management roles
• 80% of their salary for professional and technical roles
• 40% of their salary for frontline positions

Employee turnover rate, which tracks the percentage of employees who leave your organization, helps you proactively identify and address retention pitfalls that result in hiring inefficiencies. This can specifically include turnover in your recruitment team, which is causing candidate pipeline delays for 43% of companies.

Quality of hire

Fast recruitment processes are beneficial to your hiring efficiency—but only if they continue to generate the high-quality candidates you need. Quality of hire (QoH) is a metric that scores employees on a set of performance indicators such as:

• Job performance
• Engagement
• Cultural fit
• Training time
• Client feedback
• Retention

High-quality employees should effectively reduce your average turnover rate, improving hiring efficiency while driving projects and business goals forward. It’s no wonder why our 2024 Hiring Insights Report shows that QoH is the most important hiring metric for companies today.

Offer acceptance rate

Do your top candidates view your organization as their ideal employer? Your offer acceptance rate, which measures the percentage of professionals who accept the offers you extend, can tell you if you need to reevaluate your employer brand, compensation packages, or candidate experience.

Steady improvements to this metric are critical to hiring efficiency. If you frequently get a “no” after an entire hiring cycle, you probably have spent a lot of time and resources on one candidate alone. And you may miss out on other high-quality professionals while waiting to hear back from or negotiating with your top choice.

Application completion rate

When potential candidates often start applications but leave before completing them, it’s a sign that your application process might be too cumbersome or uninviting. Application completion rate is a hiring metric that reflects how user-friendly and engaging candidates find your process or how complex and difficult it may be.

A large candidate pool can be key to hiring efficiency, so if your application completion rate is low, you must make improvements to your form.

Common challenges in measuring hiring efficiency

The process of measuring hiring efficiency isn’t always straightforward, even if you know the definitions of every potential metric. Here are two common challenges your team may face and how to overcome them.

Unclear priorities

Talent acquisition professionals often track a wide range of hiring metrics without considering what efficiency goals they actually want to achieve. The result is unclear priorities and mismatched initiatives across the recruiting team.

Prioritizing hiring KPIs that directly correlate to your hiring and business objectives is key to achieving your desired outcomes. Consider this example from Dallas Frazer, Customer Success Coach at GoodTime and former Recruitment Operations Lead at Shopify:

“Retention is always the fastest and most cost-efficient way to staff a company. That’s why employee turnover should be a key recruitment metric. Of course, sometimes you simply need to hire someone new to fill a role. In that case, you’ll want to keep a close eye on time-to-hire, because hiring slowly is hiring expensively.”

Low-quality data

Inconsistent and incomplete data can lead to flawed insights by distorting your hiring KPIs. The presence of data silos, which occur when information is scattered across disconnected systems, exacerbates this issue by making it difficult to get a holistic view of your hiring efficiency.

To address this, companies can implement a centralized recruiting analytics platform like GoodTime to ensure transparency and identify bottlenecks across the entire candidate pipeline. Training teams on data best practices can also reinforce stronger decision-making.

Strategies to improve hiring efficiency

Once you know what aspects of your recruiting process are holding you back, how do you actually go about improving hiring efficiency? Here are four strategies that can help.

Leverage technology

Manually accelerating hiring efforts isn’t easy. Modern technology solutions can help your recruiting team make faster, more informed decisions by instantly turning hiring metrics into rich insights.

Charles Mah, Chief Customer and Operations Officer at GoodTime, says, “Talent Acquisition can manage supply and demand through AI, Analytics, and AI-driven customer practices for its candidates.”

Technology can also help hiring teams build a seamless, delay-free candidate journey that ensures efficiency correlates with a great experience. Charles suggests leveraging digital tools to:

“Ensure that all interactions are part of one journey, with automated alerts for necessary changes, backup interviewers, and load balancing to ensure every interviewer is adequately supported.”

Optimize hiring workflows

Boosting hiring efficiency doesn’t mean automating your entire recruiting process. Face-to-face interactions are still valuable for the hiring process, helping recruiters build rapport, which can improve efficiency metrics like offer acceptance rates.

Rather than jumping for the quickest, cheapest option, recruiting teams need to consider how implemented changes will have a long-term impact on the candidate experience and, as a result, the company’s overall growth and reputation. According to Charles Mah, Chief Customer and Operations Officer at GoodTime: “Taking a ‘success’ mindset means adopting a business-first approach to talent acquisition and elevating the value talent acquisition offers.”

Focus on retention

There’s no low-cost replacement for the professionals who leave your team. As we previously mentioned, turnover can cost thousands of dollars, which means investing in retention is one of the most cost-efficient “hiring” strategies. Take time to figure out what culture and retention initiatives your workforce responds to, such as:

• Career pathing
• Flexible work options
• Employee resource groups
• Employee recognition programs
• Mentorship and coaching

Don’t forget to track employee turnover rates along the way.

Build a supportive culture

Does your company culture allow high-impact hiring initiatives to occur? Charles emphasizes that:

“Digitalizing or going semi-manual doesn’t cut it—it just doesn’t work because it’s masking a significant operational problem when budgets and resources are being questioned.”

Business leaders need to develop a culture of trust and support, providing the resources recruiters identify as necessary to their efficiency goals. Dallas says:

“In my experience working with various customers, the most successful TA teams are those supported by company leadership who recognize recruiting as an integral part of the company’s growth and success strategy.”

Elevating hiring efficiency for business success

As talent acquisition grows more fast-paced and competitive, continuously measuring hiring efficiency is key to identifying opportunities for faster, more cost-effective, and higher-quality recruiting processes. Hiring KPIs that are well-aligned with your goals can help you win top talent while contributing directly to business goals like improved return on investment (ROI).

Be sure to leverage full-cycle recruiting technologies that enhance the visibility and quality of data. With AI-driven hiring solutions, instant intelligent insights are one integration away.

Start leveraging thoughtful AI that provides powerful recommendations and helps clarify the next step in your hiring process optimization.