Gauging Speed and Efficiency
In a tight talent market, speed is your secret weapon. The best candidates are often gone in just a few weeks, so a slow, clunky process will cost you top talent, guaranteed. Two key KPIs help you keep a finger on the pulse of your hiring velocity.
Time to Hire tracks the total number of days between a candidate hitting ‘apply’ and accepting their job offer. If this number starts creeping up, it’s a major red flag. It could mean anything from slow feedback loops with hiring managers to inefficient interview scheduling or just too many stages in the process.
Time to Fill, on the other hand, measures the days from the moment a job requisition is approved to when an offer is finally accepted. This metric gives you a broader view of the entire recruitment cycle, including sourcing and initial screening. A long Time to Fill can directly hit departmental productivity and even revenue.
Understanding the Financial Impact
Hiring is a major investment. Tracking its cost is fundamental to managing your budget and demonstrating a clear return on that investment. The most important metric here is as straightforward as it is powerful.
Cost per Hire is simply the total sum of all your recruitment costs (both internal and external) divided by the total number of hires you made in a given period. This isn’t just about agency fees; it includes everything from job ad spend and recruiter salaries to tech subscriptions and referral bonuses.
Tracking Cost per Hire isn’t about pinching pennies. It’s about making smarter investments. When you understand this metric, you can shift your budget towards the channels that deliver the best candidates for the lowest cost, truly optimising every rupee spent.
This data is exactly what you need to build a compelling business case for investing in better tools or programmes that will ultimately drive down long-term hiring expenses.
Evaluating Channel and Source Effectiveness
So, where do your best hires really come from? Answering this question is the key to refining your sourcing strategy and putting your energy where it counts. This is where tracking your Source of Hire becomes non-negotiable.
This KPI breaks down your new hires by the channel that brought them to you. This could be:
- Employee referrals
- Your company careers page
- Professional networking sites like LinkedIn
- External recruitment agencies
- Job boards
When you analyse this data, a clear pattern often emerges. While job boards might deliver the highest volume of applicants, you’ll frequently find that employee referrals produce the highest Quality of Hire.
A good set of KPIs is your roadmap to a more efficient and effective hiring strategy. They provide the insights needed to make informed decisions, justify investments, and align recruitment efforts with overarching business goals.
Essential Hiring Process KPIs
This table outlines key performance indicators to measure the efficiency and effectiveness of your hiring process, along with their strategic importance.
KPI |
What It Measures |
Why It Matters for CHROs |
Time to Hire |
The number of days from when a candidate applies to when they accept an offer. |
Indicates operational efficiency. A shorter time reduces the risk of losing top candidates to competitors. |
Time to Fill |
The number of days from when a job requisition is approved to when an offer is accepted. |
Reflects the overall speed of the entire hiring lifecycle and its impact on business continuity and productivity. |
Cost per Hire |
The total recruitment cost divided by the number of hires. |
Essential for budget management and demonstrating the financial ROI of the talent acquisition function. |
Source of Hire |
The percentage of hires coming from different channels (e.g., referrals, job boards, agencies). |
Helps optimise spending by focusing resources on the most effective and cost-efficient sourcing channels. |
Quality of Hire |
The value a new hire adds, often measured by performance ratings, retention, and manager satisfaction. |
The ultimate measure of recruitment success. It directly links hiring outcomes to long-term business performance. |
Offer Acceptance Rate |
The percentage of candidates who accept a formal job offer. |
A low rate can indicate issues with compensation, benefits, company culture, or the candidate experience itself. |
By regularly tracking these metrics, CHROs can move beyond simple headcount reporting and start telling a powerful, data-backed story about how talent acquisition drives the business forward.
The Ultimate Metric: Quality of Hire
Speed and cost are important, but they’re meaningless if you aren’t bringing the right people into the organisation. Quality of Hire is arguably the most critical—and the most challenging—recruitment KPI you can measure. It’s all about quantifying the value a new employee brings to the table.
Because it’s not a single data point, you need to combine several post-hire indicators to get a clear picture:
- New hire performance scores (often from their first performance review)
- Manager satisfaction surveys
- New hire retention rate after 6 or 12 months
- Time to productivity (how quickly they start delivering value)
A low Quality of Hire score is a signal that something is broken. Perhaps your interview process isn’t properly assessing core competencies, or your sourcing strategy is attracting the wrong kind of candidate profile. By consistently measuring these KPIs, you turn your hiring process from a reactive function into a proactive, data-driven strategic asset.