3 Steps to Become a Metrics-Driven Recruiter

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Sep 29, 2016
This article is part of a series called How-Tos.

How much does your company spend on agency hires? What are your most valuable recruiting channels? How much budget have you slated for emergency situations?

If you can’t answer questions like these with confidence, then you’re not alone. About 75 percent of recruiters aren’t using data to inform their decisions.

There are a whole host of reasons that folks tend to avoid embracing metrics, but one of the most common is intimidation. And while it’s true that using data to improve your business practices can be a complex, multifaceted topic, familiarity with even just a few basic concepts can lead to real results. So to build a solid foundation, I’ll dig deep and break down three of the most important metrics to track when it comes to hiring: cost, optimization, and budget. Hope you’re taking notes:

Step 1: Dissect Your Costs

To understand costs, you need to analyze how much money you’re spending and where. Seems obvious, right? But grasping how much you’re spending in your organization can help you better understand how you’re measuring your hiring efforts. This can be broken down into a few different metrics:

I. Total Cost

Total costs represents the cost of all of the different sources your company uses to find candidates: agencies, social media sites, job boards, advertising, technologies (such as a candidate relationship management tool or applicant tracking system), and more.

Here’s a sample of costs that might feed into your total:

budget tracker

II. Cost per candidate/hire

To get your cost per candidate, simply take your total cost spent generating candidates and divide it by the total number of candidates added to the pipeline in a certain period of time (ideally monthly or quarterly).

Similarly, to get the cost per hire, just take your total cost spent generating candidates and divide it by the total number of people hired in that same amount of time. Tracking these numbers over time can help you determine the benchmarks you should aim for in a particular quarter or time-period, so you’re always setting goals and measuring against them.

h2 2016

III. Cost per candidate/Hire by source

To calculate this metric, start by reviewing how much money you spend on each of your different candidate sources. Then divide that number by the total number of candidates generated for each source to determine your cost per candidate by source. To find out your cost per hire by source, simply divide your total spend on each source by the number of hires that source generated.

Once you’ve figured these numbers out, you can see how they stack up to your industry’s benchmark numbers and judge yourself against them. To make the most of your budget, invest more heavily in the sources with a lower cost per hire. Decrease your spend in the ones that aren’t proving to be as fruitful.

expanded total spend

Step 2: Determine (and Optimize) Your KPIs

KPIs aren’t just for marketing anymore. Setting and monitoring metrics like net new candidates, total offers accepted, applicants to hires ratio, and time-to-hire by source can help your recruiting department better set and adjust goals and see how you’re progressing. Or as I like to say: measure, optimize, and repeat.

I. KPIs — Key Performance Indicators

The first step to setting your KPIs to track: Decide what’s most important to you and your business. Need to bring in a bunch of new candidates? Maybe you want to track time-to-hire. Whatever it may be, stick to four or five only — you want to be able to see the forest for the trees. Whether that’s number of candidates by source, number of hires per quarter, quality of hire, employee satisfaction, or something else entirely, work with your team to determine what you’re trying to improve or change in your recruiting department and focus there. In the blog post, “6 Recruiting Metrics to Help You Prove and Improve Your ROI,” I shared some ideas for performance indicators that you can track.

II. Measure

Once you’ve determined your KPIs, put them to the test. After all, for any tool, technology, or strategy you use, you should be able to measure its ROI — and if you can’t, nix it. Luckily, the kind of data you need to track your results often comes with any recruiting software, job board, agency, or social media channel.

If your company has access to historical data, even better. Study it and make decisions (and predictions) based on what’s already happened — and if you don’t, outline a process to start tracking this data right away.

apps per hire cost per hire

(the image shows ideas for KPIs that you can measure and optimize. The red line represents the benchmark)

III. Optimize

Once you’ve gathered data that encompasses your relevant strategies, optimize. First things first — everything that can’t be measured should go. It’s like aiming in the dark. From there, retain the technologies and techniques that actually perform, based on the KPIs you set earlier.

Once you’ve narrowed down your strategies to the ones that legitimately work, consider investing in new ones that map back to your goals. After all, you’ve been measuring data and keeping records — so executive buy-in is that much easier to get.

You can use the recruiting funnel benchmark metrics in this blog post: 7 Benchmark Metrics to Help You Master Your Recruiting Funnel to learn more about optimization.


Step 3: Own Your Budget

It’s a common problem, especially in recruiting: When you’re strapped for cash, no matter your industry or company, it’s tough to feel like you can invest in new strategies. But in my experience, there are ways to get around that. Here’s how to dig up some extra budget and maximize your spend.

I. Budget Planning

Start with your total budget (and if you don’t know, ask someone!). Allocate your entire budget by source, so every dollar is accounted for, and you know what it will take to reach your goals. Build in that historical data we talked about earlier (if you have access), make some ballpark assumptions, and compare to your industry standard to see how you’re tracking.

II. The Emergency and Experimental Line Items

Got a safety net in place just in case. Allot five percent of your total budget to emergencies, in case your recruiting tools suddenly increase in price, or your chief executive wants to test a new recruiting campaign. Having a bit of a cushion almost always saves the day in the end.

But it’s no fun to only plan for emergencies, so retain five to ten percent of your budget for experimentation. Let’s say you’ve got your eye on a new sourcing tool or a billboard ad somewhere. This way, you won’t be limited to what strategies you can test.


After all of these steps, you can finally call yourself a metrics-driven recruiter. With data and processes on your side, you’ll be able to make smart decisions for your organization, use and stretch your budget to cover some new tactics, and ultimately set your recruiting team on a track to becoming a metrics-driven powerhouse. It doesn’t take a PhD — just dedication to finding the best talent.

This article is part of a series called How-Tos.