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Common KPI in Performance Recruiting

13/07/2021 2021/07

Bring efficiency to your recruiting process

Costs per applicant or costs per hire are still the most important KPIs (Key Performance Indicators) in recruiting, which can be used, among other things, to scrutinize the efficiency of one's own recruiting processes. Managers are increasingly basing their decisions on the reporting of such KPIs, which make the performance of the recruiting department objectively measurable.  But these KPIs are no longer sufficient and only consider the cost side. What is missing is the consideration of quality and reach. Performance recruiting starts in marketing for more visibility and attention.

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Recruiting 4.0

Only those who can use the numerous recruiting channels in a targeted manner can resolve this tension. The media mix is increasingly shifting away from traditional channels and toward online campaigns with numerous evaluation options and calculation bases, such as cost-per-click. The Internet offers many inexpensive and effective options for personnel marketing and, consequently, for increasing performance in recruiting.

More and more companies are investing heavily in target group-specific channels on the web. According to a study conducted by Talention in 2021 among 200 German companies, 7% rely on personnel marketing measures, 3% place ads in social media, and 15% rely on multiposting (posting job ads on job boards).

Performance marketing & recruiting - which KPIs are the right ones?

The post-and-pray method, i.e., publishing job advertisements in one's own job market and then hoping for incoming applications, often no longer produces the desired results. The following steps in the applicant selection process are also about to undergo a technological transformation. A data-based insight into the application process shows companies which job screws should be optimized. It is important that the analysis starts early in the recruiting funnel, i.e., in the attention phase.

Recruiting KPI: Cost-per-Click

In addition to flat-rate billing, as is familiar from the publication of advertisements in the print sector, performance-based billing models based on the cost-per-click scheme are appearing more and more on the Internet. In other words, you pay a fixed amount or a dynamic amount based on demand for each person who clicks on your ad and thus arrives at the landing page.

You can publish paid ads with a cost-per-click model not only on job search engines such as indeed, but also on social networks (e.g. Programmatic Job Ads) and search engine providers. Smaller companies in particular have little chance of making it to page 1 of Google search results through search engine optimization alone. However, by placing ads for a fee, it is possible: the link to your own career page then appears in one of the ad spaces. To do this, you specify in connection with which search terms your ad should be seen. You can also limit the visibility of your ad to certain regions or end devices, which is particularly interesting for smaller companies.

Recruiting KPI: Click-Through-Rate (Career Page | Job Ad | Apply Button)

Click-through rate (CTR), or click-through rate, can be measured in many ways. One interesting CTR is how many website visitors click from the company page to the careers page or how many visitors to the careers page, continue to click on a job ad and ultimately then click on the apply button.

Here's a calculation example:

  • If 1000 users out of 15,000 website visitors click on the career section -> CTR = (1000 /15000)*100 = 6.6%.
  • If 100 of the 1,000 users click on a job ad -> CTR = (100/1000)*100 = 10 %
  • If 5 of the users who viewed the job ad click on the apply button -> CTR = (5/100)*100 = 5%.

Recruiting KPI: Conversion rate application sent | interested party
How many users who have clicked into the career section have an interest in a JobAlert, a newsletter or have even sent an online application.  This is what matters most in the online application process and plays a significant role in how successful your channel selection is. The basis of calculation is the same as for the click-through rate.

Recruiting KPI: Cost per qualified application is better than cost per application
Cost per qualified applicant (CPQA) is similar to cost per applicant (CPA), but includes two important elements. The first is that applicants are screened for those who meet certain criteria. This saves the company a lot of time in processing a large number of unqualified applicants and checking references, etc.


Recruiting KPI: (Qualified) Application per Media
The qualified applications or hires per media KPI is used to measure the performance of each channel by calculating how many (qualified) applications or hires you received through a single channel.

Recruiting KPI: Time to Hire
Long waiting times frustrate job seekers and the cost per vacancy is increasing day by day for companies. Accordingly, every company's goal should be to reduce Time to Hire, which is the time it takes to fill an open position. Did you know that the average time to hire (job posting to contract signing) in Germany is 63 days?

Recruiting KPI: Cost per Hire
For this metric, all the costs you incur per job filling, i.e. from the job posting through the entire application process to the filled vacancy, are determined. The formula is (Internal Recruiting Costs + External Recruiting Costs)/ Number of Hires. 

Internal costs could be:

  • Referral program costs
  • Personnel costs for recruiters
  • Training costs
  • ...

External costs could be:

  • Sotware costs
  • Multiposting costs
  • Employer branding and personnel marketing costs
  • ...

Performance recruiting and efficiency in channel selection are crucial
The own online job market with its many contact points to applicants is essential as never before. Free job postings in corresponding groups on social media end up on the company's own homepage just as much as ads on job boards and career networks, which usually have to be paid for. If the company's own homepage sets the hurdles too high, for example by being insufficiently user-friendly, then candidates often abandon the application at the registration stage.

When deciding on a particular recruiting channel, you should be guided by the consideration of whether the quality of the candidates who can be reached there is in line with the effort required to use the channel. For example, free job boards are an alternative to the usually high-priced established providers. With the free advertisements, you can reach smaller numbers of applicants from a restricted target group - an interesting option if you are looking for relevant specialists. Some larger platforms also offer free basic functionalities for recruiters. However, they usually charge well for filter functions for the candidate pool, as they are required for the direct approach of applicants in the context of active sourcing, or for the more prominent placement of their own advertisement. A more subtle way to strengthen the bond between your company and potential applicants is, for example, content marketing. By publishing informative or entertaining content on blogs or social networks, you can strengthen the perception of your brand and arouse the interest of potential applicants for your company.

Keep in touch

Internal recruiting and employee referrals are well-known and cost-effective recruitment tools. In these cases, it is sometimes even possible to shorten the hiring process. The trend toward boomerang applications is moving in a similar direction: if you open up the opportunity for former employees to rejoin the company, you can secure similar advantages as with internal redeployment.
These colleagues are also already familiar with the corporate culture and know exactly what you're getting into. But whether rehiring a so-called boomerang applicant makes sense depends primarily on one important factor: the reason for the employee's departure. For a consulting company, for example, rehiring a former management consultant who has gained valuable industry experience in the meantime can be a success. However, if the reason for the change was a lack of career opportunities within the company, then rehiring the employee only makes sense if the problem has been solved in the meantime.
But how do you keep in touch with former employees? Larger companies maintain their own online platforms for this purpose, where former employees can exchange information and keep up to date on their former employer. Companies of all sizes can resort to sending out the company newspaper by mail or e-mail and inviting employees to company events as a means of maintaining contact. If contact has been lost, however, it can be resumed primarily via the career portals Xing and LinkedIn.

External support in the recruiting process

In response to strained budgets and declining applicant numbers, decision-makers are increasingly measuring their HR departments against quantitative criteria. In turn, they are turning to the expertise of external experts to increase efficiency.
At ARTS, for example, we implement customized cross-channel campaigns for addressing potential employees and innovative recruiting measures for our clients. In doing so, we focus in particular on the match between corporate and personal culture, because we know how important this is when filling responsible positions.

Sources: prescreen.io | sueddeutsche.de | hbr.org | hbr.org | farrerdigital.com | erecruiter.net | personalwirtschaft.de | t3n.de | crosswater-job-guide.com

About the Author
Melanie Balfanz | Marketing Manager Content & Strategy
Melanie Balfanz
Corporate Marketing Manager

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