Understanding Recruiting Metrics
Recruiting is about effectively managing and refining a funnel. While many perceive the recruiting process to start when an applicant applies or is sourced, it truly begins with drafting a precise job requisition, crafting a compelling job description, and posting it strategically. Delays at this outset directly impact the efficiency of the entire hiring journey.
The core value of refining this funnel is twofold: efficiency and quality. By streamlining the process, companies reduce costs associated with missed opportunities, wrong hires, and time spent on unsuitable candidates.
Amplitude, a product analytics platform, naturally, analyzes, tracks and optimizes their recruiting funnel. Today we’re going to dig deep into the key recruiting metrics they measure, why they are important and share Amplitude’s own perspectives and best practices.
Key Metrics Definitions
This is not an exhaustive list of recruiting metrics. Below are metrics that are often overlooked yet are key to creating an efficient and effective hiring process.
- Time to Start: # of days from req opening to new hire start date
- Time to Fill: # of days from req opening to offer accept date
- Time to Hire: # of days the hired candidate spent in the interview process, from application date to offer acceptance date
- Time to Source: # of days from recruiting start date to when hired candidate entered process
- Time to Launch: # of days from req opening to recruiting start date
Why They Matter and Benchmarks:
Time to Start:
This metric measures the number of days from when a job requisition is opened to the actual start date of the new hire. Why is this so crucial? It all boils down to what finance cares about the most: having those “butts in seats.” When a new employee starts, the business begins to reap the benefits of their productivity. However, every day a req remains unfilled, there’s a tangible cost to the business in terms of missed productivity. That’s why businesses must minimize the Time to Start metric.
Time to Fill:
What makes Time to Fill particularly valuable, compared to Time to Start, is its ability to gauge the effectiveness of your hiring process while considering factors beyond the control of the hiring team. External factors, such as a candidate's notice period or their readiness to start after accepting their offer, can influence this metric. Nonetheless, achieving a shorter Time to Fill should naturally lead to a reduction in Time to Start. A good SLA would be to benchmark this metric against the teams’ past performance and use that to establish a clear goal for improvement.
Time to Hire:
This measures the efficiency of your hiring process by analyzing how quickly you can get your winning candidate through the process. When you successfully hire a candidate, it's a testament to their caliber, as they've navigated and excelled in your rigorous interview process. If it consistently takes a long time to move this caliber of candidate through the hiring process, it could signal inefficiencies or bottlenecks, such as the hiring manager's ability to interview effectively, alignment between the hiring manager and the interview panel, or even the competitiveness of your offers. A good SLA would be to benchmark this metric against the teams’ historical performance and use that to set a goal to do better. Industry benchmarks for this metric is 39 days (for technical roles in 2022, Gem).
Time to Source:
This measures the speed at which the recruiting team identifies the candidate who was hired. This can help analyze the effectiveness of recruiting in sourcing and attraction efforts, as well as the alignment between recruiting and hiring managers. Amplitude sets this SLA at 21 days, but it can vary depending on factors such as the complexity of the req or the workload of the recruiting team.
Time to Launch:
Measures how quickly recruiting initiates a search once a req is opened. Ideally, this should happen promptly. If there's a delay, it's essential to ensure alignment between Finance, the business, and recruiting to understand the reasoning. When hiring managers aren't ready to kickstart the recruiting process as soon as a role opens, it's an opportunity to assess and harmonize the goals and priorities of all stakeholders. Clear communication and understanding are key. If the Recruiting Start Date is undocumented, a proxy metric could be Time to Post, which measures the time between when the req is opened and when the job description is posted. To create an SLA, you could analyze how quickly recruiting does an intake with a hiring manager to begin recruiting. If using Time to Post, an SLA of 3 days is reasonable.
What This Means for Your Company
Amplitude, with over 700 people on board worldwide, has its own set of goals and benchmarks that might not quite fit with what's best for your company, especially if you're in a different place in terms of size, stage, or market. It’s good to look at benchmark metrics to get an idea of where you could do better, but don’t just chase a metric for the sake of it.
For an early-stage startup, you might optimize for Cost of Hire or Quality of Hire as opposed to time to hire, whereas for a growth-stage company, you might be optimizing most on time to fill.
Pick the ones that really mean something to your business and be ready to switch things up as your team, market, and resources change.