Should Your KPIs for Hiring Process be Focused on Speed or Quality?

Shift a focus from some speed-related metrics like Cost and Time to hire, to more strategic HR KPIs that help to manage actual hiring quality.

It is perhaps both the best and worst of times to be a recruiter. It’s exciting because recruiters have a vast array of social media and cloud based technologies available to them. It’s challenging because recruiters find themselves embroiled in a war for talent, like they have never seen before.

Shifting Hiring Metrics from Speed to Quality

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Massive world-wide talent shortages putting pressure on recruiters

According to the Manpower Group Global Talent Shortage survey[1], 35% of 38,000 employers surveyed world-wide are experiencing difficulty filling jobs due to a lack of talent. Some of the severest talent shortages are occurring in the areas of STEM (Science, Technology, Engineering and Manufacturing), sales and finance staff. Gone are the days when you could simply post an advert and wait for the talent to flow in. Unless you are an employer super brand like Google, General Electric or GSK then expect talent to trickle rather than flow in.

Hiring metrics need to change focus from speed to quality

So, how is the hiring profession responding to these talent shortages and pressurized hiring processes? Well, of course it is having to look at ever more innovative ways of hiring staff, but it also needs to shift the KPIs and performance metrics which it uses to manage the hiring process to help them create a more stable talent pipeline.

For example, traditionally, the hiring sector has been a very process driven function and was one of the first HR functions to sign up to KPIs – and typically you would see cost-to-hire and time-to-hire as the two critical key performance indicators. These metrics are all well and good in a time when quality talent is in ready supply, as it will be much easier to develop higher quality short-lists in an acceptable time frame.

But, fast forward 20 years where talent is in short supply, and recruiters are compelled to sacrifice quality to continue to find talent within acceptable timeframes. This is a short term and self-defeating strategy as fast, but poor quality hires are likely to lead to a net reduction in performance, higher staff turnover and increasing talent shortages.

  • Placing too much emphasis on time to hire in hiring will lead to poor hires and higher turnover, creating a vicious, negative feedback cycle that is spiraling downwards and weakening your talent pipeline.

This is why the more progressive recruiting teams are beginning to shift their hiring metrics away from an exclusive focus on speed to one which is also more focused on quality, which is more in tune with the modern age of global talent shortages.

Studies show that hiring metrics are changing

This Global Talent Impact Study by Future Step[2] of around 1,500 professionals across 5 continents has shown that hiring metrics are beginning to move away from a crude emphasis on speed and moving to a broader emphasis on a range of metrics with performance of the candidate at its heart.

  • The study showed that 67% of those surveyed put performance of the new hire as the most important metric, followed by retention (cited as most important by 35% of respondents).
  • Cost to hire and time to hire had been relegated down the list of importance in terms of hiring metrics with 27% rating cost as the most important metric and 18% viewing time to hire as most important.

This is why modern recruiters need to be managing their hiring process with a new broader set of KPIs which emphasis quality of hire and performance of new hire over cost and speed of hire. Now, using multiple KPIs to manage your hiring process is going to require a more involved level of tracking and planning and you could benefit from using a KPI management tool like BSC Designer. This kind of tool makes it easy for you to record, track, update and report on KPIs; it’s much more efficient than trying to do it manually.

But, before you even get to the process of tracking KPIs, you’ll need to develop a broad set of quality focused KPIs to govern your process – and we can give you some hints on this next.

HR Hiring KPIs in BSC Designer

View View HR Hiring KPIs online in BSC Designer HR Hiring KPIs online

Time to hire and cost of hire. Now, you still need to track these KPIs, but they just need to have a lower prominence in the scale (learn more about weight in BSC Designer).

Time and cost to hire metrics have a lower relative weight

View View HR Hiring KPIs online in BSC Designer HR Hiring KPIs online

Of course, there may be some resistance to you de-prioritizing these KPIs. Budget holders may be concerned about rising costs which means you will need to present an argument based on return in investment, e.g. spend more on hiring and get a more productive employee leading to a net financial gain. You may need to make a similar justification for de-emphasizing time-to-hire by illustrating the replacement and lost opportunity costs of a bad-hire which generally far exceed the financial costs of waiting a few more weeks for a quality hire.

Performance of new hires

Clearly you will need to make some metrics based around performance of the new hire, perhaps as follows

  • Performance level of new hire after 1 year
  • Performance level of new hire after 3 years
  • % of new hires coming via referral (a white paper by Oracle[3] shows that referred employees are better quality and stay longer)

Using these kind of metrics will enable you to build a hiring process focused on quality and which is not trying to simply get ‘warm bodies’ to fill empty seats in a desperate ‘pack em and stack em’ style of recruitment, which must be very tempting in the talent starved marketplace that recruiters operate in.

Retention rate of new hires

This is a crucial statistic as studies show that it takes about 6-9 months for an employee to start to be profitable and so you’ll need some metrics to track how loyal and effective new hires are. Also, if you have higher than average industry turnover rates, you’ll put increasing pressure on your hiring processes. So some key metrics for assessing how loyal and retainable the new hires are, could be:

  • % of new hires passing probationary period
  • % of new hires still employed after 1 year

Two Important Retention KPIs

View View HR Hiring KPIs online in BSC Designer HR Hiring KPIs online

As you can see the candidate marketplace is changing and talent is scarce and recruiters are pressurized and if you persist with building a hiring process focused on speed and cost, chances are your recruiters will buckle and cut corners to get bums on seats and sacrifice quality. This is a short-term and self-defeating hiring strategy that will lead to a downward spiraling cycle of high turnover, bad hires and an increasingly pressurized hiring process.

Rather, modern hiring processes need to place an emphasis on quality of new hire so recruiters can strike a healthy balance between speed and quality of hire (in a time when they will be constantly pressurized to cut corners for speed), and deliver a more stable and high performing talent pipeline.

Use HR Hiring KPIs discussed in this article as a starting template for your own scorecard! Access this example scorecard online or download .BSC project file for BSC Designer PRO.

View HR Hiring KPIs online

Would you like to create your own scorecard? Try our free Strategy Map Wizard.


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Kazim Ladimeji is the Director of; is a HR resource for start-ups and small businesses. Kazim is also an MCIPD qualified practicing HR professional with 17 years experience.

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