The recruiting industry is a saturated market with many firms to choose from. While price is definitely a deciding factor, there are other key performance benchmarks that hiring companies want to know about before signing up with a recruiting firm. For the staffing firm, these same delivery metrics must be tracked to make sure that you are delivering an effective service to your client base.
- Capacity to deliver
Response time is important for any company. A client will want to see how fast a recruiting firm can make submissions to a client. Before signing on a recruitment firm, these straight forward KPIs will need to be presented.
- Total number of placements made in the industry for a given period. If there is a low number of placements, it means the recruiting agency will not be able to handle high volumes.
- A low placement number also indicates that the recruiting agency does not have a wide network to source candidates or do not have enough recruiters to place on a new account.
2. Response Time
Response time is the time between the job opening details reaching the staffing firm and the first set of candidate submissions. This is also one of the important recruitment metrics as it shows how responsive the staffing firm is. Staffing firms with high customer satisfaction have a 24-hour period between receipt of the job description and the first set of candidate resumes.
This is a deciding metric on how to measure recruitment effectiveness. This is the ratio of how many candidates you submit for every hire you place. It is impossible to have a 1:1 hire but a very high number of submissions to hire means that your staffing firm needs to have better qualification processes in place before client submittals. The sweet spot is 4 candidate submittals for every hire made. 40% of staffing firms are able to meet this key performance indicator in a majority of their client submissions. When the ratio is below this average level, it indicates a recruiting firm that is trying to make up by quantity rather than quality.
4. Fill Rate
Most recruiting firms rank this second in their key performance benchmarks. For example, if a client asks for 10 consultants and the recruiting firm was able to fill 7 vacancies then it is a fill rate of 70%. A low fill rate will affect your firm’s efficiency and the recruiting firm needs to plug the loopholes. Are your submittals not meeting company standards? Is your team shorthanded? Analysing the reasons and improving fill rates becomes a priority.
5. Average time to fill
Where speed is of the essence, average time to fill is one of the important recruiting benchmarks of 2019. Different jobs have different average times. Do your recruitment projects fall into these times? Temporary jobs should be filled in about 6 days, while average time for contract jobs is about 8 days. For permanent positions where more criteria need to be matched like culture fit, the average time to fill an open position is about 32-35 days.
6. Offer acceptance rates
Often the company finds a good candidate from your submissions and an offer is made, However, a lot can happen between offer and acceptance. This is the final performance indicator for recruitment metrics. A high offer acceptance shows that the recruiting firm has done all their homework before forwarding a candidate for an interview. An offer acceptance rate less than 60% indicates that there are weak hiring practices either on your firm or on the client’s side. Even after offer acceptance, candidates might still fall off before joining. This might indicate that more follow-up is needed to keep the candidate responsive.
7. Retention rates
A key performance benchmark for many staffing firms is retention rates for new hires. A high turnover affects company productivity and also getting into the hiring process again for the same job opening is awaste in terms of time and money. For example, if you hired 10 employees and 4 of them left before a year, your retention rate is 60%. The retention rate can be compared to overall company retention rates and for a recruiting firms, compare the retention rates for one client with others in your portfolio.
These recruitment metrics are not the only KPIs a recruiting firm needs to consider. However, these are the most important recruiting benchmarks for 2019 and vital that you track these key performance benchmarks. A good analytics software is usually available in most recruiting software solutions. This will make it easier to keep an eagle eye on these numbers.