7 essential KPIs for recruitment agencies

Introduction

For recruitment agencies, tracking and calculating key performance indicators (KPIs) is a critical way to measure success. Not only do they help guide business decisions, but they also identify potential areas for improvement. The top seven recruiting KPIs should focus on are:

• Revenue retention
• Employer satisfaction
• Cost per rental
• Average time to complete
• Diversity of candidate sources
• Placement rate
• Candidate conversion rate

In this blog post, we’ll discuss each KPI to help you understand how to track and calculate them.

Revenue retention

Definition

Revenue retention is a key performance indicator (KPI) that measures the amount of revenue a staffing agency is able to retain clients on an annual basis. This is an important metric to measure, as it provides insight into the effectiveness of a staffing agency’s sales and marketing strategies, as well as the overall quality of service they provide.

Benefits of Tracking

Tracking revenue retention allows recruitment agencies to better understand their performance. By understanding the amount of revenue retained from clients on an annual basis, agencies can identify areas for improvement and develop strategies to increase retention. This can lead to increased profits, higher customer satisfaction and a more competitive recruiting industry.

Industry Benchmarks

The industry benchmark for revenue retention is typically between 60-80%. This means that if a recruitment agency is able to retain at least 60% of its revenue from clients on an annual basis, it is considered to be performing well.

How to calculate

Revenue retention can be calculated using the following formula:

Calculation example

For example, if a staffing agency had revenue of million in 2019 and million in 2020, its revenue retention would be calculated as follows:

Tips and tricks

• Set realistic goals for revenue retention. Aiming too high can be unrealistic and demoralizing.
• Focus on building long-term relationships with customers, rather than just trying to close a sale.
• Develop strategies to improve customer satisfaction, such as providing quality customer service or providing additional value.
• Measure revenue retention on a quarterly basis to track progress over time.

Employer satisfaction

Definition

Employer satisfaction is an important KPI metric that measures an employer’s level of satisfaction with the recruitment process. This metric helps employers assess the performance of their recruitment agency and identify areas for improvement.

Benefits of Tracking

• Tracking employer satisfaction helps employers understand the effectiveness of their recruitment process and identify areas for improvement.
• It offers employers valuable insight into the effectiveness of their recruiting efforts.
• It helps employers make informed decisions about the recruitment process and improve their recruitment strategies.

Industry Benchmarks

The industry benchmark for employer satisfaction is typically set at 80%. This means that employers should aim to achieve a satisfaction rate of at least 80% with their recruiting efforts.

How to calculate

Employer satisfaction can be calculated by dividing the number of employers satisfied with the recruitment process by the total number of employers recruited.

Calculation example

For example, if you have recruited 10 employers and 8 of them are satisfied with the recruitment process, the employer satisfaction score is calculated as follows:

Tips and tricks

• Set realistic goals for employer satisfaction and track progress toward those goals.
• Conduct regular surveys to gauge employer satisfaction and identify areas for improvement.
• Incorporate employer feedback into the recruitment process to ensure a positive experience for all stakeholders.

Cost per rental

Definition

The cost per hire metric is a measure of the cost associated with finding and hiring a new employee, including job postings, advertising, recruiter fees, and onboarding fees. This metric is used by recruiters and hiring managers to gauge the effectiveness of their recruiting strategies.

Benefits of Tracking

• It helps to identify and reduce recruitment costs.
• It provides an indication of how the recruitment process works.
• It helps to identify areas for improvement.

Industry Benchmarks

The average cost per rental for the United States is around ,000, according to the Society for Human Resource Management. However, this varies widely depending on the industry, location, and type of position to fill.

How to calculate

The cost per hire is calculated by dividing the total cost of the recruitment process by the number of recruits.

Calculation example

For example, if the total recruitment cost is ,000 and the number of hires is 3, the cost per hire is ,000.

Tips and tricks

• Include all costs associated with recruiting, such as job postings, advertising, recruiter fees, and onboarding fees.
• Track the cost per rental metric over time to identify areas for improvement.
• Compare the cost per rental with industry benchmarks to ensure it is within an acceptable range.

Average time to complete

Definition

Average Time to Fill (ATTF) is a staffing agency KPI Metric that measures the average time it takes to hire a new employee from the time the position is posted until they start working. It measures the effectiveness of the recruiting process and helps agencies identify and address any potential bottlenecks.

Benefits of Tracking

ATTF tracking is beneficial to the recruitment agency in several ways. First, it allows them to identify areas where the recruiting process can be improved, such as reducing the time spent screening candidates or improving the interview process. Second, it provides valuable insight into how long it takes to fill a position, which can inform decisions about when to start recruiting for a new role or when to start actively seeking a replacement for an existing employee.

Industry Benchmarks

The average time to complete for staffing agencies varies by industry and type of role being filled. Typically, the average time to fill a permanent role is around 45 days, while the average time to fill for a contract role is around 20 days. However, these numbers can vary widely depending on industry and job requirements.

How to calculate

To calculate the average time to fill, you need to add up the total number of days it takes to fill a position, from when the role is posted until the employee starts working, then divide that number by the number total positions filled. The formula is: ATTF = (Total Days to fill / Total Positions filled) * 100

Calculation example

For example, if a recruitment agency posted five positions and it took them 50 days to fill all five positions, the average time to fill would be calculated as: Attf = (50/5) * 100 Attf = 10

Tips and tricks

• Set a benchmark for the Attf metric that is achievable and realistic for your recruiting agency.
• Track ATTF over time and identify any trends that can help you improve the recruiting process.
• Use ATTF to identify bottlenecks in the recruiting process and take action to address them.
• Monitor industry benchmarks and compare your ATTF to these numbers to ensure your recruitment process is efficient.

Diversity of candidate sources

Definition

Diversity of Candidate Sources is a recruitment agency KPI Metric that measures the variety of sources from which the agency recruits its candidates. This is an important measure of the effectiveness of the recruiting process and helps identify areas for improvement.

Benefits of Tracking

Benefits of tracking this KPI include:

• Gain insight into the effectiveness of recruitment strategies and tactics
• Identification of areas for improvement in the recruitment process
• Ensuring diversity among candidates
• Gain a competitive advantage over other agencies

Industry Benchmarks

The industry benchmark for candidate source diversity is a score of at least 5 sources. This is considered an ideal mix of sources for a successful recruitment process.

How to calculate

The formula for calculating candidate source diversity is:

Calculation example

For example, if a recruitment agency has 20 total sources and 10 of them are unique, the KPI candidate source diversity would be calculated as follows:

Tips and tricks

Here are some tips and tricks to improve candidate source diversity:

• Be sure to track each candidate’s sources to determine each source’s effectiveness.
• Diversify sources using social media, job sites, referrals, etc.
• Engage with passive candidates by attending events and industry networking.

Placement rate

Definition

Placement rate is a recruiting KPI that measures a recruiting agency’s effectiveness in placing candidates with their clients. It is calculated by dividing the number of successful placements in a given period by the total number of candidates the agency has placed during the same period.

Benefits of Tracking

Tracking Placement Rate helps recruitment agencies measure the effectiveness of their recruitment process and identify areas for improvement. It also helps them better understand the needs of their customers and ensure that they are providing the best possible service.

Industry Benchmarks

The average placement rate of recruitment agencies is around 70%. However, this varies by industry, types of roles the agency is recruiting for, and geographic location.

How to calculate

The placement rate is calculated by dividing the number of successful placements in a given period by the total number of candidates the agency placed during the same period.

Calculation example

For example, if a recruitment agency placed 10 applicants in a given month and 6 of them were successfully placed, the placement rate would be:

Tips and Tricks for Tracking KPIs

• Lane placement rate over time to identify areas for improvement.
• Set goals for placement rate and track progress toward those goals.
• Be sure to track the placement rate for each type of role and geographic location.
• Monitor industry benchmarks for placement rate and compare your results.

Candidate conversion rate

Definition

Candidate Conversion Rate is a recruitment agency KPI Metric that measures the success of a recruitment process by tracking the number of candidates who are successfully hired for the position.

Benefits of Tracking

Tracking candidate conversion rate is important for any recruitment agency as it allows them to measure the effectiveness of their recruitment process. This metric can help recruitment agencies better understand the success of their efforts to find and hire the best candidate for the job. It can also be used to identify areas for improvement in the recruitment process.

Industry Benchmarks

The average candidate conversion rate for recruitment agencies is around 10-15%. This means that for every 100 applicants, 10-15 would be successfully hired. However, the actual rate may vary depending on position type, industry and other factors.

How to calculate

The applicant conversion rate can be calculated by dividing the number of successfully hired applicants by the total number of applicants. The formula is:

Calculation example

For example, if a recruitment agency received 500 applicants for a position and successfully hired 100 of them, the applicant conversion rate would be 20%.

Tips and Tricks for KPIs

• It is important to regularly track the conversion rate of candidates to identify areas for improvement in the recruitment process.
• It’s also important to compare candidate conversion rates to industry benchmarks to get an accurate picture of the recruitment process.
• Recruitment agencies should also track the time it takes to hire a candidate, as this can impact candidate conversion rates.

Conclusion

Tracking and calculating the top seven recruitment agency KPIs is critical to measuring success and progress. Revenue retention, employer satisfaction, cost per hire, average time to fill, diversity of candidate sources, placement rate and candidate conversion rate impact your agency’s success recruitment and should be monitored regularly. By paying close attention to all of these KPIs, you can make informed decisions that help you increase your placement rate, lower cost per hire, and achieve better results overall.