Increase your sales recruiting program's success with key performance indicators. Learn how to set, measure, and exceed KPIs today with TSC!
May 16, 2023
If you feel like it's nearly impossible to find and hire sales candidates with the perfect skill set, you're not alone. In fact, hiring employees is difficult across the board: nine of ten surveyed employers said they struggle to fill positions. Given the huge impact of salespeople on companies' revenue and growth, choosing the right recruitment strategy and tools is vital.
Tracking KPIs in sales recruiting programs can help recruiters see where they're going wrong and what they can improve. Let's discuss how to leverage KPI for recruiters so you can create a winning strategy for acquiring top talent.
KPIs stand for key performance indicators. They measure the effectiveness of your recruitment process. Indicators include the cost of hiring, hours spent, quality, effectiveness of job postings, the turnover rate of new hires, and more. When you're recruiting for your business, these are the standards to follow.
With recruiting KPIs, you can strategize the most cost-effective way to source talent and bring the best to your company. Recruiters use KPIs to meet objectives, studying metrics to help companies understand how they have been performing.
Each company may find certain KPIs more beneficial than others. From our experience, these are the most important talent-acquisition KPIs in sales recruiting programs.
For most companies, time to hire is the most important KPI. It directly measures the number of days needed to fill a position. You should measure this from the day the job ad is published through the day the candidate signs the acceptance offer.
Keeping everything else constant, you should expect minimal fluctuations in the time to hire. If your company is hiring urgently, you may need to up your budget to speed up the process.
The source of hire tells you where your employees are coming from. Perhaps most of your recent hires are through referrals and some through job boards. It tells you how diversified your recruitment efforts are. If most recent hires are through referrals, you may have a limited range of talent.
Having a narrow recruitment funnel isn't necessarily a bad thing. But in sales, diversity is usually preferred. Source of hire enables you to see where your top-performing salespeople came from so you can adjust if needed to target a wider range of hires.
When you mass post a position on job boards and groups, you may get more low-quality candidates than you expect. The ratio of qualified candidates per opening breaks down how many applicants fit the requirements and can be considered for the job.
A low percentage of qualified candidates per opening means the hiring process needs adjustments. This KPI can be combined with the source of hire to determine the best channel in recruiting.
Not all prospective employees who start the job application will finish it. This could be due to various reasons. The aptitude test may be too demanding, the application process too long and confusing, and the timeline of the recruiting efforts unsatisfactory.
A high dropout rate indicates poor application design. Your team should review the application checklist. Don't use the same application format for all positions. Given the lower salary level, junior roles should be easier with fewer documents and tests required. There are measures to boost the application completion rate and make the job more appealing to candidates.
A fast-growing sales team may experience a hectic phase with lots of openings. Niche-specific sales departments may have a higher ratio of open positions as these roles are harder to fill. Using the number of open positions against the total positions in your company, you can see the trend of seasonal hires and which department is growing the fastest.
Too many open positions may also suggest low job satisfaction for managers and employees. This could indicate that employees struggle to pass probation or quit if the job does not appear to be as advertised.
Sometimes you find the perfect person for the role only to have them turn down the offer. It happens a lot in sales programs, especially when everyone is vying for the most competitive salary.
The offer acceptance rate tells you how attractive the salary and benefits package is. If many candidates reject their offer, it's a sign that your company is not often their first choice. Perhaps the salary doesn’t measure up to your competitors, or maybe the decision-making process is so long that they accept another job in the meantime.
This metric measures how many candidates your company has to interview before making an offer to the right one. If you have to interview many candidates, it means there are many high-quality applicants or far too few.
The interview process can be costly, and companies often look to fill sales positions as quickly as possible. You want to find the perfect hire without a large number of interviews consuming the time of your search committee, managers, or hiring manager. Recruiters need to control interview-to-hire parameters to avoid wasting time and resources.
Costs incurred in the recruitment process can affect your company’s budget in other areas. The cost per hire calculates the average expense of hiring a new team member. Costs include training, advertisements, labor hours, and administrative fees.
These costs can impact your willingness to recruit. It's important to set a balance so your business can recruit quality talent while keeping costs down. It also allows your company to plan ahead with budget reserves for specific positions.
Rehiring is burdensome. Once you've invested the time into training a new employee, you don't want them leaving within the first year and taking their skills elsewhere. The first-year turnover rate tells you a lot about your quality of hire, recruitment process, and strategy.
Companies tend to overpromise and underdeliver in hopes of sourcing qualified candidates. When new employees start working in this situation, they realize this isn't what they signed up for. Looking at the first-year turnover rate, recruiters need to match the job advertisement and onboarding process with what new employees will experience on the job.
The selection ratio compares the number of candidates initially considered with the number invited to interview. Ultimately, you want the initial screening process, whether automatic or manual, to filter out most of the unfit candidates.
Recruiters shouldn't submit an overwhelming number of candidates for your company to work through. It consumes resources, and your staff has to do another round of manual screening. A high selection ratio means most candidates are on par with your company’s requirements.
After the interview process, you can ask for feedback from interviewers, who can give a detailed look at the quality of candidates. Categorizing candidates into different batches identifies the best channel for sourcing.
Some platforms attract more capable candidates than others. Collecting feedback from interviewers is a crucial step and gives insights into improving the initial screening.
New employees become a vital pillar of your business when they generate sales and master company operations. Keeping morale high saves you the cost of rehiring soon. The candidate satisfaction rate calculates the candidate’s overall perspective on the hiring process.
A candidate who feels exploited or disrespected may leave as soon as they get a better offer. Not only is it crucial to keep candidates happy, but it is also important to listen to them. They provide feedback for improvement in the hiring process.
It goes without saying that discrimination on the basis of race, sex, age, and religion is illegal. The adverse impact ratio shows the number of candidates from a protected class applied to the number of people hired. A low ratio, say 50%, indicates there may be a conscious or unconscious bias against certain groups.
It is your company’s responsibility to create equal opportunity for all. The hiring manager needs to do their best to ensure they give each candidate a fair chance. Discrimination during the hiring process can lead to legal consequences.
All the KPIs above are effective ways to measure recruitment effectiveness. KPIs cover many aspects and can be viewed both holistically and individually.
If most recruiting metrics are up to standard, then the hiring process is functional, and no structural change is needed. You should still look into each KPI to see if any metrics are falling behind and determine how they correlate with other KPIs.
When more than half of the KPIs perform poorly, you should consider changing the whole recruitment process. Many KPIs interlink with one another. For example, a poor sourcing channel will lead to a low hiring manager satisfaction rate, which will pull down other KPIs as well.
Recruiting effectiveness measures efficiency not only at the hiring stage but also in subsequent performance. Candidates who underperform after onboarding or leave within a year are signs of a bad hire. It means something is fundamentally wrong in the recruitment process.
Identifying how each KPI interacts with each other saves costs and boosts performance. It is a direct way to measure recruiting effectiveness. Study KPIs before new recruitment to develop an appropriate strategy.
A recruiter’s job is to send quality applicants to your company. Candidates should fulfill all of the basic requirements and have a genuine interest in the open job position. KPIs like the hiring manager satisfaction rate and the first-year turnover rate are all indicators of how well the recruiter is performing.
If you find yourself filtering out most submitted applications, the recruiter is not doing their job well. If most candidates do not meet standards or get rejected at the interview stage, there is likely a misalignment in expectations between your company and the recruiter.
Quality hiring managers will do their research by looking into KPIs and how to improve the metrics. They will expand sourcing channels and set appropriate application details for each role. Each position should have its respective hiring steps designed to attract talent.
Recruiters also need to be aware of the strengths, weaknesses, and characteristics of your company. New hires need to be brought on board with the confidence that they can meet your sales team's targets in a reasonable amount of time. Compatible employees will pick up the pace quickly with a minimal adjustment period.
Most importantly, a recruiter should remain impartial about each position. They should never deliver unrealistic promises to candidates. Otherwise, overqualified candidates may accept a job just to quit soon after when the real work is disappointing.
Figuring out KPIs and hiring are time-consuming, and finding a reliable recruiter is difficult. That’s why at The Sales Connection, we promise to deliver the best with your company’s interests in mind. We recruit top sales talent for your expanding team so you can focus on other parts of your operation.
A wrong hire can set you back for months in your expansion. We'll help you avoid that. Before each hire, we'll look into the KPIs and formulate the most effective hiring process and timeline. We personalize each plan to fit your goals and provide a simple recruitment metrics dashboard. Contact The Sales Connection today for recruitment success that will boost your sales and increase revenue.
Kayvon has over two decades of experience working with high-level closers and perfecting his sales methodologies. He has earned the title of Canada’s #1 pharmaceutical sales representative and continues to share his expertise as a keynote speaker and through his multi-million-dollar coaching program.