5 Recruitment KPIs Every SME Should Monitor Monthly

Recruitment isn’t just about filling vacancies — it’s about doing so efficiently, cost-effectively, and with the right quality of hire. For small and medium-sized enterprises (SMEs), hiring decisions can make or break a team. One wrong hire or one delayed recruitment cycle can set back a project, strain budgets, and impact morale.

That’s why tracking the right recruitment key performance indicators (KPIs) each month is essential. These metrics give SMEs visibility into how well their hiring process is working — and where it’s leaking time, money, or good candidates.

Why Recruitment KPIs Matter for SMEs

Visibility and accountability

Without numbers, hiring feels like guesswork. KPIs make your recruitment process measurable, letting you report progress to stakeholders (or yourself, if you’re the founder!).

Faster, data-driven decision-making

Knowing where your bottlenecks are — whether at sourcing, screening, or interview stage — helps you focus on fixes that deliver the biggest ROI.

Better candidate experience

By tracking metrics like time-to-hire and drop-off rate, you’ll spot where candidates are disengaging and improve the process before losing more talent.

Cost control

Hiring is expensive. KPIs help SMEs monitor spend per hire and compare it against the value the hire brings, ensuring money is spent wisely.

KPI #1: Time-to-Hire

Definition

Time-to-hire measures the number of days between a candidate applying (or being sourced) and accepting an offer.

Why it matters

• Long time-to-hire increases the risk that top candidates accept offers elsewhere.
• Each day the role stays open is a day of lost productivity, which costs SMEs money.

How to calculate

Time-to-Hire (days)
= Date offer accepted – Date application received

You can calculate this per hire and take a monthly average.

Example

If three hires in September had times-to-hire of 21, 18, and 24 days, your monthly average time-to-hire = (21 + 18 + 24) ÷ 3 = 21 days.

Target

For SMEs, aim for 20–30 days for most roles. Shorter is ideal, but speed should never sacrifice candidate quality.

KPI #2: Cost-per-Hire

Definition

This KPI tracks the total spend required to make a hire — including job ads, recruiter fees, software, and internal time.

Why it matters

Without monitoring cost-per-hire, SMEs risk overspending relative to the value the role generates. Tracking this KPI also helps you compare sourcing channels (e.g. agency vs direct).

How to calculate

Cost-per-Hire (€)
= (Advertising spend + Agency fees + ATS/software costs + Recruiter time cost + Interviewer time cost) ÷ Number of hires

Example

• Job board spend: €800
• Recruiter time: €600
• Interviewer time: €400
• ATS cost: €200
• Total: €2,000
• Hires made: 2

Cost-per-hire: €2,000 ÷ 2 = €1,000 per hire

Target

There’s no universal “good” number, but SMEs should monitor this over time and aim to reduce cost-per-hire without hurting quality.

KPI #3: Candidate Drop-Off Rate

Definition

This measures the percentage of candidates who start your application process but do not finish — or who withdraw mid-process.

Why it matters

High drop-off rates mean wasted ad spend, wasted recruiter time, and a smaller pool of potential hires.

How to calculate

Drop-Off Rate (%)
= (Candidates who start but don’t complete ÷ Candidates who start) × 100

Example

• 150 candidates start the application
• 90 complete it
• 60 drop off

Drop-off rate = (60 ÷ 150) × 100 = 40%

Target

Aim to keep drop-off under 25–30% for most roles. If it’s higher, review your application flow for friction points.

KPI #4: Quality-of-Hire

Definition

Quality-of-hire measures how successful new hires are once in the role, typically assessed during probation or at the 6-month mark.

Why it matters

Fast, cheap hiring is pointless if the person leaves in three months or underperforms. SMEs feel poor hires more acutely than big firms because each team member carries a larger share of responsibility.

How to measure

You can combine several indicators:

• Performance review scores after probation
• Retention rate at 6 or 12 months
• Manager satisfaction survey (“On a scale of 1–10, how happy are you with this hire?”)

Quality-of-Hire (%)
= (Average performance score + Retention score + Manager satisfaction score) ÷ 3

This creates a composite score you can track monthly or quarterly.

KPI #5: Source-of-Hire Effectiveness

Definition

Tracks where your successful hires come from — job boards, referrals, social media, agency, careers page, etc.

Why it matters

It helps SMEs invest in the most productive sourcing channels and reduce spend on underperforming ones.

How to calculate

Source Contribution (%)
= (Hires from a given source ÷ Total hires) × 100

Example

• Total hires in October: 5
• 2 from job board, 2 from referrals, 1 from LinkedIn

Contribution:

• Job board: 40%
• Referrals: 40%
• LinkedIn: 20%

If referrals have the highest quality-of-hire score, double down on your referral programme next quarter.

Turning KPIs into Action

Tracking KPIs is only step one — acting on the data is what drives results.

• If time-to-hire is long → automate interview scheduling, streamline approvals.
• If cost-per-hire is high → switch to more cost-effective job boards or use employee referrals.
• If drop-off rate is high → simplify your application and communicate faster.
• If quality-of-hire is low → review job descriptions, assessment design, and interview training.
• If source mix is skewed → reallocate spend to channels that deliver the best hires.

Tools SMEs Can Use to Track KPIs

• ATS dashboards: Most modern systems (e.g. Workable, Teamtailor) have built-in reporting.
• Spreadsheets: A simple monthly tracker works if you have low hiring volume.
• HR analytics tools: Software like BambooHR or Factorial can aggregate data across multiple roles.

Recruitment KPIs are not just for corporate HR departments — SMEs benefit even more from regular, disciplined tracking.

By monitoring time-to-hire, cost-per-hire, candidate drop-off, quality-of-hire, and source effectiveness every month, SMEs gain a clear picture of what’s working and where to improve.

The result? Faster hiring, lower costs, better candidates — and a hiring process that supports business growth instead of holding it back.