Maximizing ROI with RPO: Key Performance Indicators (KPIs) for Enterprise Success

Every successful team follows a game plan. In recruitment, the new strategy leading the way is Recruitment Process Outsourcing (RPO). This approach includes key methods for attracting qualified candidates, conducting interviews, making offers, and smooth onboarding. The outcomes are measured using key metrics such as time-to-hire, cost-per-hire, and retention rates.

Today’s RPO strategies give businesses the edge they need to enhance recruitment efficiency, scalability, and access to specialized talent. By adopting RPO, companies gain more flexibility, reduce costs, and improve the candidate experience.

But how do you assess the success of your RPO strategy? Let’s explore the key metrics that reveal the effectiveness of RPO.

Key Performance Indicators for Measuring RPO Success

Key Performance Indicators (KPIs) and metrics are ways for us to measure the success of any process in RPO. There are two key components of a KPI: the data itself (eg, what we are measuring) and the goal for that metric (e.g., the key result we want to see). A metric like time-to-hire is valuable, as it provides at-a-glance information about your process. But by adding a goal to the metric, we turn it into a KPI and instantly have context about whether we are achieving that goal.

This distinction between a metric and KPI is important. Any data point can be a metric, but only those relevant to your business strategy can be KPIs. When talking about RPO, the KPIs we list are the ones we typically see being the most important and impactful to our clients. Here are the top RPO KPIs:

• Time-to-Hire
• Time-to-Fill
• Cost-per-Hire
• Quality of Hire
• Candidate Satisfaction
• Retention Rate
• Hiring Manager Satisfaction

Time-to-Hire

What is Time-to-Hire? Time-to-hire tracks the number of days from the start of the hiring process until a candidate accepts the job offer. This metric shows how quickly critical roles are filled and the efficiency of the hiring process. Reducing time-to-hire helps minimize the cost of vacant positions and supports business operations. AMS reduces time-to-hire by using digital tools and scalable recruitment strategies tailored to global businesses.

This metric is an indicator of operational efficiency and is important for industries where unfilled positions can disrupt production or service delivery. In competitive markets, this may mean being more agile and quicker to follow up with candidates and make offers before other companies can.

RPO providers like AMS can help clients improve the time-to-hire metric by deploying talent analytics and digital transformation tools, such as advanced Applicant Tracking Systems (ATS). Cutting edge technology like AI can help identify opportunities for optimization, streamline the process to reduce delays, and better identify and screen candidates.

Time-to-Fill

What is Time-to-Fill? Time-to-fill measures the full recruitment cycle from when a job is posted until the new hire’s first day. It highlights any delays in the process, including potential bottlenecks before onboarding. AMS uses advanced technology and data insights to speed up recruitment, improving both time-to-fill and the overall candidate experience while meeting hiring targets.

The time-to-fill metric can be critical in organizations that are experiencing rapid growth or seasonal demand. Poor performance on this measure means that it's harder to meet your organizational objectives, such as progressing on a research initiative. The key to improving this metric is to identify and fix bottlenecks in your process. For example, AMS has used data-driven insights to pinpoint challenges in the process and implemented tools, such as interview scheduling software and automated workflows to improve time-to-fill.

Cost-per-Hire

What is Cost-per-Hire? Cost-per-hire calculates the total recruitment costs divided by the number of hires. This includes expenses for advertising, interviews, and onboarding. AMS helps businesses optimize recruitment spending by applying digital solutions and data analytics, ensuring high-quality hiring outcomes without increasing costs. Our expertise helps achieve cost efficiency on a large scale, benefiting overall business performance.

Lowering the overall cost-per-hire is essential for scaling recruitment efforts. Not only does this optimize resource allocation, but it enables the business to invest in other areas of the business such as training, retention, or technology. To lower the cost-per-hire, businesses can work with RPO partners to reduce advertising costs, utilize talent pooling, and make use of automation.

Quality of Hire

What is Quality of Hire? Quality of hire measures how well new hires perform and fit within the company. It considers factors like performance, retention, and cultural alignment to ensure the recruitment process consistently brings in top talent. AMS improves quality of hire by using custom assessment strategies and focusing on diversity, equity, inclusion, and belonging (DEIB) to align talent with business goals.

Innovation comes from within. Hiring high-quality candidates ensures future growth opportunities through innovation, operational efficiency, and leadership development. This is a key metric that can be influenced from the start of the hiring process–through candidate screening–right up to onboarding and retention programs. Quality of hire can be a challenging metric to measure and requires regular performance reviews and tracking over time.

Candidate Satisfaction

What is Candidate Satisfaction? Candidate satisfaction measures how candidates view their experience during the recruitment process, from applying to onboarding. A positive experience leads to greater engagement and strengthens the company reputation. AMS boosts candidate satisfaction by using technology that simplifies hiring, ensuring clear communication, and creating an inclusive experience at every step.

Candidate satisfaction is important for employee retention as well as managing your brand's reputation. Ensuring new hires have a high level of satisfaction as they are onboarded and integrated into your workforce is critical for long-term success. RPO partners not only ensure new hires are satisfied with the process but that unsuccessful candidates are left with a positive perspective, even being encouraged to reapply in the future.

Retention Rate

What is Retention Rate? Retention rate tracks the percentage of new hires who stay with the company for a set time, usually one year. A high retention rate shows that the hiring process brings in candidates who are qualified and fit well with the company culture. AMS’s focus on quality hiring and cultural fit helps organizations increase retention, lowering turnover and long-term hiring costs.

A stable, experienced workforce helps to reduce turnover costs and project delays. High retention rates are a key pillar of building a sustainable, scalable recruiting model – akin to plugging a leaky funnel. Improving this metric will also support a strong employer brand and boost morale among teams when they see lower turnover rates.

Hiring Manager Satisfaction

What is Hiring Manager Satisfaction? Hiring manager satisfaction measures how pleased managers are with the recruitment process, the quality of candidates, and the partnership with recruitment teams. This feedback is key to improving talent acquisition strategies to better meet business needs. AMS delivers recruitment solutions based on data and advisory services, ensuring hiring managers get the talent they need to drive success.

Hiring manager satisfaction is influenced by the collaborative bonds between hiring managers and recruitment teams. Ensuring strategies align with operational goals, and that candidates are ready to meet the challenges of a given department or business unit is the foundation of high hiring manager satisfaction rates. To improve this metric, RPO partners and hiring managers work together to use data-driven strategies, feedback loops, and thorough candidate reviews.

ROI Analysis: Understanding the Financial and Strategic Impact of RPO

This discussion of the KPIs of RPO comes down to one question: Are you getting the return on investment (ROI) on your RPO services?

A strategic RPO partnership provides both direct and indirect returns. Tangible benefits can be measured through the usage of KPIs such as time-to-hire, time-to-fill, and cost-per-hire. You can associate a monetary value with these metrics and then compare that to the overall cost of your RPO investment. Partners like AMS adopt a data-driven approach to provide precise metrics to help you understand your ROI.

When evaluating an RPO partner, you will want to look at their past performance with other clients. This helps you understand the methodologies and approaches they use to successfully provide a positive ROI on your RPO investment. For example, AMS partnered with Equinor to reduce recruiting costs by more than 40% while improving candidate and hiring manager satisfaction.

Indirect benefits are more difficult to measure but still an important part of the ROI equation. These benefits include improved employee engagement, enhanced company culture, and workforce productivity. These types of benefits were exactly what happened in the AMS-Delta Airlines partnership, where the focus on improving hiring programs improved processes, workflows, and developed an internal center of excellence.

Measuring the Long-Term Success of RPO for Enterprise Growth

The foundation of a successful RPO strategy is measuring and tracking the right KPIs. Data points like time-to-hire, cost-per-hire, quality of hire, and retention rates help to measure the ROI of your recruiting efforts. This requires a data-driven approach, something that AMS champions with its modern recruiting practices and usage of cutting-edge reporting technology like Looker Studio.

The value of RPO extends beyond the short-term: RPO provides both tangible and intangible benefits to your business and can help you hit your strategic objectives. How will you meet the hiring challenges facing the global economy? Are your current KPIs showing an acceptable level of performance or is there room for improvement? By optimizing your RPO KPIs, you ensure the long-term success of your recruiting efforts.

Achieving these types of improvements requires a careful balance of expertise, experience, technology, and a data-driven approach. Continuous improvements are a key success factor, and having an RPO partner like AMS who can work alongside your teams to drive growth is a strategic advantage.