How Recruitment Analytics can help you Hire Faster & Better

For example, how will I know whether this post resonates with my target audience if I don’t define the success metrics (such as the number of likes, shares or comments) and then measure the outcome so that next time, I can publish a post which will be more successful.

I have often heard or read posts by senior Business & HR leaders as well as Founders & Co-Founders regarding the difficulties they face in their recruitment. What I have often found missing is reference to quantified data on the metrics they were using to measure the success or failure of their recruiting process. This post tries to address that.

These metrics play a vital role in understanding recruitment performance and help in identifying bottlenecks which can then be resolved. However, it is critical to understand the interplay among these different metrics and take a consolidated view. Let us go through them one by one.

Time To Hire (or Time To Fill) is the time elapsed between opening a new position and offer acceptance (or joining) by a candidate. Poor Time To Hire generally results in lost opportunities - be it sales (loss of revenue), technology (delayed time to market / launch), service (poor customer satisfaction) or other function. 

You must measure Time To Hire across different functions, departments, locations, recruiters, staffing firms and sources of candidates. Once you have the data, you can quantitatively answer questions (samples below) as well as plan for better recruiting timeliness:

These help in getting to the core of the issues you are facing and take appropriate steps for improving the Time To Hire for your organization. 

Cost Per Hire is the average of internal and external recruiting costs across your hires. Internal costs consists of your in-house recruiting team salaries as well as apportioned cost for the time spent by hiring managers in interviews etc. and external costs are fees for staffing firms, job boards, ATS / recruitment software, tests / assessments, background verification etc. 

Since Cost Per Hire at an individual hire level is difficult to calculate, an aggregate is often used or an easier substitute such as cost per employee is used (assuming that other ‘Cost Per Hire’ elements can be equally apportioned across each new hire) along with other metrics such as time spent by hiring managers in interviews. 

Having a good idea about your Cost Per Hire across different functions, departments, locations and sources of candidates will help you in answering questions such as: 

When clear historical data is available for the cost of different positions across different functions, locations etc., that data plays a major role in deciding the optimum cost for the next upcoming hire. 

However, Cost Per Hire sometimes distracts from strategic recruiting and the quality of hire because the best talent may be more expensive or take longer to acquire though they’re a better bet for success. 

If your current Cost Per Hire is higher than that of last year, it could be because you have hired better paid recruiters and invested in an excellent Recruitment Automation platform, both of which can result in better quality hires. Being cost effective is what matters, not worrying about absolute costs. 

The Candidate Pipeline metric tells you how many candidates you actually processed to make a hire (offer acceptance by a candidate) and to fill a position (offered candidate joined). Combinations of these data points can reveal a lot about your recruiting process and your talent pool. 

For example, for a particular position, let’s say you processed 25 candidates before making a hire and 50 candidates before someone joined. Consider the following questions:

Interestingly, Time To Hire and Candidate Pipeline can be directly correlated. For example, if a recruiter fills up his / her pipeline with multiple resumes which are not relevant for the position and the manager has to put in extra time to scrutinize such profiles, both Candidate Pipeline and Time To Hire will show a high number, leading to a less productive recruitment effort.

Source Mix is a powerful metric - it is more correlated with other metrics and it also indicates the strength of your employer brand. In simple terms, Source Mix indicates the source of a candidate and it can be any of the following:

If you are getting a lot of relevant applications from your career site, that would mean your organization is well known and is a good Employer Brand. A high percentage of employee referrals would mean your employees are happy and would want to refer their friends and family to work for you. Both of these are traditionally associated with lower Cost Per Hire. On the contrary, if your candidates are mostly from your staffing firm partner, your Cost Per Hire would be higher. But you may have the advantage of receiving screened applications.  

A balanced Source Mix strategy optimizes your Source Mix with Time To Hire and Cost Per Hire metrics to achieve better conversions. For example, let’s say data from your recruiting software shows the following Source Mix for last year:

This year, you can invest in a better employee referral program as well as in incentives for your recruiters to seek more candidate referrals. If these two actions can increase the overall referrals to 25%, you would be able to reduce your overall recruitment costs by at least 10%. Such data based insights can help you convince the management to approve the referral and incentive program. 

Interview Metrics consist of the number of interview rounds and time taken during the interview process. Since hiring managers are mostly involved during the interview process and several of them are senior resources with higher costs, an organization which has a lot of interview rounds could potentially be spending a lot of money on recruitment but it rarely comes up as a direct cost.

Another associated issue is the impact it has on candidates. In general, most candidates don’t appreciate either very low or very high number of interviews. Organizations should try to stick to 2 - 3 interview rounds for mid-level and 4 - 5 rounds for senior-level positions. More than this doesn’t necessarily result in better evaluation of a candidate’s suitability for a position but creates a poor candidate experience which may result in qualified candidates dropping out.

Different functions and departments in an organization sometimes behave differently. If your organization is striving to minimize the number of interview rounds by having more effective interviews and if any of the functions / departments are not in sync, using data can help to remedy the situation. This may also indicate the need for training the interviewers on interviewing techniques.   

Overall, the previous five metrics lead to an associated metric which is your Conversion Rates across different stages:

Percentages across each of these stages indicate the effectiveness of different parts of the recruitment lifecycle - sourcing, screening, interviewing, making offers and managing relationships. Hence Conversion Rates comes in handy in decoding the robustness of the overall recruitment process as well as the strength of the recruitment team, internal and external, making way for improvement wherever required.

As I mentioned in the beginning, you can’t know whether you are successful or not unless metrics for success are defined and then outcomes are measured against such metrics. So it is critical that you select the right recruitment metrics, set the target values for such metrics and then measure the outcomes. This will help you quantify your progress, adjust your recruitment marketing, recruiting strategy and hiring process to produce the desired results of getting top talent for your open positions. 

For example, Expertite automatically tracks millions of actions across your job openings, recruiters, hiring managers, candidates and staffing firms and provides you with a complete overview of your recruitment process - Time To Hire, Cost Per Hire, Candidate Pipeline, Source Mix, Interview Metrics and Conversion Rates. This can help you spot inefficiencies and opportunities hidden within your recruiting process.

So, if you want to transform how you hire by using data, optimize your recruiting spend and shorten the time from apply to hire, click here to know more about Expertite and sign-up for your Free Trial.