Your ability to find and hire great talent can make or break your organization. The people you’re able to attract and retain are the heartbeat of your business; it’s important to do everything you can to improve the quality and efficiency of your hiring processes and make smarter hiring decisions. This is especially the case in today’s executive recruiting environment, where 69% of US companies are struggling to find top talent, according to a survey from Manpower.
This means that having a robust and effective talent acquisition function is a significant competitive advantage that will deliver positive results throughout an organization. And if you get it wrong, you will not be able to consistently compete for top talent.
Improving your hiring results can be challenging because the process has many moving parts. It is difficult to understand how each component is performing and to determine where to focus your efforts. Hiring data can be invaluable as a diagnostic tool to track performance and provide important insight towards improving your talent acquisition results.
In this article, we’ll examine some of the hiring data you should be considering and how you can go about it in the right way.
Choosing the Right Metrics
The first step to better hiring processes is to select the right metrics to track that align with what you care about. What gets measured gets managed, and your choices here will have a significant impact on the incentives surrounding your recruitment – which then governs the sorts of decisions you’ll be making.
Each company will have slightly different focus areas, depending on their industry, size, maturity, and culture, making it worthwhile to take some introspective time to determine which metrics are going to be most meaningful for your specific company. To get you started, here are six important hiring metrics that are worth considering:
1. Cost-per-hire
This is relatively self-explanatory, but it’s staggering how many companies don’t actually calculate this. To calculate the cost per hire, you divide the total recruitment spend over a given period by the number of new hires. Your recruitment processes have costs associated with them, and you should always be measuring the ROI on this investment to decide if you’re overspending or underinvesting. When you understand this and can look at trends over time, you’re in a much better position to adjust course when things aren’t working.
2. Time-to-hire
Another important metric is the average time that it takes to hire a new employee. Here you should calculate the number of days between when a vacancy is open and when the hire is finally made. This demonstrates how efficient your hiring process is and what sort of lag you’re dealing with when there are changes in staff. This is important to understand because it has knock-on effects for the rest of your operations, as you must navigate this period without key resources. However, the goal is not necessarily to bring this down as low as you can. Sometimes it pays to take more time and go through a systematic and robust hiring process because it minimizes the chances of making a mistake. In other words, this metric should not be looked at in isolation, but rather in the context of the rest of your hiring data and objectives.
3. Source of candidate hire
Quantifying the sources of your hiring can be eye-opening when evaluating different recruitment channels and methods. It gives you a good grasp of where to deploy your resources so that you can focus on high-impact sources and let go of those that aren’t working for you. Using the data to drive these decisions is much more effective than simply going on gut feel, and you can often see some counterintuitive results when you track the sources carefully.
4. Candidate experience scores
A severely underrated part of hiring success is a good candidate experience because that sets the tone for the rest of the working relationship. If you don’t create a clear, efficient, and enjoyable user experience for candidates, that’s going to damage your reputation and lower the quality of people who apply for your jobs. By surveying candidates and collecting a rating of their experience, you can keep an eye on this factor and take action where required to improve things.
5. Job offer acceptance rate
Once you get to the end of a hiring journey, you make an offer to your chosen candidate. Hopefully, they accept, but that doesn’t always happen. It’s a good idea to track what percentage of job offers are accepted because it shows whether you’re screening for the right people who fit your culture and whether your hiring process is intriguing enough to get someone to engage with your mission. If this starts to decline, then you need to go back to the drawing board to understand why before you make the requisite improvements.
6. Hiring funnel conversions
In any hiring process, candidates go through a number of steps before a selection is made. First, candidates must become aware of the position, then they must declare an interest, then they must submit additional information, then a few rounds of interviews, and so on until the final decision is made. Tracking the conversion rates through all these different rounds provides invaluable information that shows how robust your processes are and where things need improvement. You want to see a natural narrowing down process starting from as much awareness as possible and ending in a very precise and (hopefully) perfect fit.
These are just some of the metrics that can be tracked, and in our experience, this is the only way to track and monitor performance so that you can improve over time.
Understand Key Data Principles
Having the data on hand is just the beginning though. Data on its own is not valuable – it’s what you do with it that counts. Here are some key principles that should be front of mind when embarking on your hiring data journey:
Collect data efficiently
Your methods of collecting data are as important as the data itself because they influence the quality, speed, and accuracy of the data that you’re using to make decisions. Be intentional about how you set up your systems so that you can do this as efficiently as possible, and you’ll reap the rewards along the way.
Act on the data
Have a bias towards action. This data is supposed to drive change within your organization, and if you’re not making adjustments that leverage the insights you’ve uncovered, then you’re not accomplishing what you should be. Everything should inform new decisions and practical actions rather than be left to die on a report of some kind.
Know the limitations of data
Having said that, it’s important to recognize that data has limitations in terms of its usefulness. You must understand what factors influence your own data to better grasp the specific risks that come with using it for decision-making. By identifying potential biases, common errors, or common misinterpretations, you can arrive at a more holistic and insightful understanding of what the data is saying.
Use data to analyze the past and plan for the future
Data should be used going backward and forward, to evaluate how your hiring has performed in the past and to forecast what could happen in the future. Both aspects offer unique value, and they can go a long way to securing better hiring results over the long term.
Build a recruitment dashboard
The best way to use hiring data to drive action is to make it very transparent for everyone involved. Having a recruitment dashboard that displays your key metrics in real-time is a great reminder to your team about what they’re working towards and how they’re doing. Making it visible and obvious can really help to drive things in the right direction.
Work through small iterations
As you discover new insights through your data, implement small changes and continue testing them to identify whether they are producing results. Be wary of large overreaching changes that are done in haste, and instead focus on small improvements that are backed by the data that is coming back from your testing.
Here at The Renaissance Network, we’ve seen these principles work wonders for clients who want to take hiring data seriously. By focusing on these key pillars, you can maximize the impact of your data to hire better, faster, and cheaper.
Why Does All of This Matter?
The last thing to consider when it comes to hiring data is to understand why it all matters in the first place. The benefits of data-driven hiring extend far beyond the personnel considerations, playing a significant role in helping your business hit its goals and objectives.
Data-driven recruiting helps with allocating budgets effectively, increasing productivity and efficiency within your HR team, unearthing hiring issues that need to be dealt with, benchmarking your efforts against other competitors, reaching more objective and legally defensible hiring decisions, and so much more. For such an important part of an organization, it pays to get detailed information on how things are progressing, and that’s why we think it’s a non-negotiable for modern businesses.
If you need some assistance with implementing data-driven hiring in your organization, then be sure to get in touch with us here at The Renaissance Network. We have years of experience in the field, and we’d love to see how we can help you leverage the power of data to uncover the insights and breakthroughs that you need to supercharge your hiring.
