By now, most of us have heard of Big Data, Artificial Intelligence, and the Internet of Things. All new advancements that are coming to save us time and free us from the drudgery of various tasks of the past. However, it’s often not clear how to best take advantage of these new technologies in a business environment.
When it comes to recruiting the right talent, collecting data and crunching it to understand behaviour is already changing the way we do business.
Data-Driven recruiting is the ability to collect considerable amounts of information on candidates, companies, and processes, so we can use it to make the hiring process more efficient; better for employers and job applicants. Put another way, data-driven hiring means taking the guesswork out of candidate selection and dramatically increasing the likelihood of hiring the right person for a position. And yet a substantial portion of companies have been slow to adopt this new methodology.
A CareerBuilder survey found that 74 percent of employers said they had hired the wrong person for a job. When you consider that the average cost of a bad hire is around $15,000, that’s a lot of wasted resources.
Of course, most companies are already collecting a lot of data regarding their hiring process; only they aren’t turning that data into usable information. By maintaining necessary Human Resource records, you likely collect the approximate percentage of bad hires, the typical length to make each hire, and your costs associated with each new employee. Your organization will probably also have collected the hiring source from each candidate and any possible referral information. Furthermore, these are just the beginnings of the “Big Data” recorded and sitting in your existing files. Tactical intelligence, often wholly forgotten.
Getting a handle on this existing store of information can open a whole new dimension to your hiring, with positive ramifications that will likely affect your company performance throughout the business.
We’re going to look at a few ways data-driven recruitment can help you refine and improve your entire company, from the hiring process onward. Many of these tactics are merely going to suggest ways to use the data you already have in-house. However, making these small adjustments to processing that data into usable information can have an enormous impact on how your company hires the right talent to meet its needs.
Selecting for Better Overall Employees
In any company, there are top performers and those who seem to be merely treading water. How can we make sure you end up with more of the former? The trick is in sorting your existing data in a particular way.
First, take an inventory of your top performers. Find out how many you have in each department. Then look at how long it takes for each new hire to be a top performer. Next, get the numbers for how many new hires quit or ‘turnover’ in the first few months of being hired. Finally, you need the hiring source for each person. Get a sense of what path led them to your organization as the next step in their career?
With these metrics, you can determine where your best employees are coming from, and what sources are bringing you the highest number of turnovers. You may find that a particular job board or social media channel is delivering you the highest number of top performers. Or, conversely, you may discover that a specific candidate source is responsible for the vast majority of your turnovers.
With just these stats, you can start to focus your approach on the channels that brought in the most significant number of top-performing employees. If, for example, you find referrals are your best source of top-performing, new team members, you may want to find ways to enhance your employee referral program. If, on the other hand, LinkedIn is consistently bringing you employees, that leave in the first three months, you can safely eliminate or reduce your spend in that channel from the marketing mix.
Reducing Time and Cost to Hire
As we mentioned earlier, the average cost per hire for most positions is approximately $15,000. Of course, when it comes to specific roles within your company, your data will provide a clearer picture of your actual internal cost per hire for each position you fill. By understanding what you’re spending on a given hire, you have a greater ability to keep expenses under control.
An essential metric in establishing cost-per-hire is first to understand how long it takes you to fill most positions in the company. Looking back at the hires made in the last number of years, you should be able to ascertain the timeline between job posting and an offer accepted. You will very likely be able to determine how long each step in the process took. The time between posting and call back. The time between selection and interview. And the investment of hours for each action required by company personnel to make a hiring decision.
By reviewing the data for each stage of your hiring process, you can make adjustments using data-sorting to shorten the time from posting to offer. For example, the early stages of a job posting usually consist of inviting candidates to submit a CV and then reviewing each submission against the job requirements. The data-driven approach might see you ask interested applicants to fill out a survey and use software to filter responses for those who best match the required qualifications. To fine-tune it even further, you might also include essential skills questions related to the position. You would then only invite those who met the requirements to submit a CV and continue to the next stage. Just by shortening the upfront sorting process, data-driven recruiting is saving time and helping reduce the expense in hiring a position.
Getting Rid of Gut Feelings
In addition to reducing the time and cost of hiring a position, implementing the data-sorting suggestions above also help remove any potential bias from the process. No matter how objective we think we’re being, people come with many internal biases that can often lead us to make hiring decisions based on a gut feeling over actual relevant data. And, while feeling like someone is a good fit for our corporate culture is essential, beginning with solid data-sorting enables us to narrow down the applicants to skilled professionals first. We then have the opportunity to decide for fit, closer to making an offer.
Understanding Your Bounce Rate
The next area where data-driven recruitment can be of big help is in understanding how effective your digital communications are to the target audience. A “bounce rate” is a measurement of how many people are leaving your website, only having viewed one page. The higher the rate, the more people are coming, and then quickly navigating away.
If your job postings are of the highest quality and sending a large amount of traffic to a given employment opportunity, that’s just the beginning. What you want to see is people continuing to look through the site for more company information, or clicking through to submit their CV.
If you don’t have Google Analytics installed on your website, or merely haven’t had access to the reports, speak to either your marketing team or webmaster. With minimal effort, you can see what external sources are driving people to your site, what pages are getting the most traffic, and what percentage of visitors are leaving as soon as they arrive. Having this data will allow you to make changes to both the postings driving the traffic and the landing pages. If there is a high bounce rate, it usually means there is a disconnect between ads you’re posting and the content applicants are finding when they click through to your site.
By monitoring your bounce rate regularly, and adjusting your postings and site content, you can better ensure they are both speaking effectively to the target candidate.
Budgeting For Future Hiring
Truly understanding how much money you need to budget for recruiting in a given year is a challenge for most every Human Resources department. Data-driven recruiting provides the best opportunity to forecast what costs you might expect year over year. By keeping track of company turnover rates, internal promotions, department expansions, you start to get a sense of the ongoing needs of the organization. When you overlay this data with the market trends for the company as a whole (areas of growth and decline), you will be able to predict with some accuracy, the expenses involved in keeping important company positions filled annually.
A Data-Driven Recruiter
As a recruiter with years of experience tracking employment trends and assisting companies in using data-driven recruiting to make better hires, we can help. We’ve partnered with companies across many industries to ensure they are converting the data they have into information they can use. Further, our extensive collection of recruitment data allows us to see trends affecting entire sectors and enable our clients to compete for the best talent in a given field. If you want to learn more about using data-driven recruiting to reduce costs and get the best candidates, please get in touch.