Data-driven recruitment: how to leverage data for better hiring decisions

Measure the effectiveness of recruitment strategies

To understand how well your recruitment strategies are working, track specific data points to gain insights into each stage of the hiring process. Here are some of the most important metrics to monitor:

• Time to hire: measure the number of days from when a job is posted to when an offer is accepted. This is a crucial indicator of the efficiency of your recruitment process. A long time to hire might suggest bottlenecks in your process, such as slow decision-making or difficulties in sourcing candidates.
• Cost per hire: calculate the total expenses involved in hiring a new employee to assess the financial efficiency of recruitment efforts. This can include internal talent team salaries, tooling and systems (Applicant Tracking Systems and LI Rec etc.), relocation, visa and legal costs, travel for interviews, any external resources (agency fees), advertising spend and recruitment platforms.
• Source of hire: track where your successful candidates are coming from, including job boards, social media, referrals or direct applications. This data helps identify which channels are most effective so you can allocate resources accordingly.
• Candidate drop-off rates: measure the percentage of candidates who drop out of the hiring process at each stage. High drop-off rates at certain stages (e.g. after initial interviews) could indicate problems such as lengthy or irrelevant processes, unclear communication or poor candidate experience.
• Quality of hire: assess the performance of new hires based on their first few months on the job via performance reviews, productivity levels and collaboration with colleagues. The higher the quality of hire, the more effective your recruitment process.
• Offer acceptance rate: identify the percentage of job offers accepted by candidates. A low acceptance rate might indicate issues such as uncompetitive salaries, slow offer processes or poor candidate experience.
• Diversity metrics: track the diversity of your candidate pool and hired employees to ensure your recruitment strategies are inclusive and attract a broad range of talent. This includes gender, ethnicity, age and other relevant demographics. There's substantial data and research to show that a diverse workforce directly correlates to business success including increased profitability and enhanced innovation.
• Employee retention rates: monitor how long new hires stay with the company. High turnover shortly after hiring could indicate mismatches in expectations, poor onboarding or issues with the workplace environment.

Make data-driven tweaks to improve recruitment strategies

• Analyse recruitment funnel data: review each stage of the recruitment process to identify where improvements are needed. For example, if you notice a high drop-off rate after initial interviews, you might need to refine your interview process, improve interviewer training, or streamline scheduling to keep candidates engaged.
• Optimise sourcing channels: use the data from your source of hire metrics to determine which channels provide the best candidates. Consider investing more in a particular job board that consistently delivers high-quality candidates. Conversely, if a channel shows poor results, it may be time to reduce spending there.
• Refine job descriptions: attract the right candidates by reviewing your job descriptions. Are they clear, concise and accurately reflecting the role? Use data on applicant quality to tweak the language, required skills or job titles to attract more suitable candidates.
• Adjust time to hire: if your time to hire is longer than industry benchmarks or causing candidate drop-offs, consider where delays are occurring. Are there too many interview rounds? Are decision-makers taking too long? Streamlining these aspects can make your process more competitive and prevent losing top talent to faster-moving companies.
• Improve candidate experience: high candidate drop-off rates or low offer acceptance rates suggest it’s time to enhance the candidate experience. Review candidate feedback and make improvements to communication, transparency and responsiveness. Ensure your interview process is respectful of candidates' time and provides a clear understanding of the role, company values and ways of working.
• Increase offer competitiveness: low offer acceptance rates might indicate that compensation packages aren’t competitive enough. Use market data to benchmark salaries and benefits against industry standards and adjust offers to make them more attractive to top talent. Also consider opportunities for career progression, a bonus or commission with strong performance (company and individual) and increased flexibility, which may impact personal expenses such as care responsibilities or travel.
• Enhance diversity efforts: if your diversity metrics are lacking, evaluate your sourcing strategies and job descriptions to ensure they’re not inadvertently discouraging diverse candidates. Consider targeted outreach efforts, partnerships with diverse professional organisations and training for all those involved in the recruitment process on unconscious bias.
• Fine-tune onboarding processes: if employee retention rates are lower than desired, particularly in the first year of employment, consider how your onboarding process might be improved. Effective onboarding can improve job satisfaction, employee integration and long-term retention.
  

Utilising data for continuous improvement

To ensure that your recruitment strategies remain effective and aligned with your company’s goals, it’s crucial to continuously analyse and act on the data you collect. Here’s how to make the most of your data:

• Regular data reviews: establish a routine for reviewing recruitment metrics, such as monthly or quarterly, depending on your hiring volume. This allows you to spot trends and issues early and make timely adjustments.
• Benchmarking: compare your metrics against industry standards or historical data within your company. This helps to understand how your recruitment process stacks up and where improvements are necessary.
• Iterative testing: implement changes based on data insights and then test their impact. For example, if you tweak job descriptions or sourcing strategies, monitor the subsequent changes in application quality or quantity. This iterative approach ensures that you're tracking outcomes from the enhancements made and achieving the desired improvements.
• Collaborative analysis: involve key stakeholders, such as hiring managers, HR, and recruitment teams, in your data analysis. Their insights can help contextualise the data and ensure that any adjustments align with broader business goals.
• Leverage technology: use Applicant Tracking Systems (ATS) and recruitment analytics tools to automate data collection and analysis. These tools can provide real-time insights and help you make data-driven decisions more efficiently.

This data-driven approach not only helps in attracting and retaining top talent but also ensures that your recruitment process is constantly improving and contributing to the overall success of your organisation.