Why your hiring funnel needs better metrics
To consistently attract, engage, and retain top talent, you need a hiring funnel and process that’s well-designed and backed by the right data. Measuring success is often limited to time or cost-per-hire and whilst they’re important to understand they don’t always give the bigger picture. Here’s why measuring your hiring funnel matters.
Metrics identify bottlenecks, can improve candidate (and hiring manager) experience providing efficiency, clear communication, and fair assessments.
Well-defined metrics align recruitment processes to business goals and improve ROI through the effective management of recruitment spend.
What is a Hiring Funnel?
A way of visualising your candidates’ journey from awareness of your business to successful hire and onboarding. Generally, typical stages include:
- Awareness: Prospective future employees discover your employer value proposition and brand.
- Review: Individuals make their application decision. Whether to apply to one of your live roles or a request to join your talent pool (if there is no suitable current vacancy available).
- Application: Candidates send you their CV for consideration.
- Screening & Interviewing: – You review CVs, create your shortlist and get those interviews booked in.
- Offer: – Make your final decisions and get those offers out to successful candidates.
- Hire & Onboarding: Offers accepted and the onboarding process completes – prospects become employees.
By ensuring you track what happens at each of these stages you identify issues or bottlenecks. You identify where candidates are dropping out of the process (and why) and discover opportunities to improve processes, systems and training. Remember to review regularly to keep pace with changes in the market, candidate behaviour and your assessment criteria.
Traditional metrics can fall short of business needs
Whilst most companies measure time and cost-per-hire, whilst useful, they don’t consider or assess:
- Why candidates may withdraw from your process.
- Where bottlenecks or quality issues exist.
- Candidate and hiring manager experience (throughout the recruitment process).
Consider connecting recruitment metrics with post-hire metrics such as performance reviews, employee engagement survey outcomes and company attrition.
A wide range of metrics gives greater business insight and evaluation generates action plans.
So which metrics matter?
Source of Hire: Which recruitment channels are being used? (Careers site, job boards, recruitment agencies; referrals) Which ones provide the best candidates? Understanding data ensures your recruitment budget is best spent, giving you access to the right future candidates.
Application-to-Interview Ratio: Are your employer brand, careers page and job adverts attracting the right applicants? Is your EVP representative of your business? Do you need a refresh of your careers page or an overall of your job descriptions? Key here is do candidates understand your business and how they will fit in if they are successful?
Interview-to-Offer Ratio: Data here provides insight on the quality of candidates reaching the final stages of your recruitment process. If your ratios are too high, consider your screening process. Do you need to add additional structure to your interviews such as competency-based questioning or provide unconscious bias training for your hiring managers?
Offer Acceptance Rate: A fantastic way of assessing how compelling your remuneration packages are, but also your EVP. A low rate often indicates misalignment between candidate expectations and what has been offered. (Consider the market conditions and the level of competition for the roles on offer.)
Candidate Withdrawal Rate: Provides insight into where candidates exit the recruitment process (again review market conditions here). Are candidates withdrawing before or after the interview process? Assessing these drop-off points can help diagnose issues such as poor communication, delays between assessment stages or long approval processes for hiring decisions.
Quality of Hire: – Tricky to measure but connecting your recruitment and HR processes gives valuable insight. Consider connecting recruitment with post-hire metrics such as performance reviews, employee engagement survey outcomes and company attrition. Connect with line managers too for their new hire feedback.
Data-Driven Hiring Funnel Considerations
Audit your current funnel: Map the process, review and plug gaps.
Choose the right tools: Consider Applicant Tracking Systems (ATS) and recruitment analytics platforms which can automate tracking and provide useful reporting.
Set Benchmarks and Targets: Define your success.
Review Regularly: Set your assessment dates – monthly, quarterly, annually or a combination.
Act: Don’t just measure. Ensure you review your data and take action to improve, communicating as needed.
Remember your hiring funnel is more than a process, it’s a reflection of your recruitment and talent acquisition strategy. The CIPD provides excellent insight for further reading. Appropriately assessing your recruitment process and candidate engagement provides deeper insights allowing you to attract better candidates, improve employee retention, and build a workforce that drives business success.
At ARM, we help organisations design smarter recruitment strategies from sourcing and screening to metrics and measurement. If you’d like to optimise your hiring funnel, contact our team.
