How Recruiters Take Control and Help Accelerate Hiring with Data Analytics and Reporting
There was a time when luck played a big role in hiring.
At a retirement dinner, the CEO would stand up and say, “Twenty-five years ago, we were lucky enough to hire Chris. Thank you, Chris!”
When it comes to recruiting the right people today, luck is no longer part of the equation. If a company hires the right person because it got lucky, that happened because of what can justifiably be called “Dumb Luck.”
“Dumb,” because the company didn’t understand the job it was trying to fill or who would best fill it. “Dumb,” because some good people just kind of showed up and applied. The company didn’t hire in an organized or strategic way, it just stumbled upon the right people. It didn’t understand what was happening during the hiring process, things just kind of worked out – or more often, failed to work out.
Today, relying on happenstance and good luck when you are hiring is worse than inefficient. It is costly in terms of money and hours that are spent hiring the wrong people, then rehiring when they don’t work out.
Ineffective recruiting does more harm. It puts your entire company at a competitive disadvantage too. Your competitors are hiring the best, are you? They are hiring people with skills and knowledge that give them a competitive advantage in the marketplace, are you? And do you have any way of knowing what you are doing wrong?
Fortunately, this article does more than tell you that you could be doing something wrong in the way you hire. It outlines a comprehensive plan to use data and reporting to hire more strategically, by showing you how to take control of every step of effective hiring.
We are publishing this article to explain solutions we know work, because our clients are using them.
Forget luck. Remember data. Let’s get started.
Critical Skill: Analyze the Jobs You Are Trying to Fill and Know Which Candidates to Consider
There is more to a job than the job description you post on a job board. There is more to a job than a simple, top-of-mind trait you drop into a job ad, like, “a great attitude” or, “loves people.”
The first step in hiring the right people is to interview key individuals who know about the job you are trying to fill, including people who are already working the job, people who have supervised them, people who rely on them, and other key constituents.
The things you learn should be broken down into data you use to recruit and screen applicants. If the most successful people who have done the job completed at least two years of college, previously worked for at least one year in retail selling, and achieved a score of at least 90% on an aptitude assessment test you use, you can use those benchmarks to advertise for, and screen, applicants. You can also evaluate the effectiveness of your hiring processes by generating reports that show how well you are attracting applicants who match those benchmarks.
It’s just the first example of how data and reporting, from the first stages of your hiring effort, lead to more strategic and successful hiring.
Critical Skill: Understand Hiring Trends at Your Company
The people who are working in your company didn’t just walk through your front door one day, sit down, and start working. They got there because they went through some kind of hiring process. Even if they were hired five, six or a dozen years ago, some kind of process was in place. What was it, which parts of it worked well, and which fell short?
And then there is the bigger question:
How well is your current hiring process working for you?
Thanks to today’s hiring platforms, you can access reports that provide data and actionable information about where your hiring processes in the past could have been improved and, even more important, about where your current processes need to be optimized to accelerate hiring at your company.
What kind of reporting and data set can help tell you what needs to be improved? In general, there are three kinds of statistics to weigh:
- Historical data about key performance indicators (see the two Critical Skills below) – In which areas was your hiring effective? Where did it fall short? And what can you learn?
- Concurrent data reports – What is happening right now with your hiring in regard to those key performance indicators? How well are you doing? Are you doing better, or worse, than what your historical data reveals? And what are you going to do about it?
- Advanced reporting of data – How can you dig into your data to optimize your current and future hiring activities? If historically you recruited your most successful new employees from a certain job board, for example, why are only a trickle of them coming from that source now? Were you recruiting better candidates when you offered a starting salary of $45,000, $65,000 or some other figure? Do male or female hires typically remain in your employment for longer periods of time, and if so, what are the statistics?
Analyze, understand and act. That’ a three-stage strategy that puts you on the road to better hiring.
Critical Skill: Use Data to Hire Smarter
Identifying important data points about your jobs and recruiting is important, but top recruiters know that simply identifying information is not enough. They know that the critical next step is to use data to hire smarter.
Here is what they do:
- Understand which data points are meaningful. In other words, which pieces of information offer valid indicators they can use to improve hiring processes? This step requires strong analytical thinking. A company might find, for example, that 75% of the successful employees it has hired for a particular job are high school graduates, but might also find that 50% of the non-grads it has hired are highly competent too. So, should that company decide that all the people it hires for that job should hold high school diplomas? Maybe, but smart recruiters will dig further to determine what other factors might define the best candidates, like high scores on a particular aptitude test or something else. The bottom line is that smart and efficient recruiters dig through data and reports to define pertinent predictors of employee performance.
- Analyze whether important goals were achieved in previous recruiting. In your previous hiring, were you able to reach specific goals you had set out? Were you able to hire people who stayed with you for an average of six months, for example? Did the employees you hired improve measurable metrics, like your company’s Net Promoter Score, or the percentage of positive reviews your company received online? Understanding whether you hit targets like those is important, but not enough. You need to go on to the next step too.
- Analyze and optimize your screening and hiring processes. If you were able to achieve the key goals you identified in the previous step, why was that the case? If you are falling short in reaching those benchmarks, why? Developing this knowledge requires that you generate reports that show pertinent data that impacts on your ability to reach those goals, as well as the patience and diligence to dig through the data for answers.
- Predict behavior and test your assumptions. After following the steps outlined just above, are you willing to predict that your best employees come from a particular college, for example, or that they have worked previous jobs in customer service? Great, those are predictions. But no prediction is worth investing in heavily until you have tested and analyzed it. If you hire only graduates of engineering programs, for example, will your new employees perform 75% better in their jobs? Predict, then hire and use data and reports to understand whether your predictions were valid.
- Dig into data to analyze specific issues. Do some of your product assemblers achieve a zero defect rate on the servos they put together on your production line? Do some of your car salesmen consistently upsell more customers to buy option packages? Those are specific issues. Now, armed with data about the people you have hired to do those jobs, can you tie specific hiring criteria to their success? And can you use your higher understanding to hire more effectively and strategically to fill those positions?
Critical Skill: Understand and Tap the Power of Key Performance Indicators
As we discovered at the start of this article, it takes more than good luck to make great hires. It takes keen understanding of hiring processes at every step of the way.
One way to gain mastery of your overall hiring process is to identify Key Performance Indicators, gather data on them, analyze that data, and understand what they are telling you about the effectiveness of your hiring.
Here are some Key Performance Indicators to understand, monitor, and use to pinpoint areas where you can optimize and improve your internal process to accelerate hiring efforts at your company:
- Time to Hire (TTH) – This is the number of days that elapse between the time you decide to hire for a job and when the candidate accepts the job.
- Time to Offer (TTO) – This is the number of days that elapse between the time you decide to hire for a job and the day you make offers to the candidates you have selected.
- Apply to Hire (ATH) – This is the number of days that elapse between the time a candidate applies for a job and the day you hire the employee.
- Offer Acceptance Rate (OAR) – This is the percentage of candidates who accept offers of employment.
Critical Skill: Use the Hiring Funnel to Answer Your Most Critical Recruiting Questions
The Hiring Funnel is a visual representation of what happens during your hiring process. Applicants enter at the top of the funnel and progress through the four following stages of hiring (phone screening, interviews, reference checking and accepting your offers) that logically follow.
Why is this process represented as a funnel? Because the largest number of job candidates are present at the top of the funnel, then their number becomes smaller as the hiring process moves downward. For example, 100 applicants might enter the top of the funnel, and that number is reduced at every step, until as few as five or six are hired at the bottom.
Smart recruiters know to ask questions like these as they analyze what is taking place in the funnel they are using to analyze how they are hiring for specific jobs:
- Do we have enough candidates entering at the top of the funnel?
- If not, are we using the best sources to find applicants? Which sources are providing us with the best candidates, and how can we recruit more actively from them?
- Where are candidates exiting the funnel, and why? And which candidates are exiting, and why? Are you losing the most candidates during phone screening, for example, and why?
- Where are there roadblocks and delays in the processes that are represented in the funnel? Can we improve our processes to hire more smoothly and effectively?
- How does the funnel we are using to analyze hiring for one job compare to the funnels we can use to analyze how we have hired for previous jobs?
And then there are bigger questions that the funnel can help strategic recruiters answer. Are you achieving your overall hiring goals, for example? If not, do the answers to why lie in the funnel?
For example, how many hours and resources are you investing at each stage that is represented by the funnel, and are those expenditures appropriate? Is the funnel telling you something about how you could reduce your cost per hire? And what does it tell you about the goals you should be pursuing in your future hiring efforts, and about the metrics and benchmarks you should develop to measure their effectiveness?
How do you populate the funnel with information you need to make determinations like those? You populate it with data that you have gathered in your hiring software/ATS platform, and with reports you generate from it.
It’s one of those “good information in, good information out” situations. The better and fresher the data you put in, the better hiring decisions you take out.
Critical Skill: Question Your Assumptions and Regroup
You have heard the old statement that the definition of insanity is doing the same thing over and over, while expecting different results. It is surprising, isn’t it, that many companies continue to do the same things repeatedly when they hire, and then are surprised when nothing improves.
Improvement comes when recruiters are brave enough to analyze what they have been doing in the past, and to discard activities that weren’t working well, even when that means tossing out their habitual beliefs and preferred processes. It comes when smart recruiters are committed and smart enough to ask questions like these:
- Are we just doing stuff, or are we achieving our goals?
- Are we hiring people to perform our actual jobs, or the jobs we only thought needed to be done?
- Are we measuring the right things that indicate that our jobs are being performed in the best possible ways?
- Are we willing to evaluate the costs and ROI of the hiring processes we use, or are we blindly continuing to do things in old ways to avoid the effort of making needed changes?
- Are we overlooking ways we can optimize the cost of hiring?
- Are we applying the wrong benchmarks to analyzing the effectiveness of our hiring processes? If we are only concerned with reducing the Time to Hire, for example, are we overlooking other key factors we should be watching?
Critical Skill: Make Reporting Part of Your Scheduled Routines
If you want to reap the most powerful and transitional benefits from data, you can’t generate and look at reports “every now and then.”
The point is, it is important to use data and reports proactively, not only when something is going wrong with your hiring. When you use data to predict, not to correct, you are well on your way to become a more powerful recruiter.
How can you take your use of reporting and data to that higher level of effectiveness? The answer is simple . . .
Determine which reports you need, and generate them on a firm, predetermined schedule.
To start realizing greater benefits from your data, simply decide that you will do one of the following things:
- Generate certain critical reports weekly and review them with your entire team.
- Generate other reports monthly or quarterly and review them with appropriate members of your team.
As you set up your master schedule for those reporting activities, consider who is the most important audience for reports, and how they will use the data they contain.
Critical Skill: Understand Your Company’s Stage of Life and Plan Your Hiring and Data Needs Accordingly
When you were in high school, chances are that you learned that different organisms have life cycles. Insects start as larvae, for example, become pupae, and later emerge as adults. Life cycles, we learned, were also the part of development of tapeworms crabs, and lots of other organisms.
Companies have life cycles too. So, where does your company fit into that kind of process?
Did you start out as a small, entrepreneurial company with a big idea, and which lived or died by how effective your company leaders were at bringing in your first accounts? Did you then become a medium-sized company that needed a top salesforce to keep growing? And then once you established a strong base of customers, did you become a company that needed to develop and introduce competitive new products in order to prosper?
That is only one kind of life cycle. But as you can see, it demands different kinds of employees if it is to survive and grow at each stage.
And how does a company – how does your company – survive at every stage of its growth? It prospers by hiring the right people.
That explains why companies that grow need top recruiters who are also able to grow, improve their skills, and keep their attention focused on the key factors that make their companies succeed in the marketplace.
We wish you every success as you help your company grow and succeed. And let us offer one final piece of advice: