How Recruiting Analytics Takes Talent Acquisition From Gut to Great
An article published last year by the Harvard Business Review says that “humans are very good at specifying what’s needed for a position and eliciting information from candidates — but they’re very bad at weighing the results.” The authors found that simple computer algorithms outperform human decisions by at least 25 percent, “regardless of whether the job is on the front line, in middle management, or in the C-suite.”
While there is obviously value in having recruiters and hiring managers who possess good people instincts, it has become even more essential that recruiters and hiring managers also have reliable data on which they can base their sourcing, screening, and hiring decisions.
In the escalating global competition for talent, instincts alone aren’t enough, especially when it comes to answering complex and nuanced questions such as:
- Are your candidates closely aligned with your organization’s mission and culture?
- Will they be engaged in the work you give them?
- Will they stay for the long term or leave you high and dry in six months?
- Do they have the skills — or the propensity to develop the skills — you’ll need a year from now? Two years from now? Five?
Recruiters and hiring managers have relied too heavily on instincts to answer these kinds of questions in the past. With the tools and technology available in recruiting software today, employers can take a far more scientific, data-driven approach. In fact, with a total talent solution in place, you can answer five crucial questions that will significantly enhance your recruiting success:
1. Who’s in Your Pipeline?
Until you know exactly who is in your talent acquisition pipeline, you’ll never be able to strategically pursue the people with the right skills and capabilities to meet your organization’s future needs. A total talent solution tells you the number of candidates you have in a variety of categories (job type, location, skills, career stage, etc.), where they stand in your recruiting process, when you last interacted with them, and more.
2. Which Sources Are Delivering the Best Talent?
You must track and measure the value of all your talent pools (job boards, referrals, social media, other companies, etc.) to learn where your most successful candidates are coming from and why. For example, if you want to know the hiring success rate for a specific source, divide the number of source hires by the number of external hires (e.g., total job board hires divided by total external hires). If you know which sources are truly measuring up, you can adjust and expend your resources more effectively.
3. What Is Your Average Time-to-Fill, and How Does It Affect Your Cost-of-Vacancy?
Time-to-fill continues to be one of the most important recruiting metrics you can track, especially if you belong to a large organization that makes continuous repetitive hires (e.g., retail, hospitality). The longer your time-to-fill, the longer positions go unfilled, and the more it will cost your company — sometimes upwards of millions of dollars per year.
Understanding why it is taking so long to fill certain roles is the first step to improving recruiting efficiencies. If you having a total talent solution in place that provides these analytics, your team can more easily source and hire for repetitive positions. This will, in turn, decrease your time-to-fill and cost-of-vacancy. Those savings can then be reinvested into your company and into your long-term recruiting efforts.
4. What Is Your Quality-of-Hire Rating?
This is often referred to as “the holy grail” of recruiting and hiring. An excellent way to determine your quality-of-hire is by tracking the turnover of your new hires during their first year with you. Higher-than-desired levels of turnover within this period often signify poor sourcing, selection, or onboarding processes — or some combination of all three. Determining your quality-of-hire comes down to how carefully you measure and track new hire sourcing, performance, competency, turnover/retention, and developmental/leadership potential.
5. What Skills Do You Really Need to Fill Your Open Reqs?
Quality-of-hire isn’t complete without knowing what skill sets are needed to fill any and all open requisitions. How many times have you screened applicants against poorly worded job descriptions only to find out the hiring manager was looking for somebody else altogether? Or even worse, you hire candidates based on incomplete skill sets, and 6-12 months later, they’re just not the right “fit” for the role, costing you more in training and replacement.
Identifying the right skill sets for each role you are hiring for eventually impacts performance, turnover/retention, and developmental/leadership potential. These skill analytics will tell you what skills you need and why you need them, and they can be tied directly to the talent profiles of those you employ and manage.
Once you have clarity on the questions above, you can focus on getting more predictive with your recruiting initiatives by looking at what you need to do over the next 12-24 months and beyond. With the right total talent solution in place, you can accurately project insights about the future based on your current recruiting trends, attrition rates, sources and skills inventories, and time-to-fill, and then analyze these insights in a multitude of ways.
Answering these questions not only gives your HR and recruiting teams the data, metrics, and analytics they need to be more effective, but it also arms you with the business information your executives need to make larger decisions and to clearly see the strategic value of your total talent initiatives.