Traditional recruiting used to rely on luck and intuition more than data, which was time-consuming to amass and analyze. Recruiters and hiring teams could only assume that their hiring methods were effective. But now, with a wealth of software and analytics tools available on the market, anyone can create a data-driven recruiting process.
What is data-driven recruiting?
Data-driven recruiting is when you use tangible facts and stats to inform your hiring decisions, from selecting candidates to creating hiring plans. Recruiting teams that use data are more likely to be efficient, reduce costs and improve their hiring.
Here’s a guide on why and how to embrace a data-driven recruiting strategy:
How data-driven recruiting can help hiring teams
Using data in your hiring process increases your quality of hire. Data-driven recruiting also helps you:
- Allocate your budget. For example, to wisely spend your budget, track source of hire to determine which recruiting channels bring in the most qualified candidates.
- Increase productivity and efficiency. For example, track how many emails members of your hiring team exchange with candidates to see if there are specific stages where you can speed up your time-to-hire.
- Unearth hiring issues. For example, review your application form conversion rates to determine if you need to tweak your questions or redesign your page. Same with diversity: look at candidate demographics to see if you are unwittingly discriminating against protected groups.
- Benchmark and forecast your hiring. For example, recruiting yield ratios can show you how many applicants you typically need to make one hire. If you have too few applications, consider sourcing or re-advertising the role.
- Reach more objective (and legally defensible) hiring decisions. For example, selecting the best candidate based on assessment scores and structured interview results is an effective hiring method.
- Make the case for recruiting process improvements. For example, if you know that your company needs to invest in a referral program, you can present data that shows the effectiveness of this method to solidify your argument.
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How to incorporate data into your hiring
Here’s what to do to shift towards data-driven recruiting:
Choose the right data and metrics
Start by selecting a few important hiring metrics to track. All companies benefit from measuring quality of hire, since this metric shows the overall effectiveness of your hiring processes. Other common metrics include:
Different companies may pay attention to different types of data. To determine what matters most, meet with senior leaders and ask them which data they care most about. Ask hiring managers:
- What do you wish you knew about your hiring process?
- What data do you use (or would like to use) to become more productive when hiring?
- What hiring problems/ bottlenecks do you see often?
- Which recruiting sources/methods do you trust, but aren’t able to prove their effectiveness with data?
- Which recruiting sources/methods do you consider unreliable, but don’t have the data to prove it?
- What recruiting data would help you build reports for your managers?
- What does a successful hiring process look like to you?
Collect data efficiently
Data collection is often time-consuming. Aim to make it as painless as possible. Here’s how:
- Use software to your advantage. Your applicant tracking system (ATS) may already have reporting capabilities that will do your work for you.
- Find different ways to collect data. Some data can easily be gathered via Google Analytics (e.g. careers page conversion rates) or via simple surveys.
Act on the data
One you’ve collected your data, determine what you will do with it. Here are examples of common recruiting issues that data will help you uncover, along with ways to address them:
If your time-to-hire is consistently greater than your industry average, examine which stages of your recruiting process lag. Here are some common bottlenecks:
Low job offer acceptance rates
Having your best candidates turn down your job offers translates into higher costs and positions remain vacant for longer. If you find that a high percentage of your job offers gets rejected, consider a few fixes:
- Create more competitive job offers. Do more thorough research on benefits and salaries through sites like Glassdoor and PayScale.
- Gauge candidate interest in the position early on. Ensure you communicate effectively with candidates during phone screenings and interviews (e.g. discuss their motivations and concerns) about the role.
- Ensure your candidate experience is positive. Make sure your team treats candidates properly (e.g. gets back to them on time, makes them comfortable during interviews.)
- Write job offer letters that reflect candidates’ expectations for the job. For example, if you’ve told candidates during interviews that a job requires 20% travel, and the job offer mentions 50%, candidates will be unlikely to accept.
High new hire turnover
New hire turnover reflects the number of employees who leave shortly after they were hired. Here are two common remedies when your new hire turnover is too high:
- Communicate well with candidates about the job. Ensure candidates understand the job duties, requirements and team and individual performance expectations, well before they receive your job offer. If your new hires feel you misinformed them about the role, they may leave.
- Create an effective onboarding process. Welcome your new employee with an email. Ensure your new hires feel welcome, receive appropriate training and are given opportunities to do meaningful work right from the start.
Know the limitations of data
- Data won’t tell you why something happens. You can get in-depth insight by combining different types of data, but you still need to interpret your findings.
- Data can’t solve your problems. Data indicates what your teams do well and where there might be problems to solve, but what you choose to do with that knowledge is at your discretion.
- Data isn’t always objective. If people on your team are creating the data, be prepared to take results with a pinch of salt. For example, if candidates’ assignments are graded by a software, the results will be more reliable than if a person grades them.
Use data to evaluate the past and plan for the future
Even if your hiring teams are used to making decisions based on intuition, they will find a stronger ally in data. Data will help them see what worked and what didn’t in past hiring processes and improve their future hiring decisions.