How to optimize your hiring & recruitment funnel with metrics
You have used a funnel to pour gasoline into your lawnmower or salad dressing into a narrow-necked bottle, but have you thought about using a funnel to recruit and hire?
All funnels start broad and narrow, resulting in a small amount going into the container. A hiring and recruitment funnel does that with one big difference from how you fill your lawnmower – a recruitment funnel gets narrower because candidates fall to the wayside. Not everyone within your funnel will land the job.
Here’s how it works and how you can use this tool to get a great candidate pool and, ultimately, the right people in the right positions.
Here’s what we’ll cover:
- What is a recruitment funnel?
- Why is a hiring funnel important?
- How to create and optimize a hiring funnel
- Metrics to monitor at each stage of a recruitment funnel
What is a recruitment funnel?
Recruiters don’t have a universal agreement on what constitutes a recruitment funnel, but they generally follow the same sort of progression. Here is what a recruitment funnel looks like.
1. Brand awareness
If a recruiter contacts just about anyone in the world and says, “Hi! I’m calling from Google about a position doing X,” the person will already have an opinion about the company. But, when you call and say, “Hi, I’m calling from Joe’s House of Accounting,” the person is far less likely to know what you are talking about.
While many candidates apply to companies they know very little about, and recruiters reach out about companies the candidate has never heard of, you increase positive responses if you can increase your reputation as an employer of choice.
Forty-seven percent of people work for small businesses. Most likely, people outside the area won’t recognize the company as an employer of choice. Changing that can dramatically change how you hire. Getting people to know what you do as a company and that you are a good company to work for can make a huge difference in hiring – it’s a core element of recruitment marketing.
2. Attracting candidates
Not everyone that knows about your company (the Brand Awareness funnel level) will apply for a job with you. This is the first narrowing, and it’s steep! But you want to keep it as wide as possible.
Well-crafted job descriptions are a critical step in this. If the job isn’t straightforward, or the requirements are too detailed and steep, you won’t get applicants. Having referral bonuses for your current employees can also bring candidates into your funnel. Targeted advertising or recruiters who search for candidates can also bring people in.
There isn’t one way to attract candidates, but you must get applicants to apply.
And a word of caution: If your online application process is too long and tedious, you’ll lose out on candidates who aren’t desperate. Asking questions that require long answers or making people input every line of their resume are things that drive candidates away.
3. Screening candidates
This is the next step in the narrowing neck. You can use an applicant tracking system to help you narrow candidates down, but depending on the number of candidates, it may be best to have a human look at each candidate. Humans can make connections that an ATS cannot.
There are often several layers of screening. The first may be the standard “six-second review’ where a recruiter determines if a resume is worth looking at closely. Then comes a thorough reading for those that passed the six seconds, and finally a screening call.
Businesses vary in how they do this type of screening. Some recruiters skip phone screens altogether. Some use recorded video interviews to narrow the funnel. And some recruiters use text messaging to reach out to and evaluate candidates. Whatever method your business uses, this is an essential step for the recruiter to shorten the list of candidates.
Some hiring managers prefer to do this screening themselves rather than having a recruiter do it. This works well when there are only a few candidates, but when you get 100-plus applicants for an open position, it can overwhelm even experienced recruiters or hiring managers.
The top candidates from the screening make it to this narrow neck of the funnel. Traditionally, this hiring process step is an in-person interview with the hiring manager or hiring panel, but now this step may take place via video conferencing.
This step is often where hiring managers create an unnecessary clog. It’s not unheard of to have three, four, or even more rounds of interviews at this stage, with the idea of narrowing it down to one candidate. However, candidates aren’t likely to stay around for a fifth round of interviews with the current job market.
Ideally, at the end of a single round of interviews, the hiring manager should know which candidate would be best and which would be a close second. At this point, you really should have no more than one or two candidates in the funnel.
5. Background check
Some companies make the job offer first, and some do a background check first. Either way, the background check is an essential last screening of a candidate. Is the information on the resume accurate, or did the candidate embellish their accomplishments or say they have degrees when they never graduated?
Checking with former managers, running criminal checks, and (when appropriate) credit reports are all part of this final step of hiring. Most companies do wait until the very end of the process to run this type of check. In the end, you should know whether someone will be a good fit for your organization.
6. The job offer
While candidates can leave the funnel at any time during this process, the job offer is where companies worry. They’ve gone through the entire process and selected this person, and now it’s time for this person to accept, negotiate, or reject the offer outright.
If you haven’t been upfront about salary expectations, or whether the position is remote or in office or hybrid, you may find yourself back at the interviewing step of the funnel and hoping that the other candidates are still around.
If the candidate accepts, you may think you are entirely done with the recruiting funnel for this position. But, there is one more step.
It’s one thing to make an offer and have the candidate accept it. It’s another to have that person show up and work. Ghosting or traditional quitting with notice, especially during the first 90 days, shows a problem with recruiting. Did you hire the wrong person? Did you lie to the candidate about what to expect? Are your salaries not competitive?
Companies may widen the job offer part of the funnel for high-turnover positions and offer places to more people than they need in the knowledge that some won’t survive the 90 days of onboarding.
But, after that 90 days is over, if the person is still there, congratulations! You’ve successfully navigated the recruitment funnel, and now it’s on to the next person.
Why is a hiring funnel important?
You can do hiring without thinking of a funnel. You may never have heard of the recruiting and hiring funnel, but you have one, but it probably is lopsided and sloshes the candidates around, making more of a mess than you need to.
When you have a clear hiring and recruiting funnel, you can look at every step and optimize what you need for you and your business. If you neglect to consider your company’s reputation, it will be challenging to gain qualified applicants. If your application process is tedious and filled with unnecessary steps, your funnel will fail at that spot.
When you keep in mind that each step is meant to narrow down the list and move people forward, you can create a better candidate experience.
How to create and optimize a hiring funnel
You have a hiring funnel already, even if you haven’t thought about it. Even if you hire everyone who walks through the door, not everyone is coming in and surviving the onboarding period.
Creating and optimizing a hiring funnel isn’t as difficult as it may seem. Here are the steps.
1. Acknowledge you need a funnel!
This may seem ridiculous, but acknowledging it and creating one go hand in hand. When you look at increasing company visibility or the company’s reputation, you’ll be talking to people outside HR, and you need to explain the funnel concept.
2. Write down each of the steps for your funnel.
These may or may not be exactly what is listed above. If your business requires a security clearance, that needs to be part of the funnel. If you have testing that candidates must pass, that is part of your funnel.
3. Create metrics for each step (see below).
Ask yourself: How will I know if I’m successful? If you can’t come up with that, then rethink what you need at each stage of the funnel.
4. Get buy-in from all relevant stakeholders.
Your funnel can be great, but if your onboarding stinks, everything falls apart. If it takes six rounds of interviews to make a decision, you’ll have people climbing out of your funnel faster than you can make an offer.
5. Apply the funnel to your recruiting efforts.
Monitor it at each step to make sure you are using the best tools possible and maximizing your productivity.
Do this and you’ll have your funnel running!
Metrics to monitor at each stage of a recruitment funnel
If you can’t measure it, it’s not real. Applying metrics at each step of your process helps you know when you’re successful and when you need to make changes. Here are some metrics you can apply to each step of the funnel.
1. Brand awareness
You can speak with your marketing people about how well known your company is, but there are things you can check directly:
- How many hits are you getting to your company webpage?
- What about followers on social media?
- How about your Glassdoor page?
All these things indicate how many people know about your company and brand.
2. Attracting candidates
The easiest metric is how many people apply to positions, but it’s not quite that simple. If you’re hiring for entry level positions, you’ll get a lot more applicants then you will if you’re hiring looking for a highly specialized senior position.
So, don’t only look at the number of applicants – look at the following:
- Applicants per position
- Internal applicants
- External applicants
- Employee referrals
- Hits on your careers page and conversion rate
- Hits on your job board page and conversion rate
- Number of people who start to fill out your application and then drop off
These things can all help you refine your methods.
3. Screening candidates
Take a look at the number of applicants that meet the job requirements. That can tell you if your job descriptions are well written – numerous unqualified applicants may mean you need to edit the descriptions.
Consider looking at the number of candidates who are qualified and could do the job. This helps you measure your screening process and your job descriptions. But, you can also use this as an opportunity to evaluate what training you need to do with your hiring managers.
How many rounds of interviews do they need? (Ideally, you want this to be a low number!) If you have candidates that meet with multiple people, take a look at how their evaluations correlate. Are you getting accurate views of each candidate?
5. Background check
While you may be looking at pass/fail, that doesn’t tell you a lot about your funnel (although it may tell about your ability to be snowed under by someone who says they’ve done things they haven’t). Instead, take a look at your turnaround time.
Again, right now it’s a job seeker’s market: if your background checks take three weeks, you’ll lose candidates.
Measure offers made to offers received. Also take a look at negotiations. While negotiating is standard, counting on candidates to negotiate will have a disparate impact on groups who are less likely to negotiate.
Make your highest and best offer first, and then look at your acceptance rate. If that acceptance rate is falling, then you probably need to increase your pay and benefits.
Of course, you want to look at your failure rate – people who quit before a 90-day period is over. But, you also want to look at performance for new hires as well. This can tell you about your training programs as well as your candidate evaluation skills in the screening and interview stages.
Standardize and measure
If you take a look at all these metrics regularly, you can create a funnel that gives you quality employees.
Understanding your recruitment funnel can really help you to maximize your recruiting efforts and bring on the best candidates.
Frequently asked questions
What is a recruitment funnel?
Recruitment funnels are a way to make sure that your company is only hiring the best candidates. The process begins with an understanding of what type or level of position you're looking for, then it narrows down potential employees by following specific steps to ensure you hire the best candidates.
How is the recruitment funnel calculated?
You can measure the effectiveness of your recruitment funnel by looking at core metrics like time to hire, cost per hire, source of hire, diversity, and candidate experience.
What is the recruitment pipeline?
Talent pipelines are essential in helping an organization find and hire top talent. This can be prospective employees and external candidates that meet certain criteria based on a specific job posting.