In the past, recruiting and hiring was largely based on manual screening and intuition, but that would only get you so far. A full 75 percent* of hires went wrong in some way or other with this approach, not to mention that it was time intensive and pricey.
The average cost of a bad hire is almost $15,000*, which most definitely affects your bottom line, especially if you have several bad hires per year. A way to improve your recruitment that is increasingly becoming more popular is using data technology to increase efficiency and reduce the costs of recruiting.
What is Data Driven Recruitment?
Data driven recruiting has changed the face of hiring significantly. In a nutshell, data driven hiring uses technology to collect information and analyze it to identify which candidates are more likely suited to your open positions. Having the data is one thing, but it is another to know how to use it to identify which candidates have the skills, experience, and interests to perform the job you are seeking to fill.
With each new campaign, and each new hire, your system will continue to add information to your database. More key performance indicators (KPI), metrics to assist in organizing the data for your organization’s hiring goals, will be at your fingertips, such as cost, quality, and efficiency.
As this modern technology is becoming more and more common, it is redefining recruitment and hiring processes. It uses more than just resumes and cover letters; it also uses all data that is available to a recruiter to make informed decisions about which candidates may be a better fit, not only for the open position, but also for the entire company.
Benefits of Data Driven Recruitment
Depending on the approach you decide to take, and how familiar you become with the new data and technology, your mileage may vary. However, analyzing the data will make your hiring life a lot easier, and there are some common benefits that result from data driven recruiting.
Eliminate Emotional Hiring
Many recruiters, given the choice of several qualified candidates, may have made decisions based on emotions. Perhaps one candidate went to a school the recruiter respects or worked previously for a company that has historically provided good workers. Some interviewees have charisma and personality, but that doesn’t always translate into a top performer. It is possible the recruiter has nothing to go on but gut feelings.
With data driven hiring, the decision is more or less made for you by identifying information that may have been overlooked by manually researching a candidate. There may be one tiny piece of information that makes one candidate more suitable than the others. With data driven recruiting, you won’t miss it and hire the wrong person.
With this type of data available to you, you can take emotions out of the hiring process altogether and make decisions objectively, using facts alone. No more decisions based on gut feelings that could easily backfire.
Higher Quality Hires
Across all industries, making good decisions is essential to a successful business, especially when those decisions affect the kind of workers you hire. With the analytics based on data, you can make better choices of which candidates to give your focus. You can sort the data by skills, experience, education and more, so you can easily see which candidates have the attributes you need.
Completely understanding who your best candidates are and what traits may make them successful in the role can vastly improve the quality of your new hires. The more information you have, the more confident you can be that you are hiring the absolute best employees for the job you need to fill.
Lower Hiring Costs
Focusing only on qualities or variables that will lead to the best potential hires will lower your cost-per-hire and streamline the hiring process, saving the company money. An example might be an advertising platform that is costing money, but not bringing in the candidates you need. This might be a cost that can be identified with data and eliminated. The costs can be saved or transferred to a platform that is performing more to your needs.
By using metrics to narrow down which are the most viable candidates in your talent pool, you are not spending valuable time sorting through resumes or interviewing individuals who do not have the skills or experience to fill the role properly. This also reduces the costs by putting a more efficient hiring process in place.
Hiring the right candidate the first time improves the chances that you won’t be filling that position again the following year or even sooner, which of course also saves the company a good deal of money.
Elevate the Candidate Experience
A difficult hiring process is naturally going to discourage potentially good candidates from choosing to work for your company, so improving that process should be prioritized. This is where your data can help you.
If your metrics show that candidates are abandoning your application at the same point, that is a red flag that you will want to investigate. By identifying where the process hits a snag, you can make improvements to encourage job seekers to continue their application. As this occurs, you can evolve your processes to reflect the changing needs of job hunters in your field, increase your candidate pool, and overall improve the candidate experience. Everybody wins!
Using the data to streamline the hiring process is another way to improve candidate experience. Waiting a long time to be hired by you could potentially cost the candidate a job elsewhere, or the opposite could happen, that is, you could miss out on a quality hire, because they accepted another company’s offer, simply because the other company acted quicker.
Forecast Hiring Needs
Once you get accustomed to analyzing your data, it will become much easier to see the trends and patterns in your recruitment needs. Knowing when and how your business works will enable you to forecast future vacancies and predict the costs of hiring new employees to fill those openings. By setting up this kind of proactive recruitment strategy, can also use the data to predict the timeframe you need a person in the job you are trying to fill.
Tracking your turnover rate, for example, can offer invaluable information for the presentation of funding needs to upper management, as well as preparing your recruiting team for the tasks ahead.
What Data Do I Need?
There is a lot of different data you can pull when you are preparing to recruit and hire. You can analyze which advertising platforms are working best for your money and efforts. You can see how much time it is taking to hire. There is no formula for which KPI will work best for your organization, but you will begin to see how the data will work with your needs as you become more familiar with it.
There are three categories of KPI that you may be interested to explore, especially if you are just learning: time, quality, and cost.
Time.This includes how long it takes from application to hire, how long from application to acceptance of employment offer, and more. Time is money, so this is important to your bottom line.
Quality. This KPI will inform you as to how many applications you receive from which advertising platform and how many candidates are generated for each advertisement you make. This also tracks employee retention rates.
Cost. You can learn how much you are spending per hire and how much growth your candidate pool is experiencing. Your advertising costs can be tracked here as well.
The best way to determine which KPI will suit you best is to determine your hiring goals and evaluate which metrics are most relevant to those goals. Then as you analyze the appropriate metrics, you will be able to make improvements as necessary.
It is crucial to have a solid understanding of your company’s recruitment processes and goals. Once you know what you want to achieve, you will be able to seek out the data that will assist in getting you there. Data driven recruitment will provide all the information you need to make the best hiring decisions and improve processes to attract high quality applicants. It is the wave of the future, but you don’t have to wait.