7 Business Advantages of Implementing a Data-Driven Recruitment Process
As a side-effect of digital transformation, companies are generating data like exhaust fumes: the audience behaviors in your CRM, disparate marketing and sales funnels, spreadsheets full of under-analyzed data in your stock lists, and so on.
Yet most of this data is just going to waste. People are so busy with their day-to-day work lives that they don’t stop considering using data to improve processes. It’s the classic entrepreneur’s dilemma of working on the business vs. working in it.
Recruitment is a perfect example of this. Recruitment is the lifeblood of a company and, in many ways, the most critical process in the whole business. It’s so important to know you have the right team. But companies are still playing by ear despite opportunities for optimization lying around.
In a data-driven recruitment process, organizations collect numbers on factors like the average length of their hiring process, the cost of each new hire, and which channels they get the most successful candidates from. They can then use this data to analyze their recruitment process objectively.
With just a little bit of data and the tools to manage it properly, you could enjoy the following advantages of data-driven recruitment.
1. No more playing by ear
Data-driven recruitment is more objective than traditional hiring processes. There are all kinds of data dashboards and business intelligence tools that you can employ here. Still, just an applicant tracking system, spreadsheet, and a Google Form would let you rank applicants against each other on factors like “years of experience” or “current/previous salary.” This will help you make choices.
Not only can this help you in later-stage interviews where you’re choosing between two great candidates, but it enables your hiring managers to dismiss hundreds of applications in just a few seconds. Previously, they’d have to judge cover letter after cover letter before they could even determine which CVs were worth reading.
2. Increase the quality of your hires
Data-driven recruitment can improve the quality of both your applicants and your successful hires. By monitoring where your top performers come from–Indeed, LinkedIn, recruitment agencies–you can double-down on the sources that get you, high-quality applicants. A simple dashboard like ClicData’s can help you take in that data automatically and feed it into a report that makes the insights plain to see.
One of the best product management books recently is Working Backwards, from former Amazon execs Colin Bryar and Bill Carr. As well as detailing the “working backward” method for coming up with new product ideas, Bryar and Carr dedicate a whole chapter to Amazon’s Bar Raiser Process for improving the quality of hires.
It’s a multi-stage process with several interviewers from the team hiring–say, Marketing–and a designated “Bar Raiser” from outside the team with a track record of good hiring decisions.
The interviewers are given specific criteria to score candidates on. After scores have been written down, the interviewers are allowed to collate their findings and decide which candidate gets the job.
The Bar Raiser watches over every stage of this process, guiding interviewers through the steps of the process, and can veto any candidate at any time. Once a candidate is successful, they’ll be monitored on performance, which will factor into the Bar Raiser’s track record of character judgments.
This is an excellent example of using quantitative data to enhance qualitative judgment, illustrating the importance of quality hires. Because the Bar Raiser comes from outside a team that urgently needs another pair of hands, they have no incentive to allow a sub-par or merely satisfactory candidate through.
The Bar Raiser gets no financial bonus for a successful hire, just a badge on the employee portal and the satisfaction of knowing they’re working alongside the best people available.
3. Hire faster
You can speed up your hiring process with data-driven recruitment if you understand the candidate funnel. To understand the candidate funnel, you need to know how to classify and acquire leads. Bring the marketing team in, and they’ll make sure everyone understands the stages of the candidate funnel: Awareness, Interest, Consideration, Application.
In the Awareness stage, you can save time and money by making the job boards that get you the best candidates your focus. Use UX tactics to increase “conversions” from those sources with the most concise and appealing job descriptions at the Interest stage. Perhaps you’ll decide that your job descriptions should mention your industry awards or ISO certification. At Consideration and Application, you’re likely using funnel analysis to identify drop-off pages on your site.
Your marketing team will know all about using web analytics data for increasing sales. With data-driven recruiting, you can use this kind of thinking to remove unnecessary hurdles and speed up your hiring process.
Any good business process is consistent and repeatable, so you should employ any task management software you’re using already to make sure your team is using best practices every time.
In the last two stages of that funnel, you should be collecting the data you need to make quick decisions. Throughout the whole process, ask yourself:
- Are there any steps in this process taking longer than they need to?
- Are there any steps that fold into another? Could they be eliminated?
- Are there steps that can be wholly or partly automated? For example, could speech analytics software assist us in the phone screening process?
4. Decrease cost per hire
By speeding up your hiring process, you’re saving money already, but a data-driven approach gives you plenty of opportunities to save more. Consider recruitment metrics like “cost per hire per source,” “average employee performance per source,” and other KPIs for HR management and optimize for the most cost-effective recruitment channels.
You might find that you can stop using costly recruitment agencies in favor of better advertising. If you’re a B2B company, your marketing team is accustomed to increasing the ROI from their LinkedIn targeted ad spend. With business intelligence software, you can pull real-time data from LinkedIn and any other source and combine it in one handy visualization, enabling better collaboration across business functions.
5. Improve your candidate experience
The best candidates are fielding offers from all directions, so you need to compete for their attention as much as they’re competing for yours. And by using data to improve the application process, you can increase the number of high-quality applicants that land in your inbox.
Some best practices to follow here include optimizing your experience for mobile, as 64% of all searches are done there. If you’re an ecommerce company, your marketing and web design teams are likely well aware of this already. If you’re not designing for mobile, you’re losing out on conversions.
6. Remove bias in your hiring process
Data-driven recruitment can help remove bias from the hiring process. This is useful for when you’ve got two just-about-equal candidates, and the hire comes down to which of the two the interviewer got along with more on a personal level but can also address more systemic issues.
In Working Backwards, Bryar and Carr write about how Amazon noticed they were hiring fewer women than they really should, considering that they make up half the population.
They amended their multi-stage hiring process by simply auto-accepting female applicants through the initial phone-screening stage. They measured the outcomes, and the data eventually showed that the number of successful female candidates had risen significantly.
7. Improve documentation and forecasting
A lack of documentation is one of the critical mistakes to avoid in QA testing processes, and your hiring process should be no different.
If you want to implement something like the Bar Raiser process, build data-rich documentation on topics like how best to conduct the interview stages and what qualities to look out for in a candidate. This will help preserve knowledge and improve the hiring process over time. Qualitative data can’t be captured in a spreadsheet, but it’s often just as valuable as the raw numbers.
Better forecasting, including considering your annual turnover rate and movements between different departments, allows you to budget accurately for new hires. If you know that roughly five employees will leave you this year, you can budget time and money for five new hires in your annual planning.
How to start with data-driven recruitment
Data-driven recruitment can improve your hiring process on almost every front, from the input costs to the quality of its results. There are plenty of tools you’ll have to pick up along the way. Still, the best way to start is with a business intelligence solution that can take data from anywhere in the company and turn it into simple dashboards and automated reports.
Alister Esam is the CEO and Founder of Process Bliss, a work management software reinventing how businesses execute day-to-day tasks. He is an expert in strategic planning, business process management, and optimization. With over 15 years of experience helping companies run at peak efficiency, Alister has dedicated his career to making work more accessible and motivating for managers and employees alike. He has written for domains such as HackerNoon and TweakYourBiz. Here is his LinkedIn.