Companies worldwide have begun to face a common problem: the issue of having too much data, but not a clear and efficient way to use it.
The hiring process, until recently, had mainly been based on guesswork. With candidates, you could never really be sure if they were going to do a good job. After all, manual resume screening and gut feeling can only take you so far.
Data-driven recruiting has recently become one of the buzzwords of the recruiting world.
But… what is it? And more importantly, how is it related?
What is data-driven recruiting?
Data-driven recruiting is when HR professionals, including recruiters, use data analytics to plan and execute hiring processes. It is the use of tangible facts and stats to inform your hiring decisions, from selecting candidates to creating hiring plans.
- 74% of managers and recruiters say they’ve hired the wrong person for a job,
- 75% of the need for new employees comes from people leaving, making attrition one of the costliest HR factors.
- Companies lose, on average, USD 14,900 for every bad hire (not including the salary given to unproductive employees).
This is where data-driven recruiting can pick up the slack and provide insight into who your best candidates are, where they come from, and how much they should cost.
Recruiting teams that use data are more likely to be efficient, reduce costs and improve their hiring.
Now, let’s take a look at the benefits of data-driven recruiting.
Benefits of Data-Driven Recruiting
Eliminate gut-feeling decision-making
While a candidate can be the most charming person you’ve ever met, that doesn’t mean they are going to do well in your company. So instead of making hiring decisions based on a resume and a candidate’s likeability, try and see what recruitment software and/or tools are out there to help you satisfy this part of the process.
Improve the quality of hire
There’s a huge difference between an A-player and a C-player. Hiring the best employees significantly improves your company’s performance- both short and long-term.
With traditional hiring, though, this can be tough. However good a candidate may seem in an interview doesn’t always translate into how well they’ll perform. Using data-driven recruiting, however, you can significantly increase your chances of making the right hires.
Decrease time to hire
If your hiring time is worse than the industry average, then there might be a couple of things you could do to improve the recruitment process overall.
As a start, you’d want to map out your entire recruitment process and gather the following data:
- How long does it take to hire a person in this field?
- What’s the process? Do you use agencies? Job boards?
- How long does the vetting process last? How long is each step of the process?
If you’re using agencies for all the staffing needs, you’d simply benchmark one agency’s process with another and invest more in the more efficient one (as long as there’s no loss of quality).
If you’re doing hiring in-house, however, you’d want to analyze the exact steps taken to process completion.
You’ll need to figure out:
- Which of the process steps takes longer than it should?
- Can the step be skipped?
- Can the step be automated?
So, for example, if your company does 2 soft-skill interviews and one technical, you might simply establish harsher standards for one of the soft-skill interviews and cut out the other.
Deliver On Recruiting Capacity
Recruiting is a fine balance: over-hiring can create an unnecessary cost burden, while under-hiring can reduce productivity. To stay on track, recruiters need fact-based hiring plans that are continuously updated to reflect the most current state of the company. Data-driven workforce planning, done in collaboration with Talent Acquisition and Finance, enables recruitment to create more accurate hiring plans, ones that use forecasts based on historical rates for factors such as employee turnover, internal movement between departments, and hiring success.
In addition, this type of planning, which incorporates data from workforce analytics, provides a full picture of spending. You’ll know instantly if you’re overspending on recruiting, or not spending as effectively as you can — because you can easily compare the total costs of activities such as internal, agency, and RPO recruiting.
Have Diversity in Recruiting Process
Traditional recruiting methods make it hard to tell whether you’ll hit your diversity targets or ensure equity during the process. Instead of guessing, use analytics to continuously monitor your hiring funnel for important demographic ratios such as gender, ethnicity, and veteran status. This enables you to better track diversity and implement the correct evidence-based programs to increase diversity throughout your pipeline.
Improve candidate experience
The very best hires have a lot of options. They’re the ones getting bombarded by recruiters and job offers, making them harder to get.
If your hiring experience is long and tedious, they might just skip over the application process and move on to the next potential employer. To fix that, you can improve the entire candidate experience & make it as easy as possible for someone to apply.
With a data-driven approach, however, you can make the entire process significantly easier, more efficient, and in the end, cost-effective. In a nutshell, the data-driven approach to recruiting is the act of using data to optimize the entire hiring process.
What are your thoughts on Data-Driven Recruiting? Do you think it can help a company grow, or is it just a sham?