5 Recruiting Analytics that Take Talent Acquisition from Gut to Great

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1 A PeopleFluent White Paper 5 Recruiting Analytics that Take Talent Acquisition from Gut to Great Gut decisions are in a sense like playing the lottery: they feel great when they pay off but leave a lot to chance. The days of recruiting decisions based on gut instincts alone are fading fast. An article in the Harvard Business Review highlighted that, humans are very good at specifying what s needed for a position and eliciting information from candidates but they re very bad at weighing the results. The authors found that simple computer algorithms outperform human decisions by at

2 least 25 percent, regardless of whether the job is on the front line, in middle management, or in the C-suite. While there is obviously still value in having recruiters and hiring managers who possess good people instincts, it has become even more essential that they have reliable data on which to base their sourcing, screening and hiring decisions. In the escalating global competition for talent, instincts alone aren t enough when it comes to answering complex and nuanced questions such as: Are your candidates closely aligned to your organization s mission and culture? Will they be engaged in the work you give them? Will they stay for the longterm or leave you high and dry in six months? Do they have the skills or the propensity to develop the skills you ll need a year from now, two years from now, or even five? Recruiters and hiring managers have relied too heavily on instinct to answer these kinds of questions in the past. With the tools and technology available in recruiting software today, employers can take a far more scientific, datadriven approach. Such an approach, however, requires more than a basic applicant tracking system with a handful of reporting capabilities. It requires a total talent solution one that allows you to source, assess, recruit and hire from any talent pool. This also means gathering and harmonizing a vast array of candidate data and convert it into meaningful metrics and actionable analytics. With the following five measurements as part of a recruiting analytics strategy, you can identify the characteristics, traits, behaviors, skills and backgrounds of your most successful candidates hired, and eventually predict where you should be sourcing future hires from and why. In fact, with a total talent solution in place, you can answer five crucial questions that will significantly elevate your recruiting success. From Gut to Great: 5 Essential Questions Answered with Recruiting Analytics With the following five measurements as part of a recruiting analytics strategy, you can identify the characteristics, traits, behaviors, skills and backgrounds of your most successful candidates hired, and eventually predict where you should be sourcing future hires from and why. Not only do recruiting analytics help you answer these questions, but they play a crucial role in your ability to immediately and consistently source and hire the right talent to ultimately impact your business: 1. Who s in your pipeline? Until you know exactly who s in your talent pipeline, you ll never be able to strategically pursue the people with the right skills and capabilities to meet your organization s future needs. A total talent solution tells you the number of candidates you have by a variety of categories (job type, location, skills, career stage, etc.), where they stand in your recruiting process, when you last interacted with them, and more. 5 Recruiting Analytics that Take Talent Acquisition from Gut to Great 2

3 2. Which sources are delivering the best talent? You must track and measure the value of all your talent pools (job boards, referrals, social media, other companies, etc.) to learn where your most successful candidates are coming from and why. For example, if you want to know the hiring success percentage rate for a specific source, divide the number of source hires by the number of external hires (e.g., total job board hires divided by total external hires.) By knowing which sources are truly measuring up, you can adjust and expend your resources more effectively. 3. What is your average time-to-fill and how does it affect your cost of vacancy? Time-to-fill continues to be one of the most important recruiting metrics you will track, especially if you are a large organization making continuous repetitive hires (e.g., retail; hospitality). The longer the time-to-fill, the longer positions go unfilled, and the more it will cost your company sometimes upwards of millions of dollars per year. Understanding why it is taking so long to fill is the first step to improving recruiting efficiencies. Having a total talent solution in place that provides these analytics so that your team can easily source and hire for repetitive positions will help you decrease time-to-fill and cost of vacancy. Those savings can then be reinvested back into your company and into your long-term recruiting efforts. 4. What is your quality-of-hire rating? This is often referred to as the holy grail of recruiting and hiring. An excellent way to determine your quality-of-hire is by tracking the turnover of your new hires during their first year with you. Higher-than-desired levels of turnover within this period often signifies poor sourcing, selection or onboarding or some combination of these activities. It all comes down to how carefully you measure and track new hire sourcing, performance, competencies, turnover/retention, and developmental/leadership potential. 5. What skills do you really need to fill your open reqs? Quality of hire isn t complete without knowing what skills and skill sets are needed to fill any and all open requisitions. How many times have you screened applicants against poorly worded job descriptions only to find out the hiring manager was looking for somebody else altogether? Or even worse, you hire candidates based on incomplete skill sets and 6-12 months later they re just not the right fit for the role, costing you more in training and replacement costs. Identifying the right skill sets for each role you are hiring for eventually impacts performance, turnover / retention and developmental / leadership potential. These skill analytics will tell you what and why and can be tied directly to the talent profiles of those you employ and manage. 5 Recruiting Analytics that Take Talent Acquisition from Gut to Great 3

4 Once you have clarity on the questions above, you can focus on getting more predictive regarding your recruiting initiatives and what you need to do over the next 12 to 24 months and beyond. With the right total talent solution in place, you can accurately project insights about the future based on your current recruiting trends, attrition rates, sources and skills inventories, timeto-fill and then analyze these insights in a multitude of ways. Answering these questions not only gives your HR and recruiting teams the data, metrics and analytics they need to be more effective, but it also arms you with the business information your executives need to make larger decisions and to clearly see the strategic value of your total talent initiatives. The Importance of a Total Talent Solution Of course, you can t answer any of these questions without the right recruiting solution in place. While some organizations have patched together elaborate webs of systems and tools, you are far better off implementing a truly unified total talent solution. Such a solution would enable you to see across all of your talent, regardless of classification, it would provide you with the comprehensive, actionable data and analytics you need to source, recruit, onboard, and empower your workforce with greater efficiency and effectiveness. With the right total talent solution in place, you can accurately project insights about the future based on your current recruiting trends, attrition rates, sources and skills inventories, time-tofill and then analyze these insights in a multitude of ways. As recent research shows, the need for a total talent solution is widespread: Staffing is on the rise 62% 62 percent of U.S. CEOs plan to add headcount this year. Source: Pricewaterhouse Coopers External recruiters still abound 80% Nearly 80 percent of companies rely on search firms to fulfill their total talent needs, spending $12 billion every year. Source: American Staffing Association 5 Recruiting Analytics that Take Talent Acquisition from Gut to Great 4

5 Time-to-fill is long It has now reached a national average of about 25 days, the longest duration measured in the 13 years covered by the DICE-DFH Vacancy Duration Measure. 25 days The benefits of a total talent solution include the ability to create hiring profiles to identify optimal candidates (especially in repetitive hiring) developing specific hiring quality predictors by roles, departments and regions quickly assessing the impact of new recruiting programs and sources and uncovering critical issues and recruiting roadblocks that might otherwise remain hidden. If your recruiting team is still relying heavily on their gut instincts to source and evaluate talent, the time has come for them to be more strategic and competitive by utilizing reliable people data, metrics and analytics. Analytics and data that can only be found in a unified total talent solution and strategy. That is what it means to be great. For more information on PeopleFluent Talent Management and HR Solutions visit us at or call us directly at Recruiting Analytics that Take Talent Acquisition from Gut to Great 5

6 About PeopleFluent PeopleFluent, the leading total workforce HCM technology company, redefines Talent Management with an innovative Talent Engagement Cloud that is built around people and not HR processes. By deeply integrating pervasive video, strategic analytics and collaborative social technologies into its complete suite of Talent Management applications, PeopleFluent redefines employee engagement to address productivity loss and diminished financial results due to an increasingly disengaged workforce. With PeopleFluent, companies can change at the speed of business without costly IT interventions through intuitive, highly configurable software that is built upon the right data. Spanning across an organization s entire global workforce with one talent cloud, PeopleFluent equips leaders with the meaningful talent data and strategic analytics necessary to make better business decisions. PeopleFluent has worked with over 5,100 organizations in 214 countries and territories to engage employees to drive better business results. Today, 80% of the Fortune 100 relies on PeopleFluent as part of their talent management delivery strategy, helping them successfully achieve their talent aspirations. Waltham, Massachusetts 300 Fifth Avenue Waltham, MA USA Tel: Raleigh, North Carolina 434 Fayetteville Street, 9th Floor Raleigh, NC USA Toll-Free: (877) Tel: London, United Kingdom 15 Fetter Lane London EC4A 1BW United Kingdom Tel: +44 (0) Talent Insights. Business Outcomes. Copyright 2014, PeopleFluent. All rights reserved. PeopleFluent is a registered trademark, and Recruiting Mirror, Colossus and the PeopleFluent logo are trademarks, of PeopleFluent. All other brand and product names are trademarks or registered trademarks of their respective holders.