Using data to improve your hiring processes

Corporate recruiting departments are increasingly becoming “data-driven” in an effort to improve their hiring processes. But what does that mean? What are the most important measures of your hiring outcomes, and how might you capture them? 

We talked to Linda Brenner from Talent Growth Advisors, out of Atlanta, to find out. If you don't know Linda, she's a former talent-acquisition leader at some major brands like The Home Depot and Gap, who’s helping Fortune 500 companies transform, audit, and improve their talent-acquisition departments. 

We're talking specifically about using data to improve your hiring and what you can look at in your data to improve the way you hire people. Any thoughts on that to kick it off, Linda? 

We certainly get input and feedback from stakeholders, but we typically look at three data sources: speed, cost, and quality of hiring. 

Tell us how you measure these. 

Look at a variety of data points. Speed comes from the ATS. Even though ATS data is usually input inconsistently and is not usually accurate, what is typically accurate in an ATS is the req open date and the req closing date. So, at a minimum, we can get a ‘swag’ at time to fill. If the data is not trustworthy or credible, that in and of itself is a learning. 

Quality is not about whether hiring managers like TA. Quality is about, from a macro sense, ‘Are the people that we're hiring as a company staying longer over time, and are they performing better over time?’ We look specifically at payroll data, usually two years, and we identify trends in hiring, attrition, and internal mobility.

We'll cull the data to identify job families geographies, or critical roles and really suss out if and where early attrition is a problem. Sometimes it's within 90 days. Sometimes it's within a year. And sometimes it's the opposite. Sometimes there’s suspiciously low attrition. 

Let’s talk about cost per hire.

We will certainly calculate cost per hire using the industry standard methodology and benchmark that with sources that we have and our own sources. But we also look at the business of the organization and estimate what poor hiring is costing the business. So that often is excess overtime, or the use of temps. 

In a healthcare setting, it's excessive use of travelers. It could be incredibly expensive sign-on bonuses, and it could be agency spending. Work with finance and understand what hiring is really costing the business.

OK. Speed, cost, quality. What about all the other things? Are you screening too many people out? Are you letting too many people in, and therefore, it takes longer to hire someone? Are you interviewing too many times? Are there too many people in the interviews? Are your requirements really necessary, such as educational requirements or years of experience?

Those are definitely important, and they will always show up in speed. If our managers insist on wanting six interviews or want their whole team to meet a candidate, it extends the process. We’ll usually hear about that when we interview recruiters and hiring managers. And that will absolutely extend the speed to hire. 

We often find that managers are kind of directing the process. And it's often based on their habits, whims, beliefs, and maybe biases. And you already mentioned a few. ‘I want to see only people with a college degree. 

I don't want to see anyone who has ever worked in manufacturing or for our competitor.’ Or, ‘I only want to pay $50,000, but I want a ready-now director.’ I mean, ludicrous specs and requests or demands. That grinds everything to a halt, and we just have to start and stop and start and stop.

I hear that you feel that all these hiring processes are sometimes negatively affected if they're too much in the hands of managers or if the TA team does not have enough control. 

They [recruiters] are often positioned in the organization as customer service providers. I did it too. 

Regarding quality, you’re mainly suggesting—though these are similar—that there should be less focus on performance reviews and more on whether the person stayed and got more pay and promotions.

If we are looking at quality of hire, we are looking first at tenure. If a hire is not retained, it's moot. Voluntary versus involuntary turnover is kind of interesting, and we'll look at it, but if they're not there, they're not there. If they stay, at what rate are they performing? And this gets into talent management. 

What data does a company have about existing employees? It might be performance, potential, pay, bonus eligibility, or rate of promotion. We can look at a variety of pretty basic data that comes out of the payroll system. And we want to increase that over time. 

As for costs, it isn’t just about what’s the least expensive, right?

It's whether we are cost-effective. Whether we are spending the right amount of money for the results we're getting.