How do you measure whether your recruiting is effective?
This video covers six main steps of the hiring funnel, metrics to measure, and benchmarks to target, illustrated with M&Ms. 🙂
Covered topics also include:
- The top 4 applicant tracking systems (ATS) for startups
- Specialized sites for hiring engineers and salespeople
- Ways to boost awareness and applications for your open roles
This continues the VentureKit series on startup recruiting. To follow the series, subscribe to the VentureKit Youtube channel or sign up for the email list on the right.
Transcript
Lord Kelvin, the first to measure the temperature of absolute zero, said “if you can’t measure it, you can’t improve it”.
I believe hiring well is the single most important thing you can do as a founder, so I’m going to cover how to improve your hiring with metrics. And I’m enlisting these 500 M&M’s to help.
The set of metrics I’ll cover in this video is for the hiring funnel, which usually has six steps:
- First, the candidate becomes aware of the role
- Then you receive applications
- Screen candidates
- Interview finalists on-site
- Make an offer
- Complete the hire
Tracking the metrics for these steps may sound daunting but it’s easy if you use an Applicant Tracking System, an ATS.
According to OnGig, which surveyed over 3,000 employers, the four most popular ATSes for startups are Jobvite, Greenhouse, SmartRecruiters, and Lever. You have many options here.
Let’s run through some hiring funnel metrics and benchmarks to focus on.
The first is the number of impressions on potential candidates. This can be outbound or inbound and includes every channel you use, like email, social media, job sites, your career page, ads, and recruiters.
A 2018 Jobvite report found that a typical job post in IT needs about 500 impressions to make one hire, so if you’re significantly below that, you probably need to market your openings more.
I recommend channels specific for your hire. For example, Stack Overflow is good for reaching engineers while TheLions specializes in sales jobs.
Paid ads, content marketing, PR, and SEO can also help you reach more candidates.
The second metric is the number of candidates who apply. Lever tracked the recruiting funnels of 600 startups and found that on average, 86 applications were needed to make one hire. If you want more applicants, you can try a few things.
- You can make your job description more compelling. I’ve published an in-depth video on how to write a great job description so check that out for tips.
- You can streamline your application form, making sure it works across different devices and doesn’t ask candidates for too much information.
- You may also need to re-evaluate whether you’re thinking about the role poorly or requirements are too strict. Ask someone who has the role to see if that might be true.
The third metric is the number of candidates you screen. Screening can mean a phone interview, a homework assignment, or any number of steps before a candidate is invited to interview on-site.
Lever reports an average of 15 screens per hire, which means only about 20% of applicants are screened. If you’re screening much more than this, you probably need stricter screening criteria. If you’re screening much less, you may need to loosen your requirements or target channels that are more specific.
The fourth metric is the number of candidates you interview on-site. On-sites are where you dig into the candidates’ skills and gauge culture fit. Candidates are interviewed by about 4-6 people and should meet everyone on the team they’d work with.
Lever reports an average of 5 on-site candidates per hire, only a third of those screened.
Because on-sites take so much time from your team, you should be quite selective. If more than half of screened candidates are getting an on-site, you probably need to screen more tightly.
Finally, there is the number of offers you make to secure a hire. Lever reports an average of 1.5 offers per hire, which means a third of the time, candidates turned down an offer.
If more than two people you offer turn you down, something is probably off with your offer. Because candidates may turn you down, sign your choice before you let go the other candidates. Also file the rejected candidates for later because if they made it this far with you, they might be a fit in the future.
This data shows that it’s a long journey from hundreds of impressions to one hire.