Optimizing Recruiting Funnel: Strategies and Metrics to Monitor

There is plenty of competition in the recruitment sphere. Getting the process right from the beginning is critical to weed out unfit candidates and show qualified candidates you are the right company for them. In fact, a bad hire can cost a company almost 30% of the recruit’s first-year salary.

In this blog, we will look at how a company can optimize the recruiting funnel by understanding different stages of the process.

What is a recruitment funnel?

A recruitment funnel is a framework by which companies streamline the process of hiring. It starts wider with companies aiming to attract talent to apply to open job roles and becomes narrow along the way. The goal of a recruitment funnel is quite like a sales or marketing funnel — conversions. In recruitment, conversion means turning a potential candidate into a full-time employee.

Here’s what a recruitment funnel looks like:

1) Creating awareness about the open role

2) Attracting applicants

3) Screening candidates

4) Interviewing shortlisted candidates

5) Comparing interviewees to find the right fit

6) Conducting a background check

7) Sharing the job offer

8) Onboarding the recruit

Why is a recruitment funnel important?

The recruiting funnel is a great way of streamlining the hiring process. By clearly mapping out each stage of the funnel, you can optimize the steps for hiring for open positions per your company's requirements. For example, showcasing your employer branding might be key to attracting quality applicants who fit the bill.

Additionally, a well-executed recruitment funnel allows the application process to be efficient and free of any unnecessary steps, which could otherwise be a major deterrent for candidates.

When you strategically and gradually reduce the pool of applicants as you go down the funnel, you can create a superior experience for prospects and a more efficient hiring process overall.

Further, having an optimized funnel in place helps mitigate any unforeseen challenges that may come along the way.

Strategies to optimize the funnel for quality hires

3 crucial steps help in optimizing the recruitment funnel. They are:

1) Evaluating hiring efforts

2) Measuring metrics

3) Prioritizing necessary steps

With that in mind, let’s look at top strategies you can use to optimize your recruitment funnel–

1) Evaluate your recruitment needs

Finding the right people for the job is vital for any company to succeed. This is especially a challenge for businesses looking to hire for senior roles. But what does it mean to find the right people for a company? It's about getting the right people with the right mindset, the right skill set, and the right attitude for your business.

Hiring and retaining the best people is key to growing as a business. By ensuring that you have a process for recruitment and evaluating your recruitment needs, you can create an effective funnel for acquiring new team members.

2) Track quantitative and qualitative metrics along the way

When developing recruitment funnel metrics, you have several factors to think about. First, tracking the cost of an acquisition is a critical factor. You must also consider qualitative metrics, such as interview experience. Recruiting can be an extensive process, so it's important to ensure that each candidate is bringing something worthwhile to the table.

Start by assessing the quality of leads at the top of your funnel. If a large number of candidates are failing the screening process, that's a sign that you need to improve your existing processes.

If the number of candidates making it to the interview stage is much smaller than the number of candidates you start with, you are going to want to look at the quality of your initial candidate pool. You should be able to drill down into the source of candidates to see if there are certain groups or sources that are providing better candidates.

Is your interview process streamlined to ensure a positive candidate experience and a high-quality hire?

3) Create your action plan based on previous insights

When creating a plan to optimize a recruitment funnel it's important to take a look at the hard data at hand. This will give you insights on how to create a successful plan that leads to quality hires.

It is important that any data received is broken down into actionable insights and then put into a plan that can be applied to future open positions. By taking action on the insights you've gained, you will be able to attract new qualified talent which is the ultimate goal of a successful recruitment funnel.

Additionally, it is just as crucial to tweak your plan as it is to be implemented effectively. This means if you’re lagging at a particular stage in the funnel or if you’re not seeing the results you were hoping for, you may want to make changes that help you bring in results.

4) Aim to provide a good experience

This part of the strategy can be broken down into 3 phases:

1) Interviewing

2) Hiring

3) Retaining

Interview: You will be filtering out a lot of candidates to reach the interview stage. Since the people at this stage will be manageable, try to create an experience that they will not forget regardless of the outcome. This can be done by quick scheduling, sharing timely feedback, easing them in with dialogue and creating an atmosphere conducive to interviewing.

Hiring: Since your new hire will be an ambassador of the company, you should ensure a seamless hiring process that lays out the requirements for them to be onboarded. This may include providing previous salary slips, proof of previous employment and identification documents.

Retaining: A thorough onboarding process increases the likelihood of the company retaining its employees. It also reduces hiring and training costs in the long term. Some of the best practices to follow to optimize this stage of the funnel are — sharing the employee handbook, assigning a point of contact, setting up accounts and familiarizing them with the work environment.

Metrics to monitor at each stage of the funnel

Since recruitment is a combination of human efforts along with automation in the mix, it is important to track metrics of what’s working and where processes can become more streamlined.

Here are some key metrics to track–

1) Quality of hire

Since you need to hire the best talent available, tracking this top-of-the-funnel metric is crucial to success. This metric may be different across organizations. Hence, it becomes important to set parameters right off the bat.

A great way to improve this metric is by investing conscious efforts in employer branding.

2) Time taken for hiring

If your hiring process is stretched out, it will start incurring additional costs. So, the goal is to minimize the amount of time you take to successfully onboard a recruit. This can be done by streamlining internal processes and automating some steps in the recruitment funnel.

You can track this metric starting from the application to the time taken to accept the job. While most open roles can be closed in 30 days or less, the time taken can vary based on industry, role or seniority level.

3) Cost per hire

One of the most important metrics, cost per hire helps you make informed decisions for current and future roles based on the average costs in the past. The formula for this is:

Cost per hire = Direct expenses + indirect expenses in a given period/ No of candidates recruited in that period

Some of the expenses to consider are HR personnel’s salaries, referral bonuses, agency fees (in case of outsourcing), advertisement fees, software costs, etc.

4) Source of application

HR personnel should focus on tracking where each applicant is coming from. Knowing the source of each candidate’s application can help in boosting efforts for that platform to draw in a larger pool of talent.

Most savvy applicant tracking systems (ATS) come with this functionality. All you have to do is put a filter to assess which platforms the qualified candidates are frequenting.

5) Diversity rate

To bring in a better pool of talent, you must track your diversity rate. This can be tracked based on the self-identified information that candidates provide during the application process such as sexuality, ethnic group, race, etc.

6) Candidate experience

Lastly, candidate experience can make or break your funnel. Track this metric by using automated survey tools that provide helpful insights. An easy one to implement is the Candidate Net Promoter Score (cNPS) which helps them rate the experience on a scale of 1-10.

Final thoughts

To truly leverage data-driven insights, optimizing your recruitment funnel is essential. With clunky ATS, doing so isn’t always possible. You need a solution that can rise above and deliver robust outcomes.
With RippleHire, you can stay on top of important recruitment metrics and transform your recruiting experience.