recruitment funnel effectiveness

Recruitment funnel effectiveness: 5 key metrics you must keep track of

If you’re looking for a practical tool that will help you visualize your hiring process, a recruitment funnel is just what you need. This framework keeps you posted and collects the insights you’ll absolutely need. However, with everything getting automated, recruiters will rely more and more on metrics. In this case – we’ll have to track recruitment funnel effectiveness

So, this is how it works: basically, you should get ready to have your recruiting efforts and outcomes measured and improved. Which stage is in need of a retouch? Which approach is becoming outdated? Are there any key factors you keep overlooking? 

Now, let’s see how to get the hang of these facts. And what to do with them in the long run!

Brief Intro: What is a recruitment funnel?

First, we should cover the basic definition here. A recruitment funnel is sort of a framework that outlines all stages and participants of the recruitment process. It covers each step from the initial point of contact and brand awareness tactics. There are five key stages, although some use more. But these are the crucial (and most popular) ones: awareness, attraction, application, interviewing, and hiring.

All your candidates are at the very top of the funnel. And your new hire is at its bottom. The data gathered here should help you learn how many applicants are needed to fill open positions and what sources attract more quality candidates and bring the best results. 

A quick guide: How do you build a recruitment funnel? [7 easy tips]

Each stage has to be carefully planned. So, first, you’ll need a clear objective. And then, make sure to fill in the blanks:

  • Focus on improved strategies to boost employer branding and candidate experience, and refine your social media tactics,
  • Write a precise and engaging job description and find out where to promote it to reach your target audience and receive qualified applications,
  • Optimize your career page and perfect your website, plus add your employees’ stories and experiences,
  • Give and receive feedback from current and former candidates and employees,
  • Make your application process simple, effortless, and mobile-friendly,
  • Interview and hire according to your actual hiring needs and keep your candidate persona in mind (with its key traits, skills, and expertise),
  • Set the stage for a tailored job offer and make yourself accessible and objective throughout the entire hiring process. 

Here’s one final piece of advice: eliminate bias and aim for diversity. You can do so by using standardized interview questions, moving the first impression more towards the end of the recruitment process, and swapping your gut feeling with automated practices (that will center your attention around the role and its requirements rather than the applicant’s aura or appearance). 

Key perks & points: Why is the recruitment funnel important?

Building an effective recruitment funnel is super important. First of all, it helps you hire more diverse talents and tap into new markets. Plus, it grows your candidate pool. And if you aim to hire a remote employee, this is an absolute necessity. All processes and steps will be simpler, more structured, and more efficient. That will save you time and money and help you gain more brand ambassadors, and quality resumes for each new open role. And finally, there’s a strong correlation between the recruitment funnel effectiveness and retention rates. So, let’s see how to make it all work out perfectly! 

What is recruitment funnel effectiveness?

Recruitment funnel effectiveness is a measurable (and imperative) point. In simple words, it’s a sum of several key recruiting metrics. Since the framework itself is made to make a recruiter’s life easy, it’s paramount to track its efficiency. By doing so, you’ll be able to filter each step and approach. Moreover, you’ll automate and streamline the whole hiring process and quickly drive better results. 

5 essential metrics to track recruitment funnel effectiveness

Wanna learn how to measure recruitment funnel effectiveness and monitor your success? Here are the five key metrics to track and calculate your score: 

  • Time to hire
  • Source of hire
  • Cost per hire 
  • Quality of hire
  • Candidate experience

Simple as ABC, right? Well, tracking these will take an extra moment or two. But if you use the right tools and collect data, it’s all quite easy – and more than useful!

Finally, you will have to keep an eye on the recruitment funnel effectiveness formula.

Recruitment funnel effectiveness formula

As we know, technology is shaping up the staffing industry. So, there are more new candidate assessment methods for a recruiter or hiring manager to use. And recruitment funnel effectiveness KPIs can be helpful when verifying whether these approaches do the trick. 

Here’s how to get started: you should divide the total number of applicants in each stage by the number of applicants who entered the funnel. That way, you can double-check every stage and area. And you’ll be able to focus on particular factors and aspects that need to be refined. 

Pro tip: Make sure that all the applicants who are about to enter the funnel are qualified for the role. You can do so by combining the old fashion tests and screenings with advanced solutions. 

Time to hire 

Some elements can make or break your recruiting process. And so, it’s vital that you track and perfect them regularly. Time to hire is one of the most frequently tracked recruitment metrics. First of all, it allows you to understand whether your whole hiring process is efficient. Its aim is to show just how much time you actually need to attract and grab the best-performing candidate. To get the right formula, you should subtract the number of days it took the candidate to enter the pipeline from the number of days it took to accept the offer and finally sign the contract. 

Source of hire

Here’s a simple fact you have to memorize: knowing where your top candidates come from is a must. And this metric grants you insights into the percentage of your overall hires who entered the pipeline from specific channels, platforms, job boards, or through referrals and other sources. So, first, you’ll understand the journey of past hires completely. And that way, you’ll know how to rebuild and refine the path for future teammates and experts. You can get the pattern by conducting a survey, looking into web analytics, or using an ATS that will do the math for you. Finally, the precise source of hire formula you should use is quite straightforward: just take the number of hires and divide it by the total number of applicants from a particular source. 

Cost per hire 

It’s always smart to take a closer look at the average expense you’ve made when recruiting and hiring a new employee. Cost per hire is a metric that guides you toward this precise result. Now, one of the key perks you’ll get is improved recruiting ROI. You’ll figure out your budget and build up your strategies. There are various types of metrics you could (and should) track to determine how much money you’ll likely spend on a new job opening and the quest that follows. However, this is the basic cost per hire formula: take the sum of all recruiting costs and divide it by the number of hires. And here’s a key point – pick a specific period that you’ll be doing the calculation for. 

Quality of hire

When the new hires bring improved skills, knowledge, and innovative points of view to the team, you’ve got yourself in a winning situation. And the quality of hire is a metric made to show whether they offer more value to your company. Decreased costs, more motivated team members, and better retention rates are some of the benefits of hiring qualified and driven people. That’s why this metric is so significant, according to Global Recruiting Trends. To calculate your new employee’s results, pick a few key indicators of their performance. Then, turn it into an equation by dividing those parameters’ scores by the number of indicators you chose. 

Candidate experience

Measuring the candidate’s satisfaction throughout the application and hiring process is crucial. That way, you’ll know what steps you need to enhance. So first, you should keep an eye on the interview and reputation metrics. And satisfaction metrics should be measured several times during the hiring process. You could use surveys to check up on your talent’s thoughts, notions, and expectations. But it’s way more effective to personally reach out and ask for feedback

Bonus tips for effective recruitment strategies

To spot, engage, and hire the most skilled people, you’ll have to go the extra mile. So, each additional trick up your sleeve is a massive plus. And these are the components you must include in your plan: 

  • Research the job market and find out the optimal salary ranges, benefits that will help you attract and keep the best hires, and other incentives,
  • Use metrics and KPIs to leverage the data and get the optimal results,
  • Speed things up and simplify every step of your recruiting process by using the right tools,
  • Build a community around your brand and stay in touch with passive candidates, their interests, and motivators,
  • Host events like meetups, workshops, conferences, etc.

And here’s the ultimate recruitment strategy that holds the key to a successful hiring & retention: referrals. Start by setting up an employee referral program and hire more qualified people who will stick around longer thanks to your top performers’ recommendations. That way, you will also save lots of time and money and build up your reputation among the best industry professionals. Finally, you could expand your search. Use recruitment affiliate software to combine the power of referrals with the knowledge and connections across your niche. Let recognized experts (both recruiters and tech professionals) source on your behalf. 

Measure your recruitment funnel effectiveness

Remember – keeping track of recruitment metrics helps you streamline your processes and drive optimal results. And recruitment funnel effectiveness needs to be at the very top of your list of calculations. It can affect your future choices and strategies. And it will have an impact on how your candidates perceive your company. Ultimately, you’ll attract, hire, and retain more qualified candidates more easily. So grab a tool or two and dedicate a few extra moments to stop and smell the progress.