Over the last decade, the amount of time employers spend on interviews of new employees has almost doubled, according to Glassdoor research. Companies spend more time — and money — recruiting quality candidates than ever before.
Many business pundits, like Peter Cappelli of the Harvard Business Review, argue that creating a smaller but better-qualified applicant pool will create a better yield.
Ways to Improve Applicant Pool Yield
In today’s environment where many applicants “ghost” prospective employers in the middle of the applicant process and where passive candidates may demand a king’s ransom, it’s an especially good time to reevaluate the creation and maintenance of your candidate pool.
Using an Independent Recruiter will dramatically reduce your wasted time, as will pre-interview screening and skill testing. Analytic or predictive data tools may be marginally beneficial, but may not be precise enough to properly identify the successful hire for your specific case.
Cappelli suggests that instead of seeking a broad applicant field at the “top of the funnel,” — since identifying and evaluating every applicant costs time and money – employers should spend more energy defining what elements make for a successful hire in the first place.
“How to determine which candidates to hire—what predicts who will be a good employee—has been rigorously studied at least since World War I. The personnel psychologists who investigated this have learned much about predicting good hires that contemporary organizations have since forgotten, such as that neither college grades nor unstructured sequential interviews (hopping from office to office) are a good predictor, whereas past performance is,” Cappelli writes.
So how do you increase the quality and yield of your applicant pool? Start with the end in mind!
Track Your Quality of Hire Metrics
Quality of Hire is a very useful, if slippery, performance KPI. A LinkedIn study showed that 40% of large companies and 45% small businesses report that finding an effective formula to track Quality of Hire (QoH) is a priority.
What exactly is Quality of Hire? Ultimately, it measures the value that new hires bring to a company via performance of tasks. It’s a metric that has a long-term horizon and can only be measured many months after you’ve made a hire. QoH can be tricky to assess and difficult to standardize as a measurement.
According to LinkedIn’s report, these are the three most common indicators that companies use:
- New hire performance metrics are used by 51% of companies. They are the most popular way of measuring quality of hire. Performance metrics include any kind of measurements that indicate a new hire adds value, like meeting X sales quota, delivering Y number of product units or achieving Z customer satisfaction ratings.
- Turnover and retention metrics are used by 48% of companies. They give an indication of whether new hires are good fits. They’re risky metrics though, because attrition might have other causes like ineffective onboarding processes or management practices.
- Hiring manager satisfaction ratings are used by 41% of companies. They show how impressed hiring managers are with the quality of their company’s hiring process and their eventual hires.
Some companies use other indicators like percentage of new hires who were promoted (within a certain time period) or ramp up time (the time it takes for a new hire to reach full productivity compared with the average time).
This is extremely valuable data to review with your hiring team, and your Independent Recruiter. It will be the basis for not only skills testing, but will also help form the recruitment strategy.
Create Your “Lookalike” Pool
In social media marketing, behemoth Facebook leveraged its data to turn digital marketing on its ear when it targeted a “lookalike” audience. That’s because people who share the attributes of a given set of “fans” are more likely to convert. With the help of your recruiting team, you can take a similar approach and leverage data to create your “lookalike” applicant pool.
What’s required is that you analyze your Quality of Hire (QoH) data and develop “profiles.” Where did your highly effective employees come from? What attributes do they share? What did they study, where did they study it, and how did they study it? How would you characterize them? Create “personas” and envision variations of the ideal hire.
Using the information you’ve gleaned from your QoH analysis and your “lookalike” exercise, it’s time to get creative in pre-applicant screening and skill testing. We’ll discuss ways to use this information to target and pre-screen for a high-yield applicant pool in our next installment.
Are you having difficulty filling open positions, or developing your applicant pool? Talk to Phoenix Partners today.