Data Driven Recruiting - The Conversion Rate Enigma

“Errors using inadequate data are much less than those using no data at all.”

(Charles Babbage, Mathematician|Philosopher|Inventor|Mechanical Engineer, 1791 - 1871)

On first glance, the numbers look reasonably right, don't they? You have a decent amount of applications and a full funnel. Conversion rates seem to be quite sound, too, only the offer acceptance range is a bit too low.
In organizations without a strong focus on data and it's implications, a discussion on the reasons why candidates don't accept the offers would start. It is an important discussion and with the right solutions the number of hires can be increased, for sure.
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Unfortunately, it misses the point! Completely...
Let's add some more data points in form of people involved and time spent:

• Get2Know Call: 1 person, 45 minutes
• 1st Round: 2-3 persons, 90 minutes
• Final Round: 1-2 persons, 60 minutes

Now the situation starts to look different, doesn't it? The funnel doesn't look so healthy anymore and realization kicks in that there might be a completley different issue...
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Let's look into it in more detail:
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Let's do the math, but brace yourself!
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That's 116h per hire!
in other words:
14.5 man days!

And this number doesn't even include the time you need to screen applications, align with hiring managers incl. briefing and de-briefing sessions, etc.
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Consequently, this funnel is fundamentally broken! It's wasting time, not only from the TA partners but also from Hiring Managers and Interviewers.
Imagine how much you can achieve in 3 weeks! How many lines of code you can write or how many clients you can call?
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Before we dive into the solution space let's take a short look at another funnel:
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That's 13h per hire!
in other words:
1.6 man days!

This looks significantly different, right? More than 3x the hires with about 90% time savings per hire!
Before you start thinking that this is random numbers - it's not! Both sets represent real data, the first just from applications, the second is only referrals.
In real life, the truth will be somewhere in the middle! But with the right approach and a well-trained and specialized TA Team it can be pushed towards the second data set. What does this mean for you?
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• You need Hiring Managers and Interviewers who have been taught and coached in interviewing techniques, unconsciousbias, candidate centricity and, also very important, on the TA process
• You need communication on eye-level between TA Partner and Hiring Manager to have full understanding on the requirements, job market, needs and wishes, etc. to eliminate the so-called black-hole-effect
• You need to have a clearly mapped-out TA process and clearly assigned roles and responsibilities in the Hiring Team
• You need to have only one process owner, preferably the TA Partner
• You need to have diversified recruiting channels, i.e. job ads on te relevant boards, structured talent sourcing, performing Employer Branding campaigns, attractive Referral Program, etc.
• You need a highly trained TA Team with strong, specialized TA Partners

The list is not exhaustive, but gives a clear indication on the direction that needs to be taken. From all the bulletpoints the first, second and third have the highest impact on the key metric here: Conversion Rates!
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While Conversion Rates are not the holy grail they give you a clear indication on the quality of the funnel! For instance, a Conversion Rate below 50% from 1st Round to Final Round is a stark indicator that there too many unqualified candidates in the 1st Round, and as a consequence the Get2Know Call is "producing" too many false positives. The pattern is clear, right?
As a recommendation for an combined funnel - i.e. Job Ads, Talent Sourcing, Referrals, etc. - Conversion Rates should look like this:
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The first two parts of the funnel cannot be mapped out easily. Out of experience, the Conversion Rate from Application to Get2Know should be below 10% to avoid too many unnecessary interviews.
Important: A major consequence of focussing on Conversion Rates is a much smaller funnel, at least as of 1st Round.

To compensate for the lower absolute numbers, the highly-trained and specialized TA Partners come into play! Only if they have a full understanding of the topic they are recruiting for, be it Engineering, Product Management, Design, or any other domain, they will be able to evaluate the candidates as scrupulous as needed and move forward with those who have the potential to make it to Offer stage.
In combination with trained Hiring Managers and Interviewers, a clearly laid-out TA process and open, precise communication on eye-level within the Hiring Team a sound recruiting funnel can be achieved and thus, successful hiring of your open positions.

Let's summarize the above and give a short outlook on addtional KPIs and metrics in TA (of which we will speak on other articles).
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In short, Data is key! There's never too much today, only too little!
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In more detail, data needs to be interpreted in a meaningful way, too, - and a healthy combination of absolute and relative data will bring the best results. So here's the ranked list:
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• Conversion Rate
  (Can and should be broken down by Role, Channel, Department, Seniority, etc.)
• Number of Hires
• Time-to-Offer and Time-to-Hire incl. break-down by Role, Channel, Department, Seniority, etc.
• Weekly Offers vs. Signed Contracts
• Talent Sourcing (Response Rate, Interest Rate, Passing 1st Round, Offers & Hires)
• Candidate Experience
• Hiring Manager Satisfaction

If you want to learn how this ties into the Talent Acquisition Framework feel free to dive into the topic here!