Recruiting software provider Lever recently conducted hiring research that collected data from more than 600 small- and medium-sized businesses for over a year. The data was collected to help “startups and SMBs understand whether what they’re seeing unfold in their hiring practices is typical,” said Amanda Bell, director of recruiting at San Francisco-based Lever.
According to Bell, a data-driven recruiter analyzes their recruiting-conversion funnel. “This is how many candidates are making it from the top of your pipeline to a screen, from a screen to an onsite interview, and so on. It’s the information you need to spot inefficiencies in your process and understand what benchmarks to hold your team accountable to,” said Bell.
Among the findings is that 31 percent of candidates decline their offers. “As a recruiter, by the time you extend a candidate an offer, you’ve invested substantial time in them. You’re emotionally invested too, so it’s tough if they say no,” said Bell, whose company promotes a 50-50 gender balance among its 92 employees. Companies should be aware that it’s normal for almost one in every three candidates to turn their offer down, and then take steps to curb that as much as possible.
The research showed only 17 percent of candidates make it to the first stage and 32 percent of screened candidates make it to the on-site interview stage.
“This data is a useful benchmark for a recruiting leader at a small company,” said Bell. “If the conversion rate dips, it means my recruiters are spending too much time on candidates that don’t meet the bar … and time is our most precious commodity.”
The significance behind hire rates is candidate-to-hire ratio, said Bell. Knowing the right number of candidates needed at the top of the funnel maximizes chances of making a hire. The research showed SMBs go through an average of 120 engineering candidates to make one hire. “Unless your ratios are meaningfully better, if you’ve only filled your pipeline with 80 engineering candidates, you risk needing to start your search back at square one,” said Bell.
Data revealed it takes 86 candidates from all sources for every hire, but far fewer employee referrals — just 12 — to make one hire. “One in every 64 proactively sourced candidates is hired, which proves the importance of candidate sourcing as a core component of a proactive talent strategy,” said Bell. Combining sourcing and referrals is important for hitting aggressive hiring targets.
Referrals get hired at high rates, so they represent a small percentage of the candidate pool, but much larger percentage of total hires. “When comparing benchmarks to companies like Lyft, which has seen employee referrals account for as high as 40 percent of hires — startups and SMBs realize it’s worthwhile keeping the focus on employee referrals high,” said Bell.
Bell recommends tracking conversion rates, offer-acceptance rates, hire ratios and time to hire. In addition to knowing these metrics, the most efficient way to leverage recruiting data is to understand how the processes vary by role.
“Invest in the right places by knowing the most efficient sources of hire,” said Bell.
According to Bell, create an inclusive culture by asking the right questions that will evaluate talent based on their work abilities. Know what you’re looking for before you go into an interview. “This allows you to ask candidates similar questions for fair comparison and reduces bias through objective decision-making,” said Bell.
After making an offer, special touches are helpful.
“At Lever, we’ve pulled all sorts of crazy stunts to make sure our offerees feel valued, like shipping a travel care package to a candidate who was about to head to Australia on vacation. You simply can’t afford to let up,” said Bell.
Mia Mancini is a Workforce intern. Comment below or email email@example.com.