After 10 years of working with HR professionals and recruiters, I’ve seen organisations make some all-too-common hiring mistakes. These “small” mistakes can cost employers thousands, as well as a chance at winning top talent. They're also easy to avoid if you look at the right metrics.
For example, did you know talent relationships are 34x more effective than job boards in finding quality hires? Or that on average 1 out of every 2.4 applicants is hired via this channel?
Without digging into the data and tracking metrics, it’s impossible for employers to see where they’re going wrong. By understanding the numbers, recruiters can adjust their strategy, rectify mistakes and improve talent acquisition outcomes.
Hiring mistake #1: Not understanding and tracking why candidates say “no”
Many recruiters spend countless hours and budget finding the perfect candidate, only to have them turn down a job offer in the final stages. It’s a frustrating (and expensive) experience that leaves them wondering what went wrong.
Tracking the offer acceptance rate can give hiring teams insight into what’s going on. Measured in the formula below, offer acceptance rates calculate how many people are saying “no” to an offer.
During 2020 the global industry benchmark was 95%. What does that mean? For every 100 offers made, 95 people said “yes” and 5 said “no”. High performing organisations – who track the reasons candidates decline offers and then put in place mitigating strategies – see offer acceptance rates of 99% year-on-year. If your offer acceptance rate is less than 95% it’s worth considering why.
A low offer acceptance rate often points to a flaw in the recruitment process and the most common mistakes include: a lack of clarity or transparency on remuneration; misalignment between the expectation and reality of the role; a process that is longer than competitors; a poor or unengaging candidate experience; or a lack of communication along the journey.
One customer I worked with recognised their offer acceptance rate needed work, and set out to do the following:
- The talent acquisition team engaged people within the business to bring its employee value proposition (EVP) to life and showcase what it’s like to work there.
- The team prioritised candidate care, leaning on recruitment technology to personalise the experience and regularly communicate with candidates.
- The organisation commenced and concluded their recruitment process earlier so the candidates received their offer before competitors made offers.
By taking these steps, the organisation reduced the number of candidates turning down a job offer and improved its offer acceptance.
Hiring mistake #2: Not having targeted job ads
Are you receiving too many applications for open roles? Unemployment rates remain high and many organisations are reporting an increase in unsuitable applicants. At the same time many organisations are running very lean talent acquisition teams.
Now, more than ever, recruiters can’t afford to wade through more applications than necessary. The ‘applicant to hire’ recruitment metric says a lot about the effectiveness of job listings. Measured using the formula below, tracking applicant to hire rates can show whether a job ad is targeted enough to reach and engage the right audience.
On average in 2020, 4% of applicants were hired. What does this mean? For every 100 applications received, 4 people are hired. A simpler way to think of it is that 1 out of every 25 applicants is hired. Globally, this is consistent with what we saw in 2019 but we’ve seen a shift in some industries. Retail and Finance both experienced an increase in applicants per role this year, resulting in a decrease in the percentage applicants to hire from 4% in 2019 to 3% in 2020.
If application volumes are too high, job ads may not be targeted enough – they could be too vague on key role requirements, they could be reaching an audience of unsuitable candidates, or they may be open for too long. Hiring teams that are receiving high volumes of applications should re-evaluate their job listings to ensure they’re clear about the role requirements and expectations. One way to address this is by adding screening questions at the start of application forms to remove unsuitable applications.
Hiring mistake #3: Not knowing where hires are coming from
Do you know the source of your most successful hires? Whenever I work with customers I always ask the following four questions:
- What sourcing channels do you use?
- Where do most of your applications come from?
- Where do most of your hires come from?
- Which channel is the most effective?
Most recruiters can easily answer questions one and two. Question three is usually an educated guess and most admit they would like greater transparency on sourcing channel effectiveness.
Without knowing where your best hires are coming from, it’s difficult to know where to invest time and resources. Relying on the wrong hiring channels can be a costly mistake. Take job boards, for example. Almost every organisation uses them to advertise open roles. But do they actually lead to quality hires? PageUp research has found that 54% of applications come via job boards, but even though this channel accounts for over half of all applications, these lead to just 17% of hires. Job boards have an effectiveness score of 80.5 (it requires 80.5 applications to lead to 1 hire).
In contrast, employee referrals are a highly effective sourcing channel. In 2020, it took 7.8 referrals to secure one hire making it over 10x more effective than job boards. But, as Peter Capelli points out in a Harvard Business Review article, “A downside to referrals, of course, is that they can lead to a homogeneous workforce, because the people we know tend to be like us. This matters greatly for organizations interested in diversity.”
Knowing the success of each sourcing channel, and the associated cost, enables talent acquisition professionals to adjust their sourcing strategy to maximise effectiveness.
These are three incredibly common but often overlooked hiring mistakes that hold recruiting teams back from securing the best people. Taking action today to track these metrics and shape talent acquisition strategy will ensure organisations are well-placed to thrive in the new year.