Hiring Funnel and its controlling potential

Metrics and KPIs are used in order to improve performance. When applying hiring funnel and reporting input metrics, HR intends to improve their performance as well, particularly measured in terms of the final outcome. It means that quantity and quality of new hires must be achieved.

Questions remain, however, how the particular input recruiting metrics must change in order to achieve higher level of performance by HR department. Then eventually, HR must move from the historically determined target ratios to performance standards leading the department to the desired quantity and quality of new hires.

Let’s look at the example again; I reviewed in the previous post on that subject. Based on the historical ratios to meet the quantity target, HR needed to interview 18 candidates and receive 4.8 applications per day (or 144 applications in total during a month) in order to hire 3 sales persons.

Assuming that high potential sellers are less likely to change jobs frequently and apply for jobs more often, the ratios should decrease in order to increase quality of hires. So HR needs to receive more applications and interview more candidates in order to hire the high performers.

With the chunk rate of 30% after first month of hiring sales people, standard ratios should be set 1/3 above the historical values.

Hires-to-interview ratio moves from historical 1/6 to 1/8, so that HR should interview 8 (6 plus 1/3 of 6) instead of 6 candidates. As a result HR must interview 24 candidates in order to hire 3 of them and no one drops after first month.

Interview-to-candidates ratio of 1/8 moves to 1/10.6, so that HR needs to receive a total of 255 applications, or an average of 8.5 applications per day.

When planning the recruitment activities and efforts targeted at motivating more job seekers to apply, HR need to remember the general job seekers behavior and job posting nature. The former suggests that job seekers rest on weekends and public holidays and get mostly active on Monday and Tuesday with their application efforts, when they realize this week is going to be as every other week. The latter implies that job ads must be refreshed and posted frequently, as a two-week old job ad does not bring as many applications as a new one, because it does not show up in the top of the search results.