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Basics of Successful Hiring

We usually talk about best practices or improvements in the hiring process. The purpose of this article is to go back to basics. If you are a smaller company in need to set-up hiring process, or larger one in need to change/improve existing one, this article might be just what you're looking for. Learn in more details how to improve your hiring process or build a new one in this short guide.


“If you think it’s expensive to hire a professional, wait until you hire an amateur.” – Red Adair



#Step1

Business strategy

Hiring, as every other HR and business function, should come as a part of overall business strategy. This means you should create at least a 1 year plan with goals you want to achieve and activities you need to reach your goals. The term "strategy" is often mystified - in essence it means to have a plan and vision to reach 1 or 2 mail goals (e.g. become the most successful marketing agency in SME segment), and several smaller goals and activities which support this main vision (e.g. creating best content for SME's marketing needs).


Same goes with hiring strategy - it should be alligned with business strategy and it should clearly state how it helps to achieve business goals. It should be a solution to your business challenges regarding human resources needed to execute business plans.


Example of simple, yet usually overlooked hiring process mistake:

Each company has a sales plan (targets to reach) and planned number of sales resources - sales people needed to reach those targets. However, hiring strategy for sales people often does not exist and does not support sales business function to meet it's targets. Hiring is often reactive, managers call for help when issues cannot be swept under the carpet anymore.


Impact on business results:

Sales department business target is based on available resources - sell 10 million dollars with 10 people in 2019. Business plan targets "think" you will have all 10 people available throughout the year with similar productivity (sales achievement) - which is never the case as you have turnover - people quit and you need a replacement.

If your hiring process lasts for 45 days - and your onboarding/learning to full productivity of new employee lasts for 60 days - you have a significant gap in your business plan and you will probably underperform in terms of sales. If your sales team is badly managed, your company is not recognized as a good employer, you have higher turnover than average - your business will suffer even more.


Just having basic hiring strategy process alligned with business needs would significantly improve your understanding how should an efficient hiring function look like and where to focus your time and effort in the next 12 months.


#Step2

Talent acquisition

So what are you going to do about it? How to impact business results and bring value to business with hiring function? Meet recruitment and her enlightened sister - talent acquisition.


Recruitment is about filling vacancies. Talent acquisition is an ongoing strategy to find specialists, leaders, or future executives for your company. Talent acquisition tends to focus on long-term human resources planning and finding appropriate candidates for positions that require a very specific skillset.

In plain words - recruitment is a process from A: find a new sales employee to B: candidate accepted job offer.

Talent acquisition is still a recruitment, but with planning and proactive approach to business needs. It is a deeper and broader business function which evolved with all the challenges companies are facing when looking for employees to hire.

Talent acquisition involves:

  • sourcing,

  • attracting,

  • testing and interviewing,

  • hiring, and

  • onboarding employees.


Just to give you a taste of talent acquisition, based on this blog post: 5 WAYS TALENT ACQUISITION IS DIFFERENT FROM RECRUITMENT we made this graphic:


Talent acquisition is a cyclical approach that’s geared towards building relationships, anticipating future hiring needs, and creating a sustainable pool of candidates. Sometimes your business does not require strategic approach to hiring and your hiring function could be minimalistic in that sense. That still does not mean you should do poor hiring process and rely only on your instincts.


#Step3

Hiring vs Quality hiring

As every job out there, you can do it just fine, you can be bad at it, or you can apply best practices, be innovative, analytical and constantly striving for improvements. The question is do you belive HR and hiring can make a difference for your business and are you willing to learn, apply or even invent models which can make that assumption a reality. If you do not believe that and think hiring is best done without thinking a lot about it, that's fine, but you should know you're on the opposite side of every modern HR and business leader.


We rarely want to admit that we are not that great or efficient at doing some work. The worst case is we don't even get asked to challenge our own processes. Just keep on working and grinding, who cares if something can be done better. Basics of business management is to constantly challenge processes, activities, plan them, measure them, invest in tools and technology, improve and be more...magic word.. competitive.


Quality hiring process is the one where:

  • overall strategy exists about your hiring needs,

  • you are planning and measuring at least some hiring metrics relevant for quality of candidates and hiring process quality,

  • you are at least sometimes asking applicants for feedback about hiring experiences,

  • you know which skills you are hiring and where to find those skills,

  • you are applying best practices in assessment and interviews,

  • when you are aware of the competition fighting for that same talent and working on your employer brand to differentiate,

  • when you are resourceful, knowledgeable and efficient in all those steps.

If you would like to start implementing improvements, first you have to analyse what is the current state of your hiring efforts. And to start with that, you should know what to measure and why.


#Step4

Basic KPI's in hiring

To analyse your business activities, you should have some meaningful data. For hiring purposes, there are several basic indicators that should be measured and optimized over time.


These are basic performance indicators which every recruiter and talent acquisition specialst should understand and analyse:

  • Time to Fill or Time to Hire

HR and managers should know how long it takes to fill a position. This measures SPEED of the hiring process, from the moment you post a job or start searching for candidates to the moment job offer is accepted. This, of course, has a number of variables and can be broken down further. Being able to break down the time to fill metric based on every step like CV analysis, testing, interviews and compare it across positions or departments is key for optimization and planning. If you want a financial weight of Time to Hire you should caluculate Cost of Vacancy - then you will have a better picture WHY is it so important to optimize this metric.


  • Offer Acceptance Ratio

This metric looks at offers accepted versus offers extended. If the offer acceptance ratio is low, it could mean a number of things such as taking too long to hire or not offering comparable compensation for talent.


  • Sourcing and Channel Effectiveness

How do you decide where to invest your time and money to find job candidates that fit your culture and required skills? Today’s recruiting uses more sourcing channels than ever before — job boards, referrals, career pages, Linkedin, Facebook, events... Identifying where applicants and hires are coming from can be helpful, but to analyze which channels deliver the best results is hugely beneficial to talent acquisition managers because they can allocate job board spend and time/effort more intelligently.


  • Application Completion Rates

The number of applications started vs. applications completed. Basically it shows application abandonment rates. How will you know if people started and didn't finish applications on a certail device or how much time it takes for an application on our new career page?


  • Net Talent Score

Is a metric borrowed from marketing (net promoter score) which tells us just one simple measure. You ask your job candidates:

"How likely would you be to recommend this employer to a friend or family member on a scale of 0 to 10?"


This score can range from -100 to +100 and the more positive figure the better. Those who answer 9 or 10 are classed as promoters; those who answer 6 or less are classed as detractors. The NPS score is the percentage of promoters minus the percentage of detractors. As simple, straightforward metrics go, you can’t get much simpler than that.

Great indication when measured over time or compared with competition.


  • Quality of Hire

This should be your NUMBER ONE KPI to measure and hopefully optimize. This is what all comes down to, are you successful and capable to bring quality hires in your organization? Not only do poor hiring decisions have a financial impact, cost of bad hire is up to $50,000, a bad hire can destroy your culture, team morale and overall business targets. According to LinkedIn's Global Recruiting Trends Report (2016), quality of hire ranks as the most valuable performance KPI. They knew it in 2016, but hey, 2 years lag is not so horrible if you start implementing how to measure it today. There are several ways to measure it: retention rates of new hires in first 6 to 12 months, performance reviews in first 6 to 12 months, hiring manager satisfaction of new hires, % of promotions of new hires, etc.


If you're looking for one formula, this one might help:


Quality of Hire (%) = (Job Performance + Ramp-up Time + Engagement + Cultural Fit)/4

You score each category and calculate average score (or weighted average) but you should take into account several areas important for employee quality measurement.


You can combine Quality of Hire with Turnover or Retention rates to understand how many people are leaving your organization or are fired due to poor fit. Analysis can be done on department level, manager level, recruiter level.

Turnover rate = number of hired employees who were fired / quit, divided by total number hired


Talenytics has a nice overview of this metric, explaining candidate quality and process quality.


  • Cost Per Hire

Cost per hire is the average amount of money you spent on making a hire. So you calculate all your hiring expenses like job advertising costs, recruiting events, assessment costs, time spent on the hiring activities, external agencies, tools you are using, referral rewards, full-time recruiters salaries. You sum it all up and divide that figure with total number of hires in one year (or you can look at it on a quarterly or monthly basis).


Important remarks:

When you know your cost-per-hire, you can better determine where to invest your recruiting dollars. These strategic recruiting decisions can potentially save your company money and attract better candidates.

How to lower cost per hire? Build a talent community, increase employee referrals, use social media, launch a corporate career site, use online assessment, etc.


#Step5

Technology and resources

The fundamentals are only possible to achieve if you have the right tools. You don't go into the forrest to chop woods with a steak knife and if you have an axe, you want it to be sharp. Even then, you will not be able to chop every wood because sometimes you'll need better, more powerful tools or know-how.

Anyone can say "you should measure this or that" but reality is we often don't have the proper tools to measure our activities and to make analysis possible. If you only use Excel, it would be quite a task just to calculate time to hire, while if you have an cloud based application where you process your candidates - you can do it instantly.

So which tools should we use to make our hiring life easier?

Firstly, you should allign hiring needs with business strategy and decide which tools will add the most value and are worth the investment. Here are some suggestions.


1. Tools which help you to track applicants in the hiring process - Applicant Tracking System tools.

What is ATS and how it helps?

Once applicants apply and end up in your talent pipeline, hiring process begins. ATS focuses on making applicants tracking easier, faster. Usually helps to have all applicants on one place, score their CV's, schedule other process stages at one place, send candidates messages, etc.

Some of the tools we can recommend are TalentLyft and SmartRecruiters and there are many more to discover.

If all the data and hiring processes are in one place, you will have basic hiring metrics available via these tools which can be a huge help.


2. Assessment tools - how to decide are your candidates skilled to do the job they applied for?

Assessment is one of the biggest value drivers in the hiring process. Companies usually don't have the resources to improve assessment process but we have some tools that can help. Online assessment can impact several hiring metrics, decrease time to hire, improve hiring experience and employer brand and lead to better hiring decisions. The logic is simple - if you collect relevant data from larger number of applicants, you have better model to decide which candidates should go to final interviews. We can recommed:

Obviously - CareerCentar - where we offer online testing in areas of Sales, Marketing, Finance and all other areas where you would implement cognitive and personality assessments. We as well offer video testing as a service.

For testing IT skills we can recommend TestDome.


3. Gamification based tools and chat bots

There is something for everyone. If you would like to expand your horizons and be a trend setter, you might find chat bot Mya interesting as your next hiring assistant. Through open-ended, natural and dynamic conversations, Mya is able to gather deep candidate insights and build trust and confidence with its users.


If you like games - Knack might be just a perfect fit. Their games let people express their knacks through a great many specific actions with a complex, real-time, immersive experience. Through extensive research and development, Knack’s data-scientists have mapped the nuances of game-play to performance on standard psychological measures.


4. Finding your job candidates - Sourcing

Sourcing is the process of finding resumes within the recruitment process. Recruiters, both third party and corporate, need to find qualified candidates for their open job orders, oftentimes with very unique or niche work experience.


In this ARTICLE: 17 EFFECTIVE CANDIDATE SOURCING TOOLS you can find extensive list of online tools which can fit your needs when it comes to sourcing.


Hope you will find this guide helpful. It would mean a lot to us if you join our network, follow us on Linkedin.


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