Talent Acquisition Analytics: Why You Need It & 5 Tips For Success
Analyzing a variety of talent acquisition data and metrics helps you build strong strategies and processes to attract, select, and hire candidates. Let’s explore everything you need to know about talent acquisition analytics, the benefits, and how to get started on your journey.
What is talent acquisition analytics?
Talent acquisition analytics—also known as TA analytics—refers to the process of analyzing candidate and recruitment data and discovering unique insights that can help you make evidence-based decisions in your recruiting and onboarding processes, improve your hiring journey, and ultimately, meet business objectives. This is often done by using technology (usually HR/recruitment software).
Talent acquisition analytics can involve:
- Analyzing candidate experience survey results.
- Sourcing channel effectiveness analytics.
- Examining how many days each step of your TA process takes, and more.
This can help boost employee productivity and engagement, address the biases in your current ways of working, and help you make key improvements that benefit both your candidates and recruiters. But analytics is only beneficial when TA teams understand the type of data points and metrics they need to collect and track.
Talent acquisition analytics is part of the wider talent analytics landscape. Research by Deloitte found that just 4% of organizations have predictive talent analytics capabilities. Only 14% have any form of talent analytics program currently in place. Yet, Bain & Company found a massive 40% difference in the productivity of organizations that invested in talent analytics compared to those that didn’t.
Talent acquisition metrics
Talent acquisition analytics involves using various metrics that are tracked and analyzed with the goal of improving your recruiting and selection process. This is typically done through a tool such as your applicant tracking system (ATS), your pre-employment assessment suite, or Excel.
Here are some of the relevant metrics you might want to track.
Time to fill
Time to fill is a metric that measures the number of calendar days it takes to find and hire a new candidate. This is typically the time between a job requisition approval and a candidate accepting your offer. Many factors can affect your time-to-fill rate, including supply and demand for the specific role and the speed of your recruiters.
Time to hire
Time to hire (also known as “time to accept”) differs from time to fill in that it measures the number of days between a candidate being approached by a recruiter or applying for a role and when they accept the job. Essentially, time to hire tells you how long it takes for a candidate to move through your entire hiring process. It indicates how well your recruiters are performing.
The shorter your time to hire, the better it is for your candidates, and the less likely it is that your competitors will snap them up. This metric can also give you a clear idea of where the bottlenecks are in your recruitment funnel.
Offer acceptance rate
Offer acceptance rate compares the number of candidates who received a job offer with the number who accepted an offer.
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Your compensation not being competitive enough is a common cause of low acceptance rate. In this case, you could consider reassessing your compensation packages, listing pay in your job posting, or asking for a candidate’s salary expectations earlier in the recruiting process.
Yield ratio measures the movements of your candidates between each stage of your hiring process, from the start to the end. For example, you will have a yield ratio for the application to screening stage, the screening stage to video interview stage, and so on.
You’ll also have a yield ratio for the number of applications to the number of hires. This helps you see whether your recruitment strategy is bringing the desired results and identify bottlenecks and biases in your hiring process.
Sourcing channel effectiveness
Sourcing channel effectiveness helps determine the number of potential candidates each recruitment channel is fielding, along with the conversion rate. Comparing these effectiveness rates shows you how effective each channel is. That way, you can focus your resources where they matter most.
Other common talent acquisition and recruitment metrics you might want to measure include:
- Quality of hire
- New hire turnover
- % of open positions
- Sourcing channel cost
- Candidate NPS
- Candidate drop off
- Candidate assessment data
- Candidate demographic data (for DEI purposes)
- Recruitment funnel effectiveness
Benefits of talent acquisition analytics
Making better hires
For a long time, HR teams and operations have largely run on perceptions and intuition to decide whether a candidate is the right fit for a role. The problem with this is that it’s risky, unrepeatable, and results in adverse outcomes.
Data (analytics) shows you which recruitment channels are bringing you the best candidates, what characteristics your top candidates have in common, where you’re lacking in diversity, and so much more.
These metrics are powerful because they can help you make more informed and strategic hiring decisions which will ultimately result in better hires. A study confirms that 41% of candidates perform better in organizations that use analytics in their hiring process.
Optimizing your talent acquisition process
Talent acquisition analytics helps you identify the strengths and weaknesses of your current talent acquisition journey. Then, you can make improvements to ensure a faster and smoother process for candidates and talent acquisition teams.
For example, reading through job applications is a tedious, administrative process that doesn’t make use of your recruiters’ talents. The right software will show you the characteristics of your top performers, deploy a range of assessments, and automatically show you who has the potential to perform well in any role.
If you find out it’s taking a long time for candidates to move from the phone interview process to the in-person interview process, you might consider adding a video interview option so that candidates can self-schedule quicker upon reaching this stage.
Feedback from candidates and employees can also help you optimize your talent acquisition process.
Creating business impact
Data enables you to improve hiring for critical roles, participate in headcount planning, make realistic time to fill predictions, identify skill and knowledge gaps, and more. These metrics help you make real-time decisions and anticipate future challenges as the organization grows. Ultimately, this helps your business thrive in the short and long term.
How to make talent acquisition analytics work for you: 5 tips
You don’t need to collect large quantities of data to start with talent acquisition analytics. Audit the data you already have or are easy to gather to begin gaining insights into your talent acquisition process. Here are five tips to get going:
1. Define what you want to achieve with talent acquisition analytics
The first step is to get clear on your objectives and set short and long-term goals.
For example, perhaps you want to improve the speed of your recruitment process, attract more qualified candidates to your open roles, or ensure fairness and transparency across your recruitment funnel. Make each of your goals SMART so that they’re tangible. If you want to improve your time to hire, your SMART goal could be: Decrease the time to hire for customer service roles by 10% in the next three months.
Once you’ve got clear goals in mind, you can determine what data, information, and metrics you need to collect and analyze.
2. Collect your data
Now that you have a solid idea of what data you need to collect, you can start collecting it. Remember that it takes time to gather a sufficient amount of reliable data to conduct a fair analysis. What’s “sufficient” will depend on several factors, including the size of your organization and industry.
When it comes to candidates, skills, experience, ability, and personality are critical attributes that affect job performance and, ultimately, create business impact. But how can you obtain this data? Assessments and skill tests at the start of the hiring journey can determine common behaviors and abilities in your most successful employees. From here, you can create an ideal candidate profile and use it as a benchmark for new candidates.
Another example of data to gather are your talent acquisition costs. It’s essential to have an accurate grasp of your cost of hire (including your HRIS, recruiting events, paid sources, assessment costs, etc.) because you can make smarter business decisions.
3. Identify what you can improve
Now it’s time to analyze the data you’ve collected to pinpoint key areas for improvement. Rank these in order of priority so that you can tackle them strategically and prevent overwhelm.
For example, your analytics might show you that candidates are currently waiting too long to receive an offer, hence why your offer acceptance rate is low. In this case, your task would be to create a more efficient hiring funnel so that your team can make a quicker decision, create an offer to top candidates faster, and mitigate the risk of losing them.
Comparing your data with industry benchmarks can also help reveal what needs improving. For instance, is there a specific role or location that has a slower than average time to hire when compared with your competitors? You can check out SHRM talent acquisition data or Gem’s Recruiting Benchmarks to get an idea of the industry benchmarks.
Are you spending a significant chunk of your sourcing resources on LinkedIn yet finding that this is the least lucrative source for qualified candidates? Now is the time to reassess where you’re investing money. Let go of what isn’t working so you can maximize your efforts on what is working.
If your candidate NPS is low, you might need to dig deeper into the reasons why your candidate experience is lacking.
4. Improve your analytical capabilities
You don’t need to be a data analyst, but data literacy is fundamental to gaining actionable insights from data. It’s essential to be able to read and understand what data means so that you can use it effectively and take action where needed.
HR will need to gather data from various departments in the business, for example, the finance or marketing departments. Consider and adhere to privacy and compliance laws when obtaining, managing, and sharing this data, and have confidence in utilizing data-based processes during the hiring journey.
If data and analysis are out of your comfort zone, you can team up with your organization’s data department for help. It’s also worth it getting a certification in data-driven talent acquisition or in people analytics to build your skills, knowledge, and confidence.
5. Monitor your progress
The final step in making talent acquisition analytics work for you is constantly tracking and monitoring your progress. When you tweak your recruitment process or attempt to improve something, check if it has the effect you intended.
For example, if you decrease the time between your final interview for candidates and creating an offer by 50%, what effect does this have on your offer acceptance rate? Do you need to make any more changes?
It’s a sensible idea to compare your current results with your previous results to ensure you’re moving in the right direction and demonstrating the business impact and value.
A great way to monitor the metrics you’re focusing on is to create a dashboard. For example, you can use a spreadsheet program, your HR software, or a dedicated business dashboard software.
Summing it up
Talent acquisition analytics helps you improve the entire candidate journey and fulfill your organization’s short and long-term talent needs. You can make data-driven, evidence-based decisions to hire top talent and thrive as a business.