3 Critical Reasons You Need HR Analytics

Have you ever wondered what it takes to build and retain the best team possible while increasing your profits?

Well, you might be surprised it comes down to HR analytics. If it’s a term you haven’t heard of before, you’re not alone. But it’s becoming increasingly common and much more important in the growth of your team and business.

I’m going to walk you through some common HR metrics and some tools you can use to get started.

So as a growth hacker, you use data to know if your experiments or your marketing campaigns are working. As a recruiter or HR manager, you use HR analytics to make informed decisions on hiring or people management based on data. While HR analytics is important for both hiring and people management, in this article we’re gonna focus on recruitment, also known as data-driven recruitment.

Now you might ask, why is this important to me? Well, a recent Deloitte report found that organisations who were using people analytics appropriately reported 82 percent higher three-year average profits than those who are not yet using data analytics strategies or who are not using them correctly.

So how do you start? First, you need to have a good way to track your HR analytics. This can be done using an applicant tracking system that is good at reporting for hiring purposes or an HR system that can give you insights to your people and processes. Let’s talk about the specifics! When data is applied to hiring, HR analytics can help you save money, cut down on wasted time, time and hire for the right skills.

While there are hundreds of things you can track, let’s focus on three important ones to get you started.

3 Critical Reasons You Need HR Analytics

Number one: Reduce time to hire.

Did you know that the average time for top candidates to find and accept a job in 10 days? In order to get the best talent out there, you’re going to have to hire faster and that starts with understanding your time to hire.

The time to hire represents the time in which a candidate expresses interest in your vacancy to the time they accept your offer. Every vacancy has a different time to hire, but when you track this metric you can find the pain points in the recruitment funnel. This can result in the loss of great candidates due to long filling times.

Once you know this you can start making improvements to your recruitment process.

Let’s dive deeper!

In order to cut down on this time, you first need to find out what your average time to hire is. If your applicant tracking system has a reporting function this is an easy number to find. And you can usually break it down into specific roles, departments, recruiters or even hiring managers. If your ATS cannot track this, you can also track it manually.

MyNextHire has an easy way to do this: First, find the sum of your time to hire for each role (for a month, quarter, year, etc.)

Next, divide it by the number of hires you made in the same period of time.

And finally, the result is your average time to hire in days. If you want to know how your time to hire stacks up against other companies, MyNextHire has a great benchmark tool that can give you data on time to hire categorised by industry and location. Remember, this will not give you all of the insights but it will let you know if you’re on the right track.

Next, is to understand which part of the recruitment funnel takes the longest.

Is it the CV screening time? Does your hiring manager take forever to get back to you on a candidate? Then you can implement tools to optimize your time to help you out. Even if these insights and tools reduce your average time to hire by 5 days, that’s 5 days sooner your team will have a new member to boost productivity and five days recruiters can focus on other open roles. It makes a huge difference!

Metric number two: Sourcing statistics.

There is a lot of competition to find talent today. And sometimes high-quality candidates are not applying to your job posting, so recruiters have to turn to sourcing. Luckily, recruiters have many different ways to reach out to candidates such as job boards, social media and beyond.

There are many different analytics that you can look at when it comes to sourcing. However, there’s no point in looking at these analytics if you don’t even know which channel is bringing you the highest quality candidates.

So let me give you an example.

If your data shows that many of your long-term employees come from a certain job board then you can put more time and energy into that job board when hiring for that role again. The same can be said when you have low-quality candidates or low performing employees that come from another job board. Then you can put less time and energy into that one.

Quick side note: If you have one low performing employee that came from one job board, that is not enough data to prove that low-quality candidates come specifically from that job board. Knowing this data saves hiring teams time and is more cost-effective.

So how do you track this? MyNextHire’s ATS makes unique application links for each job board, sourcing outreach, referral, etc. It then tells us where we found this person or from which job board they applied from.

In case, if you do not use ATS, you can also keep track of this using Google Analytics and UTM parameters. A UTM code is a string of text that you can add to the end of the URLs you use in your job descriptions, ads, social posts and so on.

You create a campaign name, medium and source. An example of this could be the campaign name is the job title, the medium is where the job description or ad appeared, such as a job board or social site, and the source is the specific site, like LinkedIn or Facebook. Then head to Google Analytics where you can see your data come in.

There are many tools that automatically add a UTM to your URL. UTM.io is a great one and it’s free. Bitly is another free one that is also a link shortener. Last but not least find a good place to track this data so you can visualise it. Tableau is a great one, but if you don’t have a big budget, Excel and Google sheets can also do the job.

Metric number three: Recruitment funnel effectiveness.

So now let’s discuss why quality candidates aren’t applying to your open job.

Hiring takes candidates through a funnel that most say begins with sourcing and ends with a signed contract. However, some recruiters believe that the funnel actually starts with employer branding.

Your employer brand is your company‘s identity. It’s everything that makes you different and stands out as an amazing company to your potential candidates. While we can talk about every step of the funnel let’s talk about the important metric of your website visitor to applicant conversion rate, which is at the top of the funnel.

According to Jobvite, if your conversion rate is more than 11% you’re doing a great job and you probably have a unique employer brand and a careers website. If you’re below 11% then there’s probably more you can do to stand out to your potential candidate.

Once again, Google Analytics comes to the rescue.

Google Analytics tracks visitors that go to your website. It also tells you where they come from, how they’re using your website and which other pages they go to such as your team page and a lot of other useful information. It’s free, fast and pretty easy to set up.

Smart Job Board has a nice step-by-step way of setting up Google Analytics on your site so you can further investigate. If you realise people are not staying on your careers page, there are a lot of great growth hacks you can do in order to optimise it and if you don’t know where to start, begin asking your potential candidates what they want to see on your careers page, like with a pop-up survey.

You can also ask your candidates who did apply what they liked about your careers page and what they felt was maybe missing. You should focus on employer branding and technologies to create a really great experience for your candidates.

There are a few things that seem to work across the board, such as being authentic when promoting your company and using employee stories to explain your company values.

Also more and more candidates are applying via their mobile phone so make sure that your careers website has a very seamless mobile experience.

Sometimes HR analytics can feel overwhelming but it doesn’t have to be. Begin with what you believe is your most important metrics and then start collecting the data. But if you know of a great one that we didn’t mention please tell us in the comments.