Where you find your candidates can determine your success in keeping them.
By Tom Boyle
Companies around the globe are intent on reducing the impact of an uncertain economy on hiring. When hiring budgets are thinner, HR professionals must continue to look for ways to make the most of precious recruitment dollars, all while positioning their companies for future growth. In fact, in difficult economic times, recruiting the best-fit talent becomes more crucial than ever.
Good recruitment sourcing, in fact, is based on sound decision making and HR strategy. Yet every recruitment professional at some time in their career has witnessed the “ready, fire, aim” approach to sourcing. Panicky last-minute ad buys and stacks of resumes from unqualified candidates are only a few symptoms of this method. Haphazard sourcing of this type impacts company visibility and the success of the business.
So how exactly can companies avoid this situation and make sound decisions that deliver real business value?
The answer is straightforward: Use hard data and employ analytics. Organizations must be able to see patterns in the data they have and use that information to guide their decisions about future spending.
The problem is, though, that many talent management professionals still lack hard, factual data to be able to empirically identify the most effective sources of recruitment marketing. They share information about their “best sources” with colleagues, but much of this is anecdotal. The industry has relied on narrow studies of a few companies and a small number of recruitment sources, as well as surveys of recruiters rather than hard data originating from real recruitment systems.
\With advances in automated applicant tracking systems (ATS) and the entry of the Web, the sourcing picture has shifted. With the right tools in hand, professionals can pinpoint exactly where applicants and hires originate—whether it be a job board, a search engine, a print ad, or a referral.
SilkRoad’s Source Effectiveness Report was designed to aid professionals in understanding the recruitment sources used by a large number of other organizations, so that they can assess their own sourcing efforts. This report delivers quantitative data about the sources that provide companies with qualified interviews and hires. The data was extracted directly from the talent management systems of some of the world’s largest companies and leading employers.
Four common metrics are frequently used by businesses to evaluate source effectiveness include applicants, interviews, offers, and hires. Out of the four, interviews with HR buyers showed that interviews and hires are rated most effective.
When a candidate qualifies for an interview, the recruitment source—at least at that early stage—can be judged effective. Beyond that, other elements are added to the mix that might determine whether a candidate receives an offer, such as salary requirements or fit with the company culture. But ultimately, the interview is the first critical step.
Hires are the second key metric that companies use to determine source effectiveness. Many companies combine this metric with others—such as external costs for agency fees and internal costs for staffing efforts and physical infrastructure, according to SHRM. Together these elements give professionals cost per-hire information, one of the most widely used measurements in the industry. Other common metrics include quality of hire, including on the job performance and tenure rates. When combine, these metrics help determine the return on investment (ROI). According to Dr. John Sullivan’s article, The Silliness of Measuring Cost Per Hire, ROI ties recruitment efforts directly to the bottom line and enables organizations to compare spending relative to the return that the costs produce.
External Versus Internal Sources
The SilkRoad OpenHire ATS data for this report came from approximately 3,500 sources. Examples of external sources include specific job search engines, branded and unspecified job boards, print advertising, TV/radio advertising, job fairs, and agencies. Examples of internal sources include recruiter sourced (employer sourcing), company career sites (employer websites), referrals, and inside hires.
Results show that external sources are more effective in generating interviews. They produce 56 percent of interviews as opposed to internal sources, which deliver 44 percent. Yet, internal sourcing (58 percent) produces more hires compared to external sources (42 percent).
This year’s results show slight gains in external sources compared to last year. For both interviews and hires, external sources gained roughly 6 percent compared to findings from last year’s reprot.
External sources. The top 10 external sources for interviews and hires were a combination of online and offline sources—with online sources predominating. Of the top 10 external sources, Indeed is the leading external source of interviews and hires (see Figure 1). It provided almost double the number of hires and almost two and a half times more interviews than the next largest source, CareerBuilder. Note that offline sources, such as agencies and print advertisements, yielded a notably smaller number of hires and inter views.
When it comes to evaluating external online and offline sources, online sources account for the lion’s share of hires and interviews: These represent an impressive 87 percent of interviews and 80 percent of hires. External online sources included specific job search engines, and branded and unspecified job boards. External offline sources included agencies, job fairs, and print advertising, among others.
Internal sources. Although employee referrals remain the strongest base for effective recruiting in terms of hires (44 percent), they were actually tied with company websites for interviews (36 percent). Internal hires accounted for most of the remaining activity from internal sources: 93 percent of interviews and 94 percent of hires came from referrals, company websites, and internal hires (see Figures 2 and 3).
An explanation for the dominance of employee referrals may be due to personal references or recommendations are heavily weighted in the hiring decision. Or, it is possible that a current employee clearly understands the qualifications that make a candidate the “best fit’’ for an organization.
Online sources. Extensive analysis of customer data shows that online recruitment efforts are vital for producing the types of candidates that companies interview and hire. Online sources accounted for 65 percent of all interviews and 48 percent of all hires.
This is a marked increase over 2012’s Source Effectiveness Report that showed online sources provided 42 percent of all interviews and 28 percent of all hires. The bottom line: Online sources are more important than ever for successful recruitment marketing. Indeed leads the way with largest number of interviews, followed by company career sites for the top online recruitment marketing sources (see Figure 4). The company site provided the largest number of hires. This demonstrates that a strong company career site is a key element of a recruitment marketing portfolio.
An appealing, high-quality company career site serves the candidate and the employer by making it easier for candidates to find and apply for jobs, and providing detailed information about the company, and in turn, helping engage best-fit applicants.
Yet, a company career site offers more than just a group of job listings and a way to apply for positions. It provides a unified brand image, which can reflect the culture and history of an organization, beyond just a job description. A great career site can include encouraging messages from management, testimonials of employees and customers, information about company philosophy, and more. Because all this information is conveniently stored in one place, the candidate experience is amplified.
In fact, the company career site is a “storefront” where a vital stage of recruitment begins. The conversion of a job seeker to an actual applicant happens at the career site no matter where the person started to hunt for jobs. Company information presented on the site helps the potential recruit decide whether he or she is the right fit for the job and organization, and can give the candidate the stimulus to apply for a position. Within this study, company career sites were the top online source of hires and the second most prevalent online source of interviews.
Job boards. In this study, all job boards combined produced 54 percent of external interviews and 56 percent of external hires. However, those percentages do not tell the entire story. To understand the most effective recruitment sources, it is important to take a closer look at the source categories used in the study. Among all the online recruitment marketing sources that SilkRoad clients identified, only two— Indeed and Simply Hired—are job search engines. These differ from job boards in that they give job seekers access in a single search to potentially millions of jobs from thousands of sources across the Web. Even though there are only two specific search engines, they account for a disproportionate amount of recruitment activity: 38 percent of external online interviews and 29 percent of hires.
To put the power of job engines in further context, these two sources alone (Indeed and Simply Hired) accounted for 33 percent of all external interviews and 24 percent of all external hires.
Branded job boards. According to Bersin & Associates 2011 Factbook, talent acquisition spending in the U.S. alone grew between 2010 and 2011 to nearly $3,500 per new hire, with most dollars going to job boards and search agencies. Customer data regarding branded job boards showed that there is great disparities in their effectiveness. Of the top 10 branded job boards. CareerBuilder clearly provided the largest number of interviews and hires (see Figure 5). Compared to Monster, the second largest source, it yielded approximately 127 percent more interviews and hires.
LinkedIn, the professional job networking site, showed dramatic increases in numbers in this year’s report, compared to last year. Linkedln accounted for nearly six times as many interviews and three times as many hires as it did last year. (While it is common knowledge that roughly 70 percent of all jobs are filled through some sort of networking, this impressive rise may be attributed to an increase in passive job seekers and the overall usage of Linkedln in the SilkRoad customer base.)
Sourcing strategy should not be frozen in time: It should shift with changes in an organization—mergers or acquisitions and new product development—and with the emergence of new sources and technologies in the marketplace. For example, in conversations with customers, SilkRoad has found that professionals are constantly weighing the efficiency of spending on offline sources against the wealth of free social media sources that are now available—a dilemma not as notable 10 years ago. The answer to some of these complex issues is found in source data. That’s why organizations must review this data regularly and adjust their marketing strategy to continue producing an acceptable ROI.
Still, even with hard data available, many organizations delay or fail to adjust their strategy. They are wedded to past ways of sourcing candidates, loyal to a specific agency or source, overestimate the brand strength of a source, or are not confident in the hard data that is collected. Executives must be crystal-clear realists who can understand hard data, determine its impact on the company, and communicate it through all parts of the business, especially to the C-suite. Only then will they realize the ROI in recruitment marketing dollars that companies expect.
Tom Boyle is SilkRoad’s director of product marketing. SilkRoad’s 2013 Recruitment Marketing Effectiveness: Meaningful Metrics Straight from the Source can be found at http://pages.silkroad.com/rs/silkroad/images/Recruitment-Marketing-Effec…