Recruitment funnel: how to optimize your hiring process?

The path from application to job offer is unfortunately many steps long and fraught with pitfalls for the recruiter. Because let’s be honest: Each stage in your hiring process is a chance for your ideal candidate to slip away. So how do you avoid this and convert more? Here are a few performance indicators to optimize the conversion rate of your hires. They’ll help you figure out if your “recruiting funnel” is up to the task.

1. What's a “recruitment funnel”?

Why do we talk about a “recruitment funnel”? Quite simply because each step affects the next one. However, it's just another way to diagram your hiring process, which is the path that a candidate takes from application to hiring.


How does it work? Once a hiring need has been expressed by an operational manager or the HR department, the race against the clock begins to get as many quality applications from the job listing as possible. And every channel can be used: Job boards, which are still recruiters’ bread and butter – for 91% of them, this is the first solution used according to the latest RegionsJob study in 2018 (= 2017) – unsolicited applications, sourcing, co-option, and recruitment firms. Each of these channels makes it possible to create an initial pool of applications. Next comes the pre-screening phase, whether done by telephone or by video interview, resulting in a shortlist of candidates who will get face-to-face interviews. Some will then be offered a job and accept it. Others won't.

The challenge for hiring is therefore to have the smoothest, most efficient process possible to reduce your hiring time. As an example, the average is 43 days. You already have the keys to improve the quality of your hiring process, now here are the keys to improve its productivity. To do so, it’s critical to examine the key performance indicators for processing applications: The conversion rate in moving from one step to another in our recruiting funnel

2. The conversion rate, step by step

Although we learned "How to calculate the return on investment of hiring tools” in a previous article, the issue here is measuring the conversion rate of candidates hired based on where their application originated.

As a guide, the study “Inside the Recruiting Funnel: Essential Metrics for Startups and SMBs” conducted by Lever highlighted how the conversion rate changes at each step of the hiring process in SMBs and start-ups. Here is the path taken by candidates who applied for a given job:

conversion funnel


In the study, looking at all candidates combined, 1.2% were hired. This is the overall conversion rate of the hiring process. How can we break down this figure? The higher your rate is, the more efficient it shows your “recruitment funnel” to be. Conversely, the lower it is, the less effective your process is as a whole. However, it should be determined whether this trend is general and each step is worth optimizing, or whether it's a weakness concentrated in one step. Because like any well-oiled system, you sometimes need a little tune-up to get the gears moving again.

Additionally, this figure is being measured for an SMB or start-up. It’s clear that a large company, whose great fame will generate more applications, will have a lower overall conversion rate.

Step 1: From application to pre-screening

This conversion rate raises a question: What are the most effective sources of hiring? The study evaluated the average conversion rate based on where the applications originated and the results are conclusive:

Conversion rate by origin of applications:

conversion rates-1

Source : « Inside the Recruiting Funnel: Essential Metrics for Startups and SMBs » Lever

Publishing a listing on job boards and a company’s career site draws in a large volume of applications, which we will call “organic applications”. Logically, the application-to-pre-screening conversion rate is necessarily low. Because getting a lot of résumés is good, but getting the right ones is better! You should therefore be more stringent in applicant pre-screening to avoid having to interview unsuitable applicants and run into potential hiring mistakes. A chatbot could be one useful tool for receiving relevant applications.

Discover the chatbot!

This isn't the case with referrals or recruitment firms because the people they suggest have gone through an initial step of natural screening. The applicant was recommended by an employee or shortlisted by a recruitment firm because they met the criteria you're looking for (required skills, personal qualities). This is one way to measure effectiveness in overall conversion, because 8% and 3.9% of the applicants brought in by these recruitment channels, respectively, end up getting hired. Referral is therefore ten times more effective on average than publishing listings online.

Step 2: From pre-selection to interviews

For recruiters, pre-screening is a big challenge. It takes a lot of time, but it affects the quality and effectiveness of the hiring process. And for good reason, because according to that same Lever study, one fully completed hire takes an average of 17 “organic” pre-screened applicants who applied in response to an online listing, or 15 candidates shortlisted by a recruitment firm, or 14 candidates sourced by the internal hiring teams. This means it’s clear that no matter the source of the applications, the number of pre-screened applicants is substantially similar. So to become more efficient at converting organic applications, the pre-screening methods must be chosen carefully. By choosing video pre-screening, for instance, some companies will be able to boost their conversion rates at that stage of the process, as it makes it possible to identify the candidates more qualitatively, and ultimately, be more efficient in face-to-face interviews.

Step 3: From interview to job offer

This conversion rate reflects the quality of your pre-screening process. This is because a higher rate means that more of the candidates who were interviewed were suitable and fit what you were looking for. This makes you more efficient, since you can interview fewer candidates but they’ll be the best ones! Naturally, a high rate sometimes means a small number of applications, especially for hard-to-fill jobs. When this happens, if you're short on candidates, you’ll need to go back to the initial step: Focus on application sources that allow for naturally qualified pre-screening, such as recruitment firms or co-option.

Note that too low a conversion rate in the interview-to-job-offer step can mean only one thing: You’re wasting time interviewing people who aren’t a good fit! If this is happening, make sure the candidate selection criteria has been understood by everyone involved in the hiring process.

Step 4: From job offer to contract

With a rate that’s generally around 70% for SMBs, and 83% at businesses of all sizes combined, it appears that candidates are now much more inclined to turn down an offer. Although this figure may be partly due to an uncertain economic climate, the growing demands of candidates are also an issue. The balance of power has tipped, and it’s up to you as the recruiter to make sure that your respective expectations match. You should also pay attention to how long hiring takes, because real talents don’t wait. The biggest reason why a job offer is turned down is that a competing offer was accepted.

Lastly, since hiring doesn’t stop when the employment contract is signed, it’s important to smoothly integrate new hires because only 2/3 will pass their trial period. This ratio should also be incorporated into the recruiter’s roadmap in order to have a positive impact on turn-over.

reloj de arena-min-1

Although measuring the effectiveness of your “recruitment funnel” is essential to analyzing the performance of your hires, you should also try a marketing angle. After all, to feed the top of the funnel, you’ll need talents to want to join your company and make your potential candidates qualified candidates. Did you know that a strong employer brand doubles your chances of getting positive responses from pre-screened candidates?

In summary:

  • Calculate the conversion rate for each step of your hiring process and the overall rate that determines the effectiveness of your recruiting funnel.
  • Compare those rates to the market averages (based on your company's size and sector).
  • Assess your strengths and weaknesses for each step.
  • Set up your hiring plan strategically, particularly by defining the number of applications you’ll need compared to your hiring goals.


Discover all the KPIs you need to measure hiring success in 2021!



#Digital Recruiting

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