People Analytics and Hiring: 5 Crucial Aspects to Analyze

This post originally appeared on the Crunchr blog.

Recruitment analytics is a major focus in people analytics because a significant amount of time and resources are dedicated to recruitment, specifically the recruitment funnel. ??

Typical metrics to analyze are Time to Fill, Time to Hire, Time to Start, and more. You can even zoom in further and scrutinize the different steps in the funnel to optimize the entire recruitment process.

However, in this blog, let's focus on what to analyze post-hiring.??Why? Hiring profoundly impacts:

?? Your organizational culture

?? Future revenue

?? Costs

The first two aspects naturally speak for themselves, but the costs associated with hiring are even broader than most people realize.

These costs encompass the labor of recruiters or agencies, vacancy advertisement expenses, labor and opportunity costs of everybody involved in the hiring process, and onboarding costs. It also takes a while before a new employee is up to productivity, so there is a cost attached to that period.

Overall, it is important to review the post-hiring process thoroughly.

So, how would you answer the question, "How are we doing with hiring"? First, you need to establish the criteria of success in hiring: who we want to hire and what we expect of them. Subsequently, analyze whether you are meeting those expectations.

So, where should we begin? Let's imagine you are a new member of your organization eager to learn about your company's hiring success.?Below are the top five questions you should be asking.        

1.?How many people are we hiring??

When reviewing your hiring success, you should start by getting a feel for your organization's sheer volume of hiring. Are we talking about dozens, hundreds, or thousands of new hires annually?

It makes sense to put these numbers into perspective by comparing them with your current headcount. For instance, you might be working for a vibrant 1,500-person advertising agency that brings on board 180 new hires annually or for a bustling 10,000-person fulfillment center that recruits 7,000 individuals annually. Understanding this context is key.

Additionally, it's worth considering whether these new hires represent an expansion of your organization or if they solely serve as replacements for departed employees.

You can delve deeper by gaining a clear sense of the scale and context.?

2 - Where in the organization are we hiring??

When hiring for your company, consider various functional areas, business units, and locations, not just high-level figures.

Are there particular roles or locations that demand more attention regarding hiring? Going into these details can provide valuable insights into where your hiring efforts are focused. Perhaps it's software engineers in France or factory workers in the Netherlands. You may also establish an entire organization with diverse roles in a specific country. By examining the percentages and absolute volumes, you can better grasp the task at hand.

Another way to segment is by job grades. Are you primarily hiring juniors or mid-level professionals? Answering these questions will give you a good feel for what's going on quantitatively.???

3 - What type of people are we hiring?

The next step is to consider how new hires stack up against your current workforce.

For some organizations, it is OK to continue an existing path, while others must adapt due to changing market conditions. Hence, you want to know the background of your new hires: work experience, education, and relevant skills are all important to consider as they align with your business objectives.

Take the software industry, for instance. Since enterprise products have become more complex, software vendors seek salespeople who excel at consultative sales rather than just transactional ones. Another vital aspect is diversity. Many organizations strive to become more diverse, so knowing whether they are progressing toward those goals is crucial.?

4 -Are we able to retain our new hires??

Understanding whether the people you hire stay with your organization is essential. As mentioned earlier, hiring is expensive, so minimizing turnover is vital.

The primary metric to consider is first-year turnover, also known as the hire-fail rate. It's important to know how many people leave within the first year, when, and why. While some level of first-year turnover is expected, a high turnover rate of 40% can have a significant financial impact. Reducing turnover, even by a few percentage points, can help your business achieve substantial benefits.?

What's more, documenting the reasons for employee departure allows you to identify trends. If this information is lacking, you can still gain insights from the timing of employees' departures. If people frequently leave within the first month, it might indicate a selection problem. On the other hand, if employees tend to go after 3-4 months, there may be an issue with onboarding.

Addressing first-year turnover is a critical task. Additionally, connecting this data to hiring channels can provide valuable insights into which channels work well and which don't.?

5 - How do our new hires perform??

In addition to comprehending whether or not your new hires stay at your company, you need to know how they perform. Many organizations conduct performance appraisals once a year or once every six months.

Connect your hire data with performance reviews to gain insights into whether you are attracting strong performers. Then, the analysis should be split across functional areas, business units, or even individual managers to examine whether there are pockets in the organization where there might be issues. It's important to note that if you identify such pockets, low-performance scores can be caused by the quality of hire and the specific organizational/team setting. However, recognizing and acknowledging such issues allows you to delve deeper and find practical solutions.?

In conclusion, discovering what happens with your new colleagues after hiring can unlock powerful insights.

These insights can help arm your HR business partners (HRBPs) to have strategic business conversations in one of the most crucial domains of any organization: finding and retaining the right talent.

Tackling challenges like reducing first-year turnover or achieving diversity goals enhances the employee experience and has a positive financial impact on companies. Follow the five steps outlined in this blog, and you will be well-prepared for success.