Building a Recruitment Funnel - Easy Guide with Expert Tips

Recruitment is a crucial process for any business as it greatly impacts an organisation's success. The right employees bring in new skills, ideas, and energy, while the wrong employees can be a costly drain on company resources. As HR professionals, it is important to develop a recruitment funnel to attract the right talent while reducing the cost and time involved in the recruitment process.

In this article, we will explore how to build an effective and efficient recruitment funnel, with tips and expert advice from HR professionals.

What is a recruitment funnel?

A recruitment funnel is a visual representation of the recruitment process, outlining the steps a candidate takes from initial awareness of the company to final selection for the job. The funnel serves as a roadmap for HR professionals, helping them understand where potential candidates are in the process and what needs to be done to move them to the next stage.

Here is a sample recruitment funnel that we have created for you (we will go through each of these steps in depth further down the page):

Why is a recruitment funnel important?

A recruitment funnel is crucial as it serves as a structured process for sourcing, evaluating, and hiring candidates. Here are the top six reasons why recruitment funnels are important:

• Efficiency: It streamlines the hiring process, allowing recruiters to manage a large volume of applicants systematically. By segmenting candidates at different stages (like application screening, interviews, assessments), it ensures efficient allocation of resources and time.
• Quality of Hire: A well-designed funnel helps in attracting and identifying top talent. It enables recruiters to focus on the most promising candidates, ensuring a higher likelihood of hiring individuals who are the best fit for the role and the company culture.
• Consistency and Standardisation: It establishes a standardised approach to candidate evaluation and selection, ensuring that all applicants go through similar stages and assessments. This consistency helps in fair and objective decision-making.
• Candidate Experience: A structured recruitment funnel also contributes to a positive candidate experience. Clear communication at each stage and a smooth application process can enhance the candidate's perception of the company, whether or not they are ultimately hired.
• Data-Driven Decision-Making: With each stage of the funnel, data is collected and analysed. This data helps in understanding which sources are most effective, where potential bottlenecks occur, and how to improve the recruitment process continuously.
• Cost and Time Savings: A well-organised funnel reduces the time to fill a position. It minimises the chances of starting the hiring process from scratch if a candidate drops out or a selected candidate declines the offer, thus saving both time and money.

In essence, a recruitment funnel ensures a structured, efficient, and effective hiring process, aligning the company's needs with the best talents available in the job market.

Creating a recruiting funnel involves structuring and organising the steps of the hiring process to attract, evaluate, and hire the best candidates efficiently. We will talk about each of the four steps in the recruitment funnel further down, but here is what you will need to do before creating a recruitment funnel:

• Define Job Requirements: Clearly outline the job role, its responsibilities, required skills, and qualifications. This forms the basis for crafting job descriptions and candidate evaluation criteria.
• Develop a Job Description: Create a compelling and detailed job description that highlights the role, its importance, and the company culture. Ensure it's engaging and accurately represents the position.

The first step in the recruitment funnel is attracting candidates. This involves creating a strong employer brand, establishing an online presence, and using job postings and other recruitment marketing tools to reach potential candidates.

Establishing an online presence can be done through websites, career pages, and social media platforms that should be regularly updated to ensure potential candidates have access to the latest information about the company.

In addition, job postings and other recruitment marketing tools such as advertisements and social media reach a wide audience of potential candidates. It is important to ensure that job postings are well written with a clear description of the role and company culture and posted on a variety of relevant job boards and social media platforms.

How to measure efficacy

You will want to measure how effective each source of hire was; identify where successful candidates originated from (job boards, referrals, social media, etc.) as certain sources may have a greater quality of job seeker.

Cost per hire is a very important metric to be using. Cost per hire will tell you the average cost incurred to hire a candidate from a specific source, or you can calculate it overall (irrespective of source).

Once potential candidates have been attracted, it’s time to screen them. This involves reviewing resumes, conducting preliminary interviews, and using psychometric assessments to determine if the candidate is a good fit for the role and the company. Online psychometrics also have the advantage of greatly speeding up the short-listing process, saving the HR team from hundreds of hours’ worth of interviewing.

However, it is important to choose a reputable provider and ensure that the assessments are valid and reliable. Additionally, it is essential to use assessments in conjunction with other selection tools, such as interviews and reference checks, to gain a comprehensive understanding of an individual’s suitability for the role.

How to measure efficacy

There are a few key metrics you can use to measure the effectiveness of this stage of the recruitment funnel:

• Application Completion Rate: Measures the percentage of candidates who complete the application process.
• Screening Efficiency: Measures the time taken to review and screen applications or resumes.
• Candidate Dropout Rate: Tracks the percentage of candidates who withdraw or drop out during the screening process.

The next step is to conduct face-to-face interviews. This allows HR professionals to further assess a candidate’s skills, experience, and cultural fit, and to determine if they are a good match for the role.

Research shows that structured interviews i.e. questions with a fixed set of questions, tend to outperform unstructured interviews when predicting job performance. Consequently, HR practitioners and hiring managers should always take the time to plan out their interviews, drafting question and additional probing questions beforehand.

How to measure efficacy

Here there are two main metrics you may wish to use to measure the effectiveness of this stage:

• Interview to Offer Ratio: Measures the number of interviews conducted before extending an offer.
• Interviewer Feedback: Tracks the quality and consistency of feedback from interviewers.

Once the interview process is complete, it is time to select the candidate who is the best fit for the role. This decision should be based on a combination of factors, including the candidate’s skills, experience, cultural fit, and the results of the psychometric assessments. By combining all of these information sources, organisations can maximise the probability of making good hires, selecting the best candidates from the recruitment funnel.

How to measure efficacy

For metrics to measure the hiring effectiveness stage you may wish to use the following:

• Offer Acceptance Rate: Measures the percentage of candidates who accept job offers.
• Time to Fill: Calculates the average time taken from posting a job to making a successful hire.

What is funnel analysis in recruitment?

Funnel analysis in recruitment involves examining and optimising the stages of the recruitment process, much like a funnel where candidates move through different stages, from awareness of a job opening to becoming a hired employee. It's a method used to track and analyse the flow of candidates at each stage of the hiring process to identify bottlenecks, areas for improvement, and opportunities for optimisation.

By analysing these metrics, recruiters and hiring managers can identify where candidates might drop out of the process, where delays occur, or which sources yield the best candidates. This analysis helps in optimising the recruitment process, reducing time to hire, improving candidate experience, and ultimately making better hiring decisions.

What are the 4 stages of the recruitment funnel?

The recruitment funnel typically consists of four main stages:

• Attract candidates: This initial stage involves attracting potential candidates to the job opening through various means such as job postings, advertising, networking, and employer branding efforts.
• Screen candidates: Once candidates apply, this stage involves screening their applications, resumes, or profiles to evaluate their qualifications, skills, and experiences. It helps narrow down the pool of applicants for further consideration.
• Interview candidates: In this stage, selected candidates from the screening phase go through various rounds of interviews, which may include phone interviews, video interviews, in-person meetings, or panel discussions. These interviews aim to assess the candidate's fit for the role and the company culture.
• Hiring: The final stage involves extending a job offer to the most suitable candidate, negotiating terms, and completing the hiring process. It includes the formalities of onboarding the new employee into the company.

How is recruitment funnel effectiveness measured?

Recruitment funnel effectiveness is measured through various key performance indicators (KPIs) and metrics at each stage of the hiring process. Some of the key metrics are Cost per hire, Application completion rate, Candidate dropout rate, Offer acceptance rate.