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People analytics: A step-by-step guide on using data to make hiring decisions

Do you “go with your gut” when hiring employees?

Many business leaders pride themselves on taking this intuitive approach.

But what if your gut is wrong? What if you’re stressed or in a bad mood on the day of the interview, or under pressure to hire someone ASAP. By relying on your feelings or first impressions, you might hire someone who’s not right for the job, or let the best candidate slip through your fingers.

There’s a better way.

Increasingly, businesses are using “people analytics,” drawing on data to find talent, much like professional sports teams have used analytics to help them make trade decisions and sign players (think “Moneyball”). You can use the same principles to build better teams, and avoid making biased hiring decisions. Just follow these 8 simple steps:

Step 1: Make your wish list

Decide what you want in a candidate. Your criteria may include education, years of experience and skills specific to the position. And set a general salary range for the position.

Besides the basics, single out the core competencies critical to the role. If you’re hiring an accounting position, that may be his or her financial skills, ability to meet deadlines or critical thinking. Also, what attributes, skills and personality traits helped former employees succeed in the role?

Step 2: Choose your tools

Now it’s time for some market research. There are many tools you can use:

To see how many of your competitors are hiring for the same role, and to review average salaries for a position…check out business networking sites such as LinkedIn, Glassdoor or job websites such as CareerBuilder or Indeed. All of them offer free market information.

For detailed analysis and demographics…consider customized products from HR software vendors.

For a snapshot of hiring trends nationally or in your state…visit the Bureau of Labor Statistics or your state workforce commission.

To learn how many applicants you have received for a position in the past…mine your organization’s HR data.

Step 3: Analyze and adjust

Look at data on compensation, job titles, locations, etc., to see what’s happening in the market, and adjust your recruitment strategy accordingly. You can also find how many people apply to certain positions, and how quickly they are filled using recruiting and workforce planning software such as CEB Talent Neuron or PeopleFluent. This helps you better predict the hiring life cycle. You can move quickly to open a position that traditionally draws fewer applicants. Or, if many people have applied to the position in the past, you can take your time and absorb the extra work internally.

Step 4: Find your competitive edge

Use the information you find to pinpoint your recruiting efforts. Let’s say you discover that there are 28 companies competing with you for the same type of candidate. What’s going to differentiate you from the pack? Is it salary? How you advertise? Maybe connecting with candidates at a job fair? Data is competitive intelligence. Leverage it to give your company the edge over others in the market.

Step 5: Select your top candidates

Once the applicants start coming in, you’ll want to winnow down your candidate pool. But what’s the best way to do that? Many business leaders and managers put extra emphasis on the resume. What does it look like? What font is it in? Does it have color on it? A good-looking resume is definitely important for a communications or marketing role. But, for a maintenance technician…not so much. Others may place extra value on prestigious schools. Consider many factors, instead of just one, for a true candidate profile.

Step 6: Create a score card

Before you begin the interview process, create a score card to objectively compare and rate candidates.  Here’s how:

  • From the core competencies you’ve identified, select four to six attributes (for example: team skills, leadership skills, presentation skills, technical ability, organizational skills).
  • Give each attribute a weight. You can weigh them all equally (say 20 percent for each attribute), or weigh the attributes higher or lower according to their importance.
  • Craft questions for each attribute. (Sample question regarding team skills: “Tell me about a time when you were given a project at work, and you had a teammate who didn’t contribute to the project. How did you handle it?”)
  • Assign a rating system to each attribute (1=not acceptable; 2=weak; 3=average; 4=above average; 5=outstanding).
  • Include a notes section where the interviewers can explain their reasoning behind their ratings.
  • Also, include space for comments, and any additional information the interviewers would like to provide.

Step 7: Interview and evaluate

Avoid walking through the job candidate’s resume during the interview. Instead, use the score card to keep you on track, and record your observations along the way. Tally up the score for each candidate, and compare the results of everyone you’ve interviewed.

Step 8: Hire away!

At the end of the process you should have at least two or three high-scoring candidates who meet all your requirements. At that point it truly becomes, “Who is the better candidate for us?” You need a tie-breaker. If the candidates are equally qualified, maybe that means going with the one who requested a salary that’s in your budget. Or the one who can start right away.

No matter who you hire, when you use “people analytics” you can feel confident in your decision, knowing that you made your choice based on facts, and not just feelings.

For more about how you can use data to optimize your hiring practices, download our free e-book, Talent Acquisition: 13 Secrets to Recruiting and Retaining Top Talent.

Talent Acquisition: 13 Secrets to Recruiting and Retaining Top Talent
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