8
 min read

The Recruitment Funnel Guide: from prospect to hire

The recruitment funnel is a concept and approach to better manage data around (potential) candidates and can help you improve your recruitment process effectiveness.

September 29, 2020
Yuma Heymans
September 6, 2022
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Recruitment funnel, recruiting pipeline, 360 recruitment cycle, recruitment marketing funnel… 😐 Let’s settle this once and for all.

The recruitment funnel is a concept that represents a process or literally a ‘funnel’ through which candidates progress through several stages of the hiring experience.

An eventual ‘hire’ only becomes a hire after completing certain milestones like learning about the job in the first place, doing a job application, meeting job requirements and signing the contract.

Getting to these milestones can be visualized and managed in stages.

That’s what the recruitment funnel is all about.

What is a recruitment funnel?

A funnel is usually visualized as a pipe or tube that is wide at the top and narrow at the bottom.

A recruitment funnel is a pipeline with several stages that a contact moves through.

The terms recruitment funnel and recruitment pipeline are used interchangeably. Although the word ‘funnel’ emphasizes the fact that the amount of contacts that move through the funnel becomes less in later stages since not all contacts progress through subsequent stages in the funnel.

Recruitment funnel visualization

As you can see, there are several stages in the funnel defined by where the contact resides. A ‘Contact’ is a collective name for anyone who goes through your recruitment funnel regardless of the stage they are in.

The funnel stages and their meaning can vary across recruiting teams. But generally speaking the stages are defined by the stage the contact is in.

For this example of the funnel the stages are:

  1. Prospect: An individual who could be interested in your job and targeted for recruiting purposes.
  2. Qualified lead: An individual who has shown an intent of applying to the job.
  3. Candidate: An individual who has applied for your job or has otherwise actively expressed interest in the job.
  4. Finalist: A candidate who is part of the last round of interviews and assessments
  5. Hire: A candidate who signed the employment contract and will be an employee soon.

What about the recruitment marketing funnel?

The recruitment marketing funnel is a very similar concept to the more generic recruitment funnel but is more targeted to the marketing efforts of the hiring company. 

A popular way of framing the recruitment marketing funnel, or a marketing funnel in general is in the AAARRR, or pirate approach, stages:

  • Awareness: How many people do you reach?
  • Acquisition: How many people visit your career page?
  • Activation: How many people take the first important step like completing a form?
  • Retention: How many people come back for a second, third or tenth time?
  • Revenue (or in recruitment application): How many people complete a job application?
  • Referral: How many people refer your company or job to other potential candidates?

In this blog we’ll focus on the more generic recruitment funnel for a broader application throughout the entire recruiting process.

Why are recruitment funnels used by recruiters?

The recruiting process is increasingly becoming more data driven.

Where we used to do a hundred phone calls a day back in the days and not have any overview of which contacts were interested and what actions they performed at what stage, we now can track every little step and milestone in the recruiting process.

This enables recruiters to make their process more data driven and therefore better measurable and controllable. 

Knowing exactly which steps a potential candidate completed in the process, helps to better support the candidate in the rest of their hiring process. 

In addition, when all of this data on individual contacts is combined, recruiters are better able to create an overview of the overall effectiveness of the recruiting process and find points of improvements.

Where managing thousands of contacts for several jobs used to be almost impossible, with today’s technology we can easily manage all those different data points.

Doing so with the concept of the recruiting funnel enables better visualization and management of contacts and underlying information.

How does a recruitment funnel work?

Every stage in the recruitment funnel has its own milestones, also called stage criteria.

Stage criteria are important moments of conversion through which the contact progresses to a next stage of the funnel.

For example, in the ‘qualified lead’ stage, a contact can have left their contact details, visited a career page or replied with interest to an outbound email. When they progress through the funnel, they might complete an application form and they become a ‘candidate’, which is the next stage of the funnel after qualified lead.

Recruitment funnel conversion

Conversion is the process of progressing contacts through the next stages of the funnel.

When a contact goes from prospect to qualified lead for example, we can say they ‘converted’ to qualified lead.

To know the conversion of each stage, you need to know the amount of contacts per stage.

The funnel with the amount of contacts per stage

As you can see, in this case there were 1000 prospects needed to end up with 1 hire. This can realistically be the case for hard to find roles like software developers. 

The conversion rate from ‘prospect’ to ‘hire’ here would be 1/1000 = 0.01%. The conversion from ‘prospect’ to ‘qualified lead’ however, would be 200/1000 = 20%.

20% conversion rate from prospect to qualified lead

You can measure the conversion rate for any two stages. Every conversion can say something different about the effectiveness of your recruitment funnel. For example, the conversion from ‘qualified lead’ to ‘candidate’ can say something about how effective you are at convincing people who have already shown initial interest in a job or company to people who follow through to officially apply for the job.

How to set up your own recruitment funnel?

You can set up your own recruitment funnel by defining the funnel stages and setting up the right tooling to run your recruitment funnel.

These are the steps to set up your recruitment funnel:

1. Define your recruitment funnel stages

Define clearly what every stage means and how you would describe a contact when they are in every individual stage.

Think of the candidate journey and the most important steps the candidate journeys through.

Is one of your stages ‘prospect’? Then describe what it means to be a prospect.

Define your stages based on clear distinctions between milestones that have to be achieved in every stage to proceed to a next stage.

2. Assign stage criteria to every stage

Determine the milestone that contacts have to meet to move to the next stage. This can be for example an official job application for qualified leads to become candidates. Or filling in a form for a prospect to become a qualified lead.

3. Set up tooling to support managing the funnel

A spreadsheet is not the best way to manage your recruitment funnel. Since you will have a lot of contacts with a lot of underlying information on touchpoints and personal data, you will need a system to manage all that information efficiently and make sense out of your data with analytics.

This can be perfectly supported by recruitment systems like an Applicant Tracking System (ATS). An example of an ATS is Recruitee.

Recruiting funnel software | Recruitee
Example of recruiting system to set up and manage your recruiting funnel

4. Measure conversion rates from the tool

Now you have clearly defined the stages and stage criteria and you have tooling to enable a data driven approach to managing your recruitment funnel, you can start measuring conversion rates across the stages.

Investigate why certain conversion rates are lower or higher than you would expect and set a goal and approach to improve conversion rates. 

5. Optionally automate stage progression

When you get the hang of managing your recruitment funnel you can start with the more advanced stuff.

For example, you can have contacts who completed a web form end up automatically in your recruitment funnel tool (or ATS). There are many automations possible like this including moving candidates to a next stage when certain online actions are completed.

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