The Recruitment Funnel

Hiring used to be simpler. Companies would post a job ad online and just wait for applications to roll in. Today, that approach isn't precise enough. To find the best talent, businesses need to target specific groups of people. This includes reaching out to "passive" candidates — skilled professionals who aren't actively looking for a job right now. Even if they're not ready to move today, a good first impression means they might think of your company first when they are ready for a change.

But even when the perfect candidate does apply, there's no guarantee they'll join your team. In sales, there's a saying: "time kills all deals," and the same is true for hiring. If your recruitment process is slow and candidates are left waiting, you're giving other companies a golden opportunity to snap them up.

That's why modern recruiting has become a science. It involves studying the job market, gathering data, and careful analysis. And one of the most important tools for this kind of HR analytics is the recruitment funnel.

Why You Need a Recruitment Funnel

Breaking your hiring process down into several funnel stages is a powerful way to see where you're spending most of your time and where you need to invest more resources. A common mistake many companies make is putting a lot of effort into the bottom of the funnel — like selecting candidates, interviewing, and making offers — while not focusing enough on the top, which is all about attracting great talent in the first place.

Understanding your recruitment funnel as a whole helps you think more strategically about how you attract and hire people.

Types of Recruitment Funnels

Recruitment funnels are generally built in two main ways: direct and reverse. Each type helps you solve different problems. A direct funnel is great for analyzing and improving your candidate search, while a reverse funnel helps you forecast how long it will take to fill a position.

• The direct funnel

A direct recruitment funnel is built from the top down, tracking candidates from the initial resume screening all the way to their first day on the job. An HR specialist monitors how the number of candidates changes as they move through each stage. This type of funnel clearly shows you at which stage most candidates are dropping out, helping you figure out why it's happening.

• The reverse funnel

A reverse recruitment funnel is built from the bottom up. This model uses real data from positions you've already filled. The analysis is based on how many people, on average, it took to get through each stage and how long the entire hiring process was. This tool is incredibly useful for predicting how long it will take your HR team to find people for similar roles in the future.

How to Create Your Hiring Funnel

A recruitment funnel is essentially a blueprint for your hiring process. To design one, recruiters need to map out the entire candidate journey and all its touchpoints. You can use popular funnel models as a starting point or create your own, but the key is to follow these main steps:

• Analyze your company's needs: Figure out who you need to hire now and in the future. Identify the key skills and competencies of in-demand employees.
• Define your key stages: List all the steps a candidate has to go through, from submitting their application to getting hired. Decide which of these steps are most critical for the specific role you're filling.
• Set clear selection criteria: Define clear criteria by which you will evaluate candidates at each stage of the recruitment funnel.
• Communicate with your hiring team: Give your recruitment team clear instructions on what needs to happen at each stage. It's also important to train them on how to use the funnel and evaluate candidates fairly.
• Test your funnel: Start with a few open positions or a pilot project. See how well it works and get feedback from your hiring team. Be ready to make adjustments to the funnel to meet changing needs.
• Review it regularly: Systematically look at the data from your hiring process to see how effective your funnel is and where it can be improved.

The Stages of a Typical Recruitment Funnel

While every company's process can be different, the stages usually include these core elements:

• Attracting Candidates
• Screening Resumes
• Conducting Interviews
• Evaluating Candidates
• Hiring the Employee

Let's take a closer look at each stage.

Attracting Candidates

The first stage is all about sourcing and attracting potential candidates, and it all starts with a well-written job posting. This step is crucial because the number and quality of people who apply will depend on how well you do this.

Screening Resumes

At this stage, recruiters do more than just review applications; they start the first real interaction with potential employees. This step is critical for keeping candidates interested and giving them the information they need to move forward in the recruitment funnel.

What's important at this stage:

• Responding quickly to candidates' questions to make them feel valued.
• Planning and conducting initial screening calls to get a better sense of who they are.

Conducting Interviews

This is the most obvious stage of the funnel. The candidate will typically go through several rounds of interviews, depending on the company's structure (for example, an aptitude test, then a group discussion, then a technical interview). This is all designed to see how well they fit the role. The interview stage helps you get to know a person's character, as well as their technical and social skills.

Evaluating Candidates

The evaluation stage is a make-or-break moment. Here, the recruiter carefully analyzes whether the candidate meets all the company's requirements. This can be done using various methods, like in-depth interviews, skills tests, or personality assessments.

A few key things to focus on when evaluating candidates:

• Conducting interviews specifically to learn about their soft skills, motivation, and how well they align with your company's values.
• Giving them a chance to talk directly with their potential manager or team members, which allows for a more detailed assessment.
• Using specialized tests — like psychometric, skills, or industry knowledge tests — for a more objective evaluation.

Hiring the Employee

The final stage is the official hire. Once your chosen candidate accepts the job offer, the recruiter needs to carefully handle all the final details to ensure a smooth and effective start.

What's important at this stage:

• Getting official confirmation that the candidate has accepted the terms of employment.
• Setting a start date and time.
• Introducing the new employee to their responsibilities, company policies, their team, and the work environment.
• Verifying documents, signing contracts, and completing all other necessary paperwork.

Recruitment Funnel Conversion: How to Calculate It?

Your recruitment conversion rate is the percentage of successful hires you make out of all the positions you had open over a certain period. This KPI is a perfect way to see if your HR department is meeting its goals. If recruiters aren't able to fill most open roles with qualified people, it means the hiring strategies aren't working, and the company is likely losing money.

To calculate your hiring conversion rate, just divide the number of new hires by the total number of open positions, then multiply by 100%.

It's a good idea to calculate this monthly or quarterly. A healthy rate is generally considered to be 75% or higher.

Assessing the Effectiveness of Your Candidate Funnel

Here are a few useful metrics that every HR specialist and recruiter should track to improve their hiring process:

• Source of hire: Knowing where your best candidates are coming from is essential for continuously improving your hiring strategy.
• Time to hire: Top candidates won't wait around forever, so you need to make sure your hiring process moves at a good pace.
• Cost per hire: This is a central metric for managing and justifying your recruitment budget.

The formula for calculating cost per hire is:
(Total internal recruiting costs + Total external recruiting costs) / Total number of hires

Internal costs include things like recruiter salaries and infrastructure expenses. External costs include advertising, technology subscriptions, job fair participation, travel or relocation costs, signing bonuses, and more.

There are many ways to find out how candidates feel about your hiring process. You could send out a survey or ask for feedback at the end of the application and at each stage of the funnel. No matter how you do it, it's important to pay attention to the feedback candidates provide and work on improving any aspects that got a negative reaction.

Optimizing the Recruitment Funnel

Using KPIs is one thing; knowing what to do with that information is another. The goal is to use what you learn to optimize your recruitment funnel.

Here are a few of the simplest and most effective ways to do that:

1. Clearly define the funnel stages for your specific business.
2. Think carefully about what each stage involves, why it's important, and what a successful outcome looks like.
3. Get buy-in from everyone involved. A well-designed funnel will fail if some team members don't follow the process.
4. Find areas where automation can help. Automation can be a huge time-saver. From reading resumes to sending out assessments, it can streamline the process and give candidates a better experience.
5. Standardize your processes. Your recruitment process is a key part of your company's growth. That means every stage should have clear, well-defined procedures.
6. Look for ways to simplify and minimize. Are there areas you can shorten or cut back on, like having fewer interviews or tasks? Think about how you collect resumes, answer questions that have already been asked, or handle background checks. Simplifying the process and reducing the time and effort per candidate will save you money.

Automating the Recruitment Funnel

Finding the right person for a role, who meets every expectation, is a tough and often exhausting task. It can sometimes end with you choosing someone who isn't the best fit.

This process can take up a lot of time that could be spent on more important activities. Automating parts of it with professional software, like an HRMS, can significantly cut down that time.

Recruiters provide the most value when they use their unique human expertise — for example, deciding to give one candidate a chance even if others look better on paper. That candidate might not meet all the requirements now, but with the right nurturing, they could become more successful than anyone else. An experienced recruiter can see that potential.

Recruiters provide the least value when doing the mechanical parts of the process, like sifting through hundreds of unsuitable resumes, scheduling interviews, or reformatting job ads for different websites. This is where recruitment automation makes perfect sense.

Let's look at a few parts of the recruitment process that are well-suited for automation.

• Resume sourcing: Sourcing resumes can be a long and demotivating task. Recruiters sift through endless pages of resumes on job boards and make countless calls, only to find that the information is outdated or the candidates have already found jobs.

The more reliable your own resume database is, the less time and money you'll spend on hiring. An HRMS can analyze your job requirements and automatically suggest suitable resumes from your database.

• Pre-screening: Pre-screening involves using "killer questions" right at the beginning of the application process. These are questions that automatically reject a candidate if they give the wrong answer.

• Automated shortlisting and rejection: Recruitment technology can take this a step further by automatically shortlisting or rejecting candidates based on their scores from a pre-screening questionnaire.

• Automated translations for international hiring: If you recruit internationally, you probably spend a lot of time localizing your process for different languages.

If you don't have native-speaking recruiters in every country, either the recruiters or the candidates have to conduct interviews in a language they're not comfortable with, which can lead to misjudgments.

If this is a challenge for you, look for recruitment technology that automates localization. This way, applicants interact with you in their own language on every screen and in every email, without you needing to hire translators. If you use video interviews, look for AI software that can automatically transcribe and translate candidates' answers.

Automation ensures that your international hiring process provides the same quality and candidate experience as your local hiring, without any delays.

• Candidate communication: If you're hiring at scale, your recruiters likely send the same messages over and over again, like interview invitations or requests for references.

Automating these communications can save your team hours every week. You create the messages once (or customize templates), and they're automatically sent to the right people at the right time. They usually include personalization tags, so they still feel like personal messages.

This approach is much faster and more consistent. Nothing gets forgotten, there are no delays, and no accidental misunderstandings.

You'll never completely remove the human element from HR. But automating parts of the recruitment process makes a lot of sense. It brings consistency, efficiency, and speed to tasks that are often manual and inefficient, freeing up your recruiters to bring more value by doing what they do best.

Conclusion

The main goal for every recruitment specialist is to hire the best talent who fits both the role and the company culture. This is becoming more time-consuming as the number of applicants grows, and it's getting harder to track each candidate and map out the right journey for them.

Navigating the recruitment landscape can often feel like a complex journey, where every step has its own unique challenges and opportunities. Recruiters need to understand the intricacies of this process, especially in today's competitive market where attracting top talent is everything.

This is where the recruitment funnel comes into play. From attracting and engaging candidates to selecting and retaining the best fit for your organization, a well-managed recruitment funnel will help you build a high-performing team.