Closed Loop Recruiting: An Advanced Approach to Performance Optimization

Closed Loop Recruiting: An Advanced Approach to Performance Optimization

Mike Roberts

It’s easy to broadly discuss recruiting without digging into the details of what goes into turning a complete stranger into an employee.

But the reality is, it’s much more complex than that. Effectively bringing on new employees encompasses the entirety of attraction, recruitment, hiring, and onboarding processes. That’s why the Talent Board’s Candidate Experience Research and Awards cover all of these phases, and why we’ve tried our best to delineate between areas like “career site candidate experience” and “candidate experience during the interview” in our writing.

The interconnectedness of talent acquisition lends itself to the idea that information and data from one phase could potentially impact performance in another. For instance, how well a candidate performs during the onboarding process is an indicator of both the health of the onboarding process itself and quality of hire. That quality of hire information could be used to improve attraction and recruiting processes.

The problem is, most talent acquisition and human resources organizations aren’t set up to openly share performance data in this way. What’s interesting is that manufacturing figured this out a long time ago, and has been using the idea of “closed-loop quality management” to share data and continuously improve performance across the whole operation.

In this post, we’ll discuss a few lessons to be learned from manufacturing, and then work our way into the idea of taking a closed-loop approach to recruiting.

Breakdown: What Does “Closing the Loop” Mean?

To set the stage, let’s discuss the way manufacturing uses closed-loop quality.

Quality is arguably the most important performance indicator in manufacturing. Without high quality products, an operation can easily fall by the wayside. But what goes into making a “high quality product” is incredibly complex. It starts with product design, and then flows into the supply chain, production, delivery, and ultimately service.

Each phase, from design through service, is interdependent on one another. Unchecked poor quality early in the value chain typically surfaces as poor quality somewhere downstream. Think about well-known examples like faulty designs causing mass automotive recalls—they’re often the result of quality issues slipping through the cracks.

As ideas take their physical form and then move into the hands of customers, manufacturing organizations “close the loop” by continuously relaying performance information back upstream.

Picture a company that produces cinderblocks. That company may use a supplier of concrete mix. By inspecting the concrete mix before using it, the company may be able to identify any quality issues and communicate that back to the supplier without ever losing any or much product. Avoiding this inspection could result in cinderblocks being made that eventually fall apart, causing unhappy customers or worse.

Having that concrete mix inspection process in place and then a workflow for communicating that to the supplier is one simple example of closed-loop quality. Why can’t talent acquisition and other human resources functions work to improve recruiting performance and candidate experience in this manner?

Closing the Loop On Recruiting

Closing the loop is really about enabling communication and information sharing between different groups or phases of processes. It’s about being cognizant that performance in one area impacts performance in another. We could compare avoiding a potential product recall to avoiding a bad employee who’s going to quit two months after starting, costing lots of money along the way.

Just like design, production, delivery, and services in manufacturing, the attraction, application, interviewing, hiring, and onboarding phases in recruiting have distinct phases that can all be monitored and optimized. The creation of closed-loop processes requires understanding performance indicators in each phase, and then identifying where feedback loops could potentially highlight areas for opportunity.

Here are some examples:

  • Candidate Experience: If you follow the advice of Gerry Crispin and use the net promoter score model after candidates go through the interview process or application process, that information can be used to dig into and identify why people may not refer another person to your company. It may seem obvious, but many companies don’t make this information actionable and apply to it improving the attraction, application, or interviewing processes. Someone or a group should be responsible for routinely investigating this.
  • Quality of Hire: We mentioned before, how well an new employee performs in his or her first months at the company is telling of both candidate quality and the health of the onboarding process. Negative trends in onboarding performance could indicate poor performance in the process itself or candidate quality. Without a process in place, there’s no way to dig deeper into it and improve.
  • Candidate Quality: The handoff from recruitment to hiring manager during the interview phase holds valuable information beyond just whether or not the candidate should come in for another interview. Again, trends in candidate quality need to be reviewed and communicated, because figuring out how to improve it earlier in the recruiting process could pay off in terms of time to fill and quality of hire. Data may reveal poor candidate quality, but without an investigation you might never know that something like poor communication of job requirements from the hiring manager is the reason for it.

These are just a few examples of potential closed-loop recruiting scenarios. This methodology is a well-known concept in the production environment, however, it should be noted that it’s not perfect there either. Manufacturers are constantly trying to figure out better ways to close the loop, and they face the same type of capability maturity limitations as recruitment.

As is the case with any performance improvement plan, it’s important to start small and then build on momentum. Information even within your own department suffers from being siloed if you don’t take the effort to make it available and consumable.

For more information on data and analytics in recruiting, check out our new eBook, “An Exploration into the Depths of Recruiting Analytics.”

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