February 7, 2023
The data your recruiting team needs to be recession-proof
Content Marketing Manager
June 7, 2022
These days, hitting your hiring goals is more challenging than ever—moving candidates through the hiring process can often feel like trying to carry water in your hands. Sure, you may start with a lot, but by the time you get to where you need to go, somehow, so much has slipped through your fingers, leaving you with almost none.
Think about candidate drop-off like that water slipping through your hands. You’ve built a good hiring pipeline, but when you reach the date at which you'd hoped to have an offer out, somehow the majority of those candidates have slipped through your fingers. Candidate drop-off is the percentage of candidates who enter your hiring process through sourcing, inbound application, referrals, etc. but do not make it through to the offer.
Candidate drop-off happens at various stages of the hiring process for many reasons, including:
Disconnect between the hiring manager and recruiter
Negative candidate experience
The tight labor market and competition for top talent have only magnified this trend, with recent estimates claiming 28% of candidates have skipped an interview or stopped communicating with a company during the interview process, and a further 10% declined a job offer even after signing a written offer. Drop-off like this takes a financial toll on the organization and an emotional toll on everyone involved in the hiring process, as sourcing and recruiting efforts have already been invested in every candidate who leaves your process.
To illustrate this, let's look at aggregate passthrough rates from Gem’s Recruiting Benchmarks Report:
For context, “Application Created” means the person was entered into the organization’s applicant tracking system (ATS)—either as an active applicant or as sourced talent who expressed interest in moving forward with the conversation. This is important because it means your talent acquisition (TA) team has invested time and energy into every candidate that makes it into this funnel.
It’s also important to note here that not all candidate drop-off is bad. By design, not all candidates who enter the hiring process will make it to an offer; in fact, most roles demand that you pick only one out of tens or hundreds of potential candidates. Candidate drop-off at the very top of the funnel is a good thing—it means you’re weeding out candidates that aren’t right for the position without investing too much time and resources.
However, if you’re seeing low talent engagement, poor offer extend/accept rates, missed diversity hiring targets, etc. candidate drop-off rates can provide critical insights about key sticking points within the hiring process that may be causing these issues.
Below, we look at some key stages in the hiring process where candidate drop-off occurs and why you might be seeing drop-off at these stages. We’ll also offer some strategies you can use to minimize drop-offs in your own process.
In a perfect world, every time a candidate dropped out of the interview process, you’d be able to know precisely why it happened and how you could adjust your recruiting strategy to address the issue moving forward. Unfortunately, this is the world we live in:
It's hard to get a candidate back on the phone once they have decided to drop out, and once you do, they may not be entirely truthful about why they dropped out.
Once a candidate has dropped out of the hiring process, your recruiting team’s attention must shift to the other candidate(s) on your list to fill the position as quickly as possible.
If a candidate drops out, your recruiting team has to move quickly to find another candidate, so they may not be recording candidate drop-off reasons at all—let alone in a coherent or uniform way.
If you’re currently tracking candidates on spreadsheets, it’s probably easiest for you to see drop-off at the offer-extend and offer-accept stages, while the top of your hiring funnel is more of a mystery. Without insight into exactly where and why candidates are dropping out of the process, your recruiting team is flying blind with no actionable information on how to change their processes to better serve candidates (and if this is you, check out how Gem’s Talent Engagement platform can change that).
However, if you currently use Gem, you have access to all the data you need. You might just need some insight on how to operationalize the data you’re seeing. In that case, read on!
Here are some common candidate drop-off points and some explanations for why you might be seeing these patterns.
Before the phone screen – This occurs when you’ve received a positive response from a potential candidate and agreed on a time to chat, but they don’t show up. This may be an indication that the candidate has visited your website looking for information on what they can expect if they join your org—benefits, work/life balance, employee support, company culture, etc.—and has concluded that your org isn’t a good fit for them after all. This may indicate a weak talent brand. According to Glassdoor, 50% of candidates say they wouldn’t work for a company with a bad employer brand reputation—even for a pay increase. This shows that building a strong talent brand is the key to drawing in and retaining top talent at your organization.
After the phone screen – This is a big drop-off stage for candidates as it’s where many questions about the role and company are answered. In some cases, you may screen the candidate out yourself after realizing they don't align with the role and/or company. Other times, the candidate may drop out on their own after learning more about the specific projects they’d be working on, career advancement opportunities (or lack thereof), or that the compensation is not what they expect. Addressing these things early in the interview process and being very clear about the role's qualifications and company mission and values will ensure the candidate is overall in alignment with the org before you move them on. Remember, it's better to lose them now than later.
After requesting an assessment – Many technical roles require a skills assessment to demonstrate a candidate’s aptitude and the value they would bring to the team. While these assessments are useful, they can be seen as annoying and, in some cases, slightly insulting—especially for sourced candidates. The thought process here is: “You reached out to me, why are you asking me to prove my value?” Instead of asking candidates to take an hour out of their day to complete an unpaid task, consider accepting recent work examples in place of a standardized assessment.
Before meeting with the Hiring Manager – If the hiring manager is rejecting candidates before meeting with them, dig deeper into why this might be—could it be due to bias? Are they being unnecessarily stringent about the job requirements? Or is candidate quality truly the issue?
Pro tip: with Talent Compass, you can require hiring managers to list reasons they rejected candidates, making it much easier to identify and address any issues. In addition, Gem users can slice and dice data by demographics (gender, race, ethnicity) alongside other filters like role, location, or hiring manager to observe where bias might lie in specific hiring pipelines.
After meeting with the Hiring Manager – If candidates are dropping off after meeting with the hiring manager, perhaps bias or inflexible qualifications are not the issues. You and your hiring manager may be misaligned on the requirements, skills, etc., needed to fill a certain role. If you’re seeing significant drop-off at this stage, sync up with your hiring manager and make sure you’re both on the same page about what a “good” candidate looks like.
After the onsite interview – These days, an “onsite” interview could be an actual interview at your company office or a Zoom call with key team members. This is where candidates get a glimpse of what it’s actually like to work at your company. Here again, candidates may drop out of the hiring process due to an inconsistent talent brand experience (i.e., they have been told one thing but seen another). To mitigate any inconsistency in your talent branding, make sure everyone at your organization is clear about the company mission and their part in promoting company success and is excited to share their experience with potential candidates.
Pro tip: with Gem’s Diversity Recruiting Insights, you can track the drop-off of different demographic groups. If you're seeing that women are dropping out of the process at higher rates than men are, or Black candidates are dropping out at higher rates than anyone else, you may want to examine the demographics of your interview team. If candidates don't see folks who look like them reflected at the company, they may be less likely to join.
After the position is offered – After so much hard work to move a candidate through the funnel, this can be an incredibly frustrating time to lose them. If you see a high percentage of candidates dropping out at this stage, compensation and/or competing offers are likely the culprit. While it’s easy to say “just give them more money/better benefits,” we all know this isn't always an option. However, there are a few things you can do throughout the hiring process to mitigate drop-off at the offer stage:
Address compensation early in the interview process – Give the candidate an honest salary range your organization has authorized. This will ensure that the candidate knows (roughly) what salary they can expect to make should they choose to pursue the role, minimizing the risk of any unpleasant surprises down the road.
Make sure your compensation package aligns with the current market – I know this is the easy answer, but with unprecedented competition for talent in today’s job market, you may find it necessary to reevaluate the comp packages your organization is offering to secure top talent for your roles.
Highlight the perks of working for your organization – Aside from the standard salary and benefits, does your company offer things like paid meals, L&D, remote/hybrid work options, etc.? Be sure to highlight these when you are making your offer as a way to set your company apart from your competition and delight candidates.
Reiterate company impact and career advancement opportunities – Candidates who have made it to the offer stage see value in working for your organization and clearly have some interest or motivation to leave their current position. Reiterating the tangible impact they would have on your organization as well as career advancement opportunities is a great way to remind the candidate why they should choose your organization over a competing company or stay in their current position.
Deliver an exceptional candidate experience – While you can’t always increase the salary or control what other organizations are offering, you can provide all-star service to a candidate throughout the process through things like good communication, follow-ups, feedback, and frequent check-ins to see how the candidate is doing. Good candidate experience can have a tremendous impact on a candidate’s decision to accept or decline an offer. A whopping 80-90% of talent say a positive or negative candidate experience can change their minds about a role or company.
Peter Drucker once said: “You can’t change what you can’t measure”—a sentiment we couldn’t agree with more. That’s why we created Talent Compass, a platform that gives you end-to-end visibility into your hiring pipeline and promotes a better, more efficient candidate experience.
Talent Compass Pipeline Analytics feature pulls in data from Gem and your ATS to give you a bird’s eye view of candidate trends across roles, hiring managers, locations, demographics, and more. A color-coded system for passthrough rates makes it easy for you to identify bottlenecks in your hiring process and know what funnel stages you need to address. This means unparalleled insight into the health of your hiring pipeline, empowering you to identify and resolve any candidate drop-off points throughout your hiring process.
For example, if only 15% of Black candidates are passing from phone screen to onsite interview for a backend engineering role, Gem alerts you to that disparity. Then, using steps 3, 4, and 5 from this list, you can identify the sticking points and resolve them—making your hiring process a well-oiled (and equitable) machine once again.
In addition, Gem’s Talent Pipeline feature allows you to dig in by role and see how long specific candidates have been sitting in each stage of the funnel, which candidates are on track to close, and which ones need immediate attention. Clicking into each tile, you can easily message a candidate, reject an application, review interview notes, and more—creating a one-stop-shop for talent management.
In today’s hyper-competitive hiring landscape, you need all the help you can get when it comes to identifying and reducing candidate drop-off throughout your talent acquisition process. With Gem on your side, you’ll have all the data you need to identify candidate drop-off points and what you can change to resolve them.
If you’d like to learn more about how Gem can improve candidate drop-off, improve recruiting workflows, and make your TA team happier, book a demo, and we’ll show you how!
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