Professional Services Director
Talent pipelining is the process of building a community of potential candidates who could apply for roles in the future but are not yet ready to enter the selection process for a current opportunity.
The pipelining process is converting passive candidates into active candidates by increasing their engagement with the company, helping them understand where they could fit and making them aware of suitable opportunities when the timing is right.
Over time your membership increases and then converts into applications and hires. As more and more of your hires are delivered via the pipeline, your need to actively market opportunities decreases. As direct job advertising is the least efficient form of marketing (because most people are not actively looking for a new opportunity) the ultimate cost savings will be very large.
In addition, because you have the time to establish a better fit between the candidate and their desired role the quality of hire will improve.
Finally, because the members of the pipeline are “ready to go” your time to hire will also decrease.
The three principle sources of talent for your pipeline are:
- People arriving at your careers site but not yet ready to apply
- People that have entered the selection process for a role, are unsuccessful but considered good candidates by recruiters (silver medallists)
- People found in public sources (e.g. LinkedIn) who are not ready to apply and need to be nurtured
Over time you will typically take your candidates through three relationship stages:
- Understanding – establishing where the candidate is on their career journey and what help they need
- Engaging – making your organisation the first choice amongst your membership
- Matching – identifying the best fit for the candidate and tailoring to your requirements
Early ROI Metrics
Because talent pipelining is a strategic initiative it is sometimes difficult to compare the results and returns on investment (ROI) with more traditional methods. This is especially true in the early stages when you are building your membership and they are all at the beginning of their relationship with you.
Nevertheless, it is possible to use early indicators to demonstrate the future value of the pipeline.
Members become Applicants become Hires
The first indicator of performance will be the number of members you are adding each month. Even at this stage you can estimate how many of these will be hired in the future and compare the cost per hire with traditional sources. The savings then become your predicted ROI.
Experience shows the likely conversion rates are around 1 in 25 for careers site entrants, 1 in 4 for silver medallists and 1 in 10 for targeted candidates. You can obviously refine these rates as you gather results specific to you.
Cost per hire
You are adding 500 candidates per month from your careers site. Based on a conversion rate of 1 in 25 you can predict that the pipeline will ultimately deliver 20 hires from these members. If your monthly cost is £3K per month this equates to a cost per hire of £150.
Return on Investment
If your current average cost per hire is £1K your monthly savings will be £14,000 giving an ROI of 466%
Depending on how quickly you can convert passive interest into active interest you should start generating applications from memberships. Obviously once you are demonstrating active applications from your membership this is much more likely to convert to hires.
A conservative estimate is that 1 in 10 applicants will be hired (this can increase to 1 in 4 for recycled or referred candidates).
Cost per hire
You are receiving 250 applications per month from your membership. Based on a conversion rate of 1 in 10 you can predict that the pipeline will ultimately deliver 25 hires from these applicants. If your monthly cost is £3K per month this equates to a cost per hire of £120.
Return on Investment
If your current average cost per hire is £1K your monthly savings will be £18,250 giving an ROI of 600%
Early Cost Savings
It will be a matter of judgement on how quickly you can scale back your direct marketing spend. For critical roles you will probably want to wait until the hires are being confirmed before switching over entirely to the pipeline. Nevertheless, there are some immediate areas where you can reduce spend:
- LinkedIn – reduce or downgrade your recruiter licences and build your relationships, instead, in your own pipeline.
- Job Boards – if you have a target for applications per role you can quickly see how many applications the pipeline is delivering and reduce your other spend accordingly.
- Suppliers – review and amend your contracts with your suppliers so you can continue the relationship with introduced candidates even if they are unsuccessful.