Understanding: Conversion rates

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NOTE: Our Understanding series digs deeper into common recruiting metrics: how to calculate your metrics, compare them to the competition, and use them to drive business outcomes. Earlier parts of this series are Understanding: Candidates per hire.

Savvy recruiters consider Lever's Conversion rates report to be their secret weapon - the most valuable tool at their disposal. The Conversion rates report identifies weak spots in your recruiting lifecycle and helps you zero in on specific changes you can make to improve your process.

In this article, we'll cover:

How to understand conversion rates

The Conversion rates report measures candidate movement. The report only counts candidates who have moved between pipeline stages, or into or out of your archive, within the specified range of time. If candidates have remained in the same pipeline stage for the length of the specified range of time, they will not be counted in the report.

At its foundation, the Conversion rates report tells you how often candidates move into Hired. Let's start with a simple example: Conversion rates > by origin:


The Percent Hired column highlights which origins are highly efficient sources of hire. In the example above, we see that more than 1 out of every 10 internal candidates is eventually hired. Put another way, the Percent Hired column represents the first column (6 hires) divided by the last column (51 candidates were moving through the pipeline during this time).

Let's take a look at the similar Conversion rates > by source report:


In the example above, you can see that Instagram was the most efficient source of hire (but keep in mind the sample size was extremely small!). LinkedIn is slightly less efficient than the jobs page, but resulted in 23 hires, while GitHub resulted in no hires.

Now that you understand the overall idea, let's move to the Conversion rates > Explore report, where we can dig deeper into candidate movement:


Moving from top to bottom:

  • Summary statistics: These numbers change as filters and date ranges are applied. In this example, 1718 candidates moved during the specified range of time, and 55 of those candidates were moved to Hired.
  • Summary sentence: Note that "the pipeline" and "Hired" are actually drop down menus which can be clicked on and changed - we'll discuss this further below.
  • Columns: Candidates can only move 3 ways: they can move forward in your active pipeline (Conversion), they can move out of your active pipeline (Archived) or they can move backward in your active pipeline (Moved Back). In this example, 236 candidates in the New Applicant stage moved forward, 336 candidates moved into the archive and 26 candidates moved backward.
  • Movement details: Hovering over any of the figures in the table reveal where the candidates moved. In this example, 70 candidates in the On-site Interview stage moved forward: 68 went to the Offer stage and 2 candidates skipped the Offer stage and moved directly from On-site Interview into Hired.

How to compare your numbers to the industry average

Lever's newly updated 2019 Benchmarks Report breaks down conversion rates across different pipeline stages, different company sizes and different industries and roles (pages 18-22, 42-43). Compare your own conversion rates against these benchmarks to see how you're faring against your competitors.

For example, if you're a company with 214 employees hiring software engineers, you'd find the following statistics relevant:

  • 0.92% of all candidates at companies sized 101-500 employees moved to Hired
  • 66.9% of all candidates at companies sized 101-500 employees who received an offer moved to Hired
  • 21.96% of all internal candidates moved to Hired

How to put your metrics to work

Dig into Conversion rates>by origin to identify widespread patterns.

Using the Conversion rates > by origin report, look for broad, overall patterns in your organization's recruiting activities. Let's say you looked at your hiring report for the last calendar year and saw the following:


Here are a few takeaways based on the numbers above:

  • Based on the data within the 2019 Benchmarks Report, this organization is hiring efficiently - 2.2% of candidates who moved through the pipeline were eventually hired.
  • Compared to our benchmarks, this company's offer acceptance rate is extremely low! Why might that be? Are their offers competitive? Are they doing a good job wooing candidates and providing a high-quality experience throughout the process? Does this organization's culture excite candidates - or scare them away?
  • While this organization is doing a good job converting applicants into employees, compared to our benchmarks, that's still 98 out of every 100 candidates going into the archive! What a waste of time. Could they dig into their candidate sources (see next section) and identify any channels flooding their pipeline with low quality candidates?

Take a look through your own conversion rates. Do your offer:hire ratios or % hired metrics differ dramatically from those in our benchmarks?

Spend your recruiting budget on the channels which deliver good hires.

Using the Conversion rates > by source report, we can see which channels delivered the highest quality of candidates - without getting distracted by the highest quantity of candidates. Many job boards promise to add hundreds of candidates to your funnel. If all of those candidates are underqualified or otherwise a bad fit for the position, was it really worth your team's time and money? Take a look at the sources which offer a high "rate of return" on your money - in other words, don't just see whether they produce candidates, focus on whether they produce hires. We break this down in our article How to use your recruiting budget efficiently.

Identify bad data hygiene now, gain accurate insights later.

The Conversion rates > Explore report is a great "health check" to see whether your recruiters are using Lever correctly, and are using Lever in the same way. Check for two key indicators that there may be an issue:

1. Are recruiters skipping important pipeline stages?

Our rule of thumb is that your organization's pipeline should always reflect the reality of that candidate's experience. A candidate doesn't necessarily have to move through every pipeline stage if they aren't doing so in real life. For example, an internal candidate could skip a 'Skills Assessment' stage if it's assumed their day-to-day work speaks for itself. If they skipped the Skills Assessment stage "in real life", then it's okay to skip that stage in Lever. Often, however, skipping stages is a sign that your recruiters aren't keeping their candidates' profiles up-to-date in Lever.

Take a look at the example below:


In this example, five candidates skipped directly from the Phone Interview stage to the Hired stage - no on-site interview, no offer letter. It must have been quite a phone call!

2. Are your recruiters moving candidates in an illogical way?

There are very few reasons why a candidate would ever move backwards in your pipeline. There may be occasional one-off situations which would justify such candidate movement, but it's rare.

Take a look at the example below:


Why would a candidate ever move backwards from the Offer stage to a Phone Interview? It might be a sign that recruiters are moving candidates forward too soon, before they've achieved consensus with their hiring managers. It might mean recruiters schedule a call to discuss the offer and need to add an "Offer Call" stage to their pipeline. It might simply be a sloppy error. Either way, it's worth further investigation!

Note: You can always add, rearrange or remove pipeline stages via this form!

Poor data hygiene makes it harder to gain real-time insight into your recruiting process: "Is this candidate really in the Phone Interview? Or are they coming into our office next week?" It also makes it hard to gain long-term insights from your recruiting process: "What's our real offer:hire ratio?" Nip bad data hygiene in the bud by spot-checking your pipeline activity for behavior that makes sense.

P.S. Of course, everyone makes a mistake from time to time! If a recruiter accidentally moves a candidate to the wrong pipeline stage, they should delete the accidental pipeline stage change from the candidate's profile:


Deleting this action from a candidate profile prevents the action from "counting" in your reports.

Use Conversion rates>Explore to identify gaps in your recruiting process.

The Conversion rates report is our go-to report to identify gaps in a recruiting process, inefficiencies, or opportunities for improvement. The Conversion rates report helps you dig into two key questions:

1. Why do candidates we don't want enter our recruiting funnel?

Identify the stage in your pipeline when most of your candidates are archived. This is usually the New Applicant stage or another early stage. (If you lose most of your candidates later in the process, that's a red flag that you aren't screening candidates effectively early on.) It's in your team's best interest to reduce the amount of time spent wading through low-quality or unnecessary candidates.

Let's look at an example:


Here are some possible next steps for the recruiting team above:

  • Train the team to close job postings as part of their workflow when moving a candidate to Hired, so candidates don't continue to apply to roles which are already filled.
  • Revisit the clarity of your job descriptions - are you honest and explicit about your expectations? Give underqualified prospects the opportunity to self-select out of the application process.

2. Why do candidates we do want leave our recruiting funnel?

Candidates who make it deep into the recruiting process represent a large investment of your team's time and money. Your team should be feeling pretty good about candidates who reach the On-site interview stage or later. It's in your team's best interest to convert most of these desirable candidates to employees - and investigate what happened when they don't.

Let's take a look at an example:


Here are some possible next steps for the recruiting team above:

  • Ask questions about compensation during the recruiter screen to set expectations earlier in the process. If a large portion of your candidates leave due to compensation, you could bring these figures to your leadership team to reassess whether your company's compensation packages are competitive.
  • Reexamine the assessment used during the Skills Fit stage to ensure it is truly identifying underqualified candidates. Ask your hiring managers what they learned during the on-site interview which disqualified the candidate - how could that have been identified earlier?
  • Take a hard look at the interview experience. Why did 1/3 of your archived candidates lose interest after meeting your team, touring the office, etc. Did they feel welcomed? Respected? Was the scheduling process convenient? Were your interviewers prepared and on-time? Did they encounter low morale? Consider auditing your interviews, or sending out surveys to your candidates asking about their interview experience.

It's important to note that both key questions require your organization to define specific, actionable archive reasons. You should be able to tell at a glance exactly why a candidate didn't move forward. You don't want to look back on a year of recruiting data to see 76% of your candidates were archived for "Not A Fit". What does that tell you? What specific, concrete actions can you take to avoid bringing those candidates into your funnel, or to screen them out early in the process? Not much! As a rule of thumb, if you're archiving a candidate and none of your archive reasons is an immediate, obvious match, reach out to our team to add an archive reason to your account.

What's next

Read through our 2019 Benchmarks Report for the latest hiring and sourcing metrics, broken down by company size and department.

Review your pipeline stages and archive reasons - are there any reasons candidates don't move forward which need to be added to your account? Is there a step in your real-life recruiting process which is missing from your pipeline?

□ Review our best practices for data hygiene, so your reports accurately reflect your day-to-day hiring process. Remember: reports are only as accurate as the data they contain.

Expect our next Understanding article next month!


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