Fiscal planning, staffing and payroll are almost always an organization’s greatest expense. Workforce management — which includes determining when to add new employees and increase compensation — requires an understanding of your labor market and its economic drivers, as well as reliable salary data.
Success in today’s ultra-competitive recruiting environment is driven by information. The need to know where and how to successfully recruit talent underscores the importance of a data-driven approach to hiring and prioritizes the solutions necessary to ensure smart fiscal planning and organizational growth.
A Data-Driven Approach to Hiring
In a tight labor market, companies increasingly are competing from smaller talent pools. Because some geographic areas seem to have few available candidates, human resource (HR) and hiring managers may rely on misguided assumptions or a limited perspective to drive their recruiting efforts.
For example, states with low unemployment rates like South Carolina, Utah and Vermont might seem like barren territory for finding new employees, leading recruiters to discount those states in their talent searches. However, research shows that even though millions of people around the U.S. are working, 51.0 percent of those currently employed are actually looking for a new or better position. It’s a safe bet that many of them are in states, metros and industries with the highest levels of employment.
That’s where data-driven recruitment comes into play. Relying on technology to quickly assess a large talent pool and winnow it down to the right candidates can guide a focused effort. Part of the process involves recruiters using sources other than résumés and applications to find the best candidates, such as social media or online Google searches.
Refining Recruiting, Refining Business Outcomes
Today’s information overload only underlines the importance of using a data-driven approach to recruiting. Receiving labor analysis at the metro or industry level can help HR professionals refine their recruiting efforts to realize more successful employment outcomes, saving them time and money. Key aspects of labor performance in your metro or industry to consider include job growth, wage growth, unemployment rate, the labor force participation rate and talent supply and demand.
Tracking time from the start of an application process to the point that a candidate accepts a job offer can tell you exactly how long the process takes and whether it is efficient. Using an applicant tracking system (ATS) can help you spot roadblocks, such as not finding enough qualified candidates and the reasons that might be happening:
Is your job description as clear as possible?
Are there enough people in the local talent pool to fill the position?
Is the job as described too burdensome for most candidates, indicating a refinement of duties is needed?
Are you offering a salary that’s competitive in your market?
In the HR sector, using workforce analytics – also called talent analytics or people analytics – is an increasingly popular solution. Because there’s a push for executives to change their perception of employees only as “necessary commodities,” there’s a growing emphasis on leveraging analytics to better manage employment journeys.
Not only does data play a bigger role in helping HR pros track candidates through the application and hiring process, this intelligence also drives decisions that help executives plan and direct their overall growth and expansion strategies. Workforce analytics can help managers identify skills gaps or high- and low-performing employees, for example, and then reallocate company resources to achieve optimal results.
Labor Market Analysis and Salary Answers
Labor market analysis and salary answers are keys to unlocking a brave new world of industry and occupation knowledge, helping hiring managers understand exactly what the demand is for an occupation, where prospective candidates are located geographically and how to be wage competitive.
Considered together, this information helps drive financial and operational planning, putting the organization in a strong, knowledgeable position of knowing exactly what compensation is necessary to successfully engage job candidates.