Why Reverse Recruitment is the Future of Tech Hiring
HR Tips Sophie Soulane
Recruiting tech talent is the main challenge for many HR managers and recruiters around the world, and it’s about to get even more challenging. In the coming years, the number of available tech jobs is expected to largely increase. At the same time, the pool of qualified developers will decrease – by 2030, we anticipate a global shortage of more than 85 million tech workers!
For this reason, it’s more important than ever to prepare. Even companies that already have a healthy pipeline of candidates should be proactive in improving their recruitment strategy to remain competitive, and reverse recruitment is the way to do it. We’ve listed the most important performance indicators in tech recruitment you should be looking at, how to measure them and how to improve them using reverse recruitment.
What is reverse recruitment?
As the name suggests, reverse recruitment is a recruitment model where companies apply to candidates instead of the other way around - literally reversing the recruitment process. Reverse recruitment is usually used on a platform (like Honeypot) and is most commonly used in tech recruitment, as the scarcity of tech talent asks for innovative ways to attract them.
To make this recruitment model work for companies, developers are screened upfront to understand their intentions and sense of urgency, and to avoid unresponsiveness which is a common obstacle when sourcing developers yourself. How many times have you sourced the perfect candidate on Linkedin, sent them a personalised and convincing message, only to be left on read? Developers receive these messages multiple times a day – often for jobs that they feel don’t match what they’re looking for – and they’re tired of them.
As reverse recruitment puts the developer in a central spot by letting companies apply to them, the majority of developers use these platforms over other channels.
Using reverse recruitment for hiring
There are a range of metrics you can use to measure the success of your recruitment strategy. Here we’ll focus on three in particular that can be optimised with reverse recruitment.
There are two KPIs regarding the time it takes to fill a position, which are often used interchangeably, but do have a significant difference: time-to-hire and time-to-fill:
- Time-to-hire measures the time from the moment the developer is sourced to the moment they accepted the offer.
- Time-to-fill measures the time the position opens to the moment the developer accepts the offer.
Both indicators have a damaging impact when not managed properly. As for time-to-hire, there is absolutely no candidate that likes a long hiring process. 17% of Gen Z job seekers accept an offer less than a week after the first interview – so cutting down time-to-hire is key in attracting newbies in the workforce.
A long time-to-hire might also result in losing high-quality developers, who get plenty of job offers and have accepted another one in the meantime.
As for time-to-fill, when you are taking a long time to get in touch with the right developers, know that by the time you know who to reach out to, your competition has made them an offer.) already. Not only that, but if you’re sourcing talent on sites like Linkedin, they’re likely to be passive candidates and this can increase your time-to-fill even more.
Keep in mind that engineering positions have the highest time-to-fill compared to other departments. To put this in perspective, the average time-to-fill an engineering position is 62 days – sometimes even more.
A reverse recruitment strategy has a positive impact on both the time-to-hire and time-to-fill as you are approaching developers who are certainly looking for a new job. On Honeypot, we have seen companies reduce their time-to-hire from 50 days to 25 days – a 50% decrease!
- advertising costs
- recruitment software fees
- salaries of in-house talent acquisition
- salary and time spent of the people involved
- employer branding activities
- and sometimes relocation costs
The cost-per-hire of a position is dependent on the seniority of the role and the department. As there is an increased demand for tech talent, the cost-per-hire for engineering roles are among one of the highest, so it isn’t any wonder that companies aim to keep it as low as possible. However, some experts advise that to attract top talent and grow your company, you need to invest, and reducing your cost-per-hire to an all-time low limits the ability to do so.
A great way to reduce costs while maintaining a high quality of candidates is to focus on reducing the time-to-fill. The costs of an open position are often very well-hidden but can add a serious burden to a company’s operational costs.
Let’s compare the cost-per-hire to the cost of an open tech position as these have the longest time-to-fill.
The average costs of an open position is estimated at €450 a day.
If you want to calculate this more accurately, you can do this by taking the salary for the position and divide this by 260 (the amount of working days in a year) and multiply by 2.
We’ll do the math for you, see below:
- A salary of €40,000 results in a €308 cost per day.
- A salary of €60,000 results in a €462 cost per day.
- A salary of €70,000 results in a €538 cost per day.
These costs include a lack of productivity, the lack of business growth, possible overtime costs for other employees, and employee turnover based on increased work pressure.
These aren’t very visible on a financial sheet, but definitely have influence on your bottom line.
Let’s use this to calculate the costs for an open tech position. As mentioned above, the average amount of time to fill a tech position is 62 days. With a salary of €50,000 a year, the costs of this open position would be 384 x 62 = €23,808.
Using reverse recruitment can reduce the time-to-fill to 25 days. However, using reverse recruitment platforms often comes with a fee – on average 15% of the yearly salary of the candidate. However, it does work out better in the end.
Here’s an example
Feel free to follow the steps with one of your open positions.
Imagine you’re hiring a developer with a salary of €50,000. Remember to divide
their salary by the number of working days in a year: 260.
So, €50,000 ÷ 260 = 192
Then multiply this number by 2 (= 384)
Remember, using reverse recruitment can reduce the time-to-fill to 25 days, so:
384 x 25 + 7500 (15% fee of yearly salary) = €17,100!
This is a 28% saving per hire – €6,708 to be precise. Imagine how much you could save by using reverse recruitment when you need to hire 10 developers! Try out the calculation for yourself with some of your open positions.
Number of qualified candidates
This metric measures how many candidates that apply for the position are worth having an initial conversation with, meaning that they fulfill the primary requirements of the job.
For some companies the amount of applications might not be the problem, yet they still struggle to fill their tech positions. How much time have you spent sifting through countless applications, only to be left with few qualified candidates? And yes, going through large amounts of applications definitely impacts the time-to-fill as well.
There are multiple reasons for having a low number of qualified candidates, but here are two that often occur in tech recruitment:
1. Tech knowledge
This is a common issue when recruiting for tech positions. Not every professional involved in recruitment has a technical background, so it can be quite difficult for a junior tech recruiter or sourcer to understand what it is that the hiring manager is looking for, leaving you with a lower number of qualified candidates. When using Honeypot as a reverse recruitment platform, you are assigned a Client Success Manager who is trained to help you select the right candidates. This is very beneficial for the less experienced tech recruiter who can use some additional guidance.
2. Appealing job descriptions
Have you optimized your allocated resources to the source of hire and are you sure that your recruiters are sourcing the right developers? It makes sense to revise your job description and see if it is written in an appealing way for developers. Check out .cult, a new platform with content for developers to understand what is currently on their minds :)
You will increase the number of qualified candidates when you actively source developers, but as you already know – this takes time. For technical roles, niche channels like reverse recruitment prove to get the most qualified candidates.
Reverse recruitment platforms allow you to use filters to ensure every developer you come across matches your primary requirements, increasing the number of qualified candidates to close to 100% when done right. This is especially interesting taking into consideration that requirements for tech jobs can be a bit more complex compared to other jobs!
It’s no secret that there are more barriers to hiring exceptional tech talent than in other professions, and as the scarcity of tech talent increases globally, every company should focus on optimising their tech recruitment metrics.
Whether your goal is to reduce time-to-fill, to increase your number of qualified candidates, or reduce your cost - reverse recruitment is the way to go! Curious? Then sign up to Honeypot!
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