How Greenhouse Grew by Activating Their Employees - HR Open Source
Greenhouse sits at the intersection of people, data, and design. We design tools for the people who are growing great companies. Our philosophy is to empower people with the best practices and data needed to build both a great business and great place to work.
We started 2015 with 47 employees. We ended the year with 186—that’s 4x growth! But our story is not merely one of growth; it’s about how we achieved that growth. (Hint: our talent acquisition team did not do it alone).
This is the story of how we used metrics and reporting to fundamentally change the way our company approached our internal recruiting process.
WHY WE DID IT
You’d think that for being a recruiting company, we’d have a perfect recruiting process from the very beginning. Quite the opposite actually. We almost missed our hiring goals by 33% in our first year of hypergrowth!
It all began in July 2015, when we sat down to forecast our hiring needs for the remainder of the year. At the time we had 100 employees. The forecast said we needed to be at 180 by the end of the calendar year in order to hit our aggressive business goals. Based on our historical recruiting capacity, we could probably end up at 140 if we kept going as-is. That just wasn’t going to work.
We realized that even if we staffed up the recruiting team immediately, they would take a while to ramp up and we would still fall significantly short of our goals. We needed the whole company to turn into a high-performing, well-communicating recruiting team for at least two quarters in order to hit our business goals.
WHAT WE DID
Most initiatives at Greenhouse follow the same basic three-step playbook:
Understand the problem at hand
Make a plan
Execute and iterate
Our approach to hitting our hiring goals was no exception. The first thing we had to do was clean up our data so that we could understand (and quantify) how much extra recruiting capacity we needed. Once we had those numbers, we made a plan and partnered with every department to help reach our goals. From there, we began to execute and tweaked our approach as we learned more about what worked and what didn’t work.
HOW WE DID IT
As mentioned above, we had to start by understanding the problem at stand. The first couple of steps centered around gathering enough data and information so that we’d be able to make a sound plan. When we didn’t have enough historical data, we used best estimates in order to move forward. From there, we set specific, actionable and measurable goals for each group. And then we tried it out and course-corrected as needed until we reached our end result.
Step 1: Determine hiring goals and categories
We started with the total number of hires we needed each quarter in each department. Then we classified each job as a 1, 2, or 3 based on recruiting difficulty and anticipated pass-through rates for each category. We could have gotten more granular, but we figured rough estimates were better than false precision.
Here’s a sample of a few of our categorizations. As a general rule of thumb, roles that we hire for regularly and have predictably performing sources are a 1. Any new role that needs a kick-off meeting and a new interview plan is at least a 2. And roles that are particularly hard-to-fill because the profile is more specialized are a 3.
Step 2: Break things down into Milestones & Qualified Candidates (QC’s)
Since different jobs have different interview plans, we broke down the recruiting funnel into a set of five major milestones that applied consistently to all jobs. Qualified Candidates, or QC’s, were the candidates that reached the first milestone - an initial screen. Face to Face were candidates that made it to the first onsite set of interviews.
Once we had the milestones defined and the roles broken out by difficulty, the next step was to assign conversion rates to each part of the funnel. Since we had only made 50 hires to date, we didn’t have great historical data. Rather than let that hold us back, we estimated what we thought were reasonable pass rates for each milestone of the three categories.
Note: We were pretty off in our original estimations, but continually updated these numbers as we learned more about our process. This chart reflects the last iteration of our revisions.
Then, for each job we determined a total number of QCs needed (based on conversion rates) to set ourselves up to make the hire. For example, for a category 2 job, 82% of offers become hires. That means you need to make 1.2 offers to get 1 hire. Then 35% of face-to-face candidates get an offer, meaning that you have to have 3.48 face-to-face candidates to make a hire. And if 23% of Qualified Candidates make it face-to-face, that means that on average, you need 15 Qualified Candidates to make 1 hire for a category 2 role.
Boiling everything down to Qualified Candidates felt very actionable and tangible for our teams.
Step 3: Create a sourcing strategy
Then we had to figure out how to get the QCs in the first place. First we broke down all different sources into four general buckets. Using historical data, we estimated conversion rates from application to QC for each of the sources. Then we set targets for what percentage of QC’s we wanted to come from each source. This exercise helped quantify how much activity we needed for each source in order to set ourselves up to hit our hiring targets. This is the chart we ended up with:
Step 4: Determine the delta
This exercise confirmed what we already knew: that our existing recruiting team could not get this many candidates in the door without help. So we estimated what we thought each recruiter could do, and determined the delta for each department.
Step 5: Partner with the department heads
We sat down with each department head and explained the steps from above. We shared what we were able to accomplish with our existing recruiting team and where we needed help from the department. Specifically, we gave each department a specific number of prospecting emails, referrals, and number of initial screens that they needed to hit to bridge the gap between our recruiting team’s capacity and the overall goal.
In order for our initiative to be successful, it had to feel like a full partnership - not just a cry for help.
From the beginning, we tied things back to business objectives. The conversation was never about how many people we could or couldn’t hire - it was about what business goals we could and couldn’t achieve. We also worked very closely with the department heads to prioritize roles and goals for their teams
Step 6: Engage the whole department
The biggest key to success was making sure the entire department was engaged in the program. We hosted kick-off meetings with each department to explain the why and the how of the initiative, and we told each team that we (the recruiting team) would give them (the department), a special prize if they hit their goals. Every department was on board because they fully understood the problem at hand and had tangible things they could do.
And we quickly made an important discovery. Some teams preferred—and naturally gravitated towards—certain activities. It was no surprise that our Sales Development Reps loved sending outreach emails and were able to produce lists of prospects within a day. Our Customer Success team, on the other hand, enjoyed conducting initial screens and asked if they could do more than we’d initially asked them to do. Our engineers excelled at making referrals, and even surpassed their initial expectations of what they could accomplish. Rather than hold each team accountable to rigid goals, we tailored the goals to play up each department’s strengths.
We also kept everyone motivated by sending weekly summary emails. This helped teams feel success and progress throughout the program. One of our biggest successes was with our referral parties, where the recruiting team hosted a beer and pizza night and offered brief tutorials on BOOLEAN searches, tracking codes, and example recruiting emails to send to prospects.
Step 7: Celebrate!
We met our goals and celebrated by throwing a “waferral” (waffles + referral = “waferral”) party to thank everyone for pitching in. It was a fun reward for all the hard work everyone put in and the whole company really appreciate it.
The plan worked!
We kicked off the initiative in the first place because we were not tracking to hit our hiring goals. Naturally, one of the major goals of the program was to increase our monthly hires. In order to achieve that, we also set goals for the leading indicators at the top of the funnel: total referrals and initial screens.We saw huge leaps in all of our numbers as soon as we kicked off the initiative. From July to August 2015, we experienced:
2.5x more applications
3.5x more referrals
2.5x more initial screens
Then, between August and September, we made 2x the number of hires as in July and August as a result of the increase in our QC’s in the previous months.
And yes, we also ended up hitting our aggressive hiring goals for the year and grew the team 400% in one year. :)
WHAT WE MISSED
At first we set specific goals for outreach, referral, and initial phone screens and expected every department to meet all of them. We didn’t take into account that each department might have a different personality or be better suited to certain tasks.
So one of our biggest lessons was that we had to collaborate to craft the strategy for each team to make it comfortable for them; a one-size-fits-all approach simply didn’t work.
In retrospect, a better approach would have been to start with the deltas and develop the strategy with each department on an individual basis. Then we could have conducted training sessions that were tailored to a specific department or activity.
We also learned that with such high interview volume, it was hard to make time to actively outreach passive candidates. We only hit about 30% of our outreach goal. But we used this knowledge to hire a sourcer to actively source as well as two coordinators who could free up bandwidth for recruiters to source.
An initiative like this has a lot of moving pieces and even more stakeholders. Buy-in and alignment are paramount to success. Here’s four things to keep in mind as you structure your program:
1. Tie it back to the broader company goals
Understand everyone’s goals and make sure you can tie recruiting back to those objectives. For example, when you talk to the sales team, you can frame it in terms of their target for the year. If you don’t hire enough account executives by a specific date, the sales team won’t be able to hit the company’s revenue goal. This makes it really easy for each department to understand why it’s worth the extra time and effort to help out with recruiting initiatives.
2. Use data so people know what needs to happen
Use numbers and funnel conversion math to articulate what’s necessary at each stage. This will help lend credibility to goals and get everyone bought in and motivated to help.
3. Make goals tangible and actionable
We purposely stayed away from focusing on hiring goals because the end success is so far removed from what someone can affect on a day-to-day basing. By focusing on referrals, initial screens, and outreach emails, we gave people the ability to achieve success every day through small efforts.
4. Create a partnership
In order to get everyone fully invested, take a collaborative approach. Many employees may want to help, but may not have recruiting experience. Provide training sessions, templates and examples, advice on BOOLEAN searches—anything you can to make their work easier. And, of course, celebrate your successes together!