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Candidate databases are excellent tools to reduce time-to-hire and cost-per-hire, find more qualified candidates, and streamline organizational efficiency.

If you want to implement one in the real world, I’ve got you covered!

This article will discuss how you can build and maintain a candidate database from scratch–for both businesses and agencies–along with many tips and real-world examples.

What Is A Candidate Database?

Candidate databases are tools to store a candidate’s information, like contact details, CV, notes, etc., and to help build a relationship with them and hire them later for different roles. 

You can use two types of databases:

  • Built-in databases: You can view and manage applicants’ information when you post a job on a platform like LinkedIn or Indeed. Those are small candidate databases specific to those apps.
  • Centralized databases: A centralized database compiles applicants from multiple sources like inbound applications, sourcing, referrals, offline events, etc. Large companies and staffing agencies use these solutions.

Centralized databases are more expensive, but they come with much more advanced functionality than built-in databases like search capabilities, communication history, hiring funnel visibility, automated data hygiene, and integrations with other apps. However, the most important thing is how you use the database. 

According to Kirsi Maharaj, a People & Culture Leader and recruitment consultant, there are two approaches to using candidate databases:

  • Transactional: You add all job applicants to your database.
  • Relationship Building: You cherry-pick who goes into the database and then build long-term relationships with them. Staffing agencies usually use this approach. I run a recruitment agency and try to hop on calls with candidates to learn more about them, get a sense of their personalities, and eventually add the good ones to our database.

Benefits Of A Candidate Database

Now that you’re clear about the ‘what,’ let’s explore ‘why’ you need a candidate database.

The first advantage is that it can make sourcing much easier.

Sourcing candidates can be a frustrating and time-consuming process and reaching out to someone cold is always trickier than someone who’s already aware of your existence.

So, having a database of candidates you already have information about and something of a relationship with is a no-brainer.

It may be someone made it most do the way through your hiring process but, for whatever reason, didn’t end up joining that time around. Perhaps they lacked experience in a certain area and someone else was better qualified.

Well, you still have a lot of information about them and hopefully provided a great experience so, when a suitable role arises in the future, you can reach back out.

The second advantage, and closely related, is that it saves resources overall as you won’t be spending as much time on sourcing and it decreases the reliance on other costs such as recruitment agencies, job boards, and LinkedIn.

Another advantage is the ability to refine your recruitment process. Recruiting software analytics can provide valuable insights to further optimize your strategies.

Gaurav Bhardwaj, Recruitment Leader @ Innovaccer, believes “Candidate databases are great sources for rich analytics and reports. You can tweak your recruiting process accordingly. For example, you can identify sources that lead to the highest-quality candidates and double down on them while cutting down on the rest.”

Personally, at my agency, I’ve noticed that I get the best candidates from industry-related communities like Slack groups and subreddits like Reddit. It’s often free to post job openings there, and these are untapped sources, unlike Indeed or LinkedIn.

Data from the candidate database made identifying that possible.

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How To Build And Manage A Candidate Database

Before getting into the nitty-gritty of building a candidate database, we must explore a topic that should be discussed more: building a business case for a candidate database.

You know your organization needs to invest in a database. But it won’t happen unless you communicate it to your executives.

And the only language they understand is numbers!

At her past company, Kirsi notes that they had spent over $150,000 on recruiter fees. If they reallocated that to a database, they would reduce their dependency on LinkedIn, agencies, etc., and notice an improvement in essential KPIs.

Boom! Her CEO approved the investment for a sophisticated candidate database system!

Alright, let’s build our database now!

Step One: figuring out which tools to use

Candidate databases can range anywhere from extremely simple to incredibly complex. There are various ways you can go about implementing them.

I use an applicant tracking system (ATS) called Zoho Recruit to post jobs, get applications, and store potential candidates’ data.

There’s also a variety of recruiting CRMs and candidate database software out there that provide a similar service and will help you out with your recruitment marketing.

If you’re really tight on budget you might consider using a Google Sheet as a candidate database, but I wouldn’t recommend it. It’s time-consuming to use at scale, you need separate automation software, and it doesn’t have the supporting tools that dedicated recruitment software comes with.

Step two: Collecting candidate data

You can add candidate data into your database from various sources. Job applications, referrals, sourcing/outreach, CVs from agencies, job boards, etc., are some of the popular ones.

As someone progresses through your hiring process the more info you’ll have on them, so be sure that it’s captured and stored properly. 

One ‘secret’ tip I use to get passive candidates is creating ‘open applications’ on my company’s career site. That way, people can submit their information even if there aren’t open positions, and these can go into your database.

Step three: Data hygiene 

Data hygiene is a critical factor in your utilization of the recruiting database. Having too much data or poorly managed data will make finding the right candidates and extracting insights more difficult.

First, define strict criteria regarding who can enter your database. For example, only new candidates who meet all the requirements specified in the job post can enter the database, or only those who have done a trial project, etc.

Next, you should periodically ensure all the fields are filled out, and the correct data type is present. Also, ensure that the candidate resumes and contact information are up to date.

Training people at your organization to do this is essential as you use your database’s fields and data for tracking and reporting.

Finally, it’s a good idea to tag candidates based on their skills or other attributes to make it easier to conduct boolean queries (yes/no questions) and advanced searches later.

Step four: Remaining compliant 

Handling user data is a very sensitive topic. It can lead to heavy fines if done wrong.

If your database has candidates from the EU/UK, you must comply with GDPR and CCPA for California residents.

You must always obtain consent from candidates before adding their data, provide an option to remove their information on demand and delete their information based on the laws.

For example, you must delete the candidate’s data every two years in Canada.

Step five: regularly engaging candidates 

Regularly engaging with candidates in an appropriate manner is the best way to build relationships with them. Here are some methods you can use:

  • Add them to company newsletters and share relevant messaging like company updates, employee stories, etc.
  • Host in-person events and webinars
  • Surveys across the application process to keep them engaged and gather data
  • Getting on networking calls with the most promising candidates (especially senior-level ones)

I add promising candidates to some of my Slack groups to keep in touch with them. It’s faster and more convenient than email and leads to a more personalized candidate experience.

You can also contact candidates every 6 - 12 months using GDPR as an excuse.

Wrapping Up

A candidate database is an essential part of the hiring stack. And the best part is that building one is pretty easy and there are plenty of tools to help.

Remember, just having a database isn’t enough. What matters is how you use it. It’s a great tool to make your job less stressful and improve KPIs.

Try out the tips, tools, and processes outlined above. For further recruitment support and tools and templates, join the People Managing People Commmunity, a supportive community of HR and business leaders passionate about building organizations of the future.

Related read: Best HR Database Software for Record Keeping

By Finn Bartram

Finn is an editor at People Managing People. He's passionate about growing organizations where people are empowered to continuously improve and genuinely enjoy coming to work. If not at his desk, you can find him playing sports or enjoying the great outdoors.