Cost of hire is a complex calculation that needs to include interview expense, recruiter overhead, lost opportunity, talent attraction, etc. Every dollar spent to attract candidates via social recruiting, adwords or job search engines is pouring money down the drain when the candidate apply process is not optimised. Is your career site optimised or its leaking cash every day?
Many recruiters have tools to provide insightful data showing which media channels work well and which are costing them too much. Typically the impact of the career website is omitted when considering how to improve cost per hire. I feel this is a big mistake.
In a recent interview with Simply Hired CEO, James Beriker, we discussed the Simply Hired recent commissioned study on cost per hire which compared job search engines (i.e job aggregators) with leading job boards. The outcome showed that job search engines like Indeed and Simply Hired delivered a cost per hire that was up to 3.5 times lower than some leading job boards.
This significant difference in talent attraction value is likely to be due to a cost per click payment model vs a cost to post payment model (or display advertising), the latter being an approach the job board could adopt if their cost structures allowed.
From a candidate perspective one difference between job boards and job search engines is the application process. The employer career site is responsible for the application process for all candidates from job search engines. This should be positive to the candidate as they are interacting directly with the employer - but I have a serious concern that often this is loosing the employer potential hires.
When reviewing the data in the Simply Hired study I wondered how the cost per hire could be further reduced? 3.5 times cheaper is great, but how could it be increased to 5 times or 10 times cheaper?
How could a recruiter get even more hires for their buck?
At a very high level there are three key factors when it comes to converting a potential candidate into a candidate who has applied, which we can refer to as the candidate conversion.
2. Messaging / Content
3. Application process
Leading job boards have invested in optimising their online application process. The clever job boards have optimised the online experience to reduce drop off. Drop off is when a candidate gives up during the application process. Many aspect impact the drop off such as how a question is worded, the layout of the forms on the web page, the order questions are asked, how mistakes are handled and even details such as colors used.
When you buy a potential candidate from a job search engine, or from social media the application process is your career site. Does your career site work for you or against you?
Is it optimised to convert those potential candidates into applications or is it driving the best talent away? What happens if that potential new hire was daring to use their smartphone or tablet to progress their job search - do you close welcome them in or make the journey an obstacle course?
Too often when discussing candidate conversion optimisation I hear recruiters say “candidates who really want to work for us will complete an awkward application process”. This may be right, but it is more likely that the most talented candidates will be put off and won't bother. The desperate candidates will fight on through the painful application process that many employers force their new hires to complete. Which candidates are more likely to get through your selection interviews and be hired - desperate candidates or talented candidates?
If your application process is optimised you will get more applications, and potentially more high quality applications. Let us agree effort optimising your career site will directly reduce your cost per hire.
The next step is to measure your current application process and identify areas to improve. This may seem very daunting, where do you start?
If you use a stats package such as Google Analytics there are a few basic key metrics to review. On their own this "funnel" is a crude illustration of your career sites performance, but it will provide you insights.
1. Total visitors to your career site.
2. Total visitors to your job listings.
3. Total visitors to your job descriptions.
4. Total applications starts.
5. Total applications completed.
If you are confident with your stats package you should dig into this data and look at the same numbers based on “referrer” (what site did the candidate come from). If possible look at the same figures based on mobile or desktop.
Using these numbers you can quickly work out the % drop off at each step. This rough analysis will immediately highlight where you leak candidates, which is the area you need to improve to reduce your cost per hire.
Now you have a benchmark you can make changes to your application process and monitor the impact.
The aim of this article is to increase the awareness of how much your career site impact cost per hire.
It is the end of the journey for many of your candidates. Unfortunately a lot more effort is made in our industry to push potential candidates into the start of the journey. The ROI on social recruiting and talent attraction marketing can be multiplied by enhancing on the end of the journey, a key learning we can all take from e-retailers.
Check out the Simply Hired, Forester report http://bit.ly/1elGyVT