Analyzing and Maximizing Your Recruitment ROI
As the days of sourcing applicants solely through job boards such as Indeed or Monster have given way to more structured, multi-channeled approaches requiring a higher spend, recruiters are increasingly tasked with measuring return-on-investment.
Just as marketing departments must consistently measure key results to determine which advertising sources are driving the most cost-effective customer leads, it’s customary for HR departments and recruiters to regularly audit the job boards and other candidate sources to determine which ones are driving quality hires, with investments made accordingly.
The risks of not doing so are clear and staggering—budgets drained on ineffective job boards and quality candidates consistently lost to the competition. In any market, that’s something employers can’t afford to do, but especially not with recent job market conditions. In late spring, for example, the U.S. unemployment rate hit an 18-year low of 3.8 percent, according to the Bureau of Labor Statistics.
At the same time, businesses across the country reported boosting their hiring efforts this year, to the tune of 61 percent of total businesses, per Indeed.com. As a result, the already tight labor market is continuing to tighten further, and smaller employers in particular are struggling to fill their open positions.
These conditions make it even more important for recruiters to not only bring in the most qualified candidates, but also maximize their recruitment spend. Below are some best practices for analyzing and optimizing your recruitment spend, broken down step-by-step:
Step 1: Audit Your Spend
In order to measure the ROI of recruitment efforts, visibility is key. Recruiters need to know which applicant sources are attracting quality candidates and whether or not the budget is being spent effectively. Talent management and recruitment platforms can give recruiters a close look at sponsored job board performance, analyzing factors including total number of sponsored posts purchased, total cost, number of quality applicants sourced and average cost-per-quality-applicant.
With these metrics in hand, recruiters can learn the ROI of their sourcing budget by simply dividing the total costs of each channel by the number of quality applicants received. The resulting number is the cost per-candidate. This can help recruiters compare different job boards, as well as other applicant sources.
With visibility into these metrics, recruiters can look to spend their budget on applicant sources that are proven to bring in the highest number of quality applicants. They can measure this by leveraging historical performance data and predictive analytics, eliminate sources that provide a low ROI and shift their budget to spend on the best-performing sources for applicants.
Step 2: Optimize Job Board Spending
While consistently measuring the ROI of applicant sources, recruiters should look to diversify the channels they use, rather than spend a majority of their budget on a single, costly job board posting. Rather than utilizing one or two recruitment channels, recruiters can post across multiple national job boards and social media platforms to effectively reach quality applicants in a more cost-effective manner. Recruiters should also optimize job descriptions by using similar titles and keywords to reach a broad set of potential applicants.
They can complement these efforts by using a variety of niche sources, such as local classified ads, industry-specific job boards and organic search engine feeds. By focusing on a wide variety of job boards and other applicant sources, recruiters can learn which sources are bringing in more quality candidates and the total cost per-hire for each, and adjust their spend accordingly.
Step 3: Take Measures to Boost ROI
After properly measuring the value of applicant sources, recruiters can take steps to improve the ROI of their overall hiring process in many ways. For example, they can start by building a compelling career website that showcases the respective company’s culture and employment brand. By providing candidates with an authentic look into what it’s like to work at your organization as well as a primer on its values and culture, you as a recruiter can effectively distinguish it from its competitors. Additionally, because career websites are an increasingly important source of hires, an effective website makes it easy for candidates to search, review and apply for open positions. It’s critical the career site be accessible to candidates through any device—desktop, mobile or tablet.
Velocity is also a key factor in measuring ROI. A seamless connection between the career website and hiring process should automatically push qualified candidates to the first stage of the hiring process. After all, what’s the point of having dozens of quality candidate leads if they’re lost to the competition due to lack of response from the employer?
A coordinated multi-channel strategy, regular audits of current applicant sources and swift adjustments to recruitment spend will result in reduced costs, higher quality applicants and a decreased time to hire—translating into increased ROI.
Adam Robinson is co-founder and CEO of Hireology, a venture-backed hiring and talent management platform. He’s the author of The Best Team Wins: Build your Business Through Predictive Hiring, and the host of The Best Team Wins Podcast featuring leading entrepreneurs discussing the people side of their business.