Can recruitment marketing deliver significant value to Talent acquisition?
The short answer is “Yes”, it can generate savings of up to 10 times the software investment cost. Here’s how…
This effect operates on multiple levels
- Increased conversion from advertising traffic
- Increased conversions from the talent pool
- Reduction in recruiter processing time & effort
Using anonymised data we have calculated the likely Return on Investment (ROI) delivered by the implementation of an automated recruitment marketing platform for a client hiring 100 people from the usual channels across a range of operations, sales, customer service and engineering roles.
We’ve used a few terms that are worth explaining up front…
Apply to Hire ratio — The number of applications it takes to generate one hire.
First touch source of hire — Where did the candidate find us originally
Last touch source of hire — Where did the candidate come from just before they applied
The numbers below are representative of a last touch source of hire report for 100 hires.
30 hires come from job boards and aggregators with an Apply to hire ratio of 300 : 1
30 hires come from direct traffic, the corporate or careers site with an Apply to hire ratio of 50 : 1
40 hires come from recruitment marketing* with an Apply to hire ratio of 30 : 1
*Includes lead capture, job alerts, bulk email activities and sms or email nurture sequences
Cost per hire calculations
Job board and aggregator traffic
For this calculation for 30 hires the Apply to Hire ratio is 300 : 1
Around $1,000 dollars is spent on advertising to generate one hire.
We will use a $10* per application processing/screening cost in terms of recruiter time.
This means that the cost for 30 hires is calculated as follows:
30 (hires) x 300 (Applications) x $10 = $90,000 (Labour effort) + 30 (hires) x $1000 = $30,000 (Advertising)
Cost per hire = $120,000 divided by 30 = $4,000 per hire**
*Application processing cost ranges from $10-$100
**Notably this figure is in-line with Bersin and SHRM research.
Direct traffic to careers site
The number of candidates who apply directly from the careers site and get hired is actually lower than reported by most ATS which do not track where the candidate found you in the first place as they are only able to track the Last touch source of hire (see last thoughts for more on this )
If they didn’t find you via a jobs board 6 weeks ago they were unlikely to randomly visit your career site direct and apply today.
In other cases these candidates are referrals, internal candidates and sourced candidates who are directed to the site to apply.
For this calculation for 30 hires the Apply to Hire ratio is 50 : 1
30 (hires) x 50 (Applications) X $10 = $15,000 (Labour effort) + $30,000 (Estimated Career site build and hosting cost per annum)
Cost per hire = $45,000 divided by 30 (hires) = $1,500 per hire
Many candidates find you on a jobs board or search engines, they may connect with you in some form but are largely ignored unless they are actively applying for a role that is available today. However this pool is the most valuable source of high quality applicants that can be hired. In general our data shows that a well implemented recruitment marketing platform will generate 40% of all hires. It makes sense when you understand that the majority of the people who make an application without getting to know your company are not getting hired and those that are nurtured and engaged are the successful ones.
For this calculation for 40 hires the Apply to Hire ratio is 30 : 1
40 (hires) x 30 (Applications) X $10 = $12,000 (Labour effort) + $38,000 ( Estimated Recruitment marketing platform cost)
Cost per hire = $50,000 divided by 40 (hires) = $1,250 per hire
Return on investment calculations
Referencing the above examples if we needed to hire another 100 people by using advertising alone it would cost us $100,000 in advertising cost and $300,000 in recruiter time for a total of $400,000
By enhancing existing advertising activities with a recruitment marketing automation platform this can be achieved at a much lower cost. Instead of spending $400,000 we can invest in a recruitment marketing platform.
$400,000 divided by $38,000 = 1,052 % Return on investment
The 1,052% ROI figure we have calculated is a significant return and leaves plenty of scope to allow for a correction factor to include the cost of all the other candidate sources e.g. advertising, sourcing or direct traffic that are needed to generate the pool of talent to market to in the first place.
It’s important to consider this because when we re-examine the hiring data from a First touch source of hire perspective we see that job boards and aggregators are significantly under attributed by the Last touch source of hire reporting that is being generated by most ATS.
Bear in mind if the candidate did not find you in the first place you are unlikely to be able to market to them…
Around of 80% of candidates find your company for the first time via a job listing however the ones that make an application on their first visit do not get hired as frequently as those that spend some time getting to know the company before they click apply. That is why recruitment marketing is so necessary to complement your advertising programs and really understand where your hires are coming from.