When I was a recruiter, it was a luxury to post jobs in the Sunday newspaper and receive resumes in return. Today, candidate flow is almost entirely dependent on job boards. Whether it’s Indeed, Zip Recruiter, or LinkedIn, recruiters are almost entirely at the whim of candidates searching for jobs online.
The shift has simply become the new normal, and with it is the way we measure success. As business owners and marketers, one of the key metrics behind job board ROI is cost per application.
This metric is widely used by all job boards to determine the success of their platform and to justify the expense. No question—this is a valuable piece of information that is directly correlated with the success of your business. After all, if it costs less to acquire an applicant, your gross profit per placement should rise.
However, the cost per application metric is not the entire story. It is just one piece of the puzzle that cannot be analyzed in a vacuum. There are other factors to consider when looking at the overall cost to acquire candidates. Getting a view of the big picture is critical to making more informed decisions about the state of your recruitment process and about your business as a whole. What other metrics should you be looking at when evaluating job board ROI?
What percentage of applications from each platform are converted to starts?
Conversion rates are dependent on the quality of your recruitment process and effectiveness of recruiters themselves. It’s impacted by how well you get to know the candidate, the reputation and process of your clients, and the ease with which you schedule interviews, provide follow-up, and negotiate compensation packages.
However, breaking down the conversion rate per platform will reveal the ultimate quality of the applicants coming from each source. A job board might deliver a low cost per application, but if few of those applicants are being successfully placed, it’s likely the overall quality of candidates from that job board is pretty low.
Certainly, low cost of application and high conversion rates is the best combination for a profitable platform. However, high conversion rates may justify a higher cost of application. In fact, this equation gives us the cost per start metric—read on for more.
Cost Per Start
What is your cost per start as it relates to each platform?
Closely related to conversion rates, calculating the total cost per start is critical in determining job board ROI. As mentioned above, a low cost of application combined with a high conversion rate is the most profitable—this gives us a low cost per start. However, even a platform that appears to have a high cost per application may be profitable if it also has a high conversation rate; this scenario also has the potential for a low cost per start.
What would this look like in real numbers? Say you’re spending $20,000 on job board X. You get 1,000 applications but of these candidates, only 10 are successful starts. You’re also spending $20,000 on job board Y, where you only receive 500 applications—but this time 50 convert to successful placements. Job board X has a lower cost per application, but the conversation rate and the cost per start is clearly more profitable for job board Y.
What percentage of applications end up in your applicant tracking system?
Many applications sit on a job board platform and never make it to your database. But building your candidate pipeline is a big piece of what you pay for, so it’s important to get every application into your database for further mining.
The cost of application might low for a specific platform, but if the overall number of candidates making it into your ATS is also low, it may indicate that the platform isn’t the best use of your spending. In some cases, there may be more work needed to integrate the platform with your ATS. Will that be a manual process or is there an automation feature that can do it for you? Time is money, and if it’s too much work to access those applicants, a low cost per application may be more trouble than it’s worth.
Does your recruiter’s day revolve around job boards?
When a platform has a low cost per application, it’s common for that job board to monopolize your recruiter processes. Most hours of the workday are spent screening the thousands of applicants from that platform, which leaves little productive time left for strategic recruiting and relationship building. When the job boards are dictating your recruitment process because of a focus on low cost per application, it’s likely your overall return is much lower than you realize.
Recruitment process should be strategically determined, with job boards just a tool to leverage throughout. When the story is flipped and job boards run the process, there is a huge hit to recruiter productivity. Productivity loss has a huge but often invisible impact on your bottom line.
Calculating Job Board ROI
It’s true, cost per application is a feel-good metric that seems straightforward to control. It’s easy to look at this number and assess the productivity of our spend. It’s easy to look at trends and claim success when our cost per application decreases. Optimizing the cost per application is an important factor in evaluating spend allocation for candidate acquisition.
But don’t be fooled. Look a little deeper at other metrics in your business that drive performance and profitability, keeping the bigger picture in mind. Looking at conversion rates, cost per start, your candidate pipeline, and recruiter productivity are all critical elements to optimize in order to yield the overall highest return.
Beyond the Job Board
At the end of the day, though, it’s equally important to realize that job boards are only one piece of the puzzle, regardless of all the metrics. Ideally, your organic traffic and other unpaid sources are driving the lion’s share of starts.
What does that look like in real life? It means having an optimized, engaging, and user-friendly website (with an easy and functional job portal), plus other inbound marketing elements like social media, email campaigns, content marketing, and more. Solid inbound marketing strategy should feed your candidate pipeline (and—bonus—should also drive new business development).
Where to start? Your staffing website is the hub of all your digital marketing efforts. To ensure you have a website design you (and your candidates) can fall in love with, learn more about our staffing website solutions here.
Looking to optimize your cost per application? Reach out today for a quick conversation about how echogravity can help.