By Jason Whitman
Nov. 3, 2009
Companies recruiting online face the challenge of knowing where their candidates and hires are coming from.
The situation becomes critical when considering two factors: Most companies don’t know there is a problem, and it’s those very companies that are spending billions of dollars a year on recruitment advertising.
It’s a matter of dollars and cents—what job sites, search engines, social networking sites and other advertising sources are providing the best return on investment? Top recruiting teams and HR departments understand that without accurate candidate-source data, you can’t conduct that analysis.
The good news is that this challenge can easily be conquered by asking the proper questions and putting some simple tracking measures in place. One of the advantages of online recruitment advertising versus traditional avenues like print is that it’s 100 percent measurable, but companies need to take advantage of the tracking opportunities. Job sites and search engine marketing (SEM) are two of the growing sources of hire, so it’s imperative that companies act now to really know where those hires are coming from.
There are four steps in making the most of a recruitment advertising budget:
• Assign: Make someone in your company responsible for tracking and measuring the effectiveness of your recruitment advertising.
• Automate: Implement automated candidate-source tracking with your applicant tracking system (ATS) or career site vendor.
• Analyze: Review your cost-per-applicant and cost-per-hire data to determine which sources perform the best.
• Adjust: Optimize your recruitment advertising investments by shifting the budget to sites and sources that deliver the best ROI.
For each of the four A’s, there is a checklist of best practices to implement a concise approach within the organization.
Step 1: Assign
The most important piece of the candidate-source tracking puzzle is not technical at all; it’s human. Companies that do not have someone specifically responsible for measuring the effectiveness and resulting ROI of recruitment advertising often have no idea what their investments are delivering in terms of candidates and hires.
As recruiting teams become more accountable for their recruitment advertising decisions and more strategic in their individual roles, this type of analysis is critical for their future success.
The good news is that there is a shift toward adding this responsibility within recruiting teams, especially in larger organizations. Having someone responsible for recruiting operations and the day-to-day analysis of the company’s recruitment advertising performance can reveal budget-saving opportunities.
Some argue that this job is handled by the ATS or HRIS administrator and doesn’t need to be its own position. Those same arguments contend that the recruiting team can request source-of-applicant and source-of-hire reports whenever they want, so why make it someone’s job to look at them?
Candidate-source tracking needs to be a priority, and leaving it in the hands of recruiters and ATS administrators means it can get forgotten. Considering that some companies’ job site contracts are hundreds of thousands—even millions—of dollars per year, assigning this responsibility is critical.
Assign: Checklist for success
• Think like a CFO—always be thinking about ROI.
• Make candidate-source tracking a real priority within the organization by becoming accountable for what the investments are delivering.
• Assign someone within the recruiting team to measure ROI as a significant responsibility within his or her job.
• Don’t rely on ATS or HRIS administrators to handle ROI measurement.
Step 2: Automate
Along with having someone responsible for looking at candidate-source data, you also need to be able to rely on that data, especially when making business decisions about what recruitment advertising to undertake or continue and where to focus the budget. The default behavior of most applicant tracking systems and company career sites is to ask job seekers how they found out about a job when applying.
Many companies with this type of tracking think they have reliable candidate-source data. However, that is not the case.
Any manual candidate-source reporting leaves the door open for inaccuracies. In fact, research shows the majority of applicant data provided this way is incorrect. Relying on job seekers to accurately choose where they found out about jobs is not realistic because the sources and sites often are omitted, too numerous or expired.
Applicants may not be careful, as they are going too fast; not know, as they came from multiple sites; or pick the wrong source on purpose.
The result of this manual reporting is inaccurate data in companies’ ATSes, which lead to confusion and ill-informed decisions about which sites and sources are delivering candidates and hires. An example of an expired source causing havoc with candidate-source data is America’s Job Bank, a job board previously subsidized by the Department of Labor that many government contractors used to meet their Office of Federal Contract Compliance Programs posting requirements.
Because of its popularity with both companies and job seekers, it was listed in every ATS as an option when job seekers applied online. That was fine until July 2007, when AJB lost government funding and was shut down. What happened in those companies’ ATSes?
Often, nothing at all. Even today, two years after AJB went away, some companies continue to think it is providing applicants and hires because of bad candidate-source data. Whose job is it to remove these sources as they expire, and how can you prevent this bad candidate-source data from continuing to pollute a bigger-picture analysis of what job sites are working best?
The best way to acquire accurate candidate-source data is behind the scenes, without the job seeker choosing from menus. The benefits are twofold:
• Faster job-seeker experience for your candidates.
• More reliable candidate-source data for your organization.
Automation is easy, and many of the popular ATSes support automated candidate-source tracking in their off-the-shelf configurations. However, sometimes employers have no idea it’s possible because they never asked or the topic wasn’t covered as part of the ATS training. Systems that support automated tracking do so via an additional piece of information that’s added to the end of the job URL to record the source of candidates when they apply.
By researching if your ATS supports this tracking and providing the job sites you use with the proper information, automated candidate-source tracking is well within your reach. So what are the challenges?
• Many companies don’t know what their ATSes are capable of. Some have automated tracking available to them but have not pursued it properly.
• Not every applicant tracking system supports such automation; ask your ATS contact for the details.
• Not every company knows its ATS contact.
• There is no industry standard for this URL information, yet almost every ATS uses a different URL parameter and code format.
These same automation steps can be applied to a career site, and sometimes it’s actually easier. Ask the IT team or the company that built the career site how to implement automated tracking using the URL parameter.
Automate: Checklist for success
• If you don’t already know, ask your ATS administrator or representative if your system supports automated tracking. If the answer is no, find out when it will be added (customer demand goes a long way).
• Once you have the proper tracking codes for the job sites you use, provide the information and verify that it has been added to all jobs.
• Submit some sample applications from your job postings or ads to make sure that the proper source information is being provided.
Step 3: Analyze
Once you have automated, reliable candidate-source data in your ATS, it’s important to review and analyze it on a regular basis and not be afraid of what you might find. Often, a company’s perception of what sites are delivering quality candidates and hires shifts considerably when real data illustrates exactly what’s working and what isn’t.
Many recruiters are driven by brand recognition and needing to have their jobs on certain sites, but this process is dependent on the data supporting the spend.
So what are the metrics? The most common metrics for measuring recruitment advertising are cost per applicant (CPA) and cost per hire (CPH), although different organizations may have variations in the specific reports they look at on a regular basis.
CPA and CPH are easy to measure:
• Cost per applicant (CPA)
Total media outside cost / number of applicants
Example: $5,000 / 750 applicants = $6.67 CPA
• Cost per hire (CPH)
Total media outside cost / number of hires
Example: $5,000 / 6 hires = $833 CPH
While some secondary factors are excluded from these calculations, such as the effort required to maintain job sites and review the resulting candidates, they provide a good overview of how a site or source is performing compared with others.
In your ATS, look for reports called “applicants by source” and “hires by source” to review this data. Every ATS is a little different, and you may have to ask your representative for an export of the data, rather than being able to run a report yourself.
Most systems won’t know your outside media costs, so it’s important to have those available to combine with the raw applicant and hire volume.
Analyze: Checklist for success
• Run source-of-candidate and source-of-hire reports on a scheduled basis.
• Integrate your outside media costs with the raw applicant and hire data that comes from your ATS to determine cost per applicant and cost per hire.
• Compare all recruitment advertising media being used to calculate your ROI from each site. Determine the top performers and underperformers.
Step 4: Adjust
It’s important to measure recruitment advertising ROI, but it’s this final step that will help you maximize that ROI by adjusting your recruitment advertising strategy and budget based on the candidate-source data you have collected. This is where many companies stall—they identify a job site or source that is outperforming others, but are unable to make the budgetary shift to take advantage of that disparity.
This happens most often because of brand awareness or perceived brand loyalty, that the company’s recruiters or hiring managers “have to have” their jobs on certain sites despite the disappointing ROI. It’s hard to stop using a service that you’ve trusted in the past, but it’s essential if the data telling you to do so is compelling.
It’s important to communicate disappointment with the performance of a particular site and find opportunities to optimize your campaigns. If you have a goal CPA or CPH, don’t hesitate to communicate it—that will only help the job site determine ways to make your recruitment advertising perform better. Being shy is not helpful when you are trying to get the most for your money.
Also, try new sites and recruitment advertising approaches to see how they compare with your historical data. Options like search engine marketing (SEM), which is pay-per-click advertising rather than pay-per-post advertising, can provide a lower cost per applicant and cost per hire than those traditional sources. SEM also is a low-risk option that is easy to test, without any long-term obligations.
Once you have made adjustments to your recruitment advertising budget or if you have pursued a pilot SEM or social networking campaign, it’s important to continue analyzing the results. Maximizing your recruitment advertising ROI is not a one-time event; it’s an ongoing process.
Your jobs change, sites’ audiences change and grow, and new options in recruitment advertising emerge (while others fade) every day. Trust your recruitment advertising strategy, measure everything and don’t be afraid to make adjustments if one of your media options is not performing well.
Adjust: Checklist for success
• Use your candidate-source data, analysis and comparisons to shift the recruitment advertising budget to sites that are performing best.
• If you have underperforming media, communicate with those sites to identify optimizations and ways to improve your ROI.
• Test new options in your recruitment advertising strategy that have the potential to provide a lower CPA and CPH.
• Always keep tracking, and measure any adjustments you make in your strategy and the complexion of recruitment advertising investments.
Every company with a job ad on the Web should know what it’s getting for its investment—how many clicks, how many applications, how many hires.
The technical aspects of candidate-source tracking are in most cases easy to implement, but companies need the personnel and initiative to pursue automated tracking and conduct the ongoing analysis to understand how sites are performing. You also need to be willing to adjust your strategy and budget to truly maximize your recruitment advertising investments.
In many cases, it may require not taking no for an answer, either from an ATS or a job site, and that’s OK. Not knowing the return on your advertising is not OK.
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