The year is quickly coming to an end and you know what this means! Yes, holiday season, but also reporting for the year and budgeting for the next.
Recruiting is strategic. Measuring the return on investments of actions you implement as part of your recruiting strategy is therefore crucial. Yet, few companies manage to work out their ROI. ROI in recruiting is often limited to examining the cost-effectiveness of visible results (number of people hired).
How to choose the best recruitment channels for you to optimize your budget? Which solutions are going to help you reach your targets? Those decisions should be based on hard data. We have created for you an “optimized ROI” recruitment strategy in 5 steps.
#1 Assess the situation
Before diving into Excel sheets and pivot tables, it is best to assess your current situation. This will allow you to:
- have a clear and realistic vision of where you are and where you are going
- identify and assess strengths and areas of improvement for your company
- present an action plan, adapted to the financial resources of your firm
We’ve used a fictional company as an example to illustrate how to analyze and identify which investments to opt for. You can now get hands-on with your dashboards, as we are going to analyze the following indicators:
- the number of recruitment planned vs completed
- recruitment sources
- budget spent per source and per recruitment
- turnover rate
*NB: We will disregard the HR team wage in our calculations, to focus on the improvement of the HR solutions cost-effectiveness.
#2 Review the current year’s targets
Let’s start by analyzing recruiting targets handled by Debbie, the HR manager, who dedicates 75% of her time to those tasks:
- 32 planned hires (22 permanent contracts in the UK, 4 abroad and 6 internships)
- €130,000 spent on hiring solutions
- 12% turnover of people hired within that period
Here is the distribution between jobs for each quarter:
#3 Analyze the results
In 2020, 28 out of 32 candidates were successfully recruited, for total spending of €111,692:
- 88% of the recruitment targets for 2020 were met.
Number of successful hires / Number of planned hires
NB: We could also add up the number of unplanned hires.
- 85% of the budget was spent;
- at an average cost of €4,000 on recruiting tools and solutions per hire (which is quite low);
- with an 18% turnover rate of the employees hired in 2020*.
Number of departures of employees in 2020 / Number of people hired in 2020
*NB: 36.1% of employees on a permanent contract stay for less than a year in the company (French Department of Labor)
Here is the budget expenditure per jobs for each quarter:
#4 Identify your recruitment sources
Unsurprisingly, the most efficient and cheap source are direct applications received after posting a job ad, with a cost below €2,000. Recruitment agencies are the most expensive source (53% of the total budget).
#5 Analyze your performance
It is obviously impossible to keep only the cheapest source: to each hire, its own source! However, we can play with different aspects to optimize and increase performance:
- Boost your employer brand
- Measure and favor sources over others
- Improve the candidate experience
- Improve your onboarding process
#6 Prioritize and choose where to focus your effort
The employer brand is often neglected by smaller companies, due to a lack of resources. A good employer brand plays on the inbound recruiting team and helps attract more qualified, more motivated candidates. The investment could be worth your time and money considering a strong brand can avoid you using agencies and participating in recruitment fairs.
Here are some options:
- Corporate videos: adding a corporate video on your career site to illustrate life at your company, or to have employees share their day-to-day life and work, helps candidates project themselves.
- A chatbot: not only does a chatbot reduce pre-screening time for recruiters, it helps candidates find relevant openings faster.
- Pimping job ads: are your job ads attractive? Do they speak to your target candidate (C-level, entry-level, etc.)? Do you mention perks and benefits? Is your recruitment process clear for candidates? Making sure these elements are present in your job ads will increase the number of qualified and motivated candidates.
Job boards are not dead!
While niche platforms are growing, there has been talks about the potential death of generalist job boards, but it really depends on your targets. Which fits? Testing different options will pay off. To avoid the time-consuming task of posting your ads on each platform (around 5 minutes per offer on each site), think about multicasting through your ATS or Jobteaser for example.
Engaging candidates and employees with a referral program
A referral program is one of the best recruitment sources. Use your employees’ precious networks and ask them to recommend people for open positions. Reward employees generously and see the quality of applications go up.
Career fairs and school forums: a complicated ROI? + Are virtual events worth it?
Collected CVs get lost on managers’ desks, the best candidates do not even seem to attend these events, plus not to mention fairs’ off-peak hours. According to the sheet, the aim for 2021 is to decrease the attendance at these physical events. However, physical events might take a little while to start again anyway. Look at virtual career fairs and assess if they can be worth trying.
Pre-recorded video interviews are a good way to see more candidates while arranging all parties involved. On one hand, the recruiters can view the interviews whenever they prefer. On the other hand, candidates all answer the same questions in the same time frame, making the process fairer, and can take the interview when is best for them instead of taking time off work, for example. The time saved is estimated at 50%, compared to phone pre-screening.*
*Average time spent over the telephone or on the answering machine with the candidates VS Average time spent watching a video and creating a campaign
Our test company chose to work with an agency to hunt international candidates with very specific skills that require experienced and specialized Talent Acquisition Managers. Working with an agency in 2021 will depend on budget and recruitment targets.
Candidate experience is priceless! The closing rate of the offers made and the offers accepted (60%) must be improved in 2021. The recruiting process takes 7 weeks on average and many candidates have already accepted offers elsewhere in the meantime.
- A branded career website with job openings written in a compelling way
- A chatbot to pre-screen candidates, build a talent pool for recruiters, and help candidates find open positions and apply faster
- Automating interview scheduling to save time, avoid missed interviews and endless phone rescheduling
- Shorter time lapse between recruiting phases (first, second interview, rejection emails, etc.)
- A simple and seamless candidate experience
Following those guidelines and automating low-value tasks will make you more efficient and free time for you to focus on the most valuable and irreplaceable part of your job: human relations.