Receive daily articles & headlines each day in your inbox with your free ERE Daily Subscription.

Not logged in. [log in or register]

Adopt a Mindset of Measurement to Drive Recruiting Performance

by Feb 28, 2014, 5:19 am ET

I know half the money I spend on advertising is wasted. I just don’t know which half.

For many marketers — and recruiters — that famous statement attributed to 19th century department store merchant John Wanamaker is still true, even with all the technology and measurement tools available in the early 21st century. How many recruiters can say they are getting the most out of the opportunities to drive new efficiencies through technology available today?

It is never easy to change old methodologies. However, recruiters have a significant opportunity to adopt best practices from another function that was forced to reinvent its core strategies in the face of technology disruption and changing consumer behavior: marketing. 

With the rise of Google and Yahoo, marketing underwent a tremendous transformation — especially in digital advertising where new economies and efficiencies allowed marketers to reach millions of people at scale. The best online marketers now use performance-based advertising methods (meaning, the advertiser only pays when viewers interact with the ads), for most of their advertising. According to the Internet Advertising Bureau, 65 percent of all digital ad spending was on a performance-based pricing model in the first half of 2013. This approach gives marketers immediate feedback on the success of their campaign performance against defined metrics, enabling them to adjust and optimize as they go.

What this means for recruiters is that they need to re-imagine planning, and evolve/transform the post-and-pray model that began in early days of the Internet, when companies shifted their spending from newspaper advertising to online job boards. In this old model, budgets are often set for the year with little consideration for what might occur during the year, and recruitment advertising buys are based on procedure, process, and consistency. 2014 requires a new approach.

Measurement Creates Efficiency

The central questions of planning your recruiting efforts should be: Where do your best hires come from, and how can you reach them more efficiently?

Efficiency equals not only ease of use, but cost effectiveness. As recruiters adopt a more ROI-focused approach, they need to concentrate on performance against key metrics in order to demonstrate how their efforts contributed to the bottom line.

Yet choosing how to allocate recruitment advertising budgets across major job boards, niche job boards, trade publication job boards, and job aggregators can be a daunting task. Adding to this complexity is the growth in mobile Internet use.  (At Simply Hired, we are seeing about one-third of our job seeking traffic now occurring on mobile devices.)

Here are some tips on how to create a more efficient, measurable recruitment advertising program as you enter 2014:

  1. Set Up Tracking. Without tracking, you won’t be able to accurately measure the effectiveness your efforts, so put tracking in place if you haven’t already. Applicant tracking systems have varying levels of accuracy that allow you to track applicant source data. Use URL tracking whenever possible; self-reported data can be unreliable as candidates typically search multiple sources and have trouble keeping track of which job they found where.
  2. Evaluate the Landscape. The job advertising landscape changes often, as do the types of positions you need to fill. Sticking with one or two job boards will limit the amount of people you reach. Evaluate advertising channels based on audience, job type, location, industry, and past experience as well as cost and pricing models.
  3. Experiment. You don’t know if you don’t try. Consider setting aside 20 percent of your budget for experimentation. Try placing a few jobs on a new website, or take advantage of promotions, sales, and free listings. If one new recruiting option nets you a stream of qualified applicants and results in a good hire, by all means, increase the budget allocation toward that site.
  4. Evaluate Performance. Good metrics to consider for each channel are number of applicants, number of hires, cost per hire, and time to hire. The key to optimization is regular review and adjustment, with a focus on cost per hire as the metric with the most impact on revenue. Schedule time in advance to review performance and make adjustments where necessary, whether that’s weekly, monthly, or quarterly.

As recruiting continues to look more and more like marketing, adopting a mindset of measurement can go a long way toward saving you money — and making the recruiting function as efficient as it can be in 2014 and beyond.

This article is provided for informational purposes only and is not intended to offer specific legal advice. You should consult your legal counsel regarding any threatened or pending litigation.

  • http://meritagetalent.com Kara Yarnot

    I completely agree that recruiters and talent acquisition leaders need to proactively set-up measurements for every advertising channel and evaluate and adjust their spending on a regular basis in order to ensure their marketing dollars are channeled to the most effective channel. However, traditional job boards and other venues also need to adjust their pricing models to help recruiters spend more efficiently.
    In most cases, job boards are still requiring employers to commit to annual contracts that include a set number for job postings and other advertising options (banner ads, email blasts, etc). As you accurately point out, companies are not able to predict how their recruitment advertising needs will change across a year, yet they are required to commit to a package of products on an annual basis. Job boards need to be more flexible in how they structure agreements with employers.
    I outline a proposed approach in an article I wrote for the International Association of Employment Website’s e-magazine: http://employmentwebsites.org/files/talent_napkin/talentnapkin_v3.pdf.
    Employers aren’t able to be flexible and experiment with new advertising options as they arise because the majority of their budget is tied up in annual agreements, which 3 months into the year may or may not be what they need at that point in time.
    Yes, putting flexibility into the annual contracting process (or better yet, eliminating the annual agreement requirement) creates a significant amount of risk for the job boards and other vendors. Thus, they must design offerings that prove their ROI on a weekly, monthly, quarterly AND annual basis and allow customers to move away from under-performing products as needed.
    There is movement in this direction, which is refreshing, driven by AppCast, the ad exchange for jobs. With AppCast, employers only pay for applicants they receive from a job board posting, not for the posting itself. So, if the job board isn’t generating any applicants, then the employer doesn’t pay a cent. It is a revolutionary idea and all suppliers of recruitment advertising need to start thinking this way.

  • Richard Araujo

    Good and to the point article. The sticking point is, as mentioned, accuracy of data. I’d add to that the difficulty of collecting data. This kind of tracking was one of the list of issues I was evaluating during my last ATS purchase and implementation, and none of them really offered much. The URL tracking option was great, but few if any ATS systems allowed for it without teaching people some HTML coding, which they inevitably mess up or forget to insert. Or, it was possible to automate but only with the purchase of a partner add-on to the ATS which in most cases upped the cost by 50-100%.

    There’s a lack of integration and automation across ATS platforms and job boards that’s only solved with a lot of money that many companies aren’t willing to spend, which means the data collection process will be a more manual one, which means employee overhead in the form of data entry people at the least, which they’re also not willing to spend. Or, you can narrow the scope of options and increase the chance of being able to automate the process, but then you’ve narrowed your options, and if they don’t perform to widen them you need to confront the cost issue again.

    One major hurdle in getting such systems online is the lack of information available from companies and their partners. I’d likely have been able to do a better job if I didn’t have to sit through a 30-45 minute ‘demonstration’ of every single product which gave no real useful information in the end. It seems like every company providing such solutions is desperate to hook you up with one of their sales people to ‘help’ you, when the information you want is easily listed in a product info sheet, and often not provided by the sales rep even after direct questioning.

    As long as the people providing such solutions insist on the car dealership model of doing business, the needed information will be hard to find, as will be the customer’s actual needs, which will never be effectively communicated to the people who can actually provide the necessary changes to the systems.

  • Keith Halperin

    Thanks, Leonard. Many important things to consider here.

    1) Planning- what’s that? With luck, we may get a headcount figure.

    2) IMSM, *the most effective means of hires are having an effective job section on your website and an ERP. Furthermore, I think it may be much more effective and certainly much more pro-active to spend a fraction of the money that would be spent on advertising jobs to passively attract candidates on virtual sourcers who can directly go after the people you want using a variety of techniques.
    An example: instead of paying $750-$900/more on job boards, LIR, or Gild, you could spend $300/week or less for a group that will work on up to 15 reqs. and/or send you up to 225 resumes from the internet, Monster, CB, and DICE.

    3) Experiment with 20% of your budget? Who has a flexible enough budget to do that?

    4) You’ve mentioned a number of things that should be done. Who’ll do them?

    BOTTOM LINE: I think that probably most larger organizations who’ve allocated enough people, money, time, will and other resources may be doing (or at least considering) doing the very sensible things you propose. The problem is, I think that most companies don’t have enough people, money, time, will and other resources to do much more than perform lip-service to them.

    Happy Friday,
    Keith

    *Folks, see if you can find some of the studies (I think in ERE, maybe from Career X-Roads) that substantiate or disprove what I’ve said.

  • Richard Araujo

    @ Kara,

    Good points. AppCast is indeed an interesting case, however their model is part of the problem. Go to the site, and is there any information? Nope, just a link to request more information where you type in your name and contact information. If they would offer something more at a glance to truly understand their model and pricing, I’d be interested. But for some reason they don’t. Likely they think getting someone on the phone means a more likely sale, but they and other companies with this approach need to consider lost sales that arise from just offering vague descriptions with no rock solid information. I’m not sitting through yet another demo for a product that can easily be explained in a one page information sheet. These people need to make their products more accessible. My time is worth something to me and my employers, I don’t want to sit through a 30-45 minute demo only to find out a product lacks some crucial feature I need or want, or that I need to pay an additional few grand a year to have it integrate with my ATS. Much less do I want endless follow up calls from people desperate to ‘build a relationship’ with me and try to sell me a product I end up not wanting.

    These companies need to drop this antiquated sales approach. If true sales is needs fulfillment, then they’re stuck on the used car salesman model and they are failing. My needs are information so I can at least have a reasonable idea of what to expect going in to a demo, and some reassurance that I’m not wasting my time. If they want to sell their product, it wouldn’t hurt to give people some more info on just what the hell it is and how it works without having to jump through ridiculous and unnecessary hoops to get access to even the basics. I have enough repeated sales calls to deal with every day, I’m not signing up for more on a lark.

    @ Keith,

    I think planning falls by the wayside not because of GAFIS, but because it’s such a pain in the ass because of the logistics of getting it done. As Kara mentioned, budgets planned for the year for a program that needs to turn on a dime, big obstacle. Lack of compatibility between ATS systems and job boards, big obstacle. Owing to that, lack of automation, big obstacle. There is no standard to delineate how, for example, a resume should be structured and parsed in a database to allow cross functional compatibility. If there were, you can bet some databases would not follow it to maintain a proprietary niche (LinkedIn most likely…), but others would follow it and it would ensure resumes get parsed into ATS systems correctly at the very least, including skills and location. Demand would pressure some of the hold-outs to get with the program.

    Other issues arise, like the job boards wanting to market themselves as complete solutions when in reality they’re just databases and advertising portals, and exclusive ones at that because full use of one would, because of cost and logistics, preclude use of another for most companies. Simply put, they’re over priced and cumbersome. Hell, look at LinkedIn. It’s a hopped up phone book and resume database with a lot of potential value, but 20K a year for some tools to make it easier to use and navigate? However that cost stacks up against other models, even if it is a massive savings, people still want to see something more concrete before paying that up front. Not offering that is an implicit admission that it’s just a database on steroids for marketing purposes, and you still need to count heavily on people and luck to an extent, and you still need to make your business attractive to work for.

    That last is the real sticking point for most companies in the end. There’s countless methods for finding people these days, but in the end they are just a means to advertise and get info on who to advertise to, and as such over priced relative to their place the scheme of things. The follow up question: is what you’re selling worth anything? And this is where reality kicks in; the average company is… average. The cultural match is the hard part, skills aren’t usually hard to find. And it’s the culture that is often undefined, or often not attractive, and so ultimately miscommunicated.

    So we have multiple incompatible and ultimately not very useful means of advertising an undefined and sometimes unattractive message which then feeds target people very inefficiently into systems that very seldom offer the kind of analytics and utility people need to make use of the information in them, because they are often process and compliance driven as opposed to results driven. It’s not really a surprise most products in this field, from job boards to ATS systems, are unsatisfying and ultimately less productive than they really could be.

  • Keith Halperin

    Thanks, Richard. Even “Cynical Keith” thinks most people want internal recruiting organizations to do better. (Except for low-level 3PRs who thrive off companies’ recruiting inefficiencies.) I wonder why some sr. recruiting honcho/honcha doesn’t say to the major employers/EOCs: “Hey gals/guys- why don’t we convene an ISO-type meeting to develop common resume, candidate-application, ATS, etc. standards?” What with the usual “me-tooness”/”lemmings-over-the-cliffness” we have in recruiting, if the big ones adopted it, many of the smaller ones would, too. It wouldn’t be anti-competitive: it would be like 19th Century countries adopting the same railway gauge so trains could go from one country to the next without having to stop.

    Cheers,
    Keith