In today's competitive business landscape, attracting and retaining top talent is crucial for any organization's success. However, many companies overlook the various impacts that a poor Candidate Experience can have on multiple areas of their business. In this blog post, we'll discuss all the different business impacts of a bad Candidate Experience, and the implications that this can have for your company’s bottom line.
The most important business impacts of a bad Candidate Experience are a damaged employer brand, the loss of valuable talent, increased time-to-hire and cost-per-hire, decreased quality of hire, and a reduction in revenue due to lost customers.
We’ll explain each of these in detail, using both existing research as well as new internal data collected from hundreds of thousands of candidates.
A bad Candidate Experience can have a lasting impact on your employer branding. Modern technology and social media have made it easier than ever to name and shame companies, share negative experiences online, and harm employer brand due to poor treatment.
If you consider the fact that 72% of candidates will share their negative experience with their networks, and that 86% of candidates check Glassdoor ratings for a company before they apply, then the effects of a damaged employer brand begin to stand out.
As we just saw, one of the potential impacts of a poor Candidate Experience is the loss of qualified candidates who are scared away by other candidates’ reviews on websites like Glassdoor, LinkedIn, or any other social media site.
But that’s not all: Candidate Experience is also closely tied to how willing candidates are to refer others to your company. Research shows that candidates who have a positive Candidate Experience are 66% more likely to refer others in their network, and truly exceptional Candidate Experience increases that figure to 79%. This is especially painful because many companies cite referrals as a particularly valuable source of potential talent.
Additionally, a poor Candidate Experience can result in candidates withdrawing their offers. It’s not hard to see why a candidate might have second thoughts about accepting an offer after enduring a sub-par hiring process. Research backs this up: 78% of candidates view Candidate Experience as an indicator of how a company treats its employees.
According to a PwC Future of Recruiting survey, around half of the surveyed candidates have turned down a job offer in the past due to a poor Candidate Experience. On the other hand, candidates who have a positive Candidate Experience are 38% more likely to accept a job offer, highlighting the important relationship that Candidate Experience and job acceptance rates have.
Imagine this: A great candidate withdraws and starts posting about their bad Candidate Experience. This causes other potential candidates to turn away, hurting both your time-to-hire and cost-per-hire. All of the previous effects we’ve mentioned all add up and compound to hurt your team’s overall performance. Simply put, a bad Candidate Experience hurts your recruitment operations and damages your recruitment team’s operational efficiency.
Ultimately, a bad candidate experience can lead to the hiring of candidates who may not be the best fit for the organization, leading to decreased employee morale, performance, and a higher turnover rate for new hires as other potential negative impacts to the company’s bottom line.
The impact of a poor customer experience is already well documented and firmly established within most business strategies. However, many businesses neglect the fact that their candidates (and their families and friends) are also their customers, and that their Candidate Experience has a strong impact on whether they would buy from you in the future.
Let’s break down the numbers a bit.
First off, studies say that anywhere between 41% and 50% of candidates who score as a detractor will refuse to do business with the company in question in the future.
Second, according to our own internal data, we see that, on average, around 45% of all rejected candidates are detractors.
Third, the ratio of applicants to rejected candidates is different for every company, but usually tends to be quite high - as any TA professional will know - often landing above 80% or 90%.
Fourth, if you know your yearly average customer spend, you can calculate the potential amount of lost revenue due to a bad Candidate Experience.
We’ve made it incredibly easy to do so by building our very own Candidate Experience Revenue Cost Calculator, which you can access using the image below.
Note that this calculation doesn’t take into consideration the buying intention of friends and family of the candidate, although existing research points to 72% of candidates sharing their experiences with their networks, and 25% actively going out of their way to convince others not to buy your product.
To summarize, a bad Candidate Experience harms your employer brand and hurts the total amount of qualified candidates you’ll have access to. It also worsens candidate withdrawal rates, and leads to decreased operational efficiency for your TA team. This means higher cost-per-hire and increased time-to-fill, resulting in more money spent and more lost productivity for the business overall. In addition, poor Candidate Experience has a large direct impact on your revenue. You can calculate the expected impact yourself using our calculator.
