Since the ‘run for talent’ is at its all-time high, the ‘Candidate Experience’ is currently on the lips of everyone working in recruitment. According to the members of The Society for Human Resource Management, in the last decade we saw a trend towards hiring quickly and at low costs rather focusing on a ‘top-notch’ Candidate Experience. While this sounds great in the short term, the hard truth is the fact that it’s hurting businesses’ bottom line in the long term.
This article is for everyone in recruitment having a hard time convincing their Finance Department to spend money on creating a good Candidate Experience. Let’s stop right there: the discussion shouldn't be about ‘spending money’ on the Candidate Experience, but about ‘how much it will save’, since it will bring a positive ROI. Let’s dive into three main areas where a good Candidate Experience can impact the bottom line of your business.
Let’s first solely look at the recruitment process itself. Every company is eager to hire ‘A-players’. Since they always want to be the dumbest person in the room (to keep a steep learning curve), they will try to hire even better people. These A-players set the bar high for themselves, but also for the companies that want to hire them. They will extrapolate the impression they get from the Candidate Experience to how the company will be. They will ‘wow’ your hiring team for sure, and therefore they need to be ‘wowed’ in return.
Not providing a great experience? They will withdraw their application and you will be stuck with ‘B-material’. The problem with these people is that they will most likely hire C-players since they’re afraid smarter people will take their jobs. Before you know it, you’ll have a company full of mediocre people and your chances for success will decline rapidly.
Some quick tips on how to increase conversions:
A recent LinkedIn Study surveyed 2,250 corporate recruiters in the US to learn more about time to hire, cost per hire metrics and most importantly the impact of a strong employer brand. They found out that companies that have strong employer brands enjoy significant cost savings with lower cost per hire and employee turnover rates.
TalentBoard shows that for most candidates that have an overall 5-star experience, didn’t get the job at the end of the day. Even after this rejection, 64% of the time, candidates are willing to increase the business relationship with that company that they applied to. In real terms, they will buy more and will buy again. And here’s the big one - they will refer you more candidates.
Bonus benefit: Companies with stronger employer brands have 28% lower turnover rates than companies with weaker employer brands.
Candidate Experience making business sense yet?
The easiest way to convince people internally about the importance of a good Candidate Experience is when your candidate is also your customer. People don't drop off the face of the earth the second they leave your recruitment funnel. They will come across your brand again, with their candidate experience front-of-mind.
What's the business impact? A global survey by Software Advice revealed that 42% of candidates who have a bad experience are somewhat to highly likely to cease buying goods from that company. 34% are somewhat to highly likely to tell their friends not to buy from that company. Put in plainer language: this means almost half of your candidates who have a bad experience won't buy from you again. A third of them will tell their friends never to buy from you again.
Take the often-discussed Virgin Media case which did the rounds on LinkedIn about how bad candidate experience cost them over 5 million dollars annually. The calculation was fairly straightforward. There were 123,000 rejected candidates each year, and 6% canceled their monthly Virgin Media subscription because of bad candidate experience, so they ended up with about 7,500 cancellations. Multiply that by the $60 subscription fee and by 12 months. Doesn’t take a lot to see that lost business because of bad candidate experience is costly. Unhappy candidates mean unhappy customers. Quite simple.
Regarding Candidate Experience ROI, Virgin Media managed to turn the ship around and the result is impressive: it’s 10 times cheaper to gain business from the recruiting process (it only costs $50 versus $500 for traditional marketing).
Let’s be honest, you can find an ‘ROI positive’ article for almost everything on the internet. The ‘problem’ with an article like this one is the fact that there are a number of stats out there, but no actual data. ‘If we can’t measure it, we can’t improve it’ will be a common response from your Finance Department when confronted with ‘yet another ROI case’.
The answer to this is easy: Start measuring your Candidate Experience in an automated way. Establish a baseline Candidate Net Promoter Score, and start optimizing from there. Combine these results with several of your own recruitment metrics:
Keep a close eye on these metrics and how they are evolving (and hopefully, improving over time once you start measuring and optimising the Candidate Experience)
Quantifying the importance of Candidate Experience has been a challenge for recruiters until now. Try explaining that giving candidates the ‘white glove’ treatment (especially rejected ones) can make or break your reputation and your recruitment pipeline. In your efforts to get buy-in for your CX project you’ll inevitably run into objects that these efforts have few clear benefits.
Therefore ‘now is the time’ to take action on this topic and convince all relevant stakeholders to invest in a great Candidate Experience.
As I’ve shown here. First - You can prove that superior Candidate Experience increases conversions. Sales funnels are constantly under scrutiny in efforts to optimize their effectiveness. It’s time to think the same way about your recruitment funnel. Second - building an employer brand in this age is vitally important, and it earns you more referrals - one of your primary growth levers. Thirdly - Candidate Experience forces you to consider the consumer-side impact of good and bad experience. Good candidate experience drives increases in revenue.
Basing Candidate Experience ROI calculations on lost business will depend largely on the type of business you run. It requires complex analysis. When it comes to Candidate Experience lost business can range from nothing to millions annually. Here I hope to have given you an idea of what this all boils down to: bad Candidate Experience harms your bottom line, and positive CX drives expansion of your core business. Combine these investments in Candidate Experience with a far smaller investment in a solution to measure the impact of Candidate Experience, and you’ll be surprised what a positive ROI impact this will have!
Read more about Candidate Experience on Starred:
Candidate Experience is clearly important, but who’s responsible?
Why feedback is the gamechanger in building a great Candidate Journey
Serious about measuring your Candidate Experience? Starred helps you go even further – we’ll show you the drivers of your cNPS so you’ll know how to improve Candidate Experience.