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The ROI of Candidate Experience

Written by Chris Almond
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The talent shift of 2021 is prompting huge change in the world of recruitment. At the same time, candidate expectations are rising.  Widespread digital adoption has meant that the traditional office space is being rethought, and workers are now getting acclimated to working from home or wherever suits their lifestyle. From the very first touchpoint on their journey with your agency, candidates play a crucial and powerful role as promoters or detractors for your brand. 

Recruitment agencies hoping to grow in 2021 must start by thinking strategically about their end-to-end candidate experience in order to build their reputation in the market and take advantage of the opportunities in the hiring landscape right now. 

Recruiters with best-practice communications in place that meet candidate expectations where they’re at right now, are clearly measuring them and consistently evaluating them, will be most likely to succeed in providing world-class candidate experience. 

This will ensure they are more likely to be regarded as a recruiter of choice, and ultimately, place the most engaged and best qualified candidates for their clients in 2021 and beyond.  

 

What is candidate experience?

Candidate experience is defined as the perception of a job seeker about an agency or recruiter, based on the interaction during the complete recruitment process.

What isn’t immediately obvious from this definition is that these feelings may start building long before the application process and that in fact, every person who comes into contact with you may be a potential customer, client or candidate, later on.

Both successful and unsuccessful candidates come through the candidate process with an impression that may turn them into a detractor or a promoter of your business. 

Developing a positive experience for all candidates, successful or not, requires a high level of involvement and a comprehensive view of the entire journey from the very first touchpoint. The experience is a journey involving steps that leadership will never encounter.

As such, business leaders must actively work to understand the end to end process, recognise the unique needs of the talent they seek, and invest in ways to measure and optimise to achieve ROI.

 

Why you should care

Candidate experience matters. And the stats prove it. 

“1 in 26 unhappy customers complain. The rest churn.”

It’s about protecting your brand and identifying advocates to turn them into referrals. 

It’s a competitive market for recruiters, and the number of new agencies entering is only going to increase, so you need to stand out as a market leader.. Here are just some of the ways you and your agency can achieve a positive ROI from measuring and improving your candidate experience.

 

The cost of doing nothing

Not measuring means you simply don’t know. Many recruiters will feel they have a good understanding of the experience they provide – I mean no-one sets out to deliver a bad one right? But without proactively asking for feedback you’ll never truly know.

It is not difficult to justify investing into your candidate experience. A research team at Virgin Media did a business wide study collecting feedback from their rejected candidates who were also customers. 

They discovered that poor recruitment experiences had led them to switch their cable providers, amounting to an annual loss of revenue of up to $5 million that year. 

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 costing the business significantly.

Now it doesn’t take a mathematician to understand the ROI in measuring this to protect your brand.

Virgin successfully used this feedback to change the results they further realised its 10x cheaper to gain a customer or referral from an applicant than other sales and marketing efforts and used their candidate experience as a profit centre for their business.

Whilst recruitment agencies can’t be directly compared to Virgin, the same principles are proven. By working towards improving your candidate experience you can generate business from reducing your churn and driving referrals at a significantly cheaper cost than other acquisition channels like a Job Advert.

Build your brand

The importance of candidate experience is manifold. Creating optimal experiences for every engagement with your brand helps build your reputation in a competitive landscape. Being highly regarded as an Agency means it is easier to attract and engage your candidates. 

Having half the work already done leads to less spend on advertising overall and can create significant inbound benefits. 

Not only does having a great reputation help your own employer brand, but it will also ensure the clients you are representing will be highly regarded as employers too, allowing you to attract a new and even bigger client portfolio. 

On the flipside, a poor candidate experience can also impact your clients’ brand – which almost certainly will result in higher churn.

 

Increase referrals

Further return on investment comes from candidate to candidate referrals

A good experience means your candidates are more likely to become an advocate for your brand. 

TalentBoard found that candidates that had 5 star experience but were unsuccessful in the application were still 64% of the time, willing to increase the relationship with that company that they applied to. 

In real terms, they will likely come back for future opportunities vs going to a competitor. And even more importantly – they will refer you to more candidates.

HOT TIP: By creating a candidate experience program, you can identify the promoters of your agency and look at creating a referral network from this pool of talent.

Peer to peer recommendations from candidates that recommend your services to their friends have much more weight than any expensive brand marketing campaign can. 

 

Minimise churn

Reduced churn and better retention rates also means money saved on advertising to attract new candidates.

It’s so much more difficult to attract new talent to your agency vs retaining those with an existing relationship with your brand.

The return on investment here is 2 two-fold. You can ensure that you derive maximum opportunity and value from your current candidate pool and also reduce your reliance and expenditure on other costly forms of marketing.

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.

 

Attract and retain the best people.

Investing in your candidate experience reaps benefits for your people too. 

A better candidate experience leads to a better brand.

Agencies with stronger employer brands have 28% lower turnover rates than companies with weaker employer brands.

Creating a positive candidate experience frameworks empowers your people, giving them a better environment to succeed.

It increases the network capability of your agency brand providing a quality platform for them to perform which they wouldn’t be able to achieve at a competing agency.

 

Better Candidate Experience = Better conversion

Whilst we create the case behind the ROI of candidate experience it important to talk about the metrics.

The goal of an agency is to increase your conversion rate; the fill rate of the roles you pick up. 

Candidate experience can have a significant impact on this. If a candidate has a bad experience at any point in the journey it likely will have a direct impact on their decision making should they be offered a role.

Let’s take a look at what might be a common example for a recruitment agency and how the experience at each stage impacts conversion:

  • Step 1: A candidate is sourced or applies for for a role – 1,000 a year
  • Step 2: They are complete an internal interview with a recruiter – 600 interview with your agency
  • Step 3: They are sent to the client and begin the interview process – 450 interview with the client
  • Step 4: They are offered a role – 150 are offered

And finally 100 are hired. 

That’s a conversion of 10% from Step 1 to placement.

You can see a drop between Step 3 & 4 of about 300 candidates. Let’s say perhaps you identified 50 of those candidates felt this was down to poor interview preparation from a recruiter.

If you can improve this then a potential further 25% have the potential to be offered the role, which could result in the same revenue increase for your business.

In this example, the desired increase in the conversion rate can be brought in with an improved candidate experience strategy, where potential candidates are kept engaged and informed about the process, the brand, and the job role. But without measuring, you’ll never know…

 

Measuring the Candidate Experience

The great thing is this can all be measured with technology!

The Net promoter score, or NPS, is the worlds’ go-to framework for measuring customer satisfaction. It’s the most popular way for brands to understand their customer happiness, measure their loyalty and improve their customer retention and referrals. This helps you get better at doing what makes your customers happy! 

Unfortunately, most recruiters don’t have any kind of candidate sentiment tracking in place. 

In fact, The Talent Board found that 73% of candidates weren’t asked to provide feedback on the recruitment process – a massive missed opportunity. The only way to improve candidate experience is to ask them how. Asking candidates for feedback and measuring it will enable you to drive insights that will help you improve the way you do things.

By using NPS you’ll be able to collect feedback from your candidates and segment them based on response:

Proactively reach out to unhappy candidates to find out about what you can fix or; 

Identify brand advocates and turn them into revenue generating opportunities.

ROI is there to be captured from all angles and if your not already doing this or thinking about it, you risk falling behind to other brands in a fiercely competitive industry.

 

Who are we?

Sourcr is the world’s only Net Promoter Score software specific for the recruitment industry making it easy for recruitment agencies to collect and measure their candidate experience. 

Candidate experience matters, and with Sourcr you can Gather actionable insights to drive better retention and accelerate growth.

Our integrations do the work for you. Set up triggers based on your ATS statuses and automate survey invites at the end of every process for anyone that has been interviewed.

To find out more reach out to the team in the chat box or join one of our live weekly sessions to see how it works

 

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