Having visibility into and fully understanding a company’s recruitment marketing analytics is essential to building a successful hiring strategy. This allows talent acquisition professions to make smarter, data-driven decisions based on their custom insights.
If companies do not understand their KPIs – or miss out on any – when focusing on the entire funnel, it can affect hiring goals. The more data companies have readily available to them, the closer they are to predicting outcomes. Data is powerful, so companies should use it to build a story and make decisions.
Especially during this ever-changing hiring landscape, recruitment marketing analytics are essential to understanding the performance and effectiveness of current strategies. These analytics can also showcase how companies can improve their hiring processes going into the future.
However, one underrated job advertising analytic that many companies are missing out on is cost-per-quality.
Read more to learn the significance of implementing this recruitment analytic into a company’s hiring strategies.
What Is Cost-Per-Quality?
When reviewing a company’s KPIs, it’s important to understand what they are.Cost-per-quality (CPQ) enables companies to know how much they've spent on a job, campaign, or source for each applicant they deem "qualified" for a role. When calculating a CPQ, hiring professionals should take the total spend on a particular job and divide it by the number of quality applicants the job received.
If a company decides to focus on cost-per-quality, it’s also a good idea to look into cost-per-hire (CPH) as well. This metric showcases how much it costs to make a hire and is important when forecasting and building recruitment budgets to achieve hiring goals.
These two metrics go together, since CPQ is closer to the top of the funnel and can change the CPH at the bottom. Organizations should use these metrics to understand the full impact of their efforts and pivot recruitment strategies to ensure a company is meeting their hiring goals. Also, visibility into these metrics can help with time-to-fill to identify and eliminate deficiencies in the recruitment strategy.
Cost-Per-Quality Can Vary
To dig in a little deeper, if a company shares that their CPQ is too high, they should look into the channels driving the high CPQ and seek to get rid of them. The goal is to get as low of a CPQ and CPH as possible, since bringing these metrics lower saves money in the long run – which is why companies should know the balance that works for them.
Also, depending on the company, their recruitment funnel can include different steps, and there are many reasons why candidates may make it to the quality event and not the hire. For example, if the hiring funnel is too long or companies didn’t reach out to the candidate fast enough in the hiring process, they might have moved on. This candidate could have been quality, and because the company didn’t connect with them fast enough, the candidate would not have made it to the CPH event. As in, this applicant would show up in the CPQ metric but not necessarily make it to the hire action.
Companies can also struggle to make the hire if there's a bad funnel flow and candidates get stuck after the quality event.
A great first step for hiring professionals is to define success so everyone understands what they’re trying to accomplish in the hiring strategy. Ensuring everyone is on the same page is essential to hitting hiring goals. Companies should define quality before adjusting recruitment strategies, so decisions or changes are not made blindly. Also, this is essential since quality can change depending on the role.
Tip: As mentioned above, recruitment funnels can vary, so it’s important to note that quality is specific to a company’s needs and will look different from company to company. This is why partnering with a platform can be helpful when deciding what is best for hiring needs.
Understanding The Recruitment Funnel
Having visibility on the entire funnel and all metrics is huge. Reviewing end-to-end analytics can help companies bridge the gap between top-of-funnel metrics (CPQ) and bottom-funnel metrics (CPH). These analytics can offer companies a more comprehensive view of their hiring practices and actionable insights.
There's no doubt that understanding CPH is helpful. However, if companies only view that one hiring event, they will not have visibility into all the activity leading up to the hire. Managing a cost-per-hire is nearly impossible if talent acquisition professionals don't see the earlier signals that occur before the hire takes place. The more data a company has available to analyze, the more actionable insights the company can derive, creating a higher likelihood of recruitment strategy success.
End-to-end analytics give hiring professionals a line of sight into the full funnel performance of their strategies and the timing of the important job seeker actions taken therein.
In addition to helping understand cost-related metrics, this visibility can also help companies decipher how long it takes to make a hire from specific channels, since companies want the shortest time between events. The data can also be used to create a timeline between events, so hiring professionals can ensure they work towards building a funnel that allows candidates to experience the shortest amount of time from the top to the bottom of the funnel.
Digging Into Metrics
Hiring professionals should also consider that metrics should be weighed differently when evaluating different kinds of media.
Understanding the purpose of different kinds of media allows companies to manage their recruitment marketing spend and invest in areas where they receive quality candidates. Also, this helps hiring professionals with their expectations from different channels.Companies might have channels that deliver a higher volume of applications that are lower in relative quality, but this can be okay since the channel is bringing in more volume.
Also, different channels can drive different applicants, so A/B testing is helpful for job advertising – so companies can be mindful of how they advertise a job and its impact on the candidate they’re seeking.
Companies should conduct these tests to find the job titles' impact or how they display job ads. For example, keywords in advertising at the top of the funnel can cause changes in the bottom of the funnel. Testing can help determine which media channels and vendors produce the highest quality candidates for certain positions.
Understand The Intent Of The Advertising Solution
Talent acquisition professionals want to be sure that the CPQ holds. However, if they’re looking at the cost-per-application (CPA) metric, it might lead to getting in front of a different audience that’s not performing well – in terms of CPQ.
Meaning, if hiring professionals are just looking at metrics from the top of the funnel, then the CPQ might not perform well.
If companies are setting CPA targets without a view into what it means for CPQ, then it could have a negative impact on CPQ and end up costing companies more money to find those quality candidates. Being hyper focussed on driving down the CPA could force marketing channels away from where quality candidates are. Hiring professionals should ensure they know what they’re looking for in top candidates so they can target that specific audience. It's important to understand the impact and what companies are looking for when they’re interested in getting a lower CPA.
Moving Forward
Utilizing cost-per-quality is essential to develop targeted and effective recruitment strategies based on tangible evidence. Recruitment marketing analytics allow hiring professionals to glean insights into the effectiveness of current talent acquisition strategies. Visibility on all KPIs ensures organizations can better understand how and where they can improve their recruitment processes, while allowing hiring professionals the opportunity to showcase the success of their efforts.
If you're looking to implement cost-per-quality into your recruitment analytics, reach out to Recruitics today!
