…ideas from Jeffery Giesener – SourceMob – CEO
Last week we met with a couple of clients who are using LinkedIn Recruiting Seats. Before we started working with them, they lacked the analytical clarity to determine exactly how well they are doing regarding cost per apply and hire from any of their job campaigns, including their LinkedIn Recruiting seats.
Frankly, not knowing your cost per apply is like driving your Talent Acquisition bus by looking through the review window.
Case Studies that Prove the Dollars and Cents…
Prior to working with SourceMob, the two accounts (one around $600 million in revenue the other around $2 billion) lacked the analytics to know how many candidates were coming to their career pages or how their campaigns were doing from a Return On Investment (ROI) perspective. They also didn’t know their cost per apply/hire by campaign, including evaluating their Recruiter Seat from LinkedIn. They are paying $8,500 per year for one LinkedIn Recruiter seat license. The larger company had 2 seats.
Do You Know Your Cost Per Apply/Hire from LinkedIn?
Here is what they learned:
Year one: LinkedIn gave Company 1 600 leads to source. Company 2 received 900 potential candidates. LinkedIn connected these candidates by linking them with a URL into their respective ATS’s. Company 1 hired 4 candidates. Company 2 hired 6 candidates. Both companies told me when we started with them indicated that they were satisfied with their LinkedIn results.
Here is the SourceMob analytical view on gross candidate applies on year one for Company 1: hire conversion is 4/600 = .67% and cost per hire $8,500/4 or $2,125. Company 2: 6/900 = 6.8%. $8,500/6 = $1,416 cost per hire.
The LinkedIn Secret?
After seeing and having to manage the significant candidate flow from LinkedIn, qualified and nonqualified candidates, both companies didn’t realize that candidate recruiting from LinkedIn. They paid about $45K per annum for each of their inside recruiter(s). These persons were also fully burdened with the load of paper pushing from LinkedIn candidate flow even when the candidates wound up in their ATS. Does this story sound familiar to you?
So when you add up the obvious costs, $8,500 LinkedIn Recruiter Seat + Inside Recruiter Fees at $45,000, each you may have $53,500 in total traceable inside recruiting costs for each LinkedIn Recruiter seat license.
Now The True Cost: They both captured 4 to 6 hires hires. So the cost of using LinkedIn was $8,500 (LinkedIn Recruiter Seat) + $45,000 (inside recruiter salary) = $53,500 or between $8,916- $13,375 per hire. ($53,500/ 4 or 6). (For this example we only burdened one inside recruiter fee.)
Once both HR SVP’s saw their different hiring analytics, their response was OMG, we didn’t realize the actual cost of using LinkedIn! As you can see, when fully burdened, there is a significantly different cost view than just the $8,500 you pay LinkedIn for a seat license.
“But Jeff,” as one SVP indicated, having thought about it for a minute, “even the $13,750 is well below what we would pay an outside recruiter for our senior positions.” Yes, I agree, but the important point I am making is that they didn’t have a clue what their true spending was. If they did, they would be managing these costs and banking the money. Even worse, one of the companies was using LinkedIn for many mid-level executives to manufacturing positions.
Additionally, buried inside of this example according to both clients, is lots of paper pushing inefficiencies, which can and needs to be chocked out of the recruiting process. When you do, every dime drops back into your budget, which I sense in today’s economy is a very good thing and will make you look very good to your boss.
So where am I going with all of this? One: LinkedIn isn’t as cheap or as efficient as it appears. Two: They do not provide a deep level of analytics. Three: You are back to a basic analog recruiting processes of emailing candidates, calling and chasing. How much does this cost and what will your candidates think about your company? Four: Don’t you want to ring out additional inefficiencies? Five: Don’t you want your brand in front of candidates in Social and Mobile?
My goal here is to help you to better understand why providing a blended strategy of social recruiting is where most companies should be and LinkedIn is only one of your chips to place your bet for your social recruiting strategy.