Cashing in on Improving Candidate Experience
“I want my gift to you to be the first gift you open this year. You know why? Because my gift comes with 10 zeroes.”
–Jack Campbell, The Family Man
Maybe not 10 zeroes, but what about 6? Even if you’ve never seen the above movie, one of my holiday favorites, the main character Jack Campbell is all about his business making money.
As it should be, right? I mean, we talk a lot about improving candidate and employee experience, creating better work cultures, investing in diversity and inclusion, ensuring social responsibility by giving back to communities in the form of donations and volunteerism.
I’m not playing a Scrooge here – I want to see all of those things thrive. And yet, when it comes to recruiting, it’s a business transaction like any other business transaction. Except that 99 out of 100 people applying for a specific job don’t get the job.
A messy human one no doubt, but still a business transaction.
Here at Talent Board we’ve talked a lot the past few years about our benchmark research and the potential impact on businesses based on how they’re treating their job candidates. We even have a candidate resentment calculator on our website that will give you a projection of how much annual revenue is at stake.
For consumer-based businesses that could translate into millions of dollars of lost revenue every year. For B2B companies, although it’s harder to connect the dots, not having the referrals you depend on or those future-fit folks applying for your jobs, it can and does impact future revenue.
And yet, we haven’t talked much about how much revenue could be generated when we look at a greater degree of candidate perceived fairness and those candidates who give a great big “great” candidate experience thumbs up in our research. Those who are willing to increase their business relationship by applying again, referring others more often and making and/or influencing purchases if and when applicable. The latter part is key for the rest of this article.
According to our 2018 candidate experience research, 28 percent of North American candidates who responded to our survey gave their overall experience a “great, I’ll increase my relationship” with the company they applied to (see Figure 1). What’s important to note is that 92 percent of all the candidates surveyed this year in North America did not get hired.
Figure 1. North American Candidate Experience Change in Business Relationship Based
Now, this is where it gets interesting – potentially interesting. Fourteen percent of the North American candidates told us they were customers of the company. If we assume that very positive job candidates who were customers might increase their spend by 15 percent (per consumer research), then that’s a good thing.
Let’s walk through a scenario with some Christmas math magic that includes the above. Let’s say we’re dealing with a large consumer-based company called Company X. I know, not very imaginative, but just work with me here.
Company X hires 1,000 employees per year and averages 100 applicants per hire. That translates into 99,000 rejected candidates annually. Company X has also determined that the annual value of one customer is $100.
As mentioned above, 28 percent of the rejected candidates say they’ll increase their relationship with Company X, that leaves 27,720 candidates of the 99,000 who were very positive. And 14 percent of those were customers of the company they had applied to.
That leaves 3,326 very positive candidates. If these same candidates (lots of if’s here) increase their annual spend by 15 percent, then that would be $115 per candidate per year spent on Company X products – $382,536 of additional potential revenue for the year.
But wait – there’s more!
If we assume that each of the 27,720 very positive candidates tells one person, and if those people become customers, then that’s another potential $2,772,000 in revenue.
Combined, that totals $3,154,536 of potential annual revenue!
Of course, there are many variables that will affect the actual potential impact, but this should still give you pause to consider the possibility. And many of our CandE Award winners, especially consumer-based business, know this first hand. And like our candidate resentment calculator, we plan on putting together a candidate spend calculator for all to use in 2019 and beyond. These tools could help you with making the business case to invest in recruiting improvements with your people, processes and technologies.
From Wall Street to Main Street, we want you all to cash in on improving candidate experience, and there’s nothing wrong with that, especially in a market where the candidates (as customers) have more influence and leverage than ever.
Kevin W. Grossman
President and Board Member