The Candidates You Ignore Have the Biggest Impact on Your Business
Candidates in this job market have more leverage than they’ve had at nearly any time in recent history.
What does this mean for recruiters? Well, it certainly makes the job a lot more challenging. And it makes the candidate experience more important than ever. Candidates are able to go wherever they have the most positive experience. And if a candidate has a negative experience with your organization there’s a fair chance they’ll make that known on social media.
The importance of the candidate experience goes beyond our bullish employment market, because it can affect your bottom line, much more significantly than you expect.
The Candidate Experience Is Shifting
Let’s start with something you might find a bit surprising: Even as we focus on the candidate experience, candidates are becoming more impatient with the hiring process.
We collected data from candidates who withdrew themselves from the recruiting process and found that in 2017, 11% of those who withdrew cited “poor rapport with recruiting professionals.” For 2018 that figure was 32%. Other factors were up as well for 2018, including “dislike of the hiring manager” and “misunderstanding of the job description.” Another indicator of candidate leverage is the proportion of candidates who withdrew because “the salary did not meet expectations” — it went from 14% in 2017 to 22% in 2018.
These statistics all point to the nearly unprecedented challenge recruiters face now. Candidates simply feel they can find something better, regardless of whether it’s money or a perceived cultural fit. But it also points to a greater risk for something else.
How the Candidate Experience Affects Your Bottom Line
A poor candidate experience affects your bottom line, especially for consumer-based businesses. Our research shows that candidates who have a poor experience are willing to sever their relationship with an organization. If you’re a high-volume customer-facing organization, this can result in a catastrophic effect to your bottom line.
Here’s where it gets 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% (per consumer research), then that’s a good thing. Let’s say we’re dealing with a large consumer-based employer. This employer hires 1,000 employees per year and averages 100 applicants per hire. That translates into 99,000 rejected candidates annually.
The company knows that the annual value of one customer is $100. Twenty-eight percent of the rejected candidates say they’ll increase their relationship with this employer, which leaves 27,720 candidates of the 99,000 who were very positive. And 14 percent of those were customers of this employer they had applied to. That leaves 3,326 very positive candidates.
Yes, there are many assumptions here, but if these same candidates increase their annual spend by 15 percent, then that would be $115 per candidate per year spent on this employer’s products – $382,536 of additional potential revenue for the year. And 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 employers across industries pause to consider the possibility. And many of the Talent Board CandE Award winners, especially consumer-based business, know this first hand.
And you’re not just worried about the candidates themselves. Social media is the great amplifier, and people are more willing to share their hiring-process experiences. Eighty percent of candidates will share their positive experiences, but over 60% will share their negative ones. It’s a trend that’s rising by the year, and it’s not difficult to see how this can exponentially affect your business. While the percentages drop when we look at how many candidates share their experiences online (i.e., social media posts, Glassdoor reviews, Kununu reviews, Indeed reviews, etc.), these are still significant populations who are willing to share this information publicly.
Get the Overhaul Started
Of course, these are just numbers, and putting a dollar value on the candidate experience might seem a bit abstract.
But there’s precedent for these concerns, and more importantly, there’s precedent you can follow to take action. In 2015, Virgin Media enlisted Ph.Creative to help it overhaul the candidate experience. The reason? Virgin had estimated it was losing $6 million in revenue from its candidate experience alone. By the end of the initiative, Virgin and Ph.Creative had created a $7 million revenue stream. You can read a lot more about it here.
Maybe you can’t afford a top-dollar consultant, or the lost revenue you’re trying to recoup isn’t in the seven figures. But before you can take action, you’re going to need to figure out just how much your candidate experience is affecting your bottom line. That’s why we’ve made an online resentment calculator for HR and talent acquisition professionals. Just plug in a few numbers and you’ll be able to estimate potential lost revenue.
This calculator is designed for customer-facing businesses, but B2B companies will find it useful as a starting point for a much-needed discussion. Because if you don’t have the candidates you need to grow and sustain your business, there’s a good chance your revenue is going to be affected.
For more on the relationship between candidate experience and business performance — and how you can improve your organization’s candidate experience — read Talent Board’s 2018 CandE Report.