The cost per hire (CPH) is one of the most widely used metrics in talent acquisition. It measures the total amount of money spent on hiring a new employee, including expenses such as advertising, sourcing, screening, interviewing, onboarding, and training. According to recent benchmark data from the Society for Human Resource Management. (SHRM), the average CPH was nearly $4,700. However, many employers estimate the total CPH of a new employee can be three or four times the position’s salary.
However, CPH is not the only factor that should be considered when evaluating the effectiveness and efficiency of the hiring process. Another crucial aspect is the candidate's experience. The candidate experience can have a significant impact on the organization’s brand, the quality of hires, and the retention rate of new hires.
The importance of the candidate experience is often forgotten when a company partners with a Recruitment Process Outsourcing (RPO) provider. This is a mistake. An RPO provider acts as an extension of your company and your brand. When candidates interact with an RPO, their experience influences their perception of your company and can impact a number of things, including whether or not they choose to accept an offer. When selecting an RPO provider, it is therefore important to partner with one that will provide candidates with a positive experience.
Here’s why the candidate experience matters:
The Benefits of a Positive Candidate Experience
A positive candidate experience can bring benefits to an organization, such as:
- Attracting more qualified candidates: A positive candidate experience can enhance the reputation and attractiveness of an employer, making it more likely that talented and skilled candidates will apply for its vacancies. According to a survey by CareerBuilder, 78% of candidates said that the overall candidate experience they receive is an indicator of how a company values its people. Moreover, 69% of candidates said they are more likely to apply for a job if the employer actively manages its employer brand.
- Increasing the offer acceptance rate: A positive candidate experience can also increase the chances that a candidate will accept a job offer from an employer. According to the IBM Smarter Workforce Institute study, candidates who had a positive experience were 38% more likely to accept a job offer than those who had a negative or neutral experience. Additionally, candidates who had a positive experience were more likely to refer others to the employer and apply again in the future.
- Reducing the cost of hiring: A positive candidate experience can also reduce the CPH by lowering the need for additional sourcing and advertising costs. For example, if candidates have a positive experience, they are more likely to share it with their network and social media platforms, generating free word-of-mouth marketing for the employer. Research finds that 72% of candidates who had a positive experience shared it online, while only 27% of those who had a negative experience did so. Furthermore, candidates who had a positive experience were four times more likely to consider the employer for a future opportunity than those who had a negative experience.
The Costs of a Negative Candidate Experience
On the other hand, a negative candidate experience can have detrimental consequences for an organization, such as:
- Losing potential customers and revenue: A negative candidate experience can damage the reputation and image of an employer, making it less appealing to potential customers and partners. According to The Talent Board’s calculator, you stand to lose $653,400 in revenue if rejected job candidates have a negative experience. That figure is really a part of your true CPH. Say 46% of that 100 have a bad experience and take their business elsewhere. Moreover, candidates who had a negative experience were 12 times more likely to stop being a customer of that employer than those who had a positive experience.
- Missing out on top talent: A negative candidate experience can also deter qualified candidates from applying for or accepting a job offer from an employer. One in three people has turned down a job offer because of a company’s negative online reviews.
While CPH is a widely used talent acquisition metric, candidate experience matters just as much - if not more. An RPO provider acts as an extension of your company and your brand. Selecting a partner that provides candidates with a positive experience is crucial because it affects not only the quality and retention of new hires but also the reputation of your brand in the marketplace and the revenue of your organization. A positive candidate experience can attract more qualified candidates, increase the offer acceptance rate, reduce the CPH, and improve the satisfaction and engagement of new hires. A negative candidate experience can have the opposite effects, resulting in lost customers, missed talent, a diminished brand reputation and standing in the marketplace, and increased turnover.
An RPO solution can offer benefits such as flexibility, cost savings, expertise, quality, and efficiency. An RPO partner should also provide a positive candidate experience.