Acronyms and jargon sound really cool and impressive, but they are even better when we understand what the heck they stand for. Previously, I shared common terms from the pay-per-click and online advertising world. When jumping into job board and recruitment advertising, those terms will be routinely used.
On top of those terms from PPC and online advertising, other phrases will be used and understanding those common acronyms in the recruitment world will make it easier to be successful in the job board space.
What terms can you expect to hear or read?
Cost Per Applicant (CPA)
This term is one of the most important phrases in the job board industry because it comes down to the bottom line. How much money did it cost for your staffing agency to acquire an application? Within the employment industry, this will vary greatly between industry (manufacturing vs. healthcare/IT) and by geography.
It’s important to know your cost per application as this helps make better performance-based decisions. Let’s say you know it costs $15 for your recruiters to acquire an accounting resume. With that data, the team can now evaluate its recruitment spend and try to improve that number. Would moving job board spend to a different board bring a lower number than $15/application? Would it increase your spend? We’ll never know without some testing. That’s the type of decisions that need to be made to improve ROI.
Cost Per Hire (CPH)
This number is harder to quantify and determine because it requires tracking the information throughout the entire process. Taking that CPA data, can the team determine how much it actually costs to hire a candidate?
This number can vary greatly when taking into account a variety of information. We have to examine your internal costs and external costs. For external costs, that goes into the actual job board advertising, background checks, any recruitment marketing expenses, etc.
For internal costs, how much gets allocated to specific recruiters? How much time are other employees spending on the hiring process? The hiring manager is meeting with HR. The hiring manager is spending time in interviews. Are other employees spending time on interviews? (We also have to think about the lost revenue because of the open position.)
I think we’re good here.
The percentage of candidates who apply for the job. It’s similar but different to the click-thru rate mentioned in the article linked in the opening paragraph. There are also different methods on how we can compute this statistic:
- More Common Method: We could look at the number of impressions on the job and the number of resulting applications. For example, let’s say the job had 500 impressions and 50 applications, that leads to a 10 percent conversion percentage.
- Alternate Method: We could look at the number of clicks on the job posting and look at applications to get our percentage. For example, let’s say the job had 100 clicks and 50 resulting applications, the conversion percentage would be 50 percent
An industry benchmark of 11 percent is suggested (that’s for the first method mentioned), but there are a variety of factors with that number. Recruiting nurse practitioners will be much different than recruiting machine operators.
Knowing the benchmarks for your staffing agency will help make better recruitment marketing decisions. It’s easier to evaluate your job board spend and your recruitment spend with these metrics in place. If the cost per application is rising, your tactics and strategies might need adjustment. Or it’s becoming a competitive market with fewer and fewer candidates.
Data and acronyms can be overwhelming, but when we understand them that leads to better results. With candidate recruitment not getting any easier, it’s important to have your benchmarks and know when to adjust.