Why Budget Distribution means more than Cost Per Application in Job Advertising:

Job advertising is very often not very well aligned with business goals. This post focuses on one thing you can do to improve that; shifting your focus from your cost per application to the distribution of your advertising budget.

Why focusing on cost per application is wrong:

As long as the cost per application is low and keeps decreasing, a lot of people think they are doing something right. Well, they usually aren’t. Why not? Because usually focusing on a lower cost per application means that budget is not spent where it is needed and effective. You can for example easily lower your cost per application by spending most of your money on the jobs that are easy to fill. Does that help a business? Not really!

There is the big difference in advertising strategy when you look at recruitment versus e-commerce; we don’t want to sell as much as possible; we want the right number of buyers (candidates) for every product (job) we have.

This is also the reason why so many people responsible for/selling job advertising are not really helping their customer/employer; they are focusing on the huge numbers they have delivered for low prices, but this is not what businesses need. It’s what they think they want or need maybe, but it simply isn’t. We need to focus way more on where money is spent. There is much more to win if you do that compared to just focusing on lowering your cost per application.

The ideal situation: Focus on distribution of budget.

What should the goal of an employer, staffing agency or job board ideally be when spending money on attracting candidates to jobs?

Employer: I want to thrive as a business by getting as many of my jobs filled as possible within my budget.
Staffing agency: I want thrive as a business by filling as many of my customers’ jobs as possible within my budget.
Job board: I want to thrive as a business by getting as many customers as possible the right number of candidates per job they post as possible within my budget.
And thus we need to focus on only spending our money there where we know a job will not get enough candidates if we don’t advertise with it, but also on not spending money on jobs we know we can’t get any candidates for.

How to get there:

First we need to sit down with whoever knows the answer to this question: How many candidates/interviews per job does it take to make the customer happy? If you know this answer, you know the goal and you know that if you reach this goal, you will keep your job/customer.

Second of all you need to realize that if you spend any money on jobs that are going to reach their goal anyway, you are getting your customer/employer further away from their goal instead of closer. Because; you are spending their budget, but not helping them because they don’t need more candidates for jobs they already have enough candidates for.

Then you need to realize that if you spend money on jobs that are not going to reach their goal, but people are (almost) not going to apply for wherever you advertise with them, you are not helping your customer either. You keep burning money on jobs your customers want more candidates for, but are (almost) not getting them any; not good.

Last but not least, the main point of this post; you need to realize that you should spend as much money as possible (within budget of course) on those jobs your employer/customer needs more candidates for AND advertising works for. That’s the sweet spot where you are actually helping a business achieve their goal.

How software can help you make this change:

Usually when I speak with people, they agree with the above, except of course when they are solely focused on user/candidate acquisition in terms of numbers. However, not many of these people are able to dedicate so much time to managing their job advertising campaigns in multiple sources, to actually execute this strategy.

That’s why a few companies (like OnRecruit, the business I work for) have built software that automates executing this strategy. You simply tell it how much budget you have and what your goal is and it constantly turns your jobs on and off based on the data it’s getting about your jobs from your website. Of course it also focuses on getting you a low cost per application, but not just the lowest possible on any jobs you have. If companies now spend half their budget on jobs that would reach their goal anyways (usually it’s more than half) and technology can spend that part of budget on jobs that actually need more inflow of candidates to reach their goal, you can imagine the huge impact technology can make.

Conclusion:

Whoever you are, if you are advertising with jobs please start talking internally and with your suppliers about at what jobs your money should get allocated. You will be amazed by the results if you start investing less/nothing on jobs that don’t need more inflow of candidates/advertising doesn’t work for and more on those jobs that do need it and it works for.

Let me know if you need any additional advice; I’m always happy to help. You can reach me via rene@onrecruit.nl and of course find me on LinkedIn, Facebook and Twitter.

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