In our last article on candidate experience ROI, we looked at the importance of converting pre-applicant candidates to applicants. In this installment we’ll look at negative candidate experience lost revenue.
When looking at the ROI of candidate experience lost revenue can be a huge factor for many organizations. The link between candidates and customers is obvious. If you have a strong, consumer facing brand, there is no doubt that the way candidates feel about your company after applying for a job can affect revenue in a number of different ways:
- Candidates can choose to stop buying your products. Many candidates seek out companies they like and do business with. If you treat them with disregard in the vetting and hiring process, many choose to take their business and their loyalty elsewhere.
- Candidates are connected on social networks. A perceived slight in the job seeking process can result in negative comments that can multiply and spread like wildfire, negatively affecting your brand and resulting in fewer customers.
If you think these kinds of concerns are overblown, think again. A Software Advice Survey found that 42% of candidates who had a negative experience would not buy products from the company again. Another 34% said they would tell their friends not to buy from the company.
If that’s not enough to raise concern, consider how candidate experience cost Virgin Media $5 million in lost revenues.
Virgin Media’s $5.4 Million Candidate Experience Lost Revenue
Virgin Media’s story began with one candidate experience from a single survey. In investigating how rejected candidates view Virgin’s brand, Virgin’s head of talent took notice a particular negative experience by one rejected candidate. The candidate explained that, prior to the negative experience, she was a rabid fan of the brand and was very excited about getting an interview. After the interview, she said she would cancel her subscription and go with a competitor.
It got him to thinking about how these rejected candidates might affect revenue.
When he compared these rejected candidates against Virgin’s customer systems, he learned that 18% of the rejected candidates were also virgin Media customers.
It turned out there were 123,000 rejected candidates each year, and 6% of them canceled their monthly Virgin Media subscription. This meant they were dealing with about 7,500 cancellations. Multiply that by the £50 ($60) subscription fee and by 12 months, adding up to £4.4 million per year, the equivalent of $5.4 million, in lost revenue.
This $5.4 million only represents the direct impact of poor candidate experience. Virgin believes the number is much higher when bad word of mouth and brand damage is factored in. The discovery led to a complete overhaul of Virgin’s candidate experience and now stands as a cautionary tale to all organizations that count candidates as customers.
And just because you’re in the business to business segment, don’t think negative candidate experience doesn’t affect you. Candidates who experience poor treatment may not be able to close their wallets on your products, but they can spread the word within your industry about what a poorly run operation you seem to have. This kind of “word of mouth” can damage your brand, your reputation and your bottom line.
The first step in finding out how candidate experience affects your revenues is to regularly survey candidates and ask the right questions. You should include Netpromoter questions asking how likely candidates would recommend your company to other job seekers and your products to their friends. You should also ask questions about your employer brand both before the candidate applies and after.
The key is to consistently check in on all your candidates. This gives them a voice, which boosts your brand in an of itself, while providing your organization with invaluable data with which you can optimize your hiring process and eliminate problems before they result in lost revenue or bad Glassdoor reviews.