I came across a great tool for measuring ROI for candidate experience at a recent Talent Board Candidate Experience Workshop (of which Survale is a major sponsor). It’s called the Candidate Resentment Calculator. I am told it came from HireRight©, so full credit to HireRight for coming up with it.
We’ve all read about how frustrated candidates can affect your bottom line. The oft-cited Virgin Media story about how Virgin saved millions in lost revenue by treating candidates better, best exemplifies the potential cost of poor candidate experience.
This Calculator allows your to find out for yourself what the cost of good or bad candidate experience is for your organization. It’s a great way to estimate the potential benefit of good candidate experience to your bottom line.
Candidate Satisfaction Results in Better Outcomes Across the Board
I’ve written about how candidate satisfaction translates into more applicants and more effective recruiting. In this day and age, we can agree that’s a given.
When it comes to candidate resentment reducing or increasing business outcomes (revenue), it’s a phenomenon that must be considered in any business case. For any business whose candidates are likely to be customers, It’s intuitively self evident that if you treat candidates better, it will ripple through your recruiting efforts. However, today we are examining how it ripples through your business as a whole.
Candidate Resentment Calculator
This particular calculator assumes that 100% of candidates are customers. Your percentage might be lower. If so, simply multiply the results by the percentage of candidates you believe are likely to be customers. To build your own calculator, just do the following:
A: Tabulate your number of annual hires
B: Calculate your candidates per hire (Total applicants in the last 12 months divided total hires for the same period)
C: Calculate your rejected applicants per hire (B minus 1)
D: Calculate your annual rejected candidates (A x C)
Because a poorly treated candidate often expresses their frustration to friends and social media, you now need to calculate the “Resonance Factor” to determine your candidate resentment cost. To do this complete the following, assuming the most conservative case (candidate tells one person):
E: Total rejected candidates (D x 2)
F: Average value of a customer (ask your CFO if you don’t know)
The Talent Board reports that 13% of candidates surveyed in their annual candidate experience research project would sever their business relationship with an employer over a bad candidate experience. Given this, complete the calculator with the following:
G: Potential lost customers (13% x E)
H: Percent of candidates that are customers
I: Potential TOTAL lost revenue (G x F)
J: Potential ACTUAL lost revenue (I x H)
The Bottom Line
That’s a lot of numbers and letters presented above. So here’s what a hypothetical calculator might look at the right (click it to download a spreadsheet you can use).
Think you might have some candidate frustration out there? Of course! It’s part of the process. You are rejecting 98% of candidates who want to work with you! Use this calculator as way to justify the time and effort it takes to absolutely delight every candidate that interfaces with your organization, either online or in person. As you can see, the cost of doing nothing is high.
Author: Ian Alexander
Ian Alexander is co-founder and CMO of Survale. He is a pioneer in SaaS HR software with decades of experience bringing leading technologies to the performance management and recruiting industry. He is a passionate advocate for revolutionizing candidate and employee satisfaction in the Enterprise.