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How Do I Calculate ROI For Applicant Tracking System?

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There are several ways to calculate the return on investment (ROI) for an applicant tracking system (ATS). But to start, you need to first determine the cost of your hiring activities without an ATS.

Equation #1: Time Cost

Let’s say we have an HR Employee who handles hiring (I’ll call her Joy). Consider the number of hours that Joy works on hiring activities in a week (H) and multiply that number by her amount of pay per hour (P).

If H = 40 hrs.

and P = $20 per hour

Then, H x P =  $800 per week focused on hiring activities without an ATS

An applicant tracking system could easily reduce that employee’s work by 25% and cost as low as $30 per week (C). So let’s look at the ROI in that scenario:

If H = 30 hrs.

and P = $20 per hour

and C =  $30

Then, (H x P) + C =  $630 per week focused on hiring activities with an ATS..a savings of $170 per week or a 560% ROI.

Equation #2: Labor Needs

But what if Joy can only review 40 applications per day and your organization really needs to review 60 applications per day? If you want to get through 60 applications in a day without a backlog–and without investing in applicant tracking software, you’ll need to hire another person.

So if one employee (E) can review 40 applications per day (A) and you need 60 applications reviewed per day (N), let’s determine how many additional employees you’ll need.

If N = 60

and A = 40

Then, N ÷ A = 1.5 employees to review 60 applications per day.

Equations #3: Labor Cost

Now, let’s combine the results of both equations to find the time cost for this scenario where hiring is the solution to meeting capacity requirements.

(H x E) x P = $1200 per week focused on hiring.

Now we have a ball-park figure we can use to see if the cost of the ATS is equal to or less than the additional labor cost.

Reducing Labor Cost With Applicant Tracking Software

An ATS can review applications more quickly than a human through the use of automatic scoring and/or disqualification filters associated with answers given for application screening questions. With the aid of these filters, the applications can be sorted and the reviewing process can begin with those applicants that most closely align with what you are seeking for that given position.

This means that Joy in our example above should have no problem reviewing 60+ applications per day, saving the organization from hiring a part-time employee and saving $400 per week in labor costs…or $1600 per month. When you consider that the price of HireCentric ATS starts at $120 per month, that’s a big return on your investment!

ROI for Applicant Tracking System Analysis Factors

Beyond the time cost savings, let’s consider some of the other items to factor into your ROI analysis:

  • Focusing on just the more-qualified applicants (as determined by the screening questions mentioned above) usually leads to better hires, because recruiters and hiring managers are no longer buried by resumes. Better hires tend to ramp up faster, perform better and stay longer. This means a better bottom line for your organization.
  • Candidates no longer “slip through the cracks” — the better ones are more quickly identified and may be contacted quickly to avoid them going elsewhere.
  • You’re now building an actual candidate pool from which to draw later. This means fewer postings to paid job boards and dollars saved because of it.
  • Jobs may be shared through social media by both your applicants and your existing employees. Again, this means more quality applicants without over-relying on paid job boards.

My experience is that focusing ROI efforts on time savings alone tends to fall on deaf ears when approaching a CEO or CFO for approval. Using some of these alternative ideas, along with the time savings and low cost nature of an applicant tracking software tool, should improve your odds of making a business case to executive management and getting the solution your organization needs.

If you would like to discuss pricing and/or ROI for ExactHire’s applicant tracking software further, please contact us today.

How to Write a Job Description Optimized for Job Boards and Internet Search, Tip 5

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Location, location, location! No, I’m not talking about prime land real estate; however, the same old catchphrase can apply to your job listings and job board real estate depending on how well your company’s geographic location aligns with the location of your targeted applicant pool. In this fifth installment of the “How to Write a Job Description Optimized for Job Boards & Internet Search” series, I’ll discuss how strategically using features available within your applicant tracking system can remedy an organization’s ailing efforts to get listings in front of out-of-town applicants.

Skills Gap: Qualified Applicants Don’t Live in Your Neighborhood

Awhile back I was chatting with one of our clients. She works for a company within the automotive industry and frequently needs to hire individuals skilled in trades, such as mechanics and technicians capable of working on large diesel engines. She usually has a number of similar positions open across multiple facilities, but the facilities are not in really large metropolitan areas…rather bigger towns scattered across the Midwest. In particular, one of those larger towns happens to be about thirty minutes from Indianapolis via interstate.

She has found that if she can get the word out, sometimes skilled individuals who reside on the edge of Indianapolis are willing to drive to her facility for work…after all, it is in the opposite direction of most rush hour traffic. However, it is much more challenging for her to engage qualified applicants that are closer and, perhaps at times, more aware of her job openings. She is definitely experiencing a skills gap in her town when it comes to technical positions.

So naturally, having had some success reaching Indianapolis residents and engaging them to come to her town for work, she wants to continue to get the word out and expand the geographic scope of her applicant pool. However, with so many postings skimmed by job seekers, she needs to do it in such a way that it is still clear that the opportunity is based in her town…and not in the city thirty minutes away. After all, she doesn’t want to waste her time, or even the time of her hiring managers, if a few applicants that don’t realize the position is really in the smaller town (and therefore do NOT want to make the commute) get through the cracks.

Strategic Job Locations & Setting Expectations Clearly

The key to this obstacle is to use your job description to make it clear that your opportunity is based in the town, but also ensure that it appears in the search results for applicants who may not be specifically looking for jobs in that town…but rather in the nearby city. Check with your applicant tracking system provider to see if alternate job locations can be enabled for the job boards to which you push your job ads.

For example, it is important to be upfront about the fact that your position is based in your town on your careers page. You may go so far as to also say as much in the first two sentences of your job listing to be sure that the town name appears in snippets of your posting in search engine and job board results pages.
Setting Location Expectations - Job Listings
Then, when pushing certain job listings to free and paid external job boards, designate the larger nearby metropolitan area as the “job board city” since applicants often do geographic searches on external job boards. After all, many more searches are likely to be done on the city than on the smaller town. And, while some of those applicants will dismiss the small town job opportunity when they note in the first few sentences that it is based in the town a half hour away; others will check it out–as they might reside in an area of the city that is relatively close to the town. Plus, they never would have thought to search for opportunities in that town, specifically. This can be especially compelling when you consider that a city like Indianapolis is so spread out that it can take nearly an hour to go from a suburb on one side to another on the opposite end of the city.
Specify Job Board City | ExactHire

Big City Skills Can Meet Small Town Opportunities

If you ever find yourself in a similar scenario scrambling to entice applicants to come to your quaint out of the way town, consider the approach I’ve outlined here. However, bear in mind the importance of still making it clear to applicants that do view your job description that the position is indeed located in your town…and not the big city. This technique isn’t about bamboozling applicants with the location bait and switch, it’s about harnessing the power of job board geographic searches to put your listing in front of applicants when it might not otherwise have been seen. Then, it is still up to the applicant to consider the merits of the scenic drive.

[VIDEO] Social Recruiting Tools

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Considering the ever-increasing number of social media users, savvy recruiting and human resources professionals are now, more than ever, pushing job postings to Facebook, LinkedIn, Twitter and other social media sites in order to generate a larger potential pool of applicants for career opportunities with their organizations. With the right applicant tracking software, reaping the benefits of social recruiting tools can be fast and easy.

In this video, see how ExactHire’s applicant tracking system integrates with social media networks and simplifies the task of promoting your job openings.

Transcript:

Using word of mouth in the recruiting process is one of the most effective and long-standing ways to attract talent. Imagine its power amplified through the use of social media networks.

ExactHire’s applicant tracking software offers many different social recruiting features. There are hundreds of millions of users on Twitter and LinkedIn each month – even over a billion on Facebook. Therefore, leveraging social media in today’s talent acquisition landscape is a must!

Your careers site visitors can easily share your jobs with friends on many different social networks. Encourage your own recruiting staff and employees to regularly visit your Jobs page and share openings, too.

While HireCentric ATS engages your active job seekers with a branded careers portal and job postings optimized for search, passive applicants can also interact with your employment brand over time by subscribing to automated job alerts via email.

Use our Facebook app to install a Jobs tab right on your company page. That way, your Facebook visitors can see all your current openings without leaving Facebook. The fewer clicks applicants must make to get to job info, the more employment applications you will receive.

If you’re spending too much time announcing new jobs on company social media sites, you’ll want to use an integration that automatically posts status updates to your company Facebook wall or Twitter page each time you create a new job listing. Post to personal LinkedIn pages, too.
Choose how often the posts occur and include hashtags to make it easy for job seekers to find your updates.

Social recruiting allows your company to exponentially increase its talent pool with little effort. With the power of social sharing, attract the best talent by improving your odds of reaching people with the right opportunity at the right time.

To see our recruiting software’s social media tools in action, we encourage you to schedule a live demonstration or do a free 14-day trial.