Recruiters: You’re Measuring ROI Wrong and This is How to Fix It

Increasingly, Talent Acquisition professionals are being tasked with measuring the cost effectiveness of their third party talent acquisition tools. And that’s a good thing. If you aren’t measuring results, you’re likely wasting some money on a current source that could be reallocated elsewhere and yield better results for your company in the form of more applications and more hires.

The more sophisticated companies we talk to, at Simply Hired, look at measures like Cost Per Applicant (CPA), Cost Per Hire (CPH), Cost Per Offer, or other measures that look at how much volume they are getting for a source versus how much money they are investing in that source. Still, we’ve found that many companies that are looking at the right KPIs are still measuring ROI wrong.

It’s all about the data they are looking at. If you aren’t starting with clean and accurate data, you can look at the KPI of your choice regularly, but you’re still making decisions based off incorrect assumptions.We see two regular themes that lead to incorrect data – manual drop down menus and automatic tracking that blends free and paid candidate flow together.

Manual Drop Down Menus Are Incredibly Inaccurate

Many companies rely solely on manual drop down menus to determine where their candidates are coming from. This means that during the application process, job seekers are presented with a question asking, “How did you hear about us?” and the job seeker is presented with a list of sources to choose from.

Manual drop down menus are notoriously inaccurate. In fact, ran a study and found that job seekers choose the wrong source 83% of the time (source). There are a number of reasons a job seeker will choose the wrong source. Sometimes they will choose referral to get to the top of the pile. Sometimes they will choose the first or last option to get through the question. Sometimes the right source isn’t even listed in the drop down menu. Whatever the reason is, the bottom line is that if you are relying on data that is 83% inaccurate to measure ROI, your numbers are way off.

Improve Accuracy With Automatic Source Tracking

Luckily, many companies have moved away from manual drop down menus and have moved to automatic source tracking. With automatic tracking when a job seeker clicks on your job, they are automatically tagged as coming from the correct referring source. Removing self-selection from the process is a key step towards accurate data collection.

Beware of Blending Your Results

But there are still problems with automatic source tracking. Yes, automatic source tracking does a good job of measuring where a job seeker comes from. The issue arises when you are looking at ROI. Sources like Simply Hired, and many other job aggregators, send candidates to your open positions even when you are not sponsoring your jobs. Remember that ROI means return on investment. If you are calculating your CPA and CPH and including your free results, you aren’t really measuring the return you are getting on your invested dollars. relying on blended rates, you may be misled by the data to invest in sources that aren’t as effective as they may appear.

Think about this – in general search you hear about Search Engine Optimization (SEO; free results) and Search Engine Marketing (SEM; paid results). They are always measured separately. The same thing should be done in recruitment advertising. The good news is that most Applicant Tracking Systems that have automatic source tracking allow for you to track sponsored and organic traffic separately.  All you have to do is ask your ATS or your aggregator partners to help set it up. Here at Simply Hired, we do it all the time. If you are interested in learning more about how you can track results more effectively please contact me at:

Read the Full White Paper: Recruitment Advertising ROI