In today’s economic climate, it’s more important than ever to keep your recruitment budget on track. The balance has begun to swing a bit in recent months, but it remains a candidate-driven market, leaving businesses constantly seeking ways to optimize their ROI when it comes to hiring. As you do this, cost per application (CPA) is a key metric to keep top of mind and measure regularly.
A Key Factor in Data-Driven Recruitment
CPA measures the total sum you invest to get candidates to apply for your open positions. It allows you to see if you’ve allotted too much of your budget, have the right number of sponsored positions, and are maintaining your desired market competitivity.
Simply put, cost per applicant = cost (in dollars) of posting a job listing/number of applicants. The lower your CPA, the more applications you will receive with your set monthly budget.
The best way to measure your CPA for your sponsored job postings is to take the amount of money you spent, and divide it by the amount of applications you received. So if you received 2,000 applications last month with a $5,000 monthly budget, your CPA would be $2.50
- Measuring CPA for different types of postings can help you decide where to allocate your budget. If you are on Indeed and ZipRecruiter and are getting a $2 CPA on Indeed, while getting a $6 CPA on ZipRecruiter, most of the time, you would allocate the bulk of your budget to Indeed. There are cases where you may be receiving a higher quality of candidate from one job board than the other, but if the quality is the same, then why wouldn’t you choose to allocate the budget accordingly?
You can calculate CPA overall, for each campaign, or per individual job postings.
- If you calculate CPA for certain industries, consider whether costs vary by job listing. For instance, does it cost more to get applications for Administrative positions versus Light Industrial positions? Once your team knows this, you can weigh the pros and cons for putting a budget behind each and determine how to spread out your budget.
- If you calculate CPA across your organization, pick a time period for your calculation. The past year or month is a good place to start. Knowing your CPA is the first step in continuously tracking your cost per placement, which i a direct measure of your ROI.
The Value of Tracking CPA
Monitoring CPA on a monthly basis – as you would any business budget line item – helps you refine your recruitment spending as needed. You also can compare your CPA to industry standards to see where you stand in terms of hiring efficiency versus your competitors.
Tracking and optimizing CPA is just one aspect of effective job advertising, which is just one of the pillars supporting your total recruitment marketing success – along with your career site, social recruiting and employment branding. Let the experienced niche experts at Haley Marketing help you keep all four pillars in balance so you stay ahead of the competition regardless of what the job market throws your way. Contact us today to learn more.
