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TalentTalk

A SilkRoad TalentTalk Report

Recruitment Marketing Effectiveness:
Meaningful Metrics Straight From the Source

Recruitment Marketing Effectiveness:
Meaningful Metrics Straight From the Source

Table of Contents
03 // Introduction 03 // A Few Highlights of this Study 04 // Methodology 05 // What Distinguishes This Report 05 // Why Automated Source Tracking is Most Effective 05 // Scope of Sample Size 06 // Source Effectiveness: Top Sources of Interviews and Hires 16 // Analyzing Data and Adjusting Your Strategy 16 // Conclusion: The Top 10 Findings 17 // Recruitment Analytics: How SilkRoad OpenHire Can Help in Tracking Sources 19 // About SilkRoad

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Introduction
Companies around the globe are intent on reducing the impact of an uncertain economy on hiring. When hiring budgets are thinner, HR professionals must continue to look for ways to make the most of precious recruitment dollars, all while positioning their companies for future growth. In fact, in difficult economic times, recruiting the best-fit talent becomes more crucial than ever. good recruitment sourcing, in fact, is based on sound decision making and HR strategy. Yet every recruitment professional at some time in their career has witnessed the “ready, fire, aim” approach to sourcing. Panicky last-minute ad buys and stacks of resumes from unqualified candidates are only a few symptoms of this method. Haphazard sourcing of this type impacts company visibility and the success of the business. So how exactly can companies avoid this situation and make sound decisions that deliver real business value? The answer is straightforward: use hard data and employ analytics. Organizations must be able to see patterns in the data they have and use that information to guide their decisions about future spending. The problem is, though, that many talent management professionals still lack hard, factual data to be able to empirically identify the most effective sources of recruitment marketing. They share information about their “best sources” with colleagues, but much of this is anecdotal. Furthermore, the industry has relied on narrow studies of a few companies and a small number of recruitment sources, as well as surveys of recruiters—rather than on hard data originating from real recruitment systems. However, with advances in automated applicant tracking systems (ATS) and the entry of the Web, the sourcing picture has shifted. With the right tools in hand, professionals can pinpoint exactly where applicants and hires originate—whether a job board, a search engine, a print ad, or a referral. That’s where SilkRoad’s Source Effectiveness Report comes in. This report was designed to aid professionals in understanding the recruitment sources used by a large number of other organizations, so that they can assess their own sourcing efforts. Accurate and substantial in scope and depth, this report delivers quantitative data about the sources that provide companies with qualified interviews and hires. The data was extracted directly from the talent management systems of some of the world’s largest companies and leading employers.

A Few Highlights of This Study
The following key findings emerged from our research: One. External sources provided the majority of interviews, but internal sources produced more hires. Two. Online recruitment efforts proved vital for producing the kinds of candidates that companies interview and hire. Three. Of the top 10 online recruitment sources, Indeed provided the largest number of interviews, followed by company career websites. Four. Company websites produced more hires than any other online source. This demonstrates that a strong company career site is a crucial part of the recruitment mix. Five. Referrals were the strongest source for hires among all internal recruitment marketing sources. Yet, referrals and company career sites effectively tied for the number of sourced interviews.

More detailed findings, analysis, and a complete summary of results can be found in the following pages.

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Methodology
Survey data on recruitment sourcing certainly has its uses: It can be rich and textured, revealing respondents’ perceptions, processes, methodologies, and satisfaction with the tools and benchmarks they employ. While valid, it is quite different in nature than primary, objective data. Survey participants often respond with “top of mind” answers and reflections, rather than digging into their metrics for fact-based answers. This limitation is further compounded when the effectiveness of recruitment marketing sources is evaluated from the perspective of job performance after the candidate has been hired; at that point, even more potentially subjective criteria can color the findings. Even recruitment metrics that attempt to separate and evaluate source of hire as a measure of effectiveness often introduce a level of posthire measurement and subjectivity. The other key limitation of studies evaluating the effectiveness of recruitment marketing sources has been their limited scope. Most studies have focused on a small sample or drilled into a single industry or one category of recruitment source. Few, if any, have covered the recruitment landscape in both breadth and depth. The data elements that recruitment consultant and author Stephen Lowisz suggests are necessary that an organization track to determine what will “drive the right results” for sourcing are: • The “number of hires by source” • The “quality of hire by source,” meaning high on job performance and tenure rates • The “efficiency of the source,” meaning how much time does a recruiter spend using a specific tool, such as Facebook or LinkedIn.1 Obviously, the number of hires by source in a certain time period is a critical piece of information. Many organizations use this metric with other measures—such as external costs for agency fees and internal costs for staffing efforts and physical infrastructure. 2 Together, these elements are used to calculate “cost-per hire,” a prevalent industry measure of source effectiveness. The cost-per-hire metric is referenced again in this report, along with other forms of measurement. All of the calculations above are entirely data-driven and should be at the fingertips of professionals. In recent years applicant tracking systems and analytical techniques have evolved significantly, enabling companies to dig into very large data sets and harness their data for better decision making. Professionals must use hard data and employ analytics to make sound decisions that deliver real business value.

1 2

Stephen Lowisz, “Source of Hire: Do you know? Should you care?, www.stephenlowicz.com, April 2009 An American national Standard for Human Resource Management, SHRM, February 2012.

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What Distinguishes This Report
The methodology that underpins this report is very different in three fundamental ways: 1. The findings are based on primary data drawn directly from applicant tracking systems. 2. Online source data is based on automated source tracking (further eliminating bias). An ATS with automated source tracking identifies the source and reports it, removing any subjectivity or interpretation on the part of the recruitment professional about the candidate. This is particularly true for online sources, where the origin of the sources is passed directly to the ATS, without any human intervention. 3. The scope of the sample is substantial in both its size and its range of recognized employer brands. The data for this report was pulled directly from the SilkRoad OpenHire applicant tracking system (ATS) of each participating employer. It is primary data—valid, untainted and objective. It includes no anecdotal responses, no subjective filtering, and no source effectiveness based on post-hire evaluations.

Why Automated Source Tracking is Most Effective
Automated source tracking is a critical element for determining source effectiveness. This type of tracking is available only for online sources and provides the researcher with very large data sets for analysis. Data provided by the SilkRoad OpenHire ATS enabled researchers to identify sourcing patterns in records for over 300 thousand interviews and more than 150,000 hires. Moreover, automated source tracking not only provides primary data, it removes any subjectivity or interpretation on the part of job seekers applying from online sources. This further eliminates bias in the presentation of the data.

Scope of Sample Size
The participating companies ranged in size from as few as 100 employees to much larger companies, including: • More than 900 employers • 10 of the Fortune 50 • 50 of the Fortune 100 Combined, the data gave insight into: • 245.595 job postings • More than 10 million applicants • More than 300,000 interviews • More than 150,000 hires

note that the numbers shown above for postings, applications, interviews, and hires grew on a year-over-year basis, from last year’s report to this year’s report. This was a result of an increase in customers participating in the study, from approximately 800 in 2011 to 1054 in 2012.

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Source Effectiveness: Top Sources of Interviews and Hires
Four common metrics are frequently used by businesses to evaluate source effectiveness: applicants, interviews, offers, and hires. In discussions with SilkRoad clients, we asked them which of these were most important in evaluating effectiveness of recruiting sources. They responded unequivocally: interviews and hires. When a candidate qualifies for an interview, the recruitment source—at least at that early stage—can be judged effective. Beyond that, other elements are added to the mix that might determine whether a candidate receives an offer, such as salary requirements or fit with the company culture. But ultimately, the interview is the first critical step. Hires are the second key metric that companies use to determine source effectiveness. Many companies combine this metric with others—such as external costs for agency fees and internal costs for staffing efforts and physical infrastructure. 3 Together these elements give professionals costper-hire information, one of the most widely used measurements in the industry. In addition, costper-hire calculations should be coupled with other metrics, such as quality of hires, including their on-the-job performance and tenure rates to determine the return on recruiting investment (ROI). ROI ties recruitment efforts directly to the business bottom line and enables organizations to compare spending relative to the return that the costs produce.4

What the Data Shows: External and Internal Sources
The SilkRoad OpenHire ATS data for this report came from approximately 3,500 sources. 5 Examples of external sources include: • Specific job search engines • Branded and unspecified job boards • Print advertising • TV/Radio advertising • Job fairs • Agencies Examples of internal sources include: • Recruiter sourced (employer sourcing) • Company career sites (employer websites) • Referrals • Inside hires

3 4 5

An American national Standard for Human Resource Management, SHRM, February 2012. Dr. John Sullivan, “The Silliness of Measuring Cost Per Hire,” www.ere.net, August 6, 2012 note that of these 3,500, approximately 200 sources accounted for 95% of interviews and hires.

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External sources provide the majority of interviews (56%) as opposed to internal sources, which provide 44%.

However, internal sources produced more hires (58%) compared to external sources (42%).

Results show that external sources are more effective in generating interviews. Yet, we can see from the chart shown above that once an applicant has made it beyond that critical interview stage, internal sourcing produces more hires. Later in the report, we examine those internal sources and others in more detail, which will provide additional context for this finding. This year shows slight gains in external sources compared to last year: For both interviews and hires, external sources gained roughly 6% compared to findings in last year’s report.

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Top Ten External Sources
The top 10 external sources for interviews and hires were a combination of online and offline sources—with online sources predominating. Of the top 10 external sources, Indeed is the leading external source of interviews and hires. It provided almost double the number of hires and almost two and a half times more interviews than the next largest source, which was Career Builder. note that offline sources, such as agencies and print advertisements yielded a notably smaller number of hires and interviews.

*Unspecified job board includes responses where the job website was not specified. Examples include “Internet Job Board”, “Job Website” and “Online Job Board”.

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External Online Sources: Hands-Down More Effective
When it comes to evaluating external online and offline sources, online sources account for the lion’s share of hires and interviews: These represent an impressive 87% of interviews and 80% of hires.

REMInDER
• • External online sources included specific job search engines, and branded and unspecified job boards. External offline sources included agencies, job fairs, and print advertising, among others.

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Internal Sources: Referrals Predominate for Hires, But not for Interviews
Although employee referrals remain the strongest base for effective recruiting in terms of hires (44%), they were actually tied with company websites for interviews (36%). Internal hires accounted for most of the remaining activity from internal sources. 93% of interviews and 94% of hires came from these three sources, i.e. referrals, company websites, and internal hires. One explanation for the dominance of employee referrals might be as follows: A personal reference or recommendation could be heavily weighted in the hiring decision. Or, it is possible that a current employee clearly understands the qualifications that make a candidate the “best fit” for an organization.

FAST FAcT

36%
Referrals and Company Career Sites effectively tied for number of sourced interviews.

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A Deep Dive into Online Sources
Extensive analysis of customer data showed that online recruitment efforts are vital for producing the kinds of candidates that companies interview and hire. Online sources accounted for: • 65% of all interviews • 48% of all hires This is a marked increase over last year’s Source Effectiveness Report that showed online sources provided 42% of all interviews and 28% of all hires. The bottom line: Online sources are more important than ever for successful recruitment marketing. The graph below shows the interview and hire performance for the top 10 online recruitment marketing sources. Indeed provided the largest number of interviews, followed by company career websites. The company site provided the largest number of hires. This demonstrates that a strong company career site is a crucial part of the recruitment mix.

FAST FAcT
Online recruitment efforts are crucial for delivering the kinds of candidates that companies interview and hire.

A Word About company career Sites
As the previous graph shows, company career sites were major sources of both interviews and hires, indicating that they are a key element of a recruitment marketing portfolio. An appealing, high-quality company career site serves the candidate and the employer by: • Making it easier for candidates to find and apply for jobs. • Providing detailed information about the company, and in turn, helping engage best-fit applicants.

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Yet, a company career site offers more than just a group of job listings and a way to apply for positions. It provides a unified brand image, which can reflect the culture and history of an organization, beyond just a job description. A great career site can include encouraging messages from management, testimonials of employees and customers, information about company philosophy, and more. Because all this information is conveniently stored in one place, the candidate experience is amplified. In fact, the company career site is a “storefront,” where a vital stage of recruitment begins. The conversion of a job seeker to an actual applicant happens at the career site—no matter where the person started to hunt for jobs. Company information presented on the site helps the potential recruit decide whether he or she is the right fit for the job and organization. In short, the company career site gives the candidate the stimulus to apply for a position. Within this study, company career sites were the top online source of hires and the second most prevalent online source of interviews.

Examples of Company Career Sites, Delivering Enhanced Candidate Experiences
Many of SilkRoad’s customers use the power of company career portals to attract, engage, and hire the world’s best talent. Here are just a few examples of companies that use career sites to drive recruitment results: Wake Forest University wakejobs.silkroad.com The university not only attracts some of the best and brightest students from around the world but also works hard to attract the best educators for those students. To help do all of that, Wake Forest uses SilkRoad OpenHire and its built-in Career Portal studio tools. The tools allowed the Wake Forest team to design a rich, engaging career site that’s loaded with constantly changing content. clear channel communications careerchannel.silkroad.com Clear Channel Communications, a global media giant, is always on the lookout for the most creative, talented professionals— from digital media professionals and programmers to designers and producers. To help recruit the best, Clear Channel has built a dynamic career portal that clearly articulates the company’s innovative brand and offers candidates colorful employee profiles. The company’s career portal sets it apart as a clear leader—and helps HR to engage and hire candidates who are at the “top of their game.”

nES Rentals nesrentalsholdingscareers. silkroad.com nES Rentals, a leader in the $25 billion equipment rental industry, has a strict emphasis on safety and attracts top technicians, field and shop mechanics, drivers, and salespeople. To engage the best talent, nES Rentals uses SilkRoad OpenHire’s built-in Career Portal. nES Rentals has a content-rich Web portal for candidates, agencies, recruiters, and hiring managers to use. The portal is packed with high quality content, including testimonials from employees, and information about employee benefits, development, and recognition programs.

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A closer Look at Job Search Engines vs. Job Boards
In this study, all job boards combined produced 54% of external interviews and 56% of external hires. However, those percentages do not tell the entire story. To understand the most effective recruitment sources, it is important to take a closer look at the source categories used in the study. Among all the online recruitment marketing sources that SilkRoad clients identified, only two—Indeed and Simply Hired—are job search engines, which differ from job boards in that they give job seekers access, in a single search, to potentially millions of jobs from thousands of sources across the Web. Even though there are only two specific search engines, they account for a disproportionate amount of recruitment activity: 38% of external online interviews and 29% of hires.

Note: Only the 10 largest External Online sources are shown on the graphs. The remaining 3,400 sources were highly fragmented. Each of them had less than 1% share of interviews and hires. Therefore, the numbers shown in the graphs do not sum to 100%.

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A Lesson in Analytics: The Impact of Job Search Engines vs. Job Boards
It’s important to note that the impact of job search engines in the previous two charts might be either underrepresented or different within your organization—depending upon the level of integration between your ATS software and search engines. Here’s an example: For its customers, SilkRoad has established integration or “feeds” with Indeed and Simply Hired, ensuring a consistent experience and current job information for applicants. However, if your ATS vendor does not provide direct integration or “feeds” to job search engines, candidates could be directed to another job board—rather than to your career site. In this case, your organization runs the risk that potential applicants are viewing outdated job postings. Moreover, your organization would not be leveraging the strength of its career site. There are also differences in the way that job boards and job search engines price their services. Job boards charge employers for posting their positions. In contrast, job search engines list employers’ jobs for free in their organic search results and only charge for additional job-seeker traffic on a pay-perclick basis. To put the power of job engines in further context, these two sources alone (Indeed and Simply Hired) accounted for 33% of all external interviews and 24% of all external hires.

In summary, these findings provide a lesson in analytics: When evaluating recruitment marketing, it is crucial to drill down into the data and to understand the way sources work. A particular source could look good under initial analysis, but when examined more closely, it might not deliver the highest return on investment for recruitment dollars spent. More thorough analysis prevents an organization from making haphazard decisions.

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The Top 10 Branded Job Boards
According to Bersin & Associates, the average cost of $3500 per new hire is an increase of 6% from the previous year’s data with much of this going towards job boards, making the analysis of those boards more important than ever. Customer data regarding branded job boards showed that there are great disparities in their effectiveness. Of the top 10 branded job boards, CareerBuilder clearly provided the largest number of interviews and hires. Compared to Monster, the second largest source, it yielded approximately 127% more interviews and hires. Intriguingly, LinkedIn, the well-known professional job networking site, showed dramatic increases in numbers in this year’s report, compared to last year’s report. LinkedIn accounted for nearly six times as many interviews and three times as many hires as it did last year. While it is common knowledge that roughly 70% of all jobs are filled through some sort of networking, this impressive rise may be attributed to an increase in passive job seekers and the overall usage of LinkedIn in the SilkRoad customer base.

One final note on the overall importance of job boards as recruitment sources: According to Bersin & Associates, talent acquisition spending in the u.S. alone grew between 2010 and 2011 to nearly $3,500 per new hire, with most dollars going to job boards and search agencies.6 Therefore, even though job search engines in this study accounted for a disproportionate amount of online recruitment activity, job boards are getting a substantial chunk of companies’ recruiting budgets overall.

6

Bersin & Associates, 2011 Factbook.

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Analyzing Data and Adjusting Your Strategy
Sourcing strategy should not be frozen in time: It should shift with changes in an organization—such as mergers or acquisitions or new product development—and with the emergence of new sources and technologies in the marketplace. For example, in conversations with customers, SilkRoad has found that professionals are constantly weighing the efficiency of spending on offline sources against the wealth of free social media sources that are now available—a dilemma not as notable ten years ago. The answer to some of these complex issues is found in source data. That’s why organizations must review this data regularly and adjust their marketing strategy to continue producing an acceptable ROI. Still, even with hard data available, many organizations delay or fail to adjust their strategy. They are wedded to past ways of sourcing candidates, loyal to a specific agency or source, overestimate the brand strength of a source, or are not confident in the hard data that is collected. In sum, professionals must be crystal-clear realists who can understand hard data, determine its impact on the company, and communicate it through all parts of the business, especially to the C-level team. Only then will they realize the ROI in recruitment marketing dollars that companies expect. Organizations must review their source data regularly and adjust their marketing strategy to produce an acceptable ROI.

conclusion: The Top 10 Findings
Collecting verifiable, primary data is vital to determining the effectiveness of recruitment marketing sources and optimally managing any recruitment marketing portfolio. This comprehensive study deeply and broadly mines that kind of data, drawing directly from the SilkRoad OpenHire ATS of more than 900 SilkRoad client companies. For all of 2012, the data included more than 10 million applicants, over 300,000 interviews, and in excess of 150,000 hires. 1. SilkRoad clients determined that interviews and hires are the most important metrics they use in determining source effectiveness. 2. External sources provided the majority of interviews (56%) as opposed to internal sources, which provided 44%. 3. Internal sources produced more hires (58%) compared to external sources (42%). 4. Among external sources, online sources were clearly more effective. They accounted for 87% of interviews and 80% of hires. 5. Indeed is the leading external source of interviews and hires. It provided almost double the number of hires and almost two and a half times more interviews than the next largest source, which was Career Builder.

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6. Of all internal recruitment marketing sources, referrals remain the strongest source for hires (44%). Internal hires followed at 26%. 7. Of internal recruitment sources, Referrals and Company Career Sites effectively tied for number of sourced interviews at (36%). 8. Of the online sources—internal or external—Indeed provided the largest percentage of interviews (27%) and company career sites accounted for the largest number of hires (30%). Findings indicate that company career sites are a crucial part of the recruitment marketing mix. 9. At first glance, it appears as if job boards outperform job search engines in this study. Job boards produced 54% of external interviews, as compared to job search engines, which produced 33% of interviews. Job boards provided 56% of hires, whereas job search engines provided 24%. However, this finding must be tempered: There were dozens of job boards in the study versus only 2 job search engines. Indeed and Simply Hired account for a disproportionate amount of recruitment activity—38% of external online interviews and 29% of external online hires. Considering the small number of job search engines in the study, the numbers accounted for by engines are impressive. 10. careerBuilder was the leading source of interviews and hires among job boards, providing 127% more interviews and hires than the next largest source.

Recruitment Analytics: How SilkRoad OpenHire can Help in Tracking Sources
Reliable recruitment analytics are vital in determining the most effective sources for hiring. More importantly, objective recruitment analytics can help recruitment and HR leaders develop meaningful business analytics that demonstrate ROI and strategic alignment with company goals. The old adage of garbage in/garbage out certainly applies to recruitment marketing data. To get a valid measure of effectiveness, it is essential that recruitment source metrics be drawn from an ATS that tracks results as accurately as possible. Reliability must be built in at the origin of primary data collection. Applicant tracking systems interoperate with recruitment advertising sources to ensure that automated tracking works. In most cases for online sources, the source site needs to pass along a value in the job uRL that that identifies the source. When this is done effectively, the option for candidate self selection is removed. The source is “passed” into the ATS automatically and more valid source effectiveness data is obtained. SilkRoad’s OpenHire ATS offers exactly this type of automated source tracking and works directly with recruitment sources to ensure it is used to its fullest capabilities. SilkRoad OpenHire provides uRL tracking values to sources for each job feed when that is possible.

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An ATS with automated source tracking works “behind the scenes.” The system identifies the source and reports it, removing any subjectivity or interpretation on the part of the job seeker. The benefits are: • More accurate recruitment source data • More reliable data to measure sourcing effectiveness • A speedier application experience for the job seeker unfortunately, some ATSs still do not support automated source tracking in any capacity. Instead, they simply offer employers the option to enable job seekers to manually select the source they used, typically choosing from a list or by typing in the source. Research has shown that this kind of manual source reporting is prone to applicant mistakes: selecting the first available choice by default, omitting sources, and including more than one source or listing expired sources. When this is the case, recruiters and HR leaders receive faulty information and cannot make sound decisions about the sources that deliver candidates. Even when automated source tracking is offered, as it is with SilkRoad OpenHire, many employers and sources fail to implement it correctly. For example, an analysis of this data showed that a surprising number of interviews and hires were attributed to “other.” This category “other” was offered to candidates as a self-selection option by employers for sources that were either unable to be tracked automatically, or just did not implement automated source tracking correctly. There is no reason for employers to offer options like this, because they do not add value or insight to measuring source effectiveness. Companies that are struggling to meaningfully identify the sources within their ATSs can seek out third-party expertise. SilkRoad offers such consulting services to organizations, helping them to determine the best ways to categorize and organize their data, so that it can be used to calculate the return on investment for dollar spent. SilkRoad is committed to assisting companies in building highperformance applicant tracking systems.

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About SilkRoad
SilkRoad is a leading global provider of cloud-based social talent management software. Why simply manage talent when you can unleash it? The award-winning SilkRoad Life Suite is an integrated set of talent management products that power businesses with the latest Internet and social media innovations: • OpenHire for recruiting • RedCarpet for onboarding and life events • HeartBeat for HRMS • GreenLight for learning management

• WingSpan for performance management • Point for social collaboration and content

The Life Suite is ideally suited for businesses of every size because of its unique and open “start anywhere” architecture: you can implement the complete suite or begin with one product and add functionality as you need it. Either way, it’s the fastest path to develop more productive and empowered employees who can rapidly boost business performance.