Case Study: One employer’s migration from duration- to CPC- to CPA-priced job posting ads

Advertising job openings used to be easy: my talent acquisition team would get a requisition from a hiring manager and we’d post it to a general site like Indeed, maybe a niche site or two, and to our company’s career site. Regardless of where we advertised the job, we knew ahead of time that the posting would run for 30 days and cost us usually around $200 to maybe $300 per job board. We didn’t know it at the time, but the pricing model we were using is what has come to be called traditional, duration-based advertising.

My company continually seeks innovative strategies to attract top talent efficiently. Striving for continuous improvement is part of our DNA and is quite literally listed in our organization’s business plan as one of our core values. As a talent acquisition leader for our prominent organization, I’ve been at the forefront of this change, steering our recruitment efforts through various channels and payment models. Recently and with some stress to our team and me personally, we’ve shifted from that traditional, duration-based job posting, pricing model to a more results-oriented approach.

The Need for Change: Understanding Our Current Model

Paying a flat fee for job ads was straightforward but not without drawbacks. While it ensured a consistent presence in the job market, it lacked a direct correlation between cost and the quality of candidates. In an effort to optimize our recruitment spending, we experimented with a cost-per-click (CPC) model. This approach seemed promising, initially offering a more tangible measure of engagement.

However, the results were mixed. Despite an increase in clicks, we noticed only 5-10 percent of these clicks converted into actual job applications. When I first saw that we were losing 90 to 95 percent of the candidates going from job boards to the postings on our ATS, I was mortified. I had no idea that the drop-off would be so massive. Fortunately, I quickly discovered that our click-to-apply conversion metrics were normal. Dismal, but normal. This realization brought us to a pivotal question: Are we truly maximizing our investment with the CPC model, or are we funneling resources into low-impact clicks?

The Transition to Cost-Per-Application: A Targeted Approach

We reached the conclusion, with the help of media partners such as College Recruiter, that we were better off buying candidate traffic on a CPC- than duration-basis, but that an even better approach was at our fingertips. We needed to consider and, potentially, shift to a cost-per-application (CPA) model. Our research led us to the understanding that the CPA approach aligned more closely with our core objective – acquiring qualified applicants rather than just generating candidate traffic. By paying only for applications, we direct our funds towards tangible outcomes, ensuring a higher return on investment.

Analyzing the Cost Implications

Determining the ideal pay rate per application is a nuanced process. It involves analyzing our historical data, understanding the industry benchmarks, and considering the nature of the roles we’re advertising. For example, niche or high-skill positions might warrant a higher CPA due to their limited applicant pool, while more general roles could have a lower rate.

Anticipating Challenges and Opportunities

Adopting a CPA model isn’t without its challenges. One significant concern is the potential for a decrease in the number of applications if job boards prioritize higher-paying ads over ours. We’ve overcome that by improving how we interact with our job board partners. Instead of calling them partners but, realistically, treating them as vendors whose goals were not well aligned in the short term with ours, we decided to work with them as we would work with consultants, lawyers, or accountants. In other words, we decided that we needed to truly listen to them and, over time, that led to us trusting them. To be sure, we still hold them accountable and disagree with them at times. But they’re fine with that and so are we.

We also ensure the quality of applications remains high, as paying for a large volume of unqualified candidates would negate the efficiency of this model. Our job board partners pushed for us to do this as close to real-time as possible and to candidly share with them the successes and failures that we were seeing with their traffic. When their traffic is really good, we tell them. When it is bad, we tell them. With that feedback, they’re sending us more good and less bad traffic, and that’s allowed us to receive far more quality applicants for the same spend which, over time, means we’ll be able to spend less.

Despite these challenges, the CPA model offers an exciting opportunity. It allows for more precise targeting and efficient use of resources. It also fosters stronger partnerships with job boards, as they are incentivized to deliver quality candidates.

Conclusion: A Step Towards Smarter Recruitment

As we delve into this new territory, our focus remains on optimizing our recruitment strategy to attract the best talent. Our transition from traditional, duration- to CPC- to CPA-based pricing model was a challenging yet rewarding step towards smarter, more outcome-focused recruitment. It promises to refine our approach, ensuring we invest in what truly matters – getting the right opportunity in front of the right candidate at the right time.

— This post was written by College Recruiter and not a talent acquisition professional, but the journey that this fictitious employer experienced is one that we’ve heard from employer after employer customer. It is quite representative of the experiences of many of the talent acquisition people that we work with.