Key recruiter metrics for the four, primary job ad posting pricing models

Until about 15 years ago, virtually all job posting ads had the same pricing model: employers would pay X for the ad to run for 30 days. The X varied site-to-site and market-to-market, but something like USD $200 was normal.

That traditional, duration-based pricing model is rapidly fading away, especially in markets such as the United States, Canada, United Kingdom, and somewhat the European Union. What’s replacing it? Mostly cost-per-click (CPC), which some sites such as Indeed call pay-per-apply-start (PPSA); cost-per-application (CPA), which some sites call pay-per-completed-application (PPCA); and cost-per-hire (CPH), which some sites call pay-per-hire (PPH).

As you might imagine, the pricing models are quite different, as the advertiser (employer) takes on far more risk of the ad not performing under the first models than the last ones. The same role from the same employer on the same job board might be $200 for 30 days under a traditional, duration-based pricing model; $1 CPC; $20 CPA; and $500 CPH.

Each model offers its own set of advantages and challenges, making it crucial for employers to understand the key metrics for evaluating their effectiveness. Below, we delve into four primary pricing models and the metrics that can help employers make informed decisions.

Traditional, Duration-Based Pricing

This model, a staple in job advertising, charges employers a fixed rate for a job posting that remains active for a predetermined period, typically 30 days. While straightforward, its effectiveness hinges on understanding specific metrics:

• Number of Views: The total number of times the job ad was viewed. A higher view count indicates good visibility but doesn’t always translate to quality applications.
• Application Rate: The ratio of applications received to the number of views. This helps gauge the ad’s effectiveness in converting viewers into applicants.

Cost-Per-Click (CPC) Pricing

CPC charges employers each time a candidate clicks on their job ad, directing them to the employer’s site. It’s performance-driven, focusing on attracting potential applicants. Key metrics include:

• Click-Through Rate (CTR): Measures the effectiveness of the ad in encouraging job seekers to click and learn more. It’s calculated by dividing the number of clicks by the number of views.
• Conversion Rate: The percentage of clicks that result in meaningful actions, such as submitting a resume. It helps assess the quality of traffic being directed to the employer’s site.

Cost-Per-Application (CPA) Pricing

Under this model, employers pay for each completed application, making it a compelling choice for those seeking to only pay for tangible outcomes. Important metrics to consider are:

• Application Quality: Not all applications are created equal. Employers should assess the relevance and qualifications of each applicant to determine the value derived from the CPA model.
• Cost-Per-Qualified-Applicant: This refines the CPA metric by focusing on the cost associated with receiving an application from a candidate who meets the specified qualifications.

Cost-Per-Hire (CPH) Pricing

Arguably the most outcome-oriented model, CPH charges employers only when they hire a candidate referred by the job board. While potentially cost-effective, it requires careful tracking of:

• Hire Quality: Assess the performance and fit of hires made through this model. A low-cost hire who performs excellently offers incredible ROI.
• Time-to-Hire: How quickly candidates are moving through the hiring funnel. A model that leads to faster hires can be highly beneficial, especially for roles that are critical to operations.

Choosing the right job posting ad pricing model is a strategic decision that can significantly impact the quality and cost-effectiveness of recruitment efforts. By focusing on the outlined metrics, employers can navigate the complexities of each model, ensuring their investment in recruitment advertising delivers the desired outcomes. Remember, the goal is not just to fill vacancies but to do so in a way that aligns with the company’s broader talent acquisition strategy and budgetary constraints.