How to get 5X ROI on your Talent Acquisition spend

Even if your staffing budget is gigantic compared to the rest of the industry, that only means as a leader you have to show your organization that much more in return.  So any-time you can maximize your return on investment, that is something most leaders take a hard look at. 

Enter PeopleOps.  In the past we have been a traditional time + materials contract sourcer billing upwards of $90hr to source candidates.  The reason companies pay that is they know that even at $90hr its pretty easy to show value over retained & contingency search firms if you can make a hire.

This year, in 2015, after much testing and tweaking.  PeopleOps has rolled out a flat rate subscription type sourcing model that puts your ROI front and center.  

Here is the skinny:  We offer a  10k monthly plan for unlimited amount of non-executive searches.  The math is simple really and we assume the risk on the front end.  

Let's say your company averages 15 openings at any given time with an average salary of $100k.  That means over the course of 12 months we will have supported somewhere in the ball-park of 180 jobs.  

1000 screened & qualified candidates over the course of a year spread across 180 searches.  Let's say that we have a 1:30 hiring ratio (no, that is NOT common..we are typically somewhere around 85%).  That is 28 hires for the year.  28 hires x 100k average at 25% agency rate (if your company pays lower agency rates the math still works out great, especially given this is a baseline scenario).  That is a normal commission of $700k a year paid out to agencies.  We would have billed $120k for the whole year, creating a 5X ROI on spend.  

Now, let's say you are a team that doesn't use agencies.  Internal recruiting teams are not cheap either.  If you are working mostly with contractors you can spend $700k supporting 180 searches very easily, especially when you factor in tools & operating costs. 

 

Jonah Manning

I #source #people #capital and #dealflow // General Partner @ConsortiumLP // Founder @PeopleOps // Dad // friend to a Jewish Carpenter //