The Hidden Costs of a Poor Candidate Experience

The Hidden Costs of a Poor Candidate Experience

Mike Roberts

Professionals in the manufacturing environment are credited with ideating many of the management philosophies and principles upon which businesses are run today. For instance, the concept of “lean manufacturing,” a methodology designed to eliminate waste, has found its way into healthcare, software development, and much more.

It makes sense to look to manufacturing for business principles and strategies, because by nature the production environment has to perform well or the entire operation won’t survive. In the past, we’ve talked about the concept of “lean recruiting,” and today we’ll continue the conversation by applying another principle from manufacturing to talent acquisition: the hidden costs of poor quality.

We will discuss this in the context of candidate experience. Many companies are still delivering a poor candidate experience, ignoring the less visible costs to recruiting and overall business performance in the process.

The Hidden Costs of Poor Quality

The hidden costs of poor quality refers to the less tangible but often massive costs that are easy to overlook in manufacturing. People describe the tangible costs as the “tip of the iceberg,” or visible part that sticks out of the water. The less tangible, but much more significant costs, are the remainder of the iceberg, which is underwater (shown below).

hidden costs of poor candidate experience
Think, for example, about an automotive manufacturer. If a faulty part makes its way through production and into cars in the lot, the visible cost is having to replace the part. The hidden cost is having to notify customers, potentially conduct a recall, redesign existing parts, put warranties into action, execute a PR campaign, pay fines and legal fees, receive backlash on social media, lose faith from current and future customers, and so on.

The Hidden Costs of a Poor Candidate Experience

In the example above, the costs of replacing the part are nothing compared to the additional hidden costs. We can think of candidate experience in the same way.

Software Advice surveyed a pool of job seekers to learn more about the effect of a negative candidate experience. They asked what action candidates would take after having such an experience while applying for a job:

negative candidate experience

Prior to the internet, talent acquisition was a very one-sided function, meaning companies had most of the power compared to candidates. Consequently, there were fewer costs of a poor candidate experience. Candidates may have mentioned the poor experience of their application or interview process to colleagues in passing. They may have also made the decision to never apply there again or buy the products, but that was typically the extent of it.

In many ways, it was the voicelessness of candidates that perpetuated poor candidate experiences for many years.

What’s interesting is the internet has taken all of the traditional ways candidates would complain about or discuss candidate experience and magnified them. Relatively recently, Glassdoor provided candidates with the option to leave feedback on the interview process on their site. Software Advice showed that 48% of candidates are likely to leave a negative review after a negative experience. Now prospective candidates read those reviews, which may impact their decision to apply.

Additionally, 33% of candidates are likely to tell others to not buy the company’s products and 59% will tell others not to apply to the company. Telling people something today means going to social media and proclaiming it to the world. The impact is far greater than in the past.

We don’t often think about the combined impact these less visible or immediate costs of candidate experience can have. Don’t forget the part of the iceberg beneath the water.

Improving Your Candidate Experience

The first step to improving your candidate experience is to fully understand it. Some talent acquisition leaders will conduct a candidate experience audit, having their team actually go through the online application and interview process to see what it’s like.

Others will employ a feedback methodology like the Net Promoter Score (NPS). NPS is basically a measurement of the likelihood someone will recommend others to apply to your company based on their experience. The Talent Board uses this methodology in its candidate experience research and awards.

Ideally, if you haven’t done much to reduce the costs of a poor candidate experience, you’ll want to use both strategies described above. The point is to take a step back and determine your current state and a then way forward. The costs of continuing with your current state could be far greater than you think.

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