4 mins, 2 secs read time
Looking back, 2021 was a challenging year for many recruiters. Recruiting costs significantly increased due to the intense competition for talent and the decrease in labor supply brought on by the pandemic. According to Appcast's Labor Economist Andrew Flowers, who spoke at the recent Greenhouse Open Conference, there were more job postings in 2021 than ever before as the demand for labor increased across all major industries. And this still rings true in 2022 – even with so much more economic uncertainty.
In his Open session, “Recruitonomics: How understanding and applying labor market data is critical to compete effectively,” Flowers takes us through the “Recruitonomics” framework and the impacts of the economy and the pandemic on hiring. We also learn how to interpret labor market data to optimize recruitment marketing. Read on to get the key takeaways from this session and to discover how you can uplevel your recruitment marketing strategy – starting now.
What is Recruitonomics?
Recruitonomics is a framework that combines labor economics – including employment and wage trends in the macroeconomy – with recruiting strategies to help optimize hiring. It recognizes that there are internal and external factors that can impact the cost, caliber and quantity of talent you're hiring for. The internal factors include your sourcing and recruiting practices, your application process, your marketing choices and your employer brand. The external factors are things like government policy, economic growth, competition and candidate supply and demand.
How have the economy and the pandemic affected hiring?
Pandemic restrictions, the Great Resignation and rising inflation have drastically impacted recruiting in the past few years, making it extra challenging to find and hire great talent.
While COVID-19 is still with us and there have been some recent surges in cases, there are more job openings today than before the pandemic hit. However, there's been a huge lack of job seekers to fill up all these openings. Flowers says that “Labor demand is exceeding labor supply, by almost two to one. There’s almost two job openings for every unemployed person in the US.” This shortage in labor supply coupled with the fierce competition among employers is making recruiting that much more difficult. He explains that “Workers realize that they have a better offer down the street and, if they feel empowered, given all the job openings out there to quit, they’ll do so.” Higher wage expectations from job seekers is one of the key impacts of inflation within recruiting today.
Another pain point inflation is causing for recruiters is rising online advertising costs. Plus, as Flowers points out, “last year, online advertising costs spiked by over 10%” due to consumer spending shifting toward e-commerce. Since people were spending more time online instead of going out, the marketplace for online advertising became more expensive. The result? Increasing costs for advertising jobs.
Key recruitment marketing metrics businesses should track
In his Open session, Flowers highlights three key recruitment marketing metrics from Appcast’s data that have been impacted by the pandemic, the labor market and the Great Resignation – cost per click (CPC), cost per application (CPA) and cost per hire (CPH).
When it comes to the CPC, Flowers says there’s been “an extraordinary growth of over 70% in the median cost per click across all jobs, across all geographies in the US, over the last two years,” indicating higher recruiting costs for companies.
The Appcast dataset shows that the CPA has increased substantially for blue-collar roles, which includes hospitality, food service, retail and warehousing jobs. Flowers explains that “A lot of these roles have been very hard to recruit for, partially because of COVID and partially because of the Great Resignation phenomenon.”
In terms of the CPH, Appcast gathered job market data from multiple sources to arrive at this key insight: no single source performs best. Sources can be anything from a job board to a recruiting service, and they all have different costs per hire for different job functions. Some sources have higher or lower costs per hire overall compared to other sources. Flowers likens CPH to investing, explaining that it’s important to diversify your portfolio. He adds that casting a wide net by using multiple sources can fetch you the lowest CPH since different job boards and recruitment platforms are good for different things.
For talent leaders and recruiters who are looking at these recruiting metrics, meeting your hiring targets is already that much easier. Using Appcast’s data can give you deeper insight into which labor markets to recruit in to elevate your recruitment marketing strategy and optimize your recruiting budget.
If you joined us at Open 2022 and want to learn more about what Flowers had to say about the future of recruiting, you can access the attendee hub to watch the full session on-demand.