High-volume recruitment presents unique challenges for talent acquisition teams. The sheer quantity of roles that need to be filled, combined with intense competition from other employers means relatively small differences in conversion ratios from top of the funnel to hire can have big effects on recruiting costs as well as time to hire.
Having a strong employer brand can make a huge difference, yet at the end of the day compensation is often king, especially for roles that pay less than <$15/hr. Put more plainly: It’s unlikely that ping pong tables or weekly catered lunches are going to convince someone to work for you for $10/hr if the company across the street is offering $11/hr for similar entry-level work.
Organizations often struggle with setting compensation levels for these roles, and with good reason: Given the intense competition for this talent, TA leaders are cautious about setting off a “wage war” with other employers in their area. Raising starting pay $1/hr could reduce cost per hire and boost retention, yet if the competition follows suit, everyone may end up paying higher wages only to land in the same intensely competitive talent market where they started. Moreover, raising compensation is likely to have ripple effects throughout an organization, as existing employees are likely to take note and expect their compensation to be raised to levels commensurate with that of new hires.
While there is no “silver bullet” for optimizing the balance between wage vs. cost per hire, we encourage our clients to utilize third party labor market data from organizations like EMSI to help them make informed decisions.
At the highest level, labor market data can be used to get a valuable 10,000-ft view of available talent pools in your organization’s zip code. Consider the table below, which summarizes the available talent pool in Gotham by hourly wage. Column B shows the number of workers in Gotham that makes each wage or less — e.g., the maximum talent pool your organization can expect to tap into at each wage level. Column C shows how the available talent pool scales with each additional $1/hr above $10/hr.
A company paying $10/hr has access to roughly 15k workers in Gotham. How can this information be used? Depends. If your organization has received 10,000 unique applications for your high volume roles in the past year and you’re struggling to source additional candidates at the top of the funnel, it could be because you’ve already maxed out your reach into the pool of available talent (10,000 applications means you’ve already engaged with two-thirds of the available supply!). In this case, you might be well advised to consider raising your starting wage to $11 or $12 per hour, which would put an additional 5,000-12,000 candidates within your reach.
On the other hand, if you’ve sourced 2,500 applications in the past year for your open role, a case could be made that you have much more room to “grow” even at your current $10/hr starting wage, and perhaps a different media strategy or messaging could be all it would take to fill your vacant roles.
Getting Beyond Wages
Beyond wages, third party labor market data can also be used to help refine your targeting and messaging. The table below shows the most common occupations for workers making $10/hr or less.
Here we see the top three jobs paying $10/hr or less in Gotham are cashiers, food prep, and personal care aides. This information can shed light on the competitive landscape, and also help TA teams craft custom campaigns specifically targeting these workers and calling out the benefits of working in a different (e.g., your) industry.
We’re Here to Help
These are just a few ways labor market data can be leveraged to optimize recruiting efforts. By combining data like these with candidate experience and employee surveys, we give organizations a competitive advantage that can dramatically reduce cost per application and time to hire.
Interested in learning more? Contact us today for a free consultation.