Backwards is Forwards: Missing the True ROI of College Recruitment

by Steven Lindner | Oct 27, 2015 | College Recruiting, Industry Research and Recruiting Metrics, Talent Acquisition | 0 comments

Backwards is Forwards: Missing the True ROI of College Recruitment

Fall is upon us!  And for those of us working on mid- and large-sized college recruitment programs, it’s the time of the year when all the thoughtful planning we’ve done over the summer goes into execution mode.

By this point, we have carefully selected our target schools and started lining up our onsite visits, career fairs, and interview days.  We are armed with engaging collateral, intern and new grad success profiles, and job postings that speak to the soul of today’s college student.  Our College Ambassadors are eager to get out and spread their contagious passion for our brand to future college hires.  Our Hiring Managers and their teams are prepped for what’s to come. They have strategically planned and mapped out the meaningful and challenging projects that next year’s intern and new grad hires will be working on. Right?

We hope it is, because college recruitment is not a cheap proposition, at least not if it’s done right.  According to the National Association of Colleges and Employers (NACE), the cost of an entry-level college hire in 2014 averaged $3,582¹ (and that only includes the direct recruitment-related costs² ; if one takes into account the time spent by hiring teams, that number becomes gaspingly larger).

A lot has been written about how to build and run a top-notch college recruitment program and for good reason – it’s a sizeable investment.  According to NACE, the average employer with a structured college recruitment program converts 51.7% of its interns and 37.8% of its co-ops³. They extend job offers to 74% of the students they interview, of which 38.3% accept the offers⁴. Retention rates of new college grad hires were reported in 2011 as 92% and 69.2% after one- and five-years of employment, with larger companies having a harder time retaining new hires. (It should be noted that 2011 includes the worst job market the U.S. has experienced in many years.  Thus, these retention rates are likely much lower today in our current improved job market.)

Based on our experience, as well as data from NACE, most companies with formal college recruitment programs do a good job on the operational piece the program. Where employers tend to miss the mark is with the explicit alignment of college recruitment outcomes to the ultimate business objectives.  To accomplish such an alignment, data analytics specific to the longer-term business objectives are far more valuable in helping to shape college recruitment strategies and design internships and recent grad programs.

NACE suggests a number of common metrics⁵ to evaluate college recruitment programs, which include:

NACE, in its Standards document⁶, provides an evaluation of the various metrics in terms of their relative use and importance as reported by NACE employers.  A review of that data is very interesting in two regards.

• First, the metrics differ in terms of the data availability following the completion of an annual college recruitment cycle – i.e., some are proximal and some are distal to that end point.
  • From the above listed metrics, Retention, Performance and Promotion clearly require the passage of one-to-five years post-recruiting a group of interns or new grads in order to have meaningful data to analyze.
• The second interesting observation, supporting our experiences in the field, is that distal metrics carry different degrees of importance and are used less frequently, overall, by employers.

However, aren’t those distal data points the ones that are the most meaningful to the business in terms of the bottom line?  Aren’t those the most critical metrics that should be shaping and driving our college recruitment strategy?

Let’s look at two examples of how that becomes quite important to the business with regards to, let’s say, developing target schools from which to recruit.  (Incidentally, the most typical selection criteria used by companies to assemble a target school list include geographic location, types of majors offered, accreditation of the school, perceived quality of the school’s programs, and recruiting experiences at the school.)

Example 1: Assume you work for a manufacturing company that recruits new MBA graduates for a leadership training program that prepares your future operations leaders.  There is a big push from the business to attend career events and recruit talent from the Ivy League schools in addition to other schools that are either within the same geography as your facilities or have MBA programs with an emphasis on productions/operations.  After five years of recruiting and hiring new MBAs from both groups of schools, you run your Retention analysis.  Your results show that MBAs from production/operations programs and regional schools have a retention rate of 78%, whereas your Ivy League schools have a retention rate of 42%, with most new hires separating between years 1 and 3 of employment.  Your Performance analysis shows the production/operations or local MBA hires consistently outperform your hires from the Ivy League schools.  If you factor in your investment in college recruitment efforts as well as in your leadership development program, there is a clear difference in terms of the ROI you get based on the type of school from which your hire came.  Shouldn’t those findings shape what schools you target in your next college recruitment cycle?

Example 2: Now, assume you work for a technology company that strives to be a leader in continuous innovation and product development.  Your college recruitment efforts are balanced between Ivy League schools and schools with strong technology programs, but when you look at your related expenses you see they are disproportionately spent relative to the number of hires you made from the two types of schools.  At the end of last year’s college recruitment cycle, your P&L shows an expenditure of over $45K for attending Ivy League School X’s career fair and getting access to resume books.  When you look at the Total Hires by School, you see that you made only one hire from Ivy League School X.  Was it worth it?  Should you keep that school on your list for this year or is your money better spent elsewhere?  Without having any distal data points to assess the ROI of the Ivy League School X’s hire, you might as well flip a coin at this point.  Fast forward 3 years out from paying that invoice to Ivy League School X for the single new college grad hire – your data shows that this hire, in her three years of employment with your company has developed and patented 3 products, which is 200% to 300% higher than any of her peers.  Do you still think it’s a good idea to drop Ivy League School X from your target list?

Staying focused on desired business results is what ultimately should drive your company’s college recruitment strategy.  And in order to stay focused, we need to be measuring the right things (or putting the right measuring processes in place to capture what really matters to the business), even if our patience for data availability may be taxed.  That is not to say that proximal process-related metrics such as Applicant-to-Hire, Interview-to-Hire, or Intern Conversion Rate do not matter – but without the ultimate goal in mind we may have a very efficient and effective process that yields all the wrong results to the business.

References:

_{1  Recruiting Benchmarks Survey Report: Key Measures for University Recruiting.  NACE, Oct. 2014}

_{2  NACE Worksheet: How to Calculate Cost-Per-Hire. NACE}

_{3  Current Benchmarks.  NACE}

_{4  Recruiting Benchmarks:  Offers and Acceptances. NACE, January 22, 2014}

_{5  2011 Recruiting Benchmark Survey:  Executive Summary.  NACE}

_{6  Professional Standards for University Relations & Recruiting.  NACE}