How Cost Per Hire Is Killing Business – And It’s Not What You Think

How Cost Per Hire Is Killing Business – And It’s Not What You Think

Why is it that we obsess about metrics like cost per hire when the cost of not filling a job can literally kill an organization’s bottom line?


The Real Cost Per Hire

I was in a meeting with the CEO, CMO, Director of Recruiting, and key staffers at a Fortune 500 company. The discussion was on candidate flow and the difficulty they were having filling revenue-producing positions. As the company’s massive investment in equipment, bricks and mortar was lying idle, customers were passing them by.  

HR’s response to the talent shortage? They wouldn’t do anything to the recruiting strategy that would increase the company’s current $700 cost per hire by $50. 

Meanwhile, the CEO pointed out the cost of not filling a position, one position, was roughly $19,000 per month in lost revenue. When I heard there were about 1,000 open positions at the company, my jaw dropped.

HR was worried about saving $50 per hire while the opportunity cost per hire was $19,000 per month. The business was losing hundreds of millions in revenue because it wasn’t making hires.  But… HR was keeping that cost per hire number under $700.  So, save tens of dollars and not make millions.

Empty Seats Are Costing You

If your recruiting efforts aren’t keeping pace with your organization’s workforce needs, it may be time to gain a better understanding of what the cost of not making a hire really is. What is that empty seat costing you? What’s that empty mechanic bay costing you? That unfilled nursing slot? The missing restaurant manager? Or that empty hairstylist chair?

In conclusion, if you are in talent acquisition or HR, knowing the cost of not making a hire can make you a rock star to your CEO. When you consider the actual financial impact and lost opportunity, you may find a lot more budget and support for recruiting by framing the problem around the cost of not filling positions. The fact is, unfilled jobs are throttling the growth of most companies, and that’s probably the case at your company, too. 

CEOs and CFOs get it.

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If you are tired of lost hiring opportunities, let’s connect. I’d like to understand the issues your company is facing and how PivotCX can help. Let’s talk about your recruiting. 

Thankful for 2021: How COVID put PivotCX on the Path to Success

Thankful for 2021: How COVID put PivotCX on the Path to Success

With so much uncertainty due to the pandemic at the end of 2019 and beginning of 2020, it would have been hard to believe the year we’ve had and even harder to acknowledge that at this point, I would be thankful for 2021 and how COVID put PivotCX on the path to success.

The Beginning of the End…

 Last March, my start-up PivotCX (formerly known as WorkHere), had an awful, terrible, horrible month.

When COVID-19 hit, we lost 85% of our revenue. 

It was a business nightmare! I dreaded answering the phone. One after another, customers would call, apologize for canceling, and blame the pandemic — nothing else we could do about it.

But why? Our software was terrible. It was so bad we had started a live chat service to operate the software, so our customers didn’t have to. I thought long and hard about shutting it down. 

Things were so uncertain in April of 2020; no one knew what would happen with COVID. At the time, there were no vaccines and even fewer answers.

All but three of our best long-term accounts left us. Then, our VP of Sales and CTO both left the company.  

To make matters worse, we were close to running out of money. I had to shift gears and build new software since we didn’t have money for a development team. 

Looking back on it, I’m not surprised by the cancellations. Our product was a poorly executed “Yelp for Jobs,” and it was 100% extra during the pandemic. The company was in zombie mode; churn numbers were high, and the product delivered little value versus every other job board. 

Salvageable Pieces

Consequently, we talked to the three accounts that stayed onboard. In all cases, the customer used our live human chat service to engage job applicants right after applying. Just think, you apply on Indeed, and you get a text message a few seconds later and can immediately talk to someone about your application. The service wasn’t sexy: it was high touch, and everyone was in love with AI and chatbots.

As I talked to these three customers, three themes came out:

  • First, our service was critical to our customer’s business in the pandemic. 
  • Second, our customers were saving incredible amounts of time by having our chat teams handle everything from application to interview.
  • And last of all, EVERYONE liked having live people the candidates could talk to and ask questions. It was a huge competitive advantage for our customers and it helped them differentiate them from their competitors who deployed chatbots.

On the Path to Success

Instead of closing down, my remaining cofounder, Howard Bates, and I decided we would take the rest of 2020 to make new software and see if we could make something great happen.

To put PivotCX on a path to success, we scraped together enough to hire a junior developer. Then we decided to build our new software by working closely with our three remaining customers. They told us what they needed, and we built it. 

By January of this year, we had $5,300 in revenue.  Our expenses were nearly four and a half times revenue. We only had a few months of runway left.  Our software was almost ready. 

 So, we did what any self-respecting entrepreneurs would do: hit the launch button

What a launch it was!

By July, we had hit $50,000 in monthly revenue.

In October, we were at $80,000. 

We’re now closing in on our first $100,000 month.

2021 has been nothing short of a miracle. Every day it feels like we are zeroing in on something special. It turns out enabling a better experience from apply-to-hi, and hi-to-hired for recruiters and job seekers is game-changing. 

COVID-19 provided us an opportunity to shift our focus, and put PivotCX on the path to success, but without listening to our customers, we could not have made it.

To the customers that stayed with us, Thank You for inspiring and guiding us.