December 15 , 2017

Revelation — Treating Job Applicants Who Are Also Customers Poorly Is Costing You Million$

If the customer is always king, then an applicant who is simultaneously your customer must also be treated like a king.

If you recruit at a firm that has retail customers, I guarantee that you don’t know the answer to this important question: “Do you have data showing what percentage of your rejected job applicants are also your product customers?”

Imagine what the reaction of executives would be when they discovered that 18 percent or almost 1 in 5 of applicants were also your customers (I call them “applicants/customers”). And consider the angst if executives further knew that 6 percent of these rejected applicants/customers dropped the firm’s product almost immediately (within one month). Finally, consider their frustration when executives learned that this applicant/customer loss was costing the firm over $5 million each year. Well, that’s precisely what the cable TV firm Virgin Media found to be happening.

This same expensive applicant/customer loss is likely occurring at your corporation. And you can’t do anything about these negative customer impacts caused by a bad recruiting experience because sadly, you don’t even know which of your current applicants are also your customers!

The dollar losses from treating applicants/customers poorly will likely exceed your entire yearly recruiting budget.

If You Decide to Act — Action Tips For Minimizing Applicant/Customer Losses

Once you become aware of this problem and its costs, you then you must take action. So as an expert in the field of “hiring your customers,” I offer these seven action tips to consider once that you decide that it is a business imperative to reduce your firm’s applicant/customer losses.

  1. Calculate what percent of job applicants are also your customers  if you link your applicant and your customer databases, you can identify the percentage of applicants who are also customers. Get an estimate first in order to determine if the percentage of applicants/customers is high enough to warrant action (e. above 5 percent). An alternative approach is to simply ask each new applicant when they apply if they are a current customer.
  2. Make an estimate of the dollar losses from losing applicants/customers — take a random sample of rejected applicants/customers and determine what percentage have stopped purchasing within one to three months after being rejected. Work with the CFO’s office to estimate the total dollar impact on product sales of losing those applicants/customers. Note that the Virgin Media research found that 2/3 of all rejected applicants are “detractors,” meaning that they won’t recommend the firm to others. Use the combination of these numbers to bolster your business case for improving the candidate experience overall, especially for your applicants/customers.
  3. Determine how you will treat applicants/customers differently — obviously, you can’t reduce the loss of applicants that are also customers unless you change the way that you treat them. Generally speaking, it is a legal requirement that the actual selection process needs to be uniform across all applicants. However, that is less of an issue if your customer base is diverse. You should, however, use “the knowledge of the firm and its products” that a long-time customer would have as one of your selection criteria. Before you design and implement a formal process, you must decide how you will treat them differently. Some of those “treat them differently” options include:
  • Acknowledge applications — directly and personally acknowledge by email that you know that an individual applicant is a customer.
  • Thank-you notes to rejects — if an applicant/customer is eventually rejected, once again personally respond with an enthusiastic thank you for both applying and remaining a customer.
  • Consider giving them honest feedback — although it will take extra work. You can reduce the number of applicant/customer losses if you provide periodic feedback on how they’re doing. And if they are rejected, provide limited feedback on anything they can do to improve their chances in the future.
  • Applicant/customer recruiting experience surveys — for all applicant/customer rejects, send them a “candidate experience” survey to gauge how they were treated and if they have any animosity. Identify the specific elements of the hiring process that had the largest impact on driving them away as a customer.
  • Give rejects a gift — consider sending rejects a product discount, a gift, or something of value to reward them for applying and thank them for being a customer. At one Midwestern bank, giving all rejects a free checking account with $25 in it proved to have a huge ROI.
  • Encourage them to reapply — actively encourage qualified rejects to reapply if there is a reasonable chance they may be hired for this job in the future. If they just need a little more of something in order to succeed, let them generally know what that is.
  • Redirect the best to another job — if you have the resources, have a recruiter identify other jobs that the best applicants may be qualified. Include their resumes in the applicant pool of the additional jobs that they do have a reasonable chance of getting.
  • Contact your lost applicants/customers — if you find that you’re losing great customers, work with your customer service function to develop a process that directly contacts the high-value ones that you have lost in order to see if the relationship can be rebuilt.
  1. Develop a process for identifying current applicants who are also customers — develop a cross-checking mechanism between the application and the customer databases. Then you need a process that marks or tags applicant/customer resumes and then alerts recruiting whenever a known customer applies for a job. If an applicant/customer gets an in-person interview, make sure that the recruiter and a hiring manager are aware of their customer status so that they can be especially courteous. Thank applicant/customer interviewees in-person for their loyalty to the firm.
  2. Track your applicant/customer drop rate each year — develop metrics and at least once a year track the percentage of applicant/customers that stop or dramatically decrease purchasing. Also, track success by individual recruiter and have a metric for identifying if overall you are actually executing the promised approaches for treating applicants/customers differently. Recognize or even reward hiring managers and recruiters who minimize their customer losses.
  3. Encourage your customers to apply for your jobs — develop a recruiting process for proactively encouraging customers to apply for your jobs. I’ve written extensively on the value of hiring your own customers. They are an ideal recruiting target because they are easy to find, they know and value your product, they live close, and they likely already admire your firm.
  4. Measure your candidate experience for all applicants — you should have a survey process that sends a candidate experience survey to a sample of all applicants. The goal is to improve the candidate experience for everyone, even while you are focusing on applicants/customers.

If you found that 2/3 of your frustrated customers wouldn’t recommend your firm, you would act immediately to change the customer experience. However, when 2/3 of rejected applicants (including perhaps 20 percent that are current customers) won’t recommend your firm to others, recruiting does nothing.

Final Thoughts

Like it or not, most executives spend little time worrying about the impacts of recruiting’s candidate experience. However, that mentality changes immediately when they know that recruiting is infringing on the customer relationship and directly causing the loss of retail customers.

Fortunately, there are some easy solutions.

To start with, recruiting leaders need to be unaware that a firm can improve its candidate experience dramatically with a few simple and inexpensive steps. If you analyze the results of surveys on a bad candidate experience, often you find that the highest impact “frustrator factors” are relatively simple to remedy. Those frustrator factors often include not acknowledging the receipt of their initial application, keeping the steps of the hiring process secret, the likely timeline of the hiring process, and not having their final rejection acknowledged in a timely manner.

And applicants/customers do expect a little more, including acknowledging that you know that they are customers, thanking them for expressing their interest by applying, encouraging them to continue to be customers after they are rejected, and at least a minimal effort to maintain the recruiting relationship over time. And finally, the overall key lesson to be learned is that you need to treat all elements of the customer relationship well. And that shouldn’t stop just because they are an applicant for your job.

If you found this article to be helpful, connect with me on LinkedIn.

As seen on ERE Media, July 24, 2017. 

Image: StockSnap.io

About Dr John Sullivan

Dr John Sullivan is an internationally known HR thought-leader from the Silicon Valley who specializes in providing bold and high business impact; strategic Talent Management solutions to large corporations.