Recruitment Costs Soared in 2021 as More Opt for Remote Work

The cost of recruiting new workers skyrocketed in 2021 as a result of a COVID-19-induced mismatch in the labor supply, according to a report from Appcast, the programmatic recruitment advertising technology and services company.

Appcast’s 2022 Recruitment Marketing Benchmark Report is based on expansive data – 165 million job ad clicks and 8 million candidate applications – from nearly 1,200 U.S. employers.

The report found that cost per application (CPA) rose by 43% last year when compared to 2020. Meanwhile, the cost per click (CPC) on job applications rose by 54% – a sharp departure from the 11% increase recorded in 2020.

These sharp spikes in recruitment marketing costs, during one of the most challenging years in recent history, appear set to continue this year, Appcast said.

“Overwhelming demand for workers across all industries left job seekers with a wealth of options, allowing people to be more selective,” the report said. “Additionally, many remained concerned about COVID risks and this resulted in a slow rebound in worker participation – something the labor market continues to grapple with.”

At the same time, Appcast’s data on initial cost per hire (CPH) revealed that no single hiring source – job board, website or social media channel, for example – performed best for open positions across all industries. Instead, each hiring source delivered the lowest CPH for at least one job function, but also demonstrated weaknesses, the company said.

“These variations in the performance of various hiring sources emphasize the need for employers to diversify sources and ensure that down-funnel data is at the heart of recruitment advertising decisions,” Appcast noted.

The Rise of Remote Work

The report found that including “remote work” or “work from home (WFH)” in job ads resulted in a higher apply rate and lower CPA. Findings also showed that the median CPA dropped from $23.29 to $20.16 when the job ad mentioned remote work, representing a 13% reduction in costs.

In addition, when work from home options were mentioned in a job ad, the apply rate improved by 12%. This indicates a significant opportunity, with job roles that can be performed remotely, to reach and attract a broader pool of talent while reducing advertising costs.

More Jobs, Less Workers

Out of 24 job functions analyzed by Appcast, only six did not record a decline in their apply rates. The food service industry saw the most notable decline, 2.67%. Job functions with the sharpest declines were found in industries where concerns over COVID risks and working conditions precipitated today’s labor shortages.

While the customer service industry dropped by 1.64%, healthcare by 0.96% and Human Resources by 0.94%, the situation was different in manufacturing. There, jobs fared the best, with apply rates increasing by 3.61%.

“Manufacturing jobs are, on average, good jobs. The typical pay is higher than in many industries while the education requirement is typically a high school diploma. So, there are usually few openings in manufacturing,” said Andrew Flowers, labor economist at Appcast.

However, he added, changes in consumer habits and increased consumption of manufactured goods during the pandemic dramatically increased available job openings in the sector.

To improve recruitment efforts, the report suggested that talent acquisition teams adopt a mobile-friendly application process and emphasize remote work opportunities.

By Solomon O.

Solomon is a staff writer for RecruitingDaily and The HCM Technology Report.