How to Calculate the ROI of Online Communities

By Richard Millington

Chapter 10.9  LinkedIn  Google Plus
ROI People

Cost per qualified applicant (CPQA) is similar to the cost per applicant (CPA), but includes two important elements. The first is that the applicants are vetted to those that meet specific criteria. This saves the organization significant time in processing a large number of unqualified applicants and checking references, etc.

The second is that this often includes a recruitment agency cost. This means they have spoken to the applicant and know the applicant is interested in the position. The major cost saving here is that a community alleviates the need to use a recruitment firm or a headhunter.

A community can help qualify an applicant by being able to assess their knowledge and interest via their previous contributions within the community. For example, communities in technical areas (e.g. coding) can show a previous code contributed by members.

Communities in law can showcase a legal applicant’s previous insights and opinions on critical cases. This can reduce the cost required to vet applicants.

This follows the same process as above with the additional cost of a member of staff’s time to vet applicants via their community score, or contribution is included on the community side and the cost of agency or staff fees for vetting applicants is included in the cost via external sources. It is also possible to include productivity loss in the time to hire category. Notice, here, that this is where the value of a community stands out.

To measure this, you need the same data as before, but with one minor twist:

  1. Cost per qualified applicant via the community (time spent writing the job advert, filtering spam, vetting applicants/interviews, overheads).
  2. Number of qualified applicants received via the community.
  3. Cost per qualified applicant vs. other methods (time spent writing the job advert, filtering spam, headhunter/recruitment agency, posting job advert on job boards).
  4. Number of qualified applicants recruited via the community.
  5. Total number of qualified applicants recruited via the community.

Community ROI Template

You can drop these metrics into this spreadsheet. As it is very similar to CPA, we have not repeated the process here.

screenshot-2016-09-02-10-52-22

Summary

  1. Cost per qualified applicant (CPQA) is similar to CPA, but includes the costs involved in recruiting and vetting applicants.
  2. Communities can increase CPQA by using contributions and participating in the community as a gage for vetting applicants quicker and cheaper. This reduces the headhunter costs.
  3. The measurement process is otherwise the same as CPA.

Chapters

Share

 LinkedIn LinkedIn

 Google Plus Google+