What are the risks employers face when paying a low cost per lead or application when posting job ads?

Before we dive into the meat of the conversation, let’s just be sure that we’re on the same page: a cost per application (CPA) in the context of job posting ads is the same as a cost per lead (CPL). Consumer marketers, those who promote products and services, are used to talking in terms of leads. But employment marketers, such as recruiters and others in talent acquisition, typically refer to the cost per application. Again, they’re the same.

Recently, we had a conversation with an employer who plans to hire hundreds and perhaps thousands of college and university students over the coming months to do what amounts to skilled data entry: they’re going to check content generated by artificial intelligence to make sure that it is accurate. If they find so-called hallucinations, they’ll report those problems, and that feedback will lead to higher quality output by the generative AI product. That may be interesting to some, but isn’t really the point of this blog article.

What prompted the writing of this article is that the employer has been quoted by a well-known job board a price of $1 per application. The cost per application that employers should pay when advertising a job varies considerably by job function or, as many call it, occupational field. To help employers figure out how much they should pay on a cost per click (CPC) or CPA basis when advertising a job, we compiled the low, median, and high ranges from data gathered from hundreds of job boards, including College Recruiter. The 24 fields listed do not include one for data entry, but it is within the administration field. According to the data, costs per lead for administration roles range from $6 to $28 with the median being $17. Again, the employer was quoted $1, so that’s 1/6th of the low range and 1/17th of the median.

When employers decide to pay for candidate traffic on a cost-per-lead (CPL) basis, they’re often attracted to the idea of getting a set number of candidates for a fixed cost per job application. While this might seem like a great deal, especially when the cost per lead is significantly lower than the prevailing rate, it can expose employers to a number of risks, particularly in terms of candidate quality.

When an employer is paying below-market rates for candidate leads, the first and most obvious risk is a drop in quality. Job boards and programmatic ad distributors who charge lower CPLs often need to make up for the reduced price by increasing volume. This can lead to a flood of applicants, many of whom may not be qualified or even relevant for the position. Employers end up spending more time and resources sifting through unqualified resumes, which can reduce the overall efficiency of their hiring process.

Lower CPL rates can also drive traffic from less reputable sources. Job boards or programmatic platforms may partner with low-quality sites or even spammy networks that prioritize quantity over quality. In these cases, leads might be generated through clickbait ads or incentivized applications where candidates apply to jobs they’re not interested in just to earn rewards. This leads to a sharp decline in candidate engagement and can hurt the brand reputation of the employer as well.

Another significant risk comes from a lack of transparency in the sourcing of leads. With lower CPLs, there’s often less accountability on the part of the job board or ad distributor to ensure that the candidates they’re delivering meet the criteria set by the employer. In some cases, these leads could come from outdated databases or irrelevant channels, where candidates may no longer be actively seeking employment. This leads to wasted resources as recruiters reach out to candidates who have little to no interest in the position, further complicating the hiring process.

Moreover, paying below the prevailing CPL rate can distort the metrics that employers use to assess the effectiveness of their recruiting efforts. Hiring managers might see a higher volume of applications and assume that the campaign is working, only to realize later that most of the candidates aren’t progressing beyond the initial application stage. This false sense of success can mask underlying inefficiencies and mislead decision-makers into continuing with ineffective recruiting strategies.

There’s also the potential risk of fraud. In some cases, low CPL rates can attract bad actors who generate fake or bot-driven leads to inflate application numbers. These fraudulent leads not only waste the employer’s time and money but also undermine trust in the recruitment process. While fraud detection technologies exist, they may not always be employed by platforms offering lower-cost leads, leaving employers vulnerable to these kinds of scams.

Lastly, paying significantly less than the going rate for leads can impact the employer’s relationship with the job board or programmatic distributor. If a job board feels that they’re not being adequately compensated, they may deprioritize the employer’s listings or place them in less visible locations, further reducing the quality of traffic. Over time, this can lead to a breakdown in trust and collaboration between the employer and their recruitment partners.

Employers should be wary of CPL deals that seem too good to be true. While it’s natural to want to save money, paying far below the market rate can introduce risks that ultimately outweigh the savings. Instead of focusing solely on cost, employers should prioritize transparency, quality assurance, and accountability in their partnerships with job boards and programmatic ad distributors to ensure that they’re getting the right candidates, not just the most candidates.