Risks to employers if they pay too low of CPA when posting business / consumer services job ads

When employers pay significantly less than the industry standard of $21 per lead for job applications in business or consumer services, they face considerable risks, especially concerning the quality of applicants. Job boards or programmatic ad platforms offering lower costs may cut corners by driving traffic from less reliable sources, leading to a flood of unqualified or irrelevant candidates. This forces employers to invest additional time and resources in filtering through large volumes of applications, only to end up with fewer qualified leads. The cost savings can quickly disappear as the efficiency of the hiring process declines.

Beyond quality concerns, paying below the market rate may attract fraudulent activity, where bots or other deceptive methods generate fake applications to meet lead quotas. This not only wastes recruiters’ time but can also skew recruitment metrics, creating the illusion of high engagement. Employers might assume their hiring campaigns are performing well based on volume alone, but when these leads don’t convert into quality hires, the true cost of the cheaper CPL strategy becomes evident. The long-term damage to the hiring pipeline and overall business operations can be far more significant than the upfront savings.

Data gathered from hundreds of job boards shows that the effective cost per application when employers advertise a job is $21 if the job function is business/consumer services. What quality and other risks do employers face if they pay a small fraction of the going rate to a job board or other vendor per job application? Here is what 16 thought leaders have to say.

• Risk of Unqualified Candidate Flood
• Quality Over Quantity Saves Resources
• Targeted Ads Attract Qualified Candidates
• Cheaper Leads Risk Hiring Quality
• Pre-Screening Questionnaires Enhance Efficiency
• Cheap Leads May Increase Training Costs
• Hidden Costs of Cheap Recruitment Leads
• Compromised Quality and Brand Reputation
• Invest in Quality Leads for Top Talent
• Low-Cost Leads Extend Hiring Process
• Advanced Targeting Worth Extra Cost
• Cheap Leads May Lower Conversion Rates
• Cheap Hiring Can Damage Employer Brand
• Legal Risks with Low-Quality Candidates
• Low CPL Leads to Wasted Resources
• Service Quality Suffers with Cheap Hiring

Risk of Unqualified Candidate Flood

If you’re cutting corners on lead generation, you might end up with unqualified candidates who don’t fit your needs. That can waste a lot of time and resources. Low-cost leads often come from questionable sources. You might find yourself attracting candidates who are just looking for any job, not necessarily the “right” job. It’s going to lead to higher turnover rates.

Every time you hire someone who isn’t a good fit, it costs you. The average cost of replacing an employee can be six to nine months of their salary. That’s a huge hit for any business. Right from their onboarding to their training, support, and resources—all of it adds up and leaves you at a loss.

Jess Rodley, Bookings Director, Andorra Escapes

Quality Over Quantity Saves Resources

Looking for cheaper options to get job applications can seem like a smart way to save money, but it often backfires. When employers pay a small fraction of the going rate, they usually get what they pay for—lower-quality leads. These applicants might not have the right skills or fit for the role, which means more time and resources spent sorting through unqualified candidates. I’ve seen businesses struggle with this firsthand, spending more on fixing hiring mistakes than if they had invested in quality leads from the start.

Focusing on quality over quantity can make a huge difference. One good way to maintain high standards while managing costs is to use a well-defined job description and a targeted advertising strategy. Ensure the job ad clearly outlines necessary skills and experiences, and use platforms that specialize in your industry. This approach not only attracts better candidates but also saves time and resources in the long run. Think of it like shopping for a rug—you’re better off buying a well-made piece that lasts, rather than going for the cheapest option that falls apart quickly.

Connor Butterworth, CEO & Owner, Southwestern Rugs Depot

Targeted Ads Attract Qualified Candidates

When employers choose to pay much less than the average $21 per application for business or consumer services roles, they risk attracting lower-quality applicants. An inexpensive ad might seem like a good deal, but it often means casting a wider net indiscriminately. Without the targeted reach that comes with higher-cost advertising, your job posting may end up in front of people who aren’t a good fit for the role. This can lead to spending more time sifting through unqualified candidates, which in turn delays the hiring process and increases your workload.

One effective way to mitigate these risks is to use a targeted job ad platform that offers precise demographic and professional targeting. Platforms that allow you to aim your ads at specific skill sets, education levels, or past job experiences can help ensure that your listing attracts qualified candidates, even if the cost per application is higher. Think of it as investing in quality over quantity; you’re far more likely to find the right fit quickly, saving time and resources in the long run.

Casey Meraz, CEO, Juris Digital

Cheaper Leads Risk Hiring Quality

Cost efficiency does not equate to value when it comes to recruitment advertising. Seeking cheaper avenues to save on hiring can lead to lower-quality job applicants, creating a greater risk in finding the right fit for the role.

One of the major issues that arise when reducing spend on recruitment advertising is the lesser visibility on leading job boards, which could result in missing out on capturing high-caliber candidates. Employing cheaper vendors can also lead to inadequate research and potentially less enticing job descriptions, which won’t attract top professionals.

Aside from quality implications, there are additional risks in potential time inefficiencies; these might include a longer time to hire due to the increased sorting through unfit applications, subsequent drain on resources, and the possibility of unfilled positions for longer periods. In essence, while the cost might seem lower at first glance, the impact on the long-term success of your enterprise might tell a completely different story. Investing properly in recruitment can ultimately lead to a stronger, more effective team, which in turn supports business growth.

Gianluca Ferruggia, General Manager, DesignRush

Pre-Screening Questionnaires Enhance Efficiency

Opting for cheaper job leads can seem like a smart move initially, but it often comes at the expense of quality. Employers who pay significantly below the standard $21 per application are likely to attract a less-qualified pool of candidates. This can result in a higher volume of applications from individuals lacking the required skills, ultimately wasting time and resources in the screening process.

To mitigate this risk, consider implementing a robust pre-screening questionnaire. Tailor your questions to filter out unqualified applicants early on. This helps ensure that only candidates who meet the essential criteria proceed to the next stage, saving time and enhancing the overall efficiency of your hiring process. Investing in quality at the outset often pays dividends in the long run, leading to better hires and a more streamlined recruitment experience.

Jessica Bane, Director of Business Operations, GoPromotional

Cheap Leads May Increase Training Costs

In the field of recruitment, cheaper isn’t always better—especially when the goal is to find high-quality leads for job functions within the business/consumer services sector. We’ve encountered scenarios where opting for lower-cost application leads led to significant challenges. 

Firstly, the quality of applicants can be compromised. Low-cost leads often attract a high volume of applicants who may lack the specific skills or qualifications necessary for the role, leading to a longer and more inefficient screening process. Secondly, it can potentially damage brand reputation. If a job is advertised on a platform seen as “cheap” or “low value,” it may reflect negatively on the company itself and deter qualified candidates from applying. 

Finally, it might result in higher training costs. Hiring less qualified applicants generally implies a higher need for training and development, which could result in additional costs that exceed initial savings.

Greta Maiocchi, Head of Marketing & Admissions, OPIT

Hidden Costs of Cheap Recruitment Leads

We’ve learned that cheap leads often come with hidden costs. Quality issues, like outdated information or unqualified candidates, can waste valuable time and resources. It’s crucial to balance cost-effectiveness with lead quality to ensure a positive ROI on your recruitment efforts.

Yarden Morgan, Director of Growth, Lusha

Compromised Quality and Brand Reputation

For me, cutting corners on recruitment can lead to significant risks.

When employers pay well below the market rate for job advertising and lead generation, they face several potential risks:

1. Lower-quality applicants: Paying competitive rates for job advertising tends to attract higher-quality candidates. Cheaper options might flood you with unqualified applicants, wasting time and resources.
   
2. Reduced visibility: Low-cost job postings may not receive prime placement on job boards. This could mean your job ad gets buried, attracting fewer qualified candidates.
   
3. Limited targeting capabilities: Budget options often lack sophisticated targeting features. You’ll waste effort on candidates who aren’t a good fit.
   
4. Poor candidate experience: Cheap platforms might offer a clunky application process, potentially turning away good candidates.
   
5. Lack of analytics and reporting: Low-cost vendors may not provide detailed insights into your recruitment efforts. Without this data, you can’t optimize your hiring process.
   
6. Potential for scams or fraudulent applications: Bargain-basement prices might attract less reputable vendors, increasing the risk of dealing with fake applications or even data breaches.
   
7. Misalignment with company brand: Using low-quality job advertising platforms could reflect poorly on your company’s image.

In recruitment, you often get what you pay for. While it’s tempting to cut costs, investing in quality lead generation can save money in the long run by improving the efficiency and effectiveness of your hiring process.

David Primrose, President, Metal Marker Manufacturing

Invest in Quality Leads for Top Talent

We’ve seen firsthand the risks of cutting corners on recruitment. Cheap leads often result in unqualified candidates, wasting valuable time and resources during the screening process. Moreover, subpar applicants can damage your employer brand and potentially lead to costly mis-hires. It’s crucial to invest wisely in quality leads to attract top talent that aligns with your organization’s values and objectives.

Barbara McMahan, CEO, Atticus Consulting LLC

Low-Cost Leads Extend Hiring Process

In my experience as an HR Director, trying to cut costs aggressively on job advertising can lead to various potential risks. One significant risk is compromising the quality of job applicants, resulting in receiving applications from less qualified or unsuitable candidates. This can result in an extended hiring process, indirectly increasing the overall hiring costs. Additionally, it’s not uncommon to see lower employee retention rates as a consequence of hiring less qualified talent, leading to higher turnover costs in the long run.

Another aspect to consider is the vendor’s service quality. If they are charging significantly below the market rate, they may compensate by offering limited customer service or features. It could mean limited exposure for job ads, a weak applicant tracking system, or below-par applicant assessment tools. This negatively impacts the overall effectiveness of the recruitment process, making it more challenging to secure the best talent. 

From a real-life example, we once decided to transition to a cheaper vendor, and this decision led to shortcomings like limited customer support and less sophisticated applicant management solutions, ultimately undermining our recruitment efforts.

Lily Wang, HR Director, Relyir

Advanced Targeting Worth Extra Cost

When an employer pays only half of what’s typical in business/consumer services ($21 per application), they risk damaging applicant quality—and their data analytics. You can definitely get more applications for less money by choosing cheap leads, but that doesn’t mean those applications will be great. 

Perhaps your analytics will show your “campaign” as a success, when in fact you’re drawing applicants from an unusually weak talent pool. You might find that the effort and other resources you have to expend in screening out the cream of your massive, mediocre applicant pile are equivalent to, or even greater than, what you saved on your lead costs.

Looking at it from a strategic angle, cutting down too much on what you pay per lead can mean you miss out on the more advanced targeting and screening technologies that often come with pricier services. These technologies help filter the applicant pool before you even see the applications, which ensures you’re more likely to get a batch that meets your job requirements.

Thomas Franklin, CEO, Swapped ApS

Cheap Leads May Lower Conversion Rates

In my experience as a founder in the e-commerce sector, I have often encountered the phrase, “You get what you pay for.” While it’s possible to source job applications for a fraction of the general cost, it comes with significant risks. First, in the world of recruiting, quality often correlates with cost. Paying less could compromise the quality of your candidates, with the risk of attracting less qualified or mismatched candidates. 

I faced a situation during the early days of my website, where, in an attempt to widen my market reach, I started using cheap but inefficient platforms. The end result was an increase in web traffic, but a significantly lower conversion rate. Similarly, in hiring, quantity doesn’t always mean quality. 

Next, consider the vendor’s ability to deliver. If they’re charging significantly less than the market rate, they might be cutting corners too. Could those corners include outdated data, poor user experience, or compromised privacy safeguards that affect the reputability of your brand?

Finally, the inconsistency of lower-cost leads can lead to a lengthier hiring process, straining internal resources. From my experience managing high-value portfolios, I learned that a well-considered investment often leads to better long-term returns; it’s worth considering a similar approach when it comes to hiring.

Kunal Madan, Founder, Amarra

Cheap Hiring Can Damage Employer Brand

In my experience, anytime you don’t pay the advertised $21 cost per application, including in the business/consumer services sector, you’re getting into trouble in more ways than one.

The most direct risk is the quality of the applicants. If the vendor is charging a lot less than the typical $21 cost per applicant, they’re likely being less thorough about sourcing or screening them. You might get many more applications, but the quality of those applicants might be lower than what you typically get, or they might be for jobs that are less of a fit than you’d prefer. You’re paying less upfront, but winding up investing more of your time and effort on sifting through applicants who are lower in quality or not as good a match.

Secondly, there is the risk to your employer brand. If it becomes known that your company is a cheapskate when it comes to hiring, this might signal to prospective high-quality applicants that you undervalue staff generally, or perhaps that you don’t like to spend money on the management of quality talent. This will deter the very best applicants in the future—and can lower the quality of your entire workforce. A good investment here would be in a good applicant tracking system (ATS) that can link to the job boards and sort through the candidates based on certain parameters.

Jay Soni, Founder and CEO, Yorkshire Fabric Shop

Legal Risks with Low-Quality Candidates

When employers pay significantly less than the market rate for job applications, they often compromise on the quality of candidates. Lower-priced leads might result in poorly qualified applicants, leading to wasted time and resources in screening and interviewing. There’s also a higher risk of inaccurate or outdated information in the applications, which increases the chances of turnover and mis-hires. Additionally, low-quality vendors may not adhere to compliance standards, exposing employers to legal risks. In the long run, saving on upfront costs can lead to higher expenses in recruitment and training.

Ronald Osborne, Founder, Ronald Osborne Business Coach

Low CPL Leads to Wasted Resources

As the head of a digital marketing agency, I have seen the risks of low-cost leads firsthand. Paying bargain prices often means sacrificing quality and relevance. Irrelevant leads waste resources and yield no results. 

Another risk is reputation damage. Unqualified applicants reflect poorly on a company and turn off quality candidates. I’ve seen businesses struggle to shake a reputation for disorganization after a messy hiring experience with underqualified applicants from cheap lead sources.

While the upfront savings of low-cost leads seem attractive, the long-term costs to productivity, resources, and brand reputation often far outweigh any benefits. My advice is to focus on quality over quantity and invest in relevant, targeted leads from reputable sources. Bargain hunting often leads to more headaches than help.

Luke Heinecke, CEO, Linear

Service Quality Suffers with Cheap Hiring

In the business/consumer services sector, opting for bargain-basement lead costs often backfires spectacularly. We’ve seen clients lured by rock-bottom prices, only to face a tsunami of unqualified applicants. When companies pay significantly less than the standard $21 per application, they’re inviting a host of problems.

The consequences are far-reaching: overwhelmed HR teams, extended hiring timelines, and increased onboarding costs due to high turnover. Most critically, service quality suffers. In an industry where your staff is essentially your product, this approach is akin to using subpar ingredients in a gourmet dish. It might save money initially, but it costs dearly in reputation and repeat business.

Bottom line: Quality applicants are your frontline brand ambassadors in service roles. Cutting corners on recruitment can lead to long-term brand damage and customer churn. It’s crucial to invest wisely in your talent pipeline to ensure service excellence and maintain a competitive edge.

Aaron Whittaker, VP of Demand Generation & Marketing, Thrive Digital Marketing Agency