Risks employers face if paying too little per application when hiring for retail jobs

When employers in the retail industry pay less than the typical $17 per application, they risk attracting a large number of unqualified or inexperienced candidates. Retail jobs often require strong customer service skills, attention to detail, and the ability to work efficiently in a fast-paced environment. By paying below the market rate, employers may receive an influx of applications from individuals who lack these essential qualifications, leading to increased time spent filtering through unfit candidates. This not only delays the hiring process but also forces managers to dedicate more resources to recruitment, negating any initial cost savings.

Additionally, paying below the standard rate for retail applications can result in skewed recruitment metrics. While employers might see an increase in application volume, the quality of those applicants may not meet the needs of the business. Retail positions require individuals who can enhance the customer experience and contribute to the overall success of the store, and hiring the wrong candidate can lead to higher turnover rates, poor customer interactions, and decreased sales. In the long run, the cost of frequent rehiring and lost sales can far outweigh the short-term savings from lower-cost applications.

Data gathered from hundreds of job boards shows that the effective cost per application when employers advertise a job is $17 if the job function is Retail. What quality and other risks do employers face if they pay a small fraction of the going rate to a vendor for these leads?” Here is what 9 thought leaders have to say.

• Risks of Poor Customer Service Skills
• Prioritize Quality Over Cost for Success
• Hidden Costs of Cheap Job Leads
• Invest in Quality Recruitment
• Ethical and Technological Risks of Cheap Leads
• Compromised Candidate Quality and High Turnover
• Impact of Low-Quality Leads on Recruitment
• Quality and Misrepresentation Concerns
• Effect on Innovation and Competitive Advantage

Risks of Poor Customer Service Skills

Retail is less risky to do this than many other fields, but that’s not to say that paying significantly less than the average cost per application won’t lead to sourcing candidates who lack customer service skills or don’t fit the company culture. Retail positions, especially those in customer-facing roles, require employees who can provide exceptional service and handle high-pressure situations, such as peak shopping hours or resolving customer complaints. This means paying for those skills, and lower-priced vendors may fail to adequately screen for everything you’d need in a trusted employee.

Dragos Badea, CEO, Yarooms

Prioritize Quality Over Cost for Success

Choosing lower-cost leads can seem tempting, but the risks often outweigh the savings. In a past campaign, we experimented with a vendor offering bargain leads. While the initial cost was appealing, only 15 percent of those applicants turned into successful hires. This not only drained our resources but also impacted team morale. Quality applicants lead to better performance and engagement, reinforcing the idea that investing in reliable sources pays dividends. The key takeaway is clear: prioritizing quality over cost fosters stronger teams and drives lasting success.

Alex Taylor, Head of Marketing, CrownTV

Hidden Costs of Cheap Job Leads

Paying significantly less than the standard rate for job leads can be tempting, but it often comes with hidden costs that outweigh the savings. Here’s why:

1. Quality of Candidates: Vendors offering leads at a fraction of the cost typically don’t invest in thorough screening processes. This can result in a flood of unqualified applicants, requiring you to spend more time and resources filtering through them.

2. Time and Efficiency: Lower-quality leads can lead to extended hiring times. Instead of finding the right candidate quickly, you might find yourself months down the line still searching, which can affect your operations, particularly in the fast-paced retail sector.

3. Employee Turnover: Poor-quality hires are more likely to leave the company quickly, either because they weren’t a good fit or they weren’t adequately prepared for the role. High turnover rates are costly and can harm team morale.

4. Reputation and Brand Impact: Constantly hiring and firing can give your company a bad reputation in the job market. Talented candidates may avoid your openings if they hear about your revolving door of employees.

I remember one instance when we tried to cut costs by using a cheaper vendor. We ended up with a stack of résumés that were completely irrelevant. It was a wake-up call; we realized that investing in quality leads saved us money in the long run by reducing turnover and ensuring a better fit for our team.

In short, while the upfront cost savings might look attractive, the downstream effects can be costly and damaging. Stick to reputable sources that offer quality leads, even if it means paying a bit more. Trust me, the investment will pay off.

Jose Gomez, Founder & CTO, Evinex

Invest in Quality Recruitment

Paying a fraction of the going rate for applicant leads is a risky gamble that rarely pays off. In my experience, I’ve seen companies struggle with high turnover and poor performance after using cheap hiring solutions. These vendors often lack proper screening processes, leading to misaligned hires that don’t fit company culture or possess the necessary skills. It’s crucial to invest in quality recruitment to build strong, productive teams—something I’ve helped numerous clients achieve through our tailored hiring strategies.

Barbara McMahan, CEO, Atticus Consulting LLC

Ethical and Technological Risks of Cheap Leads

Employers that engage with discount vendors to get job applications (much less than the typical $ 17 per application for retail jobs) are potentially engaging with vendors that are not ethical in their hiring practices. These vendors, for instance, can use aggressive or illegal strategies to acquire lots of applications quickly. This may result in spamming potential applicants or altering job descriptions to garner more applications—potentially damaging the employer’s image if exposed.

In addition, the use of such vendors could cause technological gaps between the technology architecture for a vendor’s process for receiving and transferring applicant data, and the system architecture of an employer’s systems. Free alternatives might not invest in a seamless, secure API or platform that offers data integrity and integration. This can cause significant administrative problems, data entry mistakes, and even hacking involving valuable applicants’ data. Employers should take these broader considerations into account, since the monetary savings might come at a far greater cost to the employer in terms of operational disruption and/or lost reputation in the marketplace.

Jay Soni, Founder and CEO, Yorkshire Fabric Shop

Compromised Candidate Quality and High Turnover

If employers pay a fraction of the typical $17 cost per application for retail roles, they can face several quality and operational risks. First, candidate quality is often compromised. Cheaper vendors might source leads from less reputable job boards, resulting in a flood of unqualified applicants, which leads to wasted time filtering through unsuitable résumés and more difficulty finding the right talent for retail roles that require specific customer-service or sales skills.

Another issue is poor targeting. Lower-cost providers may not invest in the necessary targeting tools to ensure they’re reaching the right audience, which means more irrelevant applications from people who may not meet even the basic requirements of the job.

Additionally, there’s a risk of high turnover. If you’re hiring through vendors offering a lower-quality pool of candidates, you may end up with hires who are less engaged or committed, leading to higher turnover rates and additional costs in rehiring and retraining.

Lastly, lead duplication is a common issue with cheaper vendors—your leads might be shared with multiple companies, making it harder to secure top candidates in a competitive job market.

Kenan Acikelli, CEO, Workhy

Impact of Low-Quality Leads on Recruitment

Employers that pay a small fraction of the standard cost for job leads often face several risks that can impact the quality of their hires and the efficiency of their recruitment process. One of the biggest risks is attracting lower-quality candidates. Vendors offering significantly cheaper leads may not have the same rigorous sourcing or vetting processes. 

As a result, the employer ends up receiving applications from individuals who lack the necessary skills, qualifications, or motivation for the role. This can lead to time-consuming filtering, increased interview processes, and potentially making poor hiring decisions.

Additionally, hiring candidates from low-quality leads often results in higher turnover rates. Candidates who are not well-matched for the role may leave or be terminated quickly, causing the employer to repeat the hiring process. This turnover not only increases costs in the long run but also disrupts operations, particularly in retail environments where consistency and employee familiarity are critical during peak seasons.

Another risk is the impact on brand reputation. If an employer consistently hires underqualified or disengaged staff, it can lead to negative customer interactions, affecting the overall customer experience. In retail, where customer service is vital, this can damage the company’s image and result in lost sales.

Ultimately, while paying less for job leads may seem like a cost-saving strategy, it can lead to hidden expenses, operational inefficiencies, and long-term damage to both workforce quality and customer satisfaction.

Charles Chakkalo, Owner, Joey’z Shopping

Quality and Misrepresentation Concerns

The biggest concern is the quality of applicants. Vendors who charge a fraction of the going rate usually have to cut corners somewhere, and that usually affects the pool of candidates. You might get a higher volume of applicants, but they may not be as qualified or genuinely interested in the role. That means employers will have to sift through more irrelevant resumes, which wastes time and resources.

There’s also the potential for misrepresentation of the job listing. When a vendor undercuts the market, they might use questionable tactics to drive traffic to your listing, such as over-promising or miscommunicating the role. This can lead to applicants coming in with unrealistic expectations, which disrupts the hiring process and damages the company’s reputation when those expectations aren’t met.

Spencer Romenco, Chief Growth Strategist, Growth Spurt

Effect on Innovation and Competitive Advantage

One risk, I think, would be its effect on innovation to companies that pay the average cost per application. Low-end recruiting services often do not access, or even have a higher priority of seeking out, talent at the forefront of cutting-edge technology and procedures in the HVAC/air-filtration sectors.

If you pay less and receive applicants who aren’t coming from the elite talent pool, you are missing out on the opportunity to recruit fresh, innovative ideas to propel our products and technology forward. This is especially true for our sector, where addressing sustainability and efficiency first-hand can affect our market position and customer experience significantly. Essentially, any initial savings we reap from lower-cost recruitment services might end up depleting our long-term competitive advantage by slowing our innovation rate and losing out on a market that is deeply focused on technological innovation.

Jason Stelle, Head of SEO, Filterbuy