Are You Spending Enough on Job Advertising? Find out With This Simple Calculation
Trucking companies don’t advertise because they’re big - they become big because they advertise.
Why you should take paid job advertising seriously
If you’re looking for the easiest way to get driver applications and fill your empty trucks, paid job advertising is the way to go. It will put you on the right track faster than any other driver sourcing method.
Why is paid job advertising so valuable? Because when you do it right, you’re not leaving your recruitment success up to hope, luck, or mojo - but rather concrete maths.
To understand how much is right for your company to be spending on job advertising, let’s break down a simple calculation that will put your ad spend into perspective.
How to calculate the budget that will fill your trucks
If you want a clear picture of how much you should spend to fill all your trucks, you can refer to the simple formula below.
(Cost per applicant x Applicants per hire) x Empty trucks = Total ad budget
So, taking into account typical numbers, let’s approximate the cost to fill 5 trucks.
(35 x 30) x 5 = $5,250
Meaning, if you can reach a cost per applicant of $35 dollars, and convert one out of 30 applicants into a hire, you’ll fill all your trucks. In other words, if you spend $5,250 - you will fill all your trucks. Sound worth it?
This is a simple and concrete approach to driver recruitment that actually works, but some carriers still have reservations about spending that kind of money on job advertising. However...
What happens if you don’t spend money on job advertising
Not spending money means losing money.
Each day one of your trucks sits empty, you’re losing $500 - $800 in unrealized revenue. That’s up to $24,000 per month per truck, not accounting for any additional losses.
If you have 5 trucks sitting empty, your monthly revenue loss is approximately $120,000. If you have specialized equipment, that number is higher.
According to a study published by the Upper Great Plains Transportation Institute, empty trucks accounted for an average of $704,745 in lost annual revenue. This study was carried out 20 years ago, but do you think that number is higher or lower now?
Spending $5,250 to fill 5 empty trucks doesn’t look too bad in comparison.
How to get the most value out of your ad budget
Many carriers are misinformed about the best ways to advertise their jobs online. They usually go down the same two or three avenues (which are always dominated by bigger and wealthier carriers) and because of a sub-optimal approach, receive a stream of low quality candidates that are difficult and costly to convert into drivers.
If you want good hiring results, you need to understand the key factors that contribute to a successful job ad campaign:
- Target the right drivers - To make sure you’re reaching the right drivers, you need to think about geolocation, age, behavior, search terms, categories, site visits, and more. Additionally, using pixels and cookies to track and re-target drivers can be an effective way to convert more drivers. Previously, this process would have to be outsourced to an ad agency, but there are ways to efficiently do this yourself.
- Get qualified applicants - If you want qualified applicants, you’ll need to be utilizing ad channels (such as Facebook) where you have detailed control over who you target.
- Target passive jobseekers - The internet is expansive, and truckers aren’t all actively looking for work on job boards. Many drivers are passive in their job search, and only react to job ads when coming across them spontaneously online. If you get seen by those drivers, you’ll get more applicants for your positions.
It’s important to evaluate your strengths and weaknesses and start with an advertising budget that will bring results, but won’t overwhelm your recruiting department. We’ve found that trucking companies are able to achieve the best ROI using Facebook and by utilizing something called programmatic recruitment.
How to convert applicants into employees
Bringing in leads with an ad campaign is the first step. Once you’ve reached this point you need to be able to efficiently convert these applicants into hires. To do just that, you’ll need to keep in mind the following factors:
- Recruiter Ability - Are your recruiters efficient, and do they have a system that allows them to process large quantities of drivers in a manner that is professional and brings results?
- Automation of the hiring process - In order to process large quantities of applicants, you need a system that allows you to work fast. If you’re not incorporating automation to aid with candidate screening and organization, you’ll quickly find yourself swamped with resumes and wasting more time than necessary on hiring.
- Recruiter workload - Dumping $10,000 dollars into your ads and receiving 500 applications is all well and good, but what happens when you don’t have enough recruiters to process them? Always keep in mind the realistic amount of workload your recruiters can do when planning your advertising budget.
Set expectations and optimize
Once you’re spending money on job advertising, you’ll realize that getting more value is sometimes about spending less - which isn’t as counterintuitive as it sounds. Let me explain. Since it’s unlikely that your first advertising effort will turn you into a superstar, you’ll need to evaluate your spending and identify what you can improve in your next iteration.
When a company starts investing into their job advertising, their focus shifts from advertising to optimizing, and they ask themselves “How do we drive down costs while increasing return on investment?”
At this stage, your ad strategy should come down to experimenting, iterating, and finding the optimal budget that brings manageable and replicable results. Some carriers that achieve highly efficient recruitment drive down their cost per application into the single digits, and their ROI skyrockets.
If you nail your ad strategy, you’ll spend less
By tackling your weak points and investing correctly into your ad strategy, you’ll be able to boost your driver conversion rate and lower your cost per hire dramatically over time.
Let’s update the first hypothetical calculation to a new one, assuming you do everything right. 35 dollars per lead turns into 20 dollars per lead, and 30 applicants per hire turns into 15 applicants per hire.
(20 x 15) x 5 = $1,500
Suddenly, all you need to fill five trucks is $1,500 as opposed to the initial $5,250. It’s ambitious, but possible. We’ve seen it happen.
Ask yourself - are you spending enough?
So with all that said, I want you to take some time and reflect on your own hiring habits. Think about what works and what doesn’t and ask yourself if you’re investing enough into your job advertising.
Recruiting is a game of constant improvement and optimization, but sometimes all you need to get moving in the right direction is a calculation. Taking into account the same things that make an ad campaign successful, think about what you can do to see tangible improvements in your future recruitment efforts. Until next time, happy hiring.