6 Steps to Building a Winning Business Case for Your Talent Acquisition Program

Often, when we ask senior leadership to invest in a new technology or service to improve our talent acquisition program, we are faced with questions like, “What’s the ROI?” or “How will this money improve the function?” What your leaders are really asking for is a business case.

If you can build an effective business case for your request, you are much more likely to receive the investment. It’s clearly a talent acquisition best practice.

Business cases are part art and part science.  You truly need to understand what you are asking for and what the projected gains from the investment will be.  The following 6 steps will help you prepare a winning talent acquisition business case, including a short example in each step.

1. Document the Problem. In this step, you need to clearly define the problem you are trying to solve and highlight the pain points your candidates, recruiters or hiring managers are experiencing.  You must also highlight both the quantitative (i.e, number of hours wasted on a task) and qualitative issues (i.e., the impact on candidate perception of your company) associated with the problem.

The current employee referral program only produces 10% of our external hires.  We receive over 1000 referrals a year, yet few are qualified for our positions. 

On average, a single recruiter spends 2 hours/week reviewing unqualified referral resumes and responding to the employee and candidate.  Thus, with 10 recruiters, that’s 20 hours per week or 1,040 hours per year.  The average recruiter salary (including benefits) is $50 per hour.  Thus, we are losing $52k per year in recruiter productivity.

2. Explain the Solution. In this step, clearly state your proposed solution and the outcomes you expect to achieve with the solution.

Invest in a 3rd party referral management solution that matches employees’ professional networks (through LinkedIn) with our open positions and recommends qualified candidates for them to refer.  The solution can be integrated with our ATS, is mobile enabled and provides automatic updates to employees about the status of their referrals

3. Outline the Resources Required. You leaders will be extremely interested in this step because it is where you explain the actual costs of the solution.  Be sure to include costs for technology and tools, labor, and marketing.  Capture costs for at least the first 2 years.  Don’t forget that costs in the first year may be greater than in future years due to technology set-up fees or initial marketing activities.

Tools/Technology:  A 3rd party tool that meets our needs will cost $35k per year plus a one-time set-up fee of $5k.

Labor: 2 hours/week for system administration.  HRIS analyst salary cost $4k per year.

IT resource needed for 1 week to set-up integration to ATS: $3k

2 hour training for recruiters on new tool: $1k

4. Capture the Gains. This step is the most important for building your talent acquisition business case.  You need to focus on both quantitative and qualitative gains.  Quantitative gains can include the savings in recruiter productivity, increase in company revenue from reducing time to fill, decrease in time hiring managers need to spend in your process, etc.

Be sure to brainstorm all of the possible gains and attach a dollar value to them. It is equally important to note qualitative gains.  These gains can include improved recruiter retention, improved employee morale, or increased hiring manager satisfaction.

While you may not be able to attach a specific dollar value to qualitative gains, it is important to show that you have thought about all of the impacts of your proposed solution.

Quantitative Gains:
Recruiter productivity: $52k per year
Reduce time to fill by 1 day: $400k per year

Qualitative Gains:
Improved employee morale
Improved recruiter morale

5. Calculate the Return on Investment (ROI). Your CFO will love you for including an ROI calculation in your business case.  Calculating ROI is not as daunting as it might seem.  You actually started the process in step 3 above – calculating your resources required for the solution.  As noted in that step, you should capture the costs for both the first year and the second year.  You also have your total gains captured in step 4.

ROI =  (Total Gains / Total Costs) * 100%

Total Gains:    Year 1+: $452k

Total Costs:     Year 1: $48k

                           Year 2+: $37k

 ROI Year 1 = $452k / $48k) * 100% = 941%

6. Offer a Comparison Cost. Even after seeing a positive ROI, some leaders may still have concerns over the costs you outline in step 3.  Thus, the step of offering a comparison cost can become very important when presenting your business case.  A comparison cost highlights money you are already spending in one area that could potentially be reduced by your solution.  I often use recruitment agency fees in my comparison cost step.  In my example, it can also be helpful if you believe your solution will reduce agency placements, thus you also show how the investment pays for itself.

Comparison Cost = Agency Fees

Average Agency fee paid: $20k per placement

First year’s cost: $48k

Thus, if we eliminate 3 agency placements with implementation of new tool, it has paid for itself in the first year

If you walk through all of these steps and can clearly articulate the value your solution will bring to you organization, you will be much more likely to get the green light for your project.

Have you presented a business case to senior leadership? What advice would you give?

Want more detail on building a business case?  You can access our Talent Acquisition Business Case Worksheet and Example via our website.

Interested in learning more about gaining investment for your recruiting programs?  Sign-up for our Talent Acquisition Program Management Academy.  We offer both web-based and in-person training sessions for individuals who run recruiting programs like college recruiting, employee referrals, military recruiting, employment branding, onboarding and much more.  Our next online class starts March 31st and we are offering an in-person course the day before the ERE Conference in San Diego on April 27.

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About Kara Yarnot

Kara founded Meritage Talent Solutions to provide tailored talent acquisition solutions to employers and employment services companies. Kara has over 17 years of leadership experience in talent acquisition and recruiting for several FORTUNE® 500 organizations, including Boeing, Intel, and SAIC.

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