Why Gem is a CFO’s best friend (even when you’re not doing much hiring)
January 9, 2023
2022 threw the market on a wild ride, and many companies—perhaps including yours—are currently navigating its ongoing ripple effects. For some organizations, it’s meant difficulty hitting sales targets; and this pacing-behind has real implications for how those companies think about spend. At Gem, we get it; we’ve been navigating the market impact alongside you. Cost-savings is necessarily top-of-mind for many Finance leaders right now, who are likely being more cautious with software spend to reduce costs proportionate to missed ARR. The market has triggered prioritization exercises. The question of “must-haves versus nice-to-haves” is now more urgent than it’s been.
On top of this, some organizations have slowed hiring or implemented freezes or reductions in force. Finance leaders at those organizations are under pressure not only to scale back hiring plans to keep burn under control, but also to cut software spend altogether. They’re asking tough but critical questions about whether to even keep the tech stacks they have, let alone whether to make (smaller) incremental purchases. Why onboard—or keep—a piece of recruiting software if your team is reducing headcount? How will it enable you to save money in both the short and long term?
Here’s a secret: we know that recruiting organizations generally tend to fly under Finance leaders’ radars. While you know the ratio of go-to-market KPIs like quota to OTE of your sales reps, cost per lead for Marketing, or ARR supported per CSM, you likely spend very little time thinking about recruiting KPIs or paying attention to the ROI of your company’s recruiting software. This is because, while Sales and Marketing are intrinsic to revenue, Recruiting is still generally lumped in with the HR or People team and viewed as a cost center. But in this market, you may no longer be at liberty to keep thinking about Recruiting as a cost center (which we’d argue it isn’t, by the way).
Despite Recruiting flying under Finance’s radar, we know the fastest way to a CFO’s heart is a concrete sense of ROI. You think in terms of dollars; and being able to tie your recruiting software back to cost-savings is essential if you’re going to consider spending on it.
So here are some ways Gem gives back a terrific return on investment—even if hiring is slow or stagnant right now:
Cut down on IT costs
Software is one of the big buckets Finance leaders must constantly consider when it comes to overall company spend. This is especially true in uncertain markets, when you’re suddenly working within the constraints of a more finite budget and have to undergo prioritization exercises. What’s the urgency of spending on this tool specifically, compared to other solutions? One of the most obvious reasons to invest in a new piece of software is if it can replace multiple existing—and collectively more expensive—pieces of software, allowing you to cut down your tech stack and reduce the total number of tools the team is using.
Gem’s sourcing solution has allowed teams to reduce spend on everything from email-finding tools to additional candidate sourcing tools like Fetcher. Gem’s Talent Compass—which offers full-funnel visibility, hiring forecasts, performance metrics, and executive reporting that TA teams use to plan ahead and guide their recruiting strategy—has helped our customers cut spend on everything from kanban boards like TalentWall to analytics solutions like Ashby (Gem’s Talent Pipeline and Talent Compass replace them both in a single, source-of-truth solution).
CFOs: have a conversation with your talent leaders to uncover what recruiting tools you’re currently paying for that a solution like Gem could replace—ultimately saving you spend through consolidation.
“Immediately we saw that Gem could replace a lot of the products we were using. It was easily one of the better products I’d seen in terms of streamlining manual work: searching for phone numbers, emails, social media sites. And the cherry on top was that it integrated seamlessly into our ATS.”
- Joe Gillespie, Head of People @ a Stealth Web3 Startup (formerly @ Robinhood)
“Our first solution offered an automated follow-up notion along with a personal email aggregator; but after a year of using them, the data wasn’t good, their algorithm wasn’t good. We created a makeshift solution out of LinkedIn Recruiter before I heard about Gem through word-of-mouth. We ran a free trial and the team immediately loved it. And I just saw productivity increase. So at that point, it was a no-brainer.”
- Angela Miller, Head of Recruiting @ Instabase (formerly @ Pure Storage)
Identify inefficient spend on candidate sources—while your team amasses a central goldmine of talent data
As a Finance leader, meaningfully identifying inefficiencies in the business may be top-of-mind for you right now. Among the many data points it surfaces, Talent Compass helps recruiting teams identify candidate sources that aren’t delivering ROI.
Most recruiting organizations have a wide array of places they source candidates from—even when headcount has been reduced and they’re currently only hiring for backfills: recruiting events, specialized job pools, LinkedIn job ads, diversity-focused platforms like SeekOut, outbound AI platforms like hireEZ, specialized vendors like Alpha for engineering talent, and so on. But which of those solutions you’re still paying for is ultimately getting you the talent you need? Where are the majority of your offer-accepts really coming from?
Because Gem details candidate source—showing teams clearly what’s working and what’s not—Finance leaders can push Recruiting to reduce or cut spend on resources that aren’t seeing ROI at the very top of the funnel.
What’s more, with Gem’s forthcoming Source Spend Calculator, teams can go one layer deeper, tracking cost-per-application and cost-per-hire from each of their sourcing channels. They can leverage these insights alongside their CFOs to make even better decisions about the channels they invest in, driving both efficiency and cost-savings by removing those with low conversion rates and high cost per application/hire.
All the while, Gem’s CRM becomes your team’s central source of candidates. It’s worth remembering that your company is already sitting on a veritable goldmine of candidate data—talent who’s expressed interest in your company by applying for roles in the past, many of whom went through an interview process with you. Working with this data can be cumbersome in the ATS (your talent team is nodding their heads right now if they’re reading this); but Gem’s powerful search capabilities allow recruiters to surface relevant candidates, rediscover “silver medalists,” and leverage the warm relationships they’ve already built across both the ATS and CRM.
Gem’s Data Refresh automatically updates prospective candidate information every 30 days, suppplementing the historial data in your ATS. So when your team does reach out to reengage warm talent, they’ve got all the context they need to do so skilfully. Ultimately, this means your team can source from its own tech stack rather than pay for a handful of third-party candidate source vendors.
“We’ve got a database of over 20,000 people—all technical talent—that we’ve one-click uploaded into Gem, over time, as we’re sourcing from LinkedIn and elsewhere. That’s our general talent pool. In other words, I rarely have to start a search from scratch on LinkedIn anymore—which is a relief, because I find LinkedIn sourcing so frustrating. When a req comes in from a client, I source directly from Gem—talent I’ve already looked at, vetted, and in some cases screened—and queue up my outreach from right within the platform. It’s like having my own more robust, more specialized, more streamlined LinkedIn.”
- Alyssa Garrison, Recruiting Leader & Co-founder @ Techmate Talent
Cut down on agency spend
We know: agencies, too, are a source of candidates. But they deserve their own section because you likely know (and quite possibly cringe at) the spend—and ultimately the ROI—of the external agencies you’re using. Agencies are typically a last resort for those roles that are notoriously hard to fill using only the resources of your internal team. And they’re costly: agency fees are typically 25-30% of first-year compensation, paid out in a lump sum. As a Finance leader, you know that lump sum is hard to watch go.
Because Gem allows the average internal recruiter to be more productive—our customers see 5x faster sourcing, 2x response rates, and 5x higher funnel passthrough rates with our talent engagement platform as their source of truth for hiring—they can typically make a handful of hires more every year than they would without Gem. The ability to get more hires out of your internal team can be game-changing from an agency spend perspective: if those are roles that would otherwise have to be filled by agencies, that’s an immediate cost-savings of $100-$200k… or more.
“In the healthcare world, agencies take 15-20%; though I understand that percentage is much higher in other industries. You average that out, and I easily saved over $125,000 in my first year on agency fees for the roles I filled with Gem sequences. Gem has paid for itself well over 9x—a more-than 1000% ROI, just in the roles that I recruit for as a working manager.”
- Blake Thiess, Head of Sourcing & Senior Headhunter @ AdAstra (formerly @ Prestige Care)
Understand industry benchmarks to push for fewer headcount
As a CFO, you probably know sales efficiency and sales productivity benchmarks really well; but you may be less familiar with recruiting productivity benchmarks. That makes it hard to know how efficient your recruiting team is relative to your peers, and whether you need to invest more or less in TA to hit your hiring goals.
But recruiting benchmarks are powerful because they help CFOs work with talent acquisition leaders to push for more productivity—or for fewer headcount—when thinking through annual planning. Imagine being able to say to your TA partner: “Benchmark data shows that the average time to hire for a role in this department, and at a company of our size, is x days. Based on that benchmark—and given the number of hires we plan to make in Q3—it looks like we don’t need to add any Recruiting headcount right now.”
We suspect that any Finance leader would be interested to know how many hires their recruiters are making every quarter relative to other companies of their size, and in their industry, for this reason. It’s why Gem’s Peer Benchmarks can help you understand how you measure up to other teams. Ultimately, this allows for more sophisticated headcount planning decisions.
Scale hiring quickly to capture demand when it’s time
A hiring pause often means CFOs are holding their breaths: you’re likely scanning the horizon, trying to figure out exactly when you can expect a recovery. Because when that recovery happens, your company needs to be positioned to immediately capture customer demand as it upticks—whether you’re a healthcare company that will need to quickly hire nurses or therapists to service more people and grow revenue, or you’re a B2B SaaS company with an outbound sales-driven model that will need to scale a team of account executives. You might not be hiring go-to-market resources now; but when the time is right, you’ll need to quickly react and staff up your AE capacity so you can ramp sales, reaccelerate your ARR growth, and make up lost ground.
Ultimately this is a question of time-to-fill, and of increasing the predictability of your revenue forecast. When the market picks up again and your company starts recruiting from a warm pipeline (your recruiters should be nurturing talent all this time!), how long will it take to have x new hires fully in-seat? Gem’s Expected Hires Calculator allows you to see, based on your current pipeline, how many hires you’ll likely yield based on historical passthrough rates and time-in-stage. In other words, Finance leaders can answer the question: Do we have enough pipeline now to hit our hiring goals—and therefore, our new ARR goals—the moment we step on the gas?
That predictability—knowing how quickly you can move from in-pipeline to in-seat—will give Finance a great deal of conviction in planning ahead when you emerge from this temporary slowdown. (Because as we all know, this downturn is temporary.)
Ultimately, when the market recovers, you want your company to be the fastest to execute on re-hiring, before every other company catches up and hiring becomes brutally competitive. By accelerating time to fill, Gem gives you a clear head start on hiring relative to your competitors. And that’s one of the most exciting things you can ask for when the market turns around again.
“Our time to fill has decreased dramatically. Within the first 30 days of using Gem, we were filling positions that had been open for over a year—talent we’d still be waiting on active applications from if it wasn’t for those automated follow-ups.”
- Jaime Schmitt, Talent Attraction Manager for North America @ Celestica
“Understanding what our baseline metrics were and then being able to identify opportunities to optimize through Gem drove a 10-day drop in Unity’s time to fill. Last year our average time-to-fill was 75 days. So we set a goal for 70 days, and we’ve been at 65 or lower all year.”
- Emily Russell, Manager, Recruiting Operations @ Ripple (formerly @ Unity Technologies)
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