By David Gaudio|Aug 9, 2024|8:59 am CDT

The restaurant industry has faced challenges in hiring for years. Even before the pandemic, turnover was high and top-talent was scarce, but COVID-19 only worsened those dynamics. As the industry contends with these challenges, artificial intelligence (AI) presents an opportunity to dramatically reduce the cost per applicant and time-to-hire metrics that determine the overall effectiveness of a hiring program. 

At the 2024 Restaurant Leadership Conference, Jamie Harrison, Chief People Officer at Pizza Hut, joined a panel hosted by Fourth CEO, Clinton Anderson. On the panel, Harrison described her experience hiring in recent years, “…the quality of candidate that is coming in has really shifted. We saw our cost per application go through the roof and the quality of candidate actually decrease through the pandemic.”  

It was an unsustainable trend. PizzaHut partnered with Fourth to implement AI programmatic bidding, which automates the placement of job ads across leading job boards. The results were stunning. Harrison explained, “When I saw the data, I thought they were lying!”  

Let’s take a closer look at how AI and programmatic bidding can so dramatically reduce hiring costs. 

Understand the Game: The Bidding Model on Job Boards 

It’s important to understand the business model and bidding system on job boards, as these systems set the rules your hiring process must operate in. In order to develop a better hiring process, you must align your procedures to the opportunities and limitations presented by the hiring platforms. 

The most popular job boards, such as Indeed, Snagajob, and LinkedIn, generate their revenue through sponsored listings on their platform. The bidding system works similarly to Google Adwords or advertising on social media. The hiring team develops the job listing and assigns key metadata to define the target audience. Typically, these fields will be based around keywords, credentials, and geographic location. The search terms used by an applicant on the website determines what paid job ads appear at the top of the screen. Different search terms will incur different rates to place your ad determined by their search volume. 

How Programmatic Bidding Helps on LinkedIn, Indeed, and other Job Boards 

Given that bidding system, metadata is everything, and there is a theoretical sweet-spot where you could bid on the keyword in your geographical area with the highest volume of applicants at the lowest cost. 

Finding the ideal keyword could be accomplished manually but only with great effort. Even if you could muster the resources, the recruiting team will quickly run into trouble. The prices on keywords are responsive to ever-changing search volumes and browsing habits of applicants. The best keyword today may not be the best keyword tomorrow, but it could be the best keyword once more down the road. Optimization requires constant vigilance. 

AI integrations with applicant tracking systems (ATS) can offer programmatic bidding in which the AI continuously analyzes the bidding market across leading job boards to find that sweet-spot. As the ideal keywords change day to day, the AI solution can redirect resources to re-optimize your spend.  

Programmatic bidding increases the volume of quality applicants by ensure your ad is always in front of the best candidates. Second, it significantly lowers the cost per applicant by optimizing your spending. 

Decreasing Cost and Time to Hire with AI 

The two most important hiring metrics are cost per applicant and time to hire. The former refers to the financial resources spent to attract each applicant for an open position. Those costs include bidding prices on job ads, labor costs of the hiring team, and any software or tools used in the process. Time-to-hire measure the amount of time between the moment the first application is submitted and a candidate signs a job offer. 

These two metrics are interconnected. The shorter the time to hire, the lower the cost per applicant, so by tracking these metrics overtime and working to improve them, you can measure the overall improvements to the hiring program. 

Beyond programmatic bidding, there are many ways that AI solutions can impact these metrics positively: 

• Stronger Reporting Capabilities: Many ATS solutions offer AI-powered reporting capabilities that provide a clearer picture of the hiring process as a whole. In doing so, the hiring team can more easily identify bottlenecks, determine where applicants are abandoning the process, and find places to streamline. This data-driven analysis is essential to reduce time to hire and cost per applicant.

• Write Job Descriptions Faster: AI chatbots, such as ChatGPT, can expedite the development of job listings. Rather than coordinating between HR and the hiring manager to draft a job description, AI can produce the same quality of content by refining the AI prompt over several iterations. Even if the recruiter must tweak the draft developed by the chatbot, the overall time spent writing will be significantly lower.

• Enhanced Candidate Screening: AI can be utilized in candidate screening to reduce the amount of time the hiring team needs to spend interviewing. By screening out unqualified candidates even before they interact with the recruiter, they can focus their efforts on top-talent. 

AI Hiring is Only the Beginning 

Thought leaders around the business world are cooking up new use cases for artificial intelligence, and improvements to the hiring process are only the beginning. AI forecasting presents another piece of low-hanging fruit. Restaurant operators can receive highly accurate predictions as to their staffing needs for upcoming shifts and reduce the likelihood of over and understaffing. 

Read more about how to help your team embrace AI forecasting in our blog, “Top 3 Ingredients to Drive AI-Powered Forecasting Adoption in Restaurants”.