How to achieve meaningful ROI with a recruitment CRM

Recently, Gem partnered with Talent Tech Labs—an independent research and advisory firm focused on helping talent acquisition (TA) and human resources (HR) leaders with their technology selections and making their talent functions best-in-class—to offer a webinar on achieving meaningful ROI with a recruitment CRM. David Francis (VP of research @ Talent Tech Labs) was joined by Lori Busch (Senior Director of TA Operations @ Toast) and Joe Totten (VP of GTM Strategy and Growth @ Gem). David opened the event with some comments on the current recruiting landscape and some data from a recent report Talent Tech Labs published to support organizations in seeing meaningful ROI from their candidate management relationship tools. The bulk of the webinar, then, was a fireside chat with Lori. 

Here are some highlights from that webinar, and from Talent Tech Labs’ research:

The six features and functionalities of a CRM

Talent Tech Labs has created a framework for thinking about the features and functionalities that any good CRM has. They call it “the six Cs”: create, cluster, communicate, convert, compliance, and chart: 

• Creation is about whatever tools you use to get candidates into the CRM database in the first place: portals or career sites, job boards, ATS integrations (for past applicants), and so on. 

• Cluster refers to a set of tools to organize the database, making it actionable for sourcers and recruitment marketers. This includes a variety of filters to organize the CRM into talent pools: location, seniority, job function, and so on. Ultimately, the goal is to align different candidate pools to the recruitment strategies that will be most effective for each of them. 

• Communicate. This set of features answers the question: How do we communicate with candidates to create journeys that keep them warm and convert them over time into applicants?

• The compliance piece is a rules-based engine for ensuring that things like GDPR or CCPA in California are met, and recruiting teams don’t run afoul of those regulations. 

• Charting is the reporting and analytics to understand the results you're getting with your CRM—which is essential for measuring ROI. 

CRMs have become an anchor in the candidate engagement category—but with varying outcomes

The quick story David shared is that CRM adoption has grown quite robustly over the past five years. Currently, adoption is at 60% according to Talent Tech Labs’ most recent pulse survey data. Notably, the majority of new RFPs they see for CRMs aren't net new, but are system switches: a company already has a CRM in place, but they feel like they're not getting the value they bargained for, so they're in the market for a new one. 

Source: Talent Tech Labs

What Talent Tech Labs found is that CRMs are one of the more polarizing categories of recruiting technology: some organizations really love their systems and are getting a lot of value out of them, while others who are using the same tool are frustrated with the state of their implementation or deployment. The question then is: What's the difference between those two sets of clients? Why are some so happy and get great results while others struggle? (Lori will say more about these questions from her point of view below.)

Common pitfalls in CRM implementation

David also spoke about the  common challenges the Talent Tech Labs team has seen organizations struggle with in their CRM implementations: 

• Integrations. The CRM needs to integrate with your applicant tracking system as well as a number of other third-party tools. If these integrations aren't set up correctly, the lack of communication and data-sharing creates all kinds of issues around workflow—and forces recruiters into needless manual work. 

• Mixed use in adoption boils down to training or change management issues: a tool might have been purchased, but it was never clearly articulated how the team is supposed to use the tool, or for what use cases, or who is driving use. Is it sourcers? Is it recruiters? Is it a mix of both? 

• Defining the use case boils down to the incongruence between recruitment marketing and sourcing. A lot of organizations ask their sourcers to code recruitment marketing campaigns when they're really not qualified to do so, for example. And so fundamentally the tool is never resourced correctly. 

• Measuring performance. This means either not using the reporting capabilities of a tool at all, or never having the strategic conversation about what your KPIs will be. How will you measure the tool’s performance? Your hiring funnel’s performance? How will you use KPIs to identify root cause problems in your recruitment workflow?

• User experience. Some organizations have essentially over-engineered the solution. In this case, it's not necessarily technology's fault; it’s that companies have tried to hit every edge case they can imagine. For the sake of recruiter and sourcer experience, David recommended training with simplicity and ease-of-use in mind. 

A conversation with Lori Busch and Joe Totten about achieving ROI with a CRM 

What was life like before Toast had a CRM? What was the business case for implementing one? 

Lori: When we first implemented Gem—this was back in 2021—we were coming out of COVID and were massively scaling the talent acquisition team. We were fewer than 10 people, looking to scale to 50+ very quickly. Pre-CRM, we didn't have a great recruiting muscle built around sourcing. So in different parts of the business, there was sourcing happening, but we hadn't yet invested in a sourcing team or built passive talent engagement into our process. 

When we looked at where we wanted to grow over the next couple of years, we knew we’d need to build a muscle around sourcing, and we needed a tool to do it. We anchored on a couple of principles: candidate experience, inclusive hiring, and scaling (efficiency and automation). We wanted to know what tool could get us there. That's how we landed in the market to purchase a CRM. 

You were in a unique situation where you were building from scratch, but the majority of companies aren't in that situation. If an organization already has a mature function and a technology in place, how do you approach that? 

Joe: You mentioned integrations earlier; and one of the key questions is: Do we think of the CRM that’s in place today as our trusted source of truth? Let’s say some net-new candidate comes into the ecosystem—they apply or they get sourced for a role that just opened up. Can you see the organization's entire history with that person, every touchpoint you’ve had previously? Lori mentioned candidate experience as one Toast’s pillars. Having a clean data model matters. If you were rejected from an interview process last quarter, we probably want to mention that in our outreach as we're re-engaging you: Hey, I know it didn't work out last time, but you were a great fit for the company. We'd love for you to consider coming back in. 

If you don't have a thoughtful, canonical history of all the touchpoints you've had with that person, you might not be able to give them the candidate experience you’d want to. That's just one example of why it's so important to have a clean data model integrated between the ATS and the CRM. I think a lot of reasons folks go shopping for a new CRM is they simply don't have that trusted source of truth. 

So you identified the need for a recruitment CRM. From a features and functionalities perspective, talk us through how you went to market. 

Lori: So as Joe mentioned, we needed a single source of truth for sourcing. At the time we didn't have a sourcing team but our recruiters were doing their own sourcing; so we needed a place to house that data. We also needed a tool that made it easy to resurface candidates. A good CRM doesn’t just solve for recruiters’ current reqs; it's solving for their future selves. It's solving for next year, two years from now, five years from now. 

We were also looking for automated features. The sequencing features in Gem spoke to our need to scale. And we were looking for a really great data tool. One of the things we're sharpening our pencil on at Toast is understanding the different phases of our funnel. What do conversion rates look like from pre-applicant all the way to hire? We needed a tool that would allow us to visualize that.

Talk us through the implementation process. How did you roll out to users? How did you set up training? How did you actually scale? 

Lori: So full transparency: we didn't nail it in the beginning, which I think is true of anyone who's ever rolled out a tool. We led with “the why,” helping recruiters understand how this would make their days easier and their future selves more effective. But Gem is an incredibly robust tool. There's great functionality around reporting; there's great functionality around creating talent pools; there's great automation and sequence-building. We found that it was a bit overwhelming for the recruiting team. So we took a step back and said, We need to build an implementation and enablement plan that’s scenario-based, because we have such different teams within Toast recruiting. 

We have a team that focuses on customer success roles. Those roles tend to be high-volume; they get a tremendous amount of applicant interest. And at that point it's a question of how to resurface those candidates very quickly, how to think about silver-medalist candidates. So that was one scenario. What does it look like for just-in-time sourcing? If we have a hard-to-fill role that's unique, what does it look like from that point of view? And then how do we use Gem for evergreen roles? We started to break training down into the different scenarios that recruiters might be in so that it was relevant to them. At Toast, we talk a lot about WIIFM, what's in it for me? We evolved our approach over time to ensure that we were capturing that for the recruiter. 

What does the ATS integration look like? 

Lori: In Gem, you're able to search your entire ATS, which is a great benefit. We get a tremendous amount of applicants. We've had our ATS for seven or eight years now. So over time as Toast has scaled, our applicants have scaled as well; being able to resurface those applicants is key. So that's a key piece of it—the bilateral integration. 

To be able to see the data is also key, because Gem allows you to visualize your pipelines at a req level, a department level, a recruiter level, a source level, a diversity level, and so on. That data is all coming from the ATS and then it's visualized and reported within Gem. 

Anything that struck you as you rolled out this tool? 

Lori: Some of the very early wins were around our usage of content. One of the teams that sits under TA Ops is our employer brand team. They spend a tremendous amount of time creating content that they're hoping will resonate with prospects who’ll eventually become candidates. We know from the employer branding and recruitment marketing space that there are something like 18 different sources a candidate might look at when they're deciding whether to apply for your company, or during their candidate journey. 

So one of the early wins was looking at content conversion within Gem and saying, Oh, if we post a link to the “Life at Toast” Instagram account, we see those emails convert at x% higher rates than if we link to a job description. Gem’s outreach data was invaluable as we thought about building out the content for our employer branding team. And the end goal is that you have more candidates in the pipeline and in the funnel. 

How are you measuring the performance of the tool itself? How do you think about ROI across those key KPIs you're tracking? 

Lori: One of the metrics I think is interesting is time to identify the candidate: how long did it take to uncover the candidate you ultimately ended up hiring? And then what do conversion rates look like throughout the process; where are your bottlenecks and where can you make improvements? 

Ultimately one of the long-term goals is to minimize the time it takes to identify the candidates who go through process. If we have a pool that's been pre-vetted, is excited about Toast, and it's just a matter of the right role at the right time rather than restarting the wheel each time a job is posted, that's the dream state. Time to identify the candidate is one of the metrics that will help us understand that. 

Joe, anything you want to add around measuring ROI? What are the metrics that matter? 

Joe: Lori touched on some key ones. We look at the candidates that were discovered through Gem: How did those enter the pipeline? How did they cycle through talent nurture campaigns over time? I like the idea of an on-demand pipeline; a CRM should be just that: Hey, we got a new role. With a few clicks in our CRM, we can turn on pipeline for that role through previously-engaged candidates and then through net new if needed. So we look at the efficiency that comes with that. 

A new way we're starting to look at it too—and I think this is the bane of a lot of recruiters’ and talent leaders’ existence—is sifting through the noise of an inbound applicant pool. There’s often a tremendously high volume of folks coming through. How do we uphold our value of creating a great candidate experience, dispositioning all those applicants quickly and efficiently and making sure we're getting to the folks who are right-fits? So there's an efficiency argument as well as a business-outcomes argument for the ROI from my point of view. 

Lori, you’ve had your ATS for eight years and you've amassed a significant number of candidates there. But those candidates aren’t doing today what they were doing eight years ago. How do you approach data accuracy as you’re re-engaging talent? 

Lori: Fortunately, Gem does that for us by sourcing the latest data from publicly-available information. So if you think about Gem in the way I spoke about earlier, is it setting us up for success in 2023? Sure. It's also setting us up for success in 2024 and in 2025. The job change rate is enormous. People are going to grow skills, change jobs, change companies, change locations over the course of the next few years. Gem automatically receives that data from public sources. So when I look at a candidate who was entered into Gem in 2022 and it's now 2025, their updated information will be immediately available to me. 

Joe, do you want to say anything more about data refresh in Gem? 

Joe: In my day job, I'm a sales leader. We use Salesforce and we track all our leads and our contacts and our opportunities there, but there is no version of this in sales technology today. My prospects change jobs at the same rate as my candidates do. So this is a pretty unique differentiator for Gem. It’s one of the things we identified early on: you can do all this work to build out a really robust CRM, but the data so quickly goes stale unless we find a way to refresh it. If a person in my CRM looks like they're hitting their five-year work anniversary at a company, but I look on LinkedIn and they're three months into a new job, that’s a pretty meaningful difference in my strategy of whom I should be reaching out to and what my messaging should be. So this is a core thing we've focused on building out to keep talent teams’ data fresh. And to my knowledge, it's a unique feature in the CRM marketplace. 

I’m thinking about GDPR compliance and other data privacy laws. Risk-wise, how do you manage compliance when you've got real-time data available on folks thanks to Gem? 

Lori: We have a legal team at Toast that helps us think about that. We partner very closely with them to understand the latest legal laws. They’re also a key part of our contract review process. So there was a lot of back-and-forth with the Gem team in order for us to even purchase and implement the tool. And in the Ops space, we stay up-to-date on what those laws are and make sure our systems meet them. What that looks like practically is potentially the removal of data over time; or if there’s a request of records, that has to be readily available to the person that requests them. But we work closely with the legal team to make sure our tools comply. 

Joe: I've been at Gem for about five years, and during some of the early days of GDPR I talked to a lot of talent leaders and lawyers and general counsels. ‘I don't see how any talent CRM would even be possible’ was our starting point in a lot of conversations because of the data privacy loss. And my message on the topic is, there is always a way. Even if you're starting from a really conservative take on GDPR and there's no way to do something like this without getting into the weeds, there is always a way if you engage the right way in the process. 

The majority of RFPs coming to market are system switches. We've seen a lot of cases where organizations have been really unhappy with their implementation, but really it was around how they deployed the tool. I’d love your thoughts around evaluating: Should we go to market for a new system or should we try to own our existing technology a little bit better? 

Joe: So obviously I'm a bit biased and certainly every TA organization that's not a Gem customer should consider a new CRM! But as a business leader, I share that sense of: if we can save ourselves the pain of implementation, if there's a way to get on track with what we've got, that's where we have to start. And that's where I think you have to answer those fundamental questions, like do we have an integration we trust? If we're going to ask our day-to-day end users of the product to re-engage and really buy in, do we as the owners of the system trust that we're going to get it to where it needs to be? 

I think a good CRM makes the user better at their job. They might fight it a bit at first out of habit; but as soon as they get into the technology, they should feel like, Hey, this is actually making me faster, more efficient, helping me get to better outcomes. And there should be some of those lightbulb moments happening. If you don't see those, or evidence that those could happen, it's probably time to go to market. 

Lori: I’d add: talk to your users. It seems so simple. But from the Ops space, be in close touch with your subject matter expert users, your power users. Our sourcing team does a great job of highlighting when there are big wins based on Gem as one way we can drive adoption, to help people really understand and fit it into their day-to-day. So to your question, David, about do you go to market to look for something, a lot of times this may just be about building the muscle and the philosophy of what you're trying to do with your tool, rather than about the tool itself. Is everybody bought into the reasons why you need a tool in the first place? If yes, look at your tool and understand what's blocking your team from using it. If the only thing blocking them from using it is that they don't use it, that's something you can address. But if there's something they can't achieve within the constructs of the tool, then it's time to buy something new. 

One issue that comes up is different internal resources sourcing the same candidate:  somebody's already in the pipeline and somebody else reaches out to them; it creates a bad candidate experience and some internal conflict. How do you get around that? 

Lori: Gem helps with that as well, because all candidate touchpoints are housed in the same place. Previously, if somebody reached out on LinkedIn and then somebody else reached out via email, there wasn’t that visibility. You could easily have recruiters run into each other. If I get reached out to by three people in the same week or the same hour about the same job, that's a pretty terrible candidate experience. So we talk a lot about a Toast-first, hiring-first philosophy. In recruiting there's this concept of candidate ownership: who's getting credit for the candidate? By deciding that, as Toast’s talent acquisition team there are a hundred of us responsible for filling x number of jobs to support the business' growth, there’s no longer a battleground from the candidate ownership point of view.

Let’s talk about the ROI of a CRM. Lori, you suggested that ROI should increase exponentially over time. How do you think about year one versus year five? 

Lori: I think the most tactical example is campus recruiting. If you look at early career recruiting, we're meeting students who will graduate in 2023. They'll be at one step of their career in 2024, another in 2025, another in 2026. So looking at that population five years from now and thinking about recruiting for more senior-level roles—take software engineering as an example—you can be an entry-level software engineer, two years later you're mid-level, three years later you're more senior-level. If we know that Toast will be doing a lot of senior-level engineering hiring at any point, building that talent pool now knowing that's where that pool will be in five or six years will make life much easier for future Toast tech recruiters. 

That's probably the most tactical way to think about it: as people's careers grow, they change. You can also think about a cost-per-hire metric. Cost per hire goes up as positions get more senior. If you have that readily-available pipeline because you've been nurturing it over the past four or five years, cost per hire will drop. So when you think about ROI metrics, that also plays in.

If you’re eager to hear the entire conversation, achieving meaningful ROI with a recruitment CRM can be seen on demand. And Talent Tech Labs’ report, created in partnership with Gem, covers everything from the current state of CRM, to the most useful CRM features, to best practices, to measuring ROI, and more. 

We wish you ease (and joy!) on your CRM marketplace journey.