The ROI of adopting the AI-based recruitment software is 1,000%, meaning that for every dollar spent on the AI software – YVI, the customer expects to gain $10 in return.
potential benefits or gains that a company misses out on by not adopting the AI software.
Identify Key Metrics Before Adoption
- Time-to-Hire: Measure the average time it takes to fill a position without the AI tool.
- Cost-per-Hire: Calculate the cost associated with each hire, including HR hours, recruitment agency fees, etc.
- Quality of Hire: Assess the performance and retention rates of hires made without the AI software.
- Candidate Experience: Evaluate the satisfaction levels of candidates during the recruitment process.
Calculate ROI of AI Adoption
- Total Savings and Gains from AI: Combine all the potential gains, including reduced costs, increased revenue from faster hiring, and improved employee performance.
- Initial and Ongoing Costs of AI: Subtract the cost of purchasing, implementing, and maintaining the AI software.
Scenario:
A company is considering adopting AI recruitment software to streamline its hiring process. Currently, the company has the following metrics:
Average Time-to-Hire:60 days
Cost-per-Hire: $5,000
Number of Positions to Fill Annually: 100
Average Revenue per Day per Unfilled Position: $300
After implementing AI recruitment software, the company expects the following improvements:
Reduced Time-to-Hire: 30 days (saving 30 days per hire)
Reduced Cost-per-Hire: $3,000 (saving $2,000 per hire)
Increased Number of Hires per Year: 110 (due to faster recruitment process)
Cost of AI Software Implementation and Maintenance: $100,000 annually
Step 1: Calculate Opportunity Gains**
1.1 Revenue from Reduced Time-to-Hire:
Days Saved per Hire: 30 days
Revenue per Day per Position: $300
Revenue Gain per Hire: 30 times 300 = $9,000
Total Revenue Gain from Faster Hiring (for 100 positions):100 times 9,000 = $900,000
1.2 Savings from Reduced Cost-per-Hire:
Cost Savings per Hire: 5,000 – 3,000 = $2,000
Total Cost Savings (for 100 positions): 100 times 2,000 = $200,000
Step 2: Calculate Total Opportunity Gains
Add the revenue gain from faster hiring and cost savings:
Total Opportunity Gains} = 900,000 + 200,000 = $1,100,000
Step 3: Subtract the Cost of AI Software
Cost of AI Software: $100,000
Step 4: Calculate ROI
