How can an organisation make over 100 Million USD in profits through Internal Fulfilment?
75% of recruiting partners and hiring managers have disclosed that most candidates don’t possess the necessary skills for a particular job.
One of the most cost intensive functions of an organisation is the acquisition of new talent balanced against overall employee attrition. With the rising skill gap and difficulty faced in recruiting from the millennial market, finding the right talent to meet incoming business demands has become a gargantuan expense for organisations all over.
Moreover, a detailed study has revealed that on an average, companies lose around 1% – 2.5% of their overall annual revenue by expending time and resources into the training and development of their newly acquired talent.
Furthermore, service-based IT firms have been hit the worst in this onslaught. IT firms need to regularly bring in new talent for incoming projects, as well as to combat regular employee attrition.
So, in order to battle this very predicament, companies have begun looking inward to locate the right talent to fill rising employment gaps. And thus, internal fulfilment of job openings became a contending solution.
AI to the rescue:
Popular belief, which is a global shortage of skills, arises primarily from a lack of visibility of all the available skills in an organisation. This where Artificial Intelligence (AI) rears its head and comes to the rescue.
AI-based fulfilment platforms have exponentially increased the visibility of the relevant supply (or employee profiles) within an organisation. The governing attribute of an AI-powered platform is its ability to analyse voluminous heaps of unstructured data and derive actionable insights.
AI algorithms scour through thousands of profiles and produce the right match for diverse job demands, all from a company’s internal database of employees.
The advantages of using AI-ML algorithms, in order to internally fulfil demands, spreads across improved utilization, faster search and match, accurate allocations and a detailed view of all the available skills in an organisation.
How is it done?
Before we can get down to the calculations and decisions, we need to assume certain general governing constants. These are:
- The company in question needs to fulfil 75,000 open positions internally.
- A total of 180 working days for a single position.
- An average billing rate of 200 USD per day for a single employee.
Since we have assumed that over 75,000 jobs need be filled in order to meet arising business demands, the annual net revenue from these open positions is derived by multiplying these job demands with the number of working days and also the average billing rate per day.
This puts the total revenue at approximately 2.7 Billion USD.
Now in the entirety of fulfilled demands, we must acknowledge the fact that it is next to impossible to fulfil 100% of all demands internally. However, assuming a rather modest 75% fulfilment number, with 25% being hired externally, the revenue is now pegged at 2 Billion USD.
Direct allocations occur when the hiring/project manager has already zeroed in on a candidate before getting flagged. Further assuming that 45% of these remaining hires were allocated directly, 55% of the remnant allocations were reckoned to be worth 1.1 Billion USD in income.
AI accuracy is defined as the overall efficiency of the functioning algorithm, with respect to a host of governing metrics and parameters. If we were to factor in a mere 80% in overall algorithmic accuracy, the revenue derived from successful internal fulfilment will roughly be around 910 Million USD.
The platform increases visibility into the entire talent supply pool by 4x. So, the logical assumption from this statistic is that three quarters (or 75%) of all internal fulfillments were successfully executed by the AI, which places the total value derived at 680 Million USD.
With a 15% profit margin, the total profit derived from the internal fulfilment of open job positions is approximated to be 102 Million USD.
It bares to keep in mind that these values are derived from carefully analysing the data derived from the AI-powered fulfilment platform. Every statistic and monetary value considered has been rounded down, to increase credibility. These numbers could very well be much higher, depending on a host of multiple, and crucial, factoids.
However, one thing is for certain. AI has proven itself capable in the aspect of internal mobility, and the future of work is here.
Content Development Specialist