The case
Question 1
Client Goal: Double the number of recruits while maintaining their quality with minimal increase in resources expended
Our client recruits graduating college seniors for entry-level positions in locations around the world. It currently hires and places 500 graduates per year but would like to triple in size over the next ten years while maintaining quality. Assume that the increase must all come from hiring graduating seniors. (In an actual case, you may not be given this and other assumptions unless you ask.)
The client's current recruiting budget is $2 million annually, and while it is in a strong financial position, it would like to spend as few additional resources as possible on recruiting. McKinsey is advising the client on what steps it will need to take in order to meet its growth targets, while staying within its budget constraints.

Q1: What levers does the organization have at its disposal to achieve its growth goal?
A: Some possible levers are given below. It's terrific if you identified several of these and perhaps some others.
•Attract more applicants at the same cost
oReview the list of campuses targeted (e.g., optimize resource allocation across schools). The review may result in adding certain higher potential campuses and eliminating other ones that appear to have more limited potential.
oReview recruiting approach at each campus (e.g., optimize cost-effectiveness of messages and approaches at each school).
•Extend offers to a higher percentage of applicants while maintaining quality (e.g., reduce the number of people who are turned down who would have performed equally well in the job)
•Improve acceptance rates among offerees (e.g., better communicate the benefits of the job relative to alternatives or improve the attractiveness of the job relative to alternatives)

Question 2
For the remainder of the discussion we'd like to focus on the two specific levers involving attracting more applicants at the same cost.
•Review the list of campuses targeted (e.g., optimize resource allocation across schools). The review may result in adding certain higher potential campuses and eliminating other ones that appear to have more limited potential.
•Review recruiting approach at each campus (e.g., optimize cost-effectiveness of messages and approaches at each school).
Please note that if you identified different but equally valid levers, the interviewer would be able to assess them. But for the purpose of this case study, we are going to focus on these two levers.

Q2: How would you initially approach determining whether the client can increase hiring by adjusting the list of campuses targeted? What sort of analysis would you want to conduct and why?
A: You might take the following approach, where we've outlined two avenues of analysis:
•Estimate the hiring potential across schools
oAnalyze the number of hires by school over the last several years
oDevelop a comprehensive list of schools that meet our requirements and a minimum set of standards for recruits
oSurvey seniors at these schools to determine interest in an entry-level position with the client
oConsider the size of the graduating class at each school, determine how that class might be segmented (e.g., each class could be segmented by discipline or segmented based on career interests in response to the survey), then calculate the size of each segment
•Estimate the optimal cost-per-hire across schools
oCompare the current cost-per hire across schools
oIdentify opportunities to decrease the cost-per-hire at each school

Helpful Tip
You may have a slightly different list. Whatever your approach, we love to see candidates come at a problem in more than one way, but still address the issue as directly and practically as possible. In giving the answer, it's useful if you are clear about how the results of the analysis would help to answer the original question posed.

Question 3
Twenty-five percent of the annual recruiting budget is spent on candidates (i.e., attracting, assessing, and getting them to accept). Twenty percent of hires are categorized as "most expensive" and have an average cost-per-hire of $2,000.

Q3: What is the average cost-per-hire of all other candidates? Remember that the client hires 500 students per year and its annual recruiting budget is $2 million (information that we hope you noted earlier).
A: The answer is $750 per hire (or less than half the cost-per-hire of the "most expensive" candidates).
Amount spent on the less expensive candidates:
25% of $2 million budget = $500,000 spent on candidates
20% of 500 student = 100 students categorized as "most expensive"
100 x $2,000 cost-per-hire = $200,000 spent on "most expensive" hires
$500,000 recruiting budget - $200,000 = $300,000 remaining for all other hires
The number of less expensive candidates:
500 hires - 100 = 400 "other hires"
Cost-per-hire of the less expensive candidates:
$300,000/400 =$750 per hire
Helpful Tip
While you may find that doing a straightforward math problem in the context of an interview is a bit tougher, you can see that it is just a matter of breaking the problem down. We are looking for both your ability to set the analysis up properly and then to do the math in real time.

Question4
Q: In order to decide whether to reduce costs at the least efficient schools (i.e., those with an average cost per hire of $2,000), what else would you want to know?
A: Some of the possible answers are given below.
Basic questions:
•What are the components of costs at these schools (why is it so expensive to recruit there)?
•What opportunities exist to reduce costs?
•How much cost savings would result from implementing each of the opportunities?
•What consequences would implementing each of these opportunities have on recruiting at the least efficient schools?
Questions demonstrating further insight:
•Why is the cost lower at more efficient schools, and are there best practices in resource management that can be applied to the least efficient schools?
•If we reduce costs at the least efficient schools, what will we do with the cost savings (i.e., what would be the benefit of spending the money elsewhere vs. where it is currently being spent)?

Helpful Tip
We would not expect anyone to come up with all of these answers, but we hope some of your answers head in the same direction as ours. Yours may bring some additional insights. In either case, be sure that you can clearly explain how your question will bring you closer to the right decision.

Question 5
The McKinsey team conducts some analysis that indicates that increasing spending on blanket advertising (e.g., advertisements/flyers on campus) does not yield any significant increase in hires.
Q5: Given that increased blanket advertising spending seems to be relatively ineffective, and the client doesn't want to increase overall costs, what might be some other ideas for increasing the candidate pool on a specific campus?
A: We are looking for at least a couple of answers like the ones given below:
•Improve/enhance recruiting messages (e.g., understand target candidate group, refocus message on this group, understand competitive dynamic on campus)
•Utilize referrals (e.g., faculty, alumni)
•Come up with creative ways to target specific departments/clubs of the school
•Rethink advertising spending - while increasing blanket ad spending doesn't seem to work, advertising might still be the most efficient and effective way to increase the number of candidates if it is deployed in a more systematic, targeted way

Helpful Tip
This question is a good one for demonstrating creativity because there's a long list of possible ideas. Additional insights into how a given idea would be approached and how much it would cost are helpful.

Question 6
For simplicity's sake, let's say we've conducted market research and found that there are two types of people on each campus, A and B. Historically, our client has also used two types of recruiting messages in its advertising. The first, called "See the World," gets one percent of type A students to apply, but three percent of type B students. The second, called "Pathway to Leadership," gets five percent of Type A students to apply, but only two percent of type B students.
The chart below lists the breakdown of types A and B students at some of our major campuses, and the message our client is using on campus.

School% of Type A Students% of Type B StudentsRecruiting Message Used on Campus
University 180%20%Pathway to Leadership
University 248%52%See the World
University 370%30%Pathway to Leadership
University 460%40%See the World

Q6: Assuming there's no difference between the costs of each message, what can you tell me from this information?
School% of Type A Students% of Type B StudentsRecruiting Message Used on Campus
University 180%20%Pathway to Leadership
University 248%52%See the World
University 370%30%Pathway to Leadership
University 460%40%See the World

A: According to these numbers, the client should use the "Pathway to Leadership" message across all four universities. The "See the World" message is preferable only if more than 80% of the students at a given university are of type B.

Helpful Tip
An even more insightful response would mention that the ultimate answer depends on the cost of each message, whether the cost increases depending on the number of students at the campus, and how interested we are in students of Type A vs. Type B (e.g., will one type be more likely than the other to get an offer and to be successful on the job). One could imagine using both messages on some campuses if the additional cost were justified by the resulting increase in hires.

Question7
University 4 graduates 1,000 seniors each year.
Q7: How many new candidates might be generated by changing the recruiting message at University 4 to Pathway to Leadership?
A: The answer is 20 candidates (i.e., an increase of over 100%).
Number of each type of student at University 4:
1,000 seniors x 60% = 600 Type A students
1,000 seniors x 40% = 400 Type B students
Candidates attracted be See the World message:
(1% x 600) + (3% x 400) = 18 candidates
Candidates attracted by Pathway to Leadership message:
(5% x 600) + (2% x 400) = 38 candidates
Increase in candidates resulting from change in message:
38 - 18 = 20 more candidates (an increase of over 100%)

Question8
Q8: What sort of next steps should we tell our client we'd like to take based on what we have discussed today?
A: The ability to come to a logical, defensible synthesis based on the information available at any point in an engagement is critical to the work we do. Even though we'd consider ourselves to be very early in the overall project at this point in the case, we do want to be able to share our current perspective. The ideal answer would include the following points:
FINDINGS
•There appears to be an opportunity to significantly increase total applicants of the same quality that we are getting today at the same or reduced cost:
oIncreasing blanket advertising is ineffective and costly, but changing the advertising message on some campuses could increase applicants significantly without increasing costs. At one of the campuses we've looked at, University 4, the number of applicants would go up more than 100 percent
oThe cost-per-hire varies dramatically from school to school. This suggests that there may be opportunities to reduce costs in certain places or reallocate resources more efficiently
NEXT STEPS
•We plan to explore further ideas for increasing quality applications by changing the mix of schools, beginning with a more detailed review of the opportunities to reduce costs at certain schools
•After looking at levers to increase total applicants, we will be analyzing opportunities to improve the offer rate (i.e., ensure we're not turning down quality applicants) and to increase the acceptance rate
•We will examine additional methods for attracting more applications from our current campuses (e.g., referrals, clubs) in addition to assessing the impact of improved messaging on campus