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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.
Question
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)?
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
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
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
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 Students Recruiting Message Used on Campus
University 1 80% 20% Pathway to Leadership
University 2 48% 52% See the World
University 3 70% 30% Pathway to Leadership
University 4 60% 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 Students Recruiting Message Used on Campus
University 1 80% 20% Pathway to Leadership
University 2 48% 52% See the World
University 3 70% 30% Pathway to Leadership
University 4 60% 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.
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.
Question
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%)
Question
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:
· Increasing 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
· The 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
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