Saving on Costs During the Recruitment Process
Recruitment within your organisation is inevitable. In order to grow, you need to hire the right talent to provide the right services. This doesn’t come cheap. Hiring an employee can cost an organisation well into the thousands and so keeping your cost per hire low should be a strategic move within your organisation.
In its 2016 Human Capital Benchmarking Report, the Society for Human Resource Management estimated that companies spend an average of 42 days to fill a position and $4,129 per hire. That’s two extremely valuable resources going into one hire.
Let’s look more into the logistics around recruiting and how you can budget wisely and spend less.
What goes into recruiting?
The cost of hiring an employee involves both internal and external recruiting costs which includes the direct and indirect costs of the recruiting process, training of the employee, employee salary and benefits, integrating the employee into the workplace, office supplies and equipment costs and more.
· an $8/hour employee can end up costing a company around $3,500 in turnover costs.
· small companies spent, on average, more than $1,500 on training alone, per employee, in 2019.
· the salary-plus-benefits package for an employee who makes $50,000 a year could equal $62,500 to $70,000.
So, how can you recruit effectively?
Focus on the building blocks. The first steps on how to cost effectively recruit for your agency involve strategy and meticulous planning. If you don’t have a plan, you have nothing.
1. Budget accordingly
This will involve putting together a recruiting strategy and plan that details how much it’s going to cost you per hire, how much you have available to spend on the recruitment process and therefore how many successful hires you can make.
2. Plan accordingly
Once you have your budget together, focus how you’re going to recruit – what talents and skills do you need and how are you going to find the right candidates, i.e., where are you going to advertise your job applications?
3. Execute accordingly
The third and most crucial step is ensuring you execute your plan to the best of your ability and stick to the budget. Adopting competitive strategies in recruitment can help improve the hiring process and recruitment success rate.
What can you do to reduce recruitment costs?
Advertise inhouse and see if you have any employees who are best suited for the job, giving them the opportunity to apply. Alternatively, ask current employees for referrals of people they may know who fit the job specifications. According to a LinkedIn survey, 48% of businesses say their high-quality hires come from employee referrals.
It is important to note that while this will save costs on advertising, you will still need a team to handle the process from start to finish.
If you have the time, you can save money by advertising for job openings online for little to no spend at all. Make use of social media, email marketing, online recruitment marketplaces, and encourage your family and friends to share too. Social media recruitment statistics recently published that 79% of job seekers say they use social networks in their job search.
Much the same as the first point, the only downside is while you’re also saving money taking this route, you’re still utilising valuable internal resources (such as time) by handling the entire process internally.
This leads us to our final tip…
Recruit via a recruitment agency
Recruitment agencies are designed to handle the entire recruitment process from start to finish in the most cost-effective way for you, while taking the burden off of your hands at the same time. Not only this, but with meticulous tried and tested processes in place, utilising a recruitment agency has a higher chance of ensuring a successful placement, therefore saving further costs down the line. Furthermore, an online recruitment platform like Hiring Antz reduces even more costs and proves to be even more successful.
Avoid hiring for the sake of hiring. This shouldn’t be a decision taken lightly as it’s not a light expense. In the turbulent times of a global pandemic, organisations are doing everything they can to cut costs and save money. Unless you’re absolutely desperate to add team members to your staff, save on recruitments costs until you have no other choice.
As leaders in the recruitment industry, we can help you find the right fit for your organisation at a fraction of the cost to do it internally. Get in touch for a successful recruitment process.