5 Ways You Can Reduce Your Recruitment Costs
In most companies around the world, recruitment takes a huge chunk of the overall operational costs. In fact, according to the International Public Management Association for Human Resources, about 30% of companies spend between $1,000 and $3,000 per hire and 15 percent spend $5,000 to $7,000.
Imagine you have to hire 10 or more workers in a year, and those costs can quickly add up.
You need to understand how much recruitment is actually costing your company before you can determine areas that can be eliminated or reduced. Some of the direct costs to recruitment include turnover, HR Administration, job board fees, agency and advertising budgets, onboarding budget and processing costs.
After understanding which areas of recruitment you are spending most money on, you can know which areas you can streamline spending. Here are some of the most effective ways you can save on recruitment costs without sacrificing the talent pipeline:
1. Start automating some of the recruitment tasks
There are several software in the market that can help you automate some tasks such as post application messaging, nurturing workflows, social messaging, FAQs, and automated help desk messages.
You can also use the system to screen hundreds of applications so that you won’t have to do it manually. Put in some keywords per position and the system will automatically sort through each application to see if any of your applicants match your keywords.
2. Reduce time to hire
In theory, when you reduce time to hire, you reduce the cost per hire. For faster recruiting your hiring team can agree on the job ad or description before it gets posted, and use technologies like video interviewing, consolidate first round and assessment interviews, and have managers assist in the hiring process earlier on.
By reducing time to hire, you are also creating a much better candidate experience, which your potential hires will greatly appreciate.
3. Hire great candidates the first time
If you hire great employees on the get-go, you can save a lot of time in finding a replacement in the future and just focus on how you can retain them. With the price of each lost employee slated running as high as 150% of annual salary, increasing on retention can assist in containing recruitment costs.
According to Paul Slezak at RecruitLoop, thousands of dollars per year can be drained from your budget with low staff retention rates. The costs don’t just come from direct expenses associated with hiring a new person but also in the loss of productivity around the resignation, rehiring and retraining processes, he added.
4. Offer a competitive salary package
It’s good to offer a competitive salary package right away so you don’t waste man hours by forcing recruiters to negotiate and re-negotiate with potential candidates.
Adding flexibility into your compensation ranges may increase offer acceptance and allow your recruiters to nab their first choice every time (which may reduce time to hire and increase retention respectively).
5. Boost your employee referral program
Studies show that employee referrals are among the most qualified, quickly hired and the easily retained candidates overall. HR software like Firstbird can ensure that you are implementing an efficient employer branding, employee referral program, and sourcing functions.
By having an employee referral program, you can empower your own employees to become brand ambassadors and recruit great candidates for your business. They can share your jobs on social media for you, saving you a lot in terms of advertising costs.
Recruitment can be a costly activity for companies and by using cost-cutting ideas like those listed above, you will not only save your organization money but create additional efficiencies and value within your recruiting function.
Looking for ways to boost your referral program? Why don’t you see a demo with Firstbird.