How can I cut down on recruitment costs? Technology is constantly advancing, which makes it possible for people in a wide variety of fields to carry out their work in a more efficient and effective manner. These technological advancements also have an effect on the way that jobs are filled and candidates are selected.
The cost of recruitment is consistently one of the highest operating expenses for any company, and the goal of any employer should be to find ways to reduce recruitment costs while maintaining the same level of talent in the workforce. Determine how much money your current method of recruitment is costing your company as a first step, and then look for places where costs can be cut or eliminated entirely. This is a good place to start. When it comes to hiring the right people on a tight budget, I’ve encountered my fair share of challenges, but having the appropriate processes in place has made the process a lot simpler for me to handle.
Are you paying too much for recruiting new employees?
You’ll be able to cut down on your cost of hire with the help of these seven easy tips.
Unfortunately, there is no such thing as a free new hire, but there are tactics you can employ to cut down on the costs of hiring that are unavoidable.
Before we get into the specifics of how to cut costs, it would be beneficial for you to take a moment to consider what you are currently spending and how you are spending it. The cost of adding a new member to your team can vary greatly depending on the methodology that is used to calculate that cost. According to research conducted by Oxford Economics, the average cost of replacing a single employee could be as high as £30,000 if the onboarding period is taken into consideration. The onboarding period refers to the amount of time it takes for a new hire to get up to full working speed.
When determining how much it costs to hire an employee, the majority of businesses will focus their attention primarily on a few key aspects, such as the fees charged by recruitment agencies, fees charged for referrals, and advertising charges. And it’s important to keep in mind that these costs will vary depending on the type of role you are recruiting for; the CIPD Resourcing and Talent Planning survey 2017 puts the median cost for hiring senior managers and directors at £6,000, while the median cost for hiring all types of employees is £2,000. Also, it’s important to keep in mind that these costs will vary depending on the type of role you are recruiting for. The budget you need to set aside for recruitment will change depending on whether you choose to handle hiring internally, outsource it, or combine the two approaches. You can also choose to combine the two.
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How can I cut down on recruitment costs?
Here are seven ways you can reduce recruitment costs without sacrificing the quality of hires, regardless of who you are hiring or the methods you are using to find and select them.
1. Decrease the need for you to hire people in the first place
Although it is common knowledge that retaining talent is less expensive than recruiting new talent, I have observed that a significant number of businesses do not appear to be aware of this fact. According to the findings of research, employee retention statistics for the year 2018, which show that the turnover rate was 27%, the average turnover rate in 2019 stood at 36%. Since 2010, there has been an astonishing increase of 88 percent in the turnover rate. You will be able to save a significant amount of money by minimizing employee turnover through the implementation of retention strategies; as a result, there will be a decreased need to recruit and train new workers to fill vacant positions. When a company posts job ads month after month for the same positions, not only does it give the company a bad name, but it also has the potential to drive away qualified applicants.
You can stay informed about employees who are interested in making lateral or vertical movements within the organization if you have managers arrange frequent goal reviews with their subordinates. This keeps you informed about individuals who are interested in moving up in the organization. Keeping up with the aspirations of employees will enable you to make the most of the talent you already have on your team and will also allow you to cultivate a culture in which employees feel appreciated and heard, both of which are essential for reducing employee turnover rates.
2. Tap into advocacy
Consider the process you went through the last time you chose a place to eat or spend your vacation: you probably checked out some reviews online or consulted with a close friend or member of your family. Jobseekers are increasingly turning to the same strategy, which entails inquiring about the employer from dependable coworkers, peers, or friends; consulting their connections on social media networks such as Twitter and LinkedIn; and consulting employer review sites like Glassdoor for the inside scoop.
If you are confident that you are doing the right things to make your employees feel supported, happy, and engaged at work, then your organization should feel comfortable encouraging staff to share their experiences of your workplace, particularly through their social media channels. According to research conducted by MSL Group, brand messages are shared 24 times more often when distributed by employees than when shared by the brand itself. As a result, advocacy is a powerful tool that can be utilized at a low cost and has the potential to significantly impact your recruitment strategy.
3. Establish a system for receiving referrals
Referrals are the most effective way for businesses to increase their revenue, and the same principle applies to the hiring process. I always check in with employees to see if they know anyone in their network who would be a great fit for an open position because referrals are a great way to find some of the best talents, which is why I always check in with employees to see if they have anyone in their network who would be a great fit for an open position. I also make it a point to take the time to encourage employees to share job postings with one another and even offer incentives in order to generate more excitement and move the process along more quickly. This is without a doubt the most effective method for lowering recruitment costs while maintaining quality.
The implementation of a referral program will necessitate the setting aside of funds in order to provide current employees with a gratifying “thank you” bonus for successful introductions; however, this type of program has the potential to be very cost-effective in the long run. Employees are more likely to recommend people they know who not only meet the requirements of the role, but also are compatible with the working culture of your organization and are therefore more likely to remain with you for a longer period of time.
4. Make the most of your social networks.
Employers are able to provide an insight into their day-to-day operations, their vision and values, and the type of people who work there when their employees are willing and able to communicate socially. Because of this transparency and authenticity, you should see an increase in the number of applications you receive from people who are already certain that they will be a good fit for your company’s culture and that they share your values and vision.
The best part is that using social media doesn’t have to cost you a dime; all it takes is a little bit of your time to put together the appropriate messages and campaigns and to interact with the people who follow you. You also have the option of paying for advertising campaigns that are directed toward particular demographics of consumers.
If you’re just getting started, it’s best to limit your attention to the platforms and channels that are most relevant to your target demographic rather than trying to be everywhere at once. It’s likely that you’ll discover that LinkedIn is the social media platform that contributes the most to your recruitment strategy. If you are uncertain as to which strategies are the most successful when applied to social media, you can consult one of the innumerable blogs that are dedicated to the topic, or you can ask your marketing colleagues for support and advice.
5. Make sure the advertisement is well-written and captivating.
The job advertisement that a potential employee finds on your company’s website, on a job board, or on social media may be one of the first and, as a result, the most important experiences they have with your company.
Your advertisement not only needs to be well written and free of errors in order to be effective in a market that is essentially a candidate’s market; it also needs to be compelling, optimized for search, and provide a clear outline of the job’s most important requirements and responsibilities.
Be sure that these requirements are accurate; for example, if you aren’t actually requiring a degree, you shouldn’t say that they are because you might turn away some excellent applicants. Saying that the position could be performed on a part-time basis, having flexible working hours, or working remotely are all options will also increase the number of people who are interested in applying for the position.
These minor adjustments won’t cost you any money, but they could have a significant impact on your ability to find the ideal candidate for the role you have available.
6. Increase productivity by utilizing AI’s prowess.
Recruiting is a tedious task that needs to be correct from beginning to end in order to get the right results. Recruiters really have their work cut out for them, from developing an appropriate job description to selecting the appropriate marketing channels. Why not make your recruitment process one that is driven by data instead?
Our customers on Fuzu utilize talent-screening systems, which compare the skills and experience of applicants with the requirements, and then provide lists of the top applicant matches in real time. This method automates the first stage of the screening process, which enables HR managers to focus their resources on candidates who are suitable for the position. When you make an investment in the appropriate technology, you will eventually see a return on that investment in the form of time savings, increased efficiency, and the ability to meet the overall goals of your company by attracting high-quality talent.
If you think that hiring quality professionals is expensive, just wait until you hire the wrong person; the repercussions will affect not only your company but also you as a person, setting you back many milestones from your planned ambitions. If you think that hiring quality professionals is expensive, just wait until you hire the wrong person. If you make the wrong hire for your company, it could cost you time, money, and even customers. There is a good chance that not all of the strategies described in the previous paragraph will work for you. Consequently, ensure that you use a combination of these strategies and tools to assist you in efficiently recruiting new members.
7. Develop talent pools and alumni networking opportunities.
It is not uncommon to have a number of exceptionally qualified individuals apply for a single position. Don’t throw away those connections; instead, create talent pools with names of people you can contact in the event new positions become available in the future.
When compared to starting from scratch to find candidates, pre-qualifying applicants is a significantly simpler, faster, and more cost-effective process. The applicant has already provided you with more information about themselves if they have previously progressed further through the process. However, you need to make sure that your continued storage and processing of the data pertaining to these individuals is in accordance with the requirements of the GDPR. Implementing a powerful ATS can be of assistance in this regard.
In a similar vein, former employees who have moved on to greener pastures can be an excellent source of candidates for future openings. If you maintain contact with your former employees, some of them may be interested in applying for open positions again, or they may suggest that a friend apply in their place.