Welcome to the first day of Autumn!
Employee wages and employment recruitment expense are a large chunk of any organization’s overall costs. During and post-pandemic it will be money well spent when employers start to vie for talent again to have an excellent, fast recruiting process either in-house or with outside support. However not every organization will have the resources to spend much for recruitment. Controlling talent acquisition expenses is not something that HR recruitment specialists are really faced with often.
But maybe in the current climate your management has instituted across-the-board budget cutbacks which might linger when your business reopens or even after the pandemic.
Recruitment Expense Control
Below are 5 ways a talent recruitment professional can use to tamp down recruitment expense without impairing the talent pipeline.
1.Accurately Calculate Your Recruitment Costs
You must establish what your company’s actual recruitment cost is before you can decide which elements to reduce or eliminate or remain the same. Include both direct and indirect costs when calculating your recruitment costs.
Examples of some direct costs include:
- HR administration
- job board fees
- agency and advertising budgets
- onboarding budget
- processing costs
Examples of indirect costs can include:
- loss of business while the job is unfilled
- turnover (yes, this shows up both places)
- additional training costs
- reduced productivity while the job remains vacant
- burnout of other workers who pick up the slack
It is important that you keep records – not just the recruitment costs but also what value recruitment brings to your firm. Consider your processes – their effectiveness, their duration, their use of personnel, their weaknesses and their return-for-effort expended:
- interviewing costs
- travel expense
- time to review resumes
- communicate with multiple applicants
- conduct formal interviews
- discuss candidates with peers
- determine who will make the best fit
2. When Surrounded by Alligators, Don’t Decide to Drain the Swamp
Putting an entirely new hiring method or new recruiting software into operation will save time and money longer term, but a system-wide change should only be made if yours is truly not functional. The time and costs of a completely different method will be high before savings begin to show up. Plus, new procedures require training and lead to some unexpected errors during the learning curve. Rather, plan to modify your recruiting approach to revamp the most time-consuming components.
Hiring managers need to collaborate with HR recruiters and help create a more consistent, less labor-intensive and faster-moving approach. You want to optimize the hiring process so more candidates accept your offers. Part of improving the recruiting process has the recruiter and hiring manager form the basis of an offer early-on that becomes suitably persuasive to the candidate.
3. Employee Referral Programs
Studies consistently show that employee referrals improve quality-of-hire and retention rates while lowering hiring costs. Yet, they are still underutilized.
“Employee referrals have proven success,” said Amber Hyatt, SHRM-SCP, vice president of product marketing for SilkRoad. “Employee referrals have excellent conversion rates from interview-to-hire, as well as typically longer tenure with the organization. Recruiting teams are very aware of the benefits of leveraging employee referral programs to cost-effectively recruit, speed the time-to-hire and secure top talent to fill hard-to-fill positions.”
Furthermore, “I find most organizations spend the least amount of money marketing and automating their referral program than any other single source they have,” said Tim Sackett, SHRM-SCP, president of HRU Technical Resources. “Yet, it’s their No. 1 source and their No. 1 quality-of-hire source.”
For employers looking to hire, especially while the pandemic still challenges, and particularly those needing to fill critical roles, employee referral programs are demonstrating real potential. By leveraging the influence of trusted friends and colleagues, talent recruiters can increase their odds of making a successful hire.
If you are just starting an employee referral program, it may not be necessary to offer financial incentives because in these difficult times people will naturally respond out of good will or out of concern for a laid-off friend or family member.
4. Compress Time-To-Hire (TTH)
If you minimize the time it takes to hire, that will lower your cost-per-hire. Attention to time-to-hire could also result in an improved experience for the candidate. Way to do this are for the recruiter and hiring manager to agree on the job description and advertisement before publishing, to pay attention to newer recruiting technologies, to combine first and assessment round interviews into one, and to have direct managers engage earlier in the recruiting process.
5. Reporting Automation
Reporting is essential for several reasons. First, it takes time away from your recruiters’ time that could be allotted to higher priority activities. Try reporting systems that lower administrative burden for those whose time would be better spent in interviewing. While this step does not lower hard costs, it does optimize the activities of your in-house resources. But you should budget for a productivity loss while transitioning your team to reporting automation from current more manual techniques.
Think about automating:
- post-application messaging
- nurturing workflows
- social messaging
- automated help desk messages
Richard Fairbank, CEO at Capital One Financial Corp. is a billionaire and renowned businessperson. He is an expert at using a combination of information technology and testing. His recruiting comments are, “At most companies, people spend 2% of their time recruiting and 75% managing their recruiting mistakes.” It’s likely that your HR department and operations supervisors do not reflect that quote, but you need to realize that more executives are paying attention to recruiting, its cost and value.
The question then is what are you doing to optimize your firm’s recruiting process to make certain you are keeping recruiting expenses down while adding value?
By using recruitment cost containment steps like those listed above, you will not only save your company money but produce additional efficiencies and usefulness within your recruiting function. Or maybe even save your organization in these perilous times.