5 Ways to Cut Down the Cost of Recruiting
Entrepreneur's New Year’s Guide
No matter the size of your company, finding and retaining talent can be a difficult, expensive task. Whether you decide to handle recruiting in-house or hire a staffing agency, costs add up quickly -- so it is important to budget wisely.
At my company, DialAmerica, we cast a wide recruiting net, which enables us to be selective but also forces us to undergo an extensive and thorough recruiting process. Here’s what I have learned about maximizing your current assets and minimizing costs when recruiting.
1. Establish clear requirements for potential candidates.
According to one study, the typical cost of turnover for positions earning less than $30,000 annually is 16 percent of an employee’s yearly salary. If you aren’t exact and careful in your selection process, the re-hiring process can be expensive. Investing in getting it right the first time is worthwhile.
Remember to be proactive in your search, stay true to the type of employee you are looking for, and keep critical qualities top-of-mind when interviewing potential candidates.
2. Use your existing network.
Your most important recruiting assets are at your fingertips, and you may not even realize it. They are your own employees.
Ask your current employees to post job openings on their social media pages, and encourage them to recruit friends and former colleagues by offering a referral bonus. At my firm, we have a high-end applicant tracking system and database of past employees, which enables us to stay on top of our current progress and earn dividends off of work we’ve already done.
3. Make the most out of free resources available to you.
Be sure to utilize industry-related LinkedIn groups to reach your target audience, contact local universities to share your openings with students / prospective employees, and attend free career fairs.
4. If you do need to put money into your recruiting efforts, make it count.
After you’ve exhausted free resources, it may be time to spend. Conduct research on where your ideal candidates reside. Are they active job seekers searching on job boards, or are they passive candidates on LinkedIn waiting for someone to approach them with a great offer? Knowing where your candidates are looking will allow you to allocate your budget to the site where you’ll get the most favorable cost per hire.
If you go with job boards, make the most of your spend by posting job openings to sites like CareerBuilder and Monster, as it guarantees that your postings will be picked up and distributed by aggregators including Indeed, Glassdoor and many others.
The challenge some companies have is weeding through all their applications to find the best candidates. These companies may want to consider one of the many solutions available to screen and test applicants for desired skills early in the process. This allows recruiters to use their time working with truly qualified applicants.
5. Measure what matters.
Very few companies are measuring recruiting results effectively. Incorporating measurement ratios into your process, like interviews to application, allows your company to determine the relationship between the number of applications you receive and the number of resulting interviews that take place.
Not to mention, knowing the source of your applications is also important for the measurement of cost per hire. Metrics like these are important dimensions that help measure return on investment and contribute to the development of better, more nimble recruiting strategies.
While the recruitment process can be daunting, taking a step back and strategizing a smart approach is imperative. There are costs, but there are also a variety of free and easily accessible resources that your company can -- and should -- be using to its advantage.
Even though the process must adapt to projected growth and the needs of your company at a given time, it’s important to utilize the multitude of resources that are at your disposal. Each resource is put in place to ensure your company hires the best employees that are going to stay with you for a long time. Remember that keeping an open mind and being expansive in your efforts are the keys to recruitment success.