The cost of recruitment is a large factor when choosing how and where to promote a vacant position. This week, we take a look at how to cut the costs of recruiting, maximising the chances of hiring the right person by not rushing to fill a position due to expensive running costs!
Direct and Indirect Costs
Before hiring a new employee, it is important to look at whether you are using cost-effective recruitment methods and minimising the dent hiring makes on your company wallet. Costs to consider before hiring can be direct and indirect. Examples of direct costs are:
• Leaving employee – The employee being replaced accrues their own specific costs before the position has even been advertised. These can be through the amendment of records, the updating of pensions and payroll and providing references.
• Recruitment advertising – The cost of putting an advertisement live through various mediums can be costly depending on the platform you wish to advertise through, e.g print/newspaper or signing up with a recruitment agency.
• Induction costs – Training new employees upon hiring can cost the company money as they are paid a full salary in spite of the time it takes to reach their optimum level of performance.
As well as the direct costs, there are indirect costs which may not be immediately obvious at the first stage of the hiring process, and can be hard to quantify in financial terms. Indirect costs can include:
• Paying for cover – Organising adequate cover while the position is vacant can run up unseen costs.
• Reduced levels of work – Whilst waiting for a new recruit or during the initial stages of induction, a reduced level of output and a decrease in team unity can bring about costs through lessening of productivity.
There are methods to implement within a business structure that can help lower these costs. Firstly, creating a cost chart with detailed examples of pricing regarding the different avenues available can help manage overall cost and allow for contingency plans should there be any unexpected fees. This chart can then be cross-referenced with previous hiring information, i.e., the costs accrued through previous implementation of each avenue…although admittedly, processing past data may, ironically, accrue some time costs anyway!
Using some of the following techniques can be also useful for those looking to attract a wide array of quality talent without breaking the bank. These can be entirely cost free or at least minimally expensive. Methods include:
• Internal recruitment – Initially, looking internally can be of great benefit to companies looking to find workers that are up to date with the company and specific practices. It cuts the costs of advertising, as managers can post advertisements through internal email and with 44% of workers using this method, it is popular. However one drawback may be the lack of breadth.
• Social/online recruitment – Utilising online trends in the hiring process is a contemporary way to increase the reach of your job advertisement by targeting both active and passive candidates.
• Online recruitment agencies – Looking towards a low cost online recruitment agency takes much of the legwork out of the process and ensures all outreach tools are being professionally used to their maximum potential by those who do it 24/7. A great deal of recruitment agencies work entirely online, further reducing their own overheads and allowing the savings they make to be passed onto the client. This, teamed with a deep knowledge of current industry trends maximises a company’s chances of hiring the best employee in the shortest time.
Reducing the cost of your recruitment process does not mean a lack of talented candidates; the variety of low cost and free platforms through which to advertise your position is enormous and the reach these platforms have mean thousands of potential candidates are closer, and cheaper to find, than you might imagine.