Do you know how much it costs you to bring on a new employee? From candidate sourcing to interviews to onboarding, the price tag for new hires may be putting a crimp in your budget. Learn how to calculate your hiring team’s total recruitment cost, then see ways you can minimize expenses when seeking even top talent.
What is recruitment cost?
The money you spend to attract and hire a new employee is included in the recruitment cost. This includes everything from buying a classified ad to paying the wages for your hiring teams. Totaling recruitment cost is important because it tells you if you are getting a good return on your hiring investment. It’s a core component of profit analysis and a metric of hiring effectively.
How to calculate recruitment cost
Totaling up the hard and soft expenses for everything involved in hiring will take time. Be sure to consider the following:
- Job listings, paid advertisements, and career fairs
- Outside agencies and staffing services
- Travel and accommodations for in-person interviews
- Wages for your hiring teams
While it may be difficult to know the per-person price for each of these costs, you can usually find totals for a fiscal year or quarter. Add up everything, and divide by the number of people you actually hired during the budgetary period. This number will be the actual recruitment cost you are spending per new employee. It can show you if your efforts are profitable and cost effective, and it will give you a baseline to help lower costs in the future.
How to reduce recruitment costs and time to hire
By reducing time to hire, you are freeing up your teams to do other work. It also makes you look good to your future potential employees. To save time and money, consider these recruitment strategies and best practices.
1. Create a candidate persona
Who is your ideal hire? To get closer to your goals, take time to imagine what the right candidate will offer. Consider factors like their experience, background, and an appreciation of your company culture. Creating a persona based on those qualities helps you know what you want in an employee, while also serving as a checkpoint for what you don’t want.
2. Build talent pools
By having a pool of engaged and qualified candidates in your arsenal, you can save time starting from square one and then narrowing down applicants. A talent pool is filled with those who have already interacted with you and who either wasn’t the right choice for a particular position or who already work in your company in another capacity. Keep these contacts handy for when you need them.
3. Create referral schemes
It can be expensive to hire a complete stranger to your company, because you have to invest a considerable amount in word-of-mouth or direct marketing. Add in the risk that the new hire won’t fit into the existing company culture, and it can be challenging to determine if the money spent on a new employee will be worth it.
By putting together an employee referral program, you may see that your new hires are fitting in just fine. You’ll boost your reputation with existing employees, too. They’ll likely appreciate the opportunity to earn extra money or prizes for passing along job openings to quality candidates in their network.
4. Optimize your company career portal
If you’re not hosting job opportunities on your own branded company portal, you’re missing an opportunity to control the message about your company’s career openings. A clean and mobile-friendly job site that allows candidates to apply from their computers or smartphones can reduce hiring time. Plus, you won’t need to completely rely on third-party job sites and job boards to get your message across.
5. Recruit via social media
With so many job seekers using social media (especially LinkedIn) to learn about opportunities, recruiters and hiring teams can really miss out by not being there. You can gain considerable traction for free, but you also have the option to use paid advertising. The shareability of social posts also means that well-meaning friends and family are more likely to grab the job posting you share and pass it along to someone they know who is looking for work.
6. Limit the number of candidates
Too many candidates can create confusion and exhaustion for your hiring teams, and it can send the message to job applicants that they’re just a number in a crowd. By focusing solely on the most qualified applicants, you reduce interviews and get the job filled faster.
7. Automate your processes
So much of the hiring process and workflow must be done by humans, such as interviewing and onboarding. Many of the tasks, however, are best left to software solutions. Whether you use automation to filter out inappropriate resumes or create metrics reports, this approach can streamline elements of your process. It may also drastically reduce your cost-per-hire and create a more consistent hiring experience for internal team members and potential candidates you may bring on board.
8. Create strategies to improve employee retention
Aside from new hires to fill growth positions, you should focus on keeping your best employees at your company. When you use tactics like regular check-ins and employee appreciation programs, it’s far easier (and cheaper) to retain your good workers. A high turnover rate is also deadly to your employer brand and can contribute to the decay of company culture.
9. Use digital interviewing to lower recruitment costs
With the pandemic pushing more business interaction to happen online, everyone is quickly becoming a pro at video communications. Skip the cost of travel and ensure you can narrow down your candidate pool through video interviewing. Then, you’ll be more inclined to make the right hire after a final in-person interview.
Improve your process today with Comeet
Feeling overwhelmed and don’t know where to start? Consider connecting with an elastic recruiting company like Comeet that can help organize your strategy and keep automated steps continuing in the background. These solutions are also perfect for collaborative teams, as they help make sure everyone is on the same page during your hiring process.
Want to learn more about how Comeet can help? Sign up for a free demo today!