Hiring doesn’t need to break the budget. Here’s how to save and reduce your cost-per-hire.
The total costs to hire new employees can be quite taxing. The unfortunate part is that all too many businesses take these expenses for granted. They assume that there’s no way around these costs, and continue hiring with inefficient processes.
It’s true – we’ll never remove the expenses associated with hiring. However, cost-per hire metrics can range anywhere from 12% to 30%. So if your hiring process is on the inefficient side, you could easily be throwing away tens of thousands of dollars every year.
How can companies cut down their cost-per-hire? We’ve got three strategies you can put in place today.
#1 Way to Reduce Cost-per-Hire: Leverage Employee Referrals for All Their Worth
As a recruiting firm, we’d love to tell you that we’re the best possible way for you to recruit, full-stop. But we’d be remiss if we skipped over employee referrals. Employee referrals give you hands-down the best ROI out of any recruitment approach. They’re also known to provide some of the best candidates.
The downside is that in all likelihood you will never be able to recruit consistently or at a large volume with referrals. If every company could meet all of their staffing needs with referrals, we wouldn’t be in business.
Still, it’s a strategy you should take full advantage of. Use cash bonuses to incentivize hires. Another good idea is to make a payment upon hiring and a second payment when the referral has stayed with the company long enough to emphasize quality hires. Make your employees’ networks work for you.
#2 Adopt a Proactive Strategy with Employment Branding and Sourcing Passive Candidates
With unemployment at record lows, we really cannot afford to post and pray or rely on employee referrals. The vast majority of qualified professionals either have a job or have abundant opportunities at their disposal. You need a very proactive talent acquisition strategy in order to effectively reduce cost-per-hire.
Employment branding is a great place to start. Even something simple like a landing page advertising the position and company as a workplace can entice candidates to pay attention. Larger companies should offer candidates a way to search for opportunities at the company as well. The stronger your employment brand, the more likely candidates will apply on their own initiative and accept offers.
Sourcing passive candidates is also critical. As mentioned previously, most qualified candidates are already gainfully employed. We have to find quality talent in similar roles at other companies and strategically engage them with details about the opportunity. This is harder than it looks, however, as candidates often ignore anyone who is overselling the role in the first InMail.
#3 Work With a Third-Party
If you can’t beat ‘em, hire ‘em.
Seriously – if someone is able to make quality hires more efficiently than you, why would you continue wasting money trying to do it yourself? If you outsource the process to the right third-party, you’ll save money while still getting the quality submittals you need.
Even if you have an in-house recruiting team, a third-party can still help you reduce cost per-hire.
Third-party recruiters can offer flexibility to help you keep costs low when hiring needs spike or fall. You can leverage a core team of recruiters, but tap a third-party for large hiring initiatives. That way, you get the help you need when you need it but aren’t losing money when hiring needs return to normal.
Furthermore, many recruiting companies offer auxiliary services to streamline the recruiting process. Here at Qualigence, we help out in-house recruiting teams by sourcing qualified, interested candidates – allowing you to hit the ground running with warm leads.
Be wary of lengthy, rigid contracts from any agency. You should always be able to try a recruiting service at a low upfront cost to see if it works for your company.
Your Cost-per-Hire Shouldn’t Make Your Head Spin
You need talent to run a business and you need to spend money to get talent. That’s a fact of doing business. But a high cost-per-hire is avoidable.
If you’re looking to boost your bottom line as talent acquisition gets tougher and tougher with a tight labor market, consider the above strategies. Trust us – after all, we’ve been doing this for 20 years!
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