5th April 2023 4 MIN READ •Hiring Tips •Talos ATS
Reducing recruitment costs is often a priority for HR teams. So, we’ve put together a list of practical and actionable ways you can reduce your hiring costs.
However you approach your recruitment process, you’ll always spend money – either directly, or via the time you spend sourcing and hiring. Therefore, knowing how to reduce cost per hire and other talent acquisition costs can benefit your organisation’s bottom line and potentially make the hiring process more efficient too. Read on to find out how to reduce recruitment costs without compromising quality talent.
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The real cost of hiring an employee
According to Oxford Economics, recruiting for an employee earning £25,000 or more will set you back nearly £31,000 to replace. And that was back in 2014, so the rate will be even higher now. As a general rule of thumb, the true cost of an employee will often be between 75% and 100% more than a candidate’s salary.
What’s included in recruitment costs?
First things first: hiring a new candidate is never a straightforward process. For a start, it takes time, and as the old adage goes, time costs money. And as such, recruitment budgets can very quickly get swallowed up.
Calculating your total hiring costs depends on how much you spend to fill one position. However, this figure is just one element of the cost of recruitment. The cost to the wider business is quite another.
For example, the longer you take to fill a vacant position, the business has to foot the bill for:
- An empty chair
- The loss in productivity
- The loss of knowledge and expertise
- Poor hires
The cost of unsuitable hires is perhaps the most pertinent and one every HR team in the country will agree with; hire too quickly, and you could be back at square one before you know it, albeit just a little lighter on the old budget.
What’s the cost of a poor hire?
According to the Recruitment and Employment Confederation, the cost of a bad hire with a salary of £42k can cost a business a total of £132,000 in wasted salary, loss of productivity, training and several other hiring costs. We don’t need to tell you how big a loss that is; just imagine how much this can rack up after just a couple of poor hires…
How to reduce recruitment cost per hire
From knowing who your perfect candidate is to utilising talent technology, here are 10 ways to reduce recruitment costs for your organisation without affecting talent quality.
1. Define your ideal candidate
It’s amazing just how many companies will skip this stage. Within your company, you likely know the exact skills and attributes that will make a new hire successful, so taking the time to profile what an excellent employee looks like – will pay dividends in the long run. It will also hugely benefit the candidate attraction and screening process. However, the need for speed can sometimes detract from this initial fact-find.
Instead, HR is often given little or no directive, instead simply instructed to find a replacement double quick. It’s what we’d call reactive recruitment. What we’re proposing is proactive recruitment, which means profiling the role and the ideal employee to fill that role.
By defining your role, you’ll help:
- Focus your campaign
- Create a focused job spec
- Align candidates with your culture
- Strengthen your culture
- Increase retention
- Create brand ambassadors
- Reduce recruitment costs
2. Don’t discount internal talent
This might seem a no-brainer. And it is. But it’s surprising just how many businesses plunge into a new recruitment drive without first surveying the talent right under their noses.
When you consider that, according to LinkedIn, 41% of employees will stick with a company when you have a reputation for hiring from within (a key component of a magnetic culture), this recruitment route should surely be a top priority.
Our advice before you launch a new recruitment campaign is to:
- Advertise vacancies internally first
- Take time to identify your top talent
- Consider upskilling your current workforce to plug gaps
These steps could help you reduce recruitment costs.
3. Increase job board visibility
There’s so much HR recruitment tech these days that it’s easy to forget that not everyone uses it.
The beauty of the modern applicant tracking system is that you’ll have access to multiple job board integrations through a single dashboard. That in itself will save you time. And time, as we know, is money.
With smart tech, you’ll be able to:
- Manage your available vacancies
- Analyse individual job board success
- Maximise your ROI
- Track the job board that works best for your roles
- Improve your job adverts, if they’re not performing
4. Create a careers site
If you haven’t got a careers site yet and want to reduce hiring costs, it might be time to investigate. But how does a careers site save on cost?
First, if you possess your own career site, you’ll have a one-stop shop for all your career opportunities. So, straight away, you’ll be reducing recruitment costs.
Second, you’re giving yourself a brilliant platform to promote your employee value proposition (EVP), increasing your chances of making successful hires by 29%.
The pros of a career site at a glance include:
- Advertise your own job vacancies
- Control SEO optimisation
- Showcase your EVP
- Deliver a talent-winning recruitment journey
- Ensure a mobile-friendly candidate experience
- Create landing pages for specific roles
- Highlight featured jobs
10 ways to reduce recruitment costs
For most businesses, their biggest cost by far is always people. From recruitment and salary to training and turnover, it’s inevitable. But reducing people costs isn’t impossible. In our full Recruitment Costs Guide, we share our 10 unmissable tips for reducing people costs.
From utilising employee referral programs to implementing advanced hiring software powered by AI to streamline hiring, we’ve shared our latest tactics to keep people costs as low as possible.
Download our full list of 10 ways to reduce hiring costs today
