Do you know what it really costs to hire a new employee?
Let’s make sure we understand what hiring costs actually are. Hiring costs are the sum of your internal costs (ATS systems, bonuses for referrals, in-house talent acquisition staff, recruiter’s fees, etc.) and your external costs (marketing materials, job boards, recruitment technology). Sometimes referred to as recruiting costs, they can easily spiral out of control.
Understanding your cost-per-hire (CPH) which is total hiring costs divided by employees hired in a period – is key to saving money and making smart recruiting decisions.
Compare the CPH of Each Hiring Resource
Your company’s open positions are more than likely shared across some combination of social media, job boards, and your website. Begin by calculating an approximate cost-per-hire for each platform.
For example, is LinkedIn’s CPH suspiciously higher than Indeed’s? Is your website’s significantly lower than Facebook’s?
Use this new understanding to adjust your budget accordingly. Don’t pour money into a platform that isn’t working as efficiently for you – you should be getting the full bang for your buck.
While every dollar of your company’s hiring spend might seem worth it on paper, here are three ways to control costs.
1. Streamline Training and Onboarding
A new employee doesn’t reach full productivity until after the first 8 to 26 weeks in a new position, found a Mellon Financial Corp. study.
What does that mean for you? Hidden costs – and lots of them. The same study reported decreased productivity from new employees could cost between 1% and 2.5% of total revenue. Finding ways to minimize resistance in your company’s training and onboarding could reduce hiring costs dramatically.
2. Digitize Paperwork and Streamline Onboarding
Train new employees in groups. Have a well-documented, easy-to-follow training process for everyone involved.
3. Revamp Your Job Ads
When it comes to job advertisements, consistency and clarity are essential. This might be a candidate’s first (and potentially only) interaction with your company, so to reduce bounce and encourage quality applications, make it count. Here’s how:
- Proofread. Check for errors in grammar and spelling.
- Make it concise & compelling. Keep requirements and key skills reasonable. Don’t include pointless jargon or company-specific terminology.
- Be honest. Is the position full time? Temporary? Part time? Remote? Laying out the specifics of the job will encourage qualified candidates to apply – and discourage blanket applications of those “covering their bases”.
While there’s no way to eliminate hiring costs completely, making well-informed decisions with the information you have is key to ensuring your dollars are working as hard as they can.
Ready To Control Your Hiring Costs?
Need to cut costs, but aren’t sure where to start? Contact us to learn more about how we can help you make the most of your hiring spend.