Reduce Hiring Costs While Recruiting
May 22, 2023
The recruitment process could consume a major part of your overall operational costs. While the need to reduce hiring costs in good times is an ongoing objective, it’s a necessity in tough times. Recruiting, however, occurs in both good and bad times.
The International Public Management Association for Human Resources revealed that about 30% of businesses spend between $1,000 and $3,000 per hire. If you’re spending a lot on hiring new employees, it’s high time to take effective measures so that you improve your bottom line. You can dramatically reduce recruiting costs by employing innovative recruiting tactics and tools
Hiring great people becomes difficult when you have a limited recruiting budget and an old-fashioned recruitment process in place. This blog post will identify some of the most practical and straightforward ways to reduce your hiring costs and hire the right people for your business.
5 Smart Ways to Reduce Hiring Costs
Before you implement any recruiting strategy, make sure to examine your overall hiring process. Find out how much recruitment is costing your company. Consider both direct and indirect costs during the process. HR administration, turnover, job board fees, advertising, and processing costs are some of the direct requirement costs. Indirect costs include the time of internal staff, productivity, and opportunity costs.
No matter what strategy you’re using to attract new talent, make sure to consider these 5 ways to improve your hiring process:
Automate Your Recruiting Process
In most cases, in-house resources have to post a job description on more than 10 different platforms and scan through a massive stack of resumes. How much energy and time do you think your staff would be investing in performing these repetitive tasks that aren’t even part of their responsibilities?
Most small business owners go through the frustration of spending more time and money than they should on HR-related activities. From job posting to payroll, and HR management, entrepreneurs can spend a significant chunk of their day on these time-consuming tasks.
Automation is the only way to move forward because it can save a lot of your resources and keep your business ahead of the curve. For example, a robust applicant tracking system can remove the pain points in the entire hiring process from job posting and interviews to talent acquisition, which ultimately leads to reduced operational costs.
A recruiting automation system can help perform the following tasks with great ease and speed:
- Applicant tracking
- Candidate pre-screening
- Access to pre-qualified talent
- Expand your reach into the talent market
- Candidate nurturing
- Manage everything using a single platform
Avoid Costly Turnover
While automation gives you a competitive advantage, avoiding turnover can reduce your hiring expenses. Every business with workers experiences employee turnover. When an employee left your company, you have to allocate time and money to find a replacement and train them. That’s why you have to avoid costly turnover in order to reduce your recruiting costs.
Here are some cost-effective techniques to reduce high employee turnover:
- Hire the right people in the first place
- Offer competitive pay and benefits
- Reward your employees when they deliver results
- Give them a sense of purpose and direction
- Allow flexible work schedules, if possible
Pro Tip: Use a digital recruitment approach to recruit pre-qualified employees to avoid turnovers.
It’s never been more difficult for HR managers to find the right employees: competition for talent is fiercer than ever before. To make your recruiting more cost-efficient, you not only have to find the right people but also expedite the overall process. Again, you can’t recruit faster unless you employ modern tools to streamline the hiring process.
As you scale from recruiting 5 people in a year to 5 people a week, efficient hiring processes can make a big difference. One of the ways to reduce your HR costs is to move faster throughout the process. To find bottlenecks in your process, analyze how long candidates spend in each step of the selection process.
Develop Talent Pool
Developing and maintaining a pipeline of qualified candidates will also help you reduce your cost-per-hire. It becomes easier for your team to fill in new positions quickly when you build a talent pool. On top of this, you don’t have to spend on advertisements.
Some companies hire a temporary replacement which contributes to a high cost per hire. Reduced time-to-fill will help you eliminate the need for finding temporary replacements. Besides, you wouldn’t have to waste the time of your team on a mass of unqualified candidates.
Here are some quick tips for building an effective talent pool:
- Use an efficient sourcing tool
- Take advantage of your current employees’ network to expand your pool
- Build a strong social media presence to invite potential candidates
- Encourage potential candidates to join your talent pool
Deploy the Right ATS
There are so many Applicant Tracking Systems that help companies streamline their recruiting process. However, you need to carefully scrutinize your needs before adding an HR system to your toolkits.
When you implement an ATS that is a good fit for your company, you will be able to cut several HR costs while enhancing your capabilities to connect with ideal candidates. Platforms like Wiggli come with a comprehensive recruiting tool that you can use to easily weed out under-qualified applicants, build an applicant database, communicate, schedule interviews, and automate various aspects of the hiring process.
Don’t let inefficient recruiting methods have a negative impact on your bottom line. Reach the right candidates quickly and cost-efficiently.
Final Thoughts on How to Reduce Hiring Costs
Your recruiting cost depends largely on the time your HR team spends on recruiting tasks. If your staff is using spreadsheets and email to track the hiring process, your recruiting costs are likely to be much higher. So, adopt smart recruiting tools to resolve most of your HR-related issues once and for all.