According to Glassdoor, the average cost of hiring a new employee in 2019 was $4,000.
There’s got to be a better way.
But, before we get too ahead of ourselves, let’s make sure we understand what hiring costs actually are. Hiring costs are the sum of your internal costs (ATS systems, referral rewards, recruiting staff, etc.) and your external costs (marketing materials, job boards, recruitment tech). Sometimes referred to as recruiting costs, they can easily spiral out of control.
Understanding this metric – and more specifically, your cost-per-hire (total hiring costs divided by employees hired in a period) – is key to saving money and making smart recruiting decisions.
While every dollar of your company’s hiring spend might seem worth it on paper, here are three ways to control costs.
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. Do the work to calculate an approximate cost-per-hire for each platform.
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.
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.
Train new employees in groups. Have a well-documented, easy-to-follow training process for everyone involved.
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. Do list requirements and key skills. Don’t include pointless jargon; this will only dissuade applicants.
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 Collaborative LLC today to learn more about how we can help you make the most of your hiring spend.