Recruitment costs often vary depending on the size of the company, the scope of the search, and the talent of the candidates, but the average cost per candidate ranges anywhere from $1,000 to $5,000 and can get up into the high tens of thousands (and beyond) for key employees.
The expenses include, but aren’t limited to labor, relocation, sign-on bonuses, background checks, and more. One of the largest costs is travel as recruiters fly or drive around the world, staying in hotels, eating out, and racking up large bills.
Unfortunately, these costs double if you make a bad hire. You spent time and money on finding someone, hiring them, and paying their wages, only to have them quit or be fired shortly into the transition. That employee may have negatively impacted morale or client relations, not to mention the lost productivity. Now, you’re required to start the process all over again.
RecruiterBox shared info from a Harris Interactive Poll, reporting that a bad hire costs 41 percent of companies $25,000 and 25 percent of companies $50,000. Even if your expenses aren’t quite that high, there’s always room for improvement.
Lucky for you, there are just three simple steps you can take to cut your recruiting costs and enjoy higher profits.
1. Outsource Where Possible
The savvy recruiter doesn’t try to do it all alone, and neither should you. Recognize the sheer freedom and power in outsourcing and delegating whenever possible. This includes the day-to-day items that you would be accomplishing if you weren’t focusing on the recruiting efforts.
For example, you can use tax preparation outsourcing to remove the burden of accounting during the recruiting process. You might also hire a virtual secretary to keep you organized and focused on the task at hand.
There are other essential components of recruiting that can be outsourced as well. A well-written job description, for instance, is vital to your efforts. Hiring a copywriter to handle this portion of the recruitment process can make your life simpler all around.
2. Perfect the Recruitment Process
There’s no better way to reduce costs than to create a foolproof process. Your goal here is to create such an efficient strategy for finding new recruits every time that there’s no room for overspending, lost time, inconsistency, or legal mistakes.
Is there such a thing as a perfect recruiting process? Probably not. But you can work hard to hone your process so that it’s affordable and effective. Here’s what you need to do:
Set Your Goal
Every hiring process must begin with a clearly defined objective. You should be able to name the job to be filled and then list the qualities of your ideal candidate, including required qualifications, preferred work experience, background information, and other pertinent information.
Consider the firm’s needs as well. Are you looking for an employee for a temporary basis? Do you need more diversity in your firm? Are you looking for someone who could eventually take over? These considerations will greatly affect the kind of people you’re targeting as potential hires.
It also helps to set a time frame to complete your goal with the understanding that you may have to adjust the deadline if the perfect candidate doesn’t appear. This can help motivate you to work quickly and efficiently.
Develop the Job Description
Once you’ve clearly defined who you’re looking for and how they can benefit your firm, you need a clear and concise description of the job. This helps to clarify the job for you as well as presents a deliverable that can be published across the media to attract attention.
A good job description should provide an excellent impression of the company, describe the skills, experience, and education required, list the responsibilities of the job, and avoid any potential legal problems. For example, you should note that the job offers competitive pay with equal opportunities for those physically able to handle the work.
After writing the description, show it to a third party. Make sure they clearly understand what’s required and who might apply so that you know it will reach the right people.
Crafting a good job description takes time, but it will attract top talent and discourage the unqualified from applying.
Market Your Description
This is the part of the plan that can be somewhat tricky to regulate. Of course, you have control over where you post the description—social media, newspapers, online listing services, etc. However, you can’t always predict how long it will take to find a good candidate, costing you more money.
Try to streamline your advertising costs, only posting the description to platforms you know have worked well for you in the past. This will put your advertisement in front of those most likely to engage so you’re not wasting your spending.
Conduct Interviews and Hire
As applications start rolling in, you’ll need a clear strategy for conducting interviews and ultimately selecting the person you want to hire. Standardizing this process will make your job infinitely easier and reduce your costs exponentially.
Select who will be on the interviewing panel, how the interview will be conducted, what questions will be asked, and how the selection criteria will be graded. It can be helpful to have a scorecard for each candidate to help you narrow your choices.
Streamlining the entire recruiting process is one of the simplest and most profound things you can do to minimize your costs overall. Implement a clearly stated procedure in your firm and see how your budget improves.
3. Embrace New Recruitment Technology
Recruiters who don’t take advantage of every technological tool available are simply begging to lose money. There’s no need to spend thousands of dollars on a recruiting trip in many cases because technology enables you to do it all without leaving the office, if need be.
Recruitment technology is common and widespread with tons of gadgets available for you to try before you buy, if you’d like. Most tools are designed around targeting, identifying, and hiring potential talent. Some technology is even equipped with decision-making software that includes talent assessments or score sheets, so you can evaluate the candidates side-by-side.
One of the best qualities of these technologies is the time-saving aspect. Because a computer is sorting through all your applicants and identifying the best ones, you can focus on other things. It also reduces the paperwork involved in hiring.
Many recruiters have also eliminated the need for recruitment travel costs as well. With video-calling and online communication, there’s no need for face-to-face interactions until you’re in the final phase of hiring.
Those involved in the hiring process can better work together to make the right decision as well. Making a unified decision is one of the key challenges any company faces when there are multiple members on the hiring committee. Using digital scoring systems, decision-making software, and collaboration tools to keep everyone on the same page makes the process smooth and affordable.
Remember that technology can be somewhat fickle, and it can sometimes complicate matters more than it can help. Ensure your technology is working together and streamlining the process, not pulling against you and making thing worse.
Don’t let your company fall into the trap of believing that recruiting must be expensive if you want to find top talent. There are tried and true methods of cutting costs while still hiring excellent people if you’re willing to set up the process, utilize the tools available to you, and outsource where necessary.
Save Time and Money with Taxfyle
When trying to save time and money in recruiting processes or any other aspect of your business, outsourcing your tax preparation to Taxfyle is a great place to start. Our team of certified EAs and licensed CPAs are ready and able to meet your deadlines and bear some of that burden.
To see if Taxfyle is right for you, request a free demo today!