Anyone included in a company’s hiring knows how time-consuming the process is, but what some recruiters might not know is how much it costs an organization every time a job gets posted, and potential candidates are sought out.
The Society for Human Resource Management (SHRM) found that the average cost per hire is just above $4,000, and it takes about 42 days to fill a position.
Recruiting is a tedious process and a necessary evil to find the best quality candidates, avoiding turnover as much as possible. So, companies should do the most to make the best of the process and ensure that it’s executed properly, considering how much it costs to bring on a new hire.
Here are 4 ways to optimize the hiring process.
Doing this on the front end is important, but this isn’t a set-it-and-forget-it practice. Instead, organizations must continually evaluate the measurements and see how things change as the process transitions from step to step or potential new hire to potential new hire. Some performance measurements to include in this process are as follows:
- Timing of step 1 to actual hire – this is the time from the first job description post to day 1 of the onboarding process
- Hiring salary – this is the amount agreed upon with the new hire in comparison to the previous employee’s earnings
- Net hiring number – this is the number of people a company initially planned to hire in comparison to the amount that’s actually needed to hire
Plan for Turnover
Sometimes turnover is outside of a company’s control, and you need to realize that it’s a part of business. Think of how you handle the turnover from a financial standpoint. For example, if someone gives notice more than 2 weeks out, don’t start recruiting for the opening until you can financially. If you hire someone before the exiting employee leaves, make sure you can support both salaries. If not, wait to hire. Time is money. If the operational process of your organization can wait to hire, consider saving what you would spend on a salary.
Everyone involved in the hiring process needs to be on the same page regarding the plan in place. Clearly communicate how everyone can execute effectively and make the hiring process seamless. And this starts at the top. For example, imagine that your Sales Manager wants to hire two people in a certain role to help the effectiveness of their sales plan for the team, but the CFO knows that the company can only support the salary of one employee. If the Sales Manager isn’t aware of this, things can go awry during the recruitment process and internally between departments or colleagues. So, again, be clear and transparent in communication.
Handle Tangible Costs
Hiring isn’t just about paying a salary. There’s a lot that goes into finding a quality job candidate. Recruiting comes with tangible fees, including:
- Third-party recruiters – sometimes it takes more than your in-house recruiting team (if you have one) to find the person you want to step into a role
- Job board costs – these are a necessary evil because they are the way you advertise your role to people actively seeking a job
- Software and events – if your team gets involved with job fairs or uses software to help find or manage candidates, these are both costs a company endures
Recruiting comes with considerable expenses, and it’s not just about the salary. So, what is your company’s true cost of hiring an employee? Join the conversation on LinkedIn and check out Red Flags to Recognize in Your Next Interview.