The stakes of recruiting the right people are rising. How does this affect the costs of recruiting?
LinkedIn’s Future of Recruiting Report highlights a key prediction, which is “Recruiting will be mission critical”. This is a bold statement but if you think about it, it actually does reflect a core trend. Systems and automations are taking over repetitive and less creative tasks. This means, the jobs that are rising in demand are ones that will have even more impact within a business than before, as they are far more complex today.
As a famous saying goes: You don’t build a business, you build people. And then people build the business. – Zig Ziglar
Building businesses and especially growing them is becoming more complex. Therefore the jobs are too. For complex jobs, the difference between “good” and “great” skills are huge, and will ultimately have an impact within business, becoming a key differentiator – who manages to get the best talent?
At Lionstep, we have encountered this discussion many times, it’s the question about the true cost of hiring. As with so many things in business, to consider the true cost, you also have to think about the opportunity cost, which in this case is delaying a hire and even hiring the wrong person.
- What is the cost of others in a team having to cover for the position?
- What is the cost of projects not being completed by schedule or delivering results?
- What is the cost of the in-house team having to focus on that hire compared to all the other projects on their agenda?
- What is the cost of onboarding and training to find out in the end, you hired the wrong person?
There are so many opportunity costs to consider when hiring.
Effective recruiting should allow your team to operate with the most limited opportunity costs possible.
If you consider all the above listed opportunity costs, one factor stands out strongly. It is: time. The faster you hire the right person, the more likely you are to limit the mentioned opportunity costs.
To understand the true costs of recruiting:
You have to breakdown all the processes involved in recruiting the right person, which traditionally would include:
- Involving multiple people (hiring manager, recruiter, team) to understand the job position
- Developing a job description/ad
- Distributing the vacancy (career page and elsewhere)
- Maintaining the application systems
- Screen active and passive candidate market
- Screening the candidate applications and CVs
- Drafting emails for: replying to applicants, scheduling interviews, declining applications
- Interviewing candidates and recording analysis/recommendations
- Drafting emails for: post interview feedback, rejecting candidates, scheduling second interviews.
- Second Interviews
- Discussing status internally
- Drafting new feedback emails
- Scheduling assessment tests (if applicable)
- Rejecting the candidates with feedback
- Drafting and discussing offers
As you can see this can be complex and unique to the companies recruiting processes. There might be different assessments involved, different number of interview rounds and more. Recruitment can be a disruptive process for the entire organization. The key is to find out how you can save time and also ensure decision making is optimized on each level to ensure accuracy in hiring the right candidate.
It more about saving money rather than the costs
A professional recruitment service, like Lionstep, can help save money and of course, time. Such a service can support finding qualified candidates faster and are specialists in understanding the talent market and accessing talent pools.
Recruiting is also not just about handling the active applications but also tapping into the passive candidate market
Especially when looking for highly qualified candidates, it is often necessary to reach out to the passive talent market. There is a full industry developing on the know-how of sourcing and engaging passive talents. Even if you receive a lot of applications, so are other companies. In fact, candidates who are actively looking for a job send out around 10 applications on average, sometimes even weekly. You can imagine that the offer acceptance rate will be affected, depending on the level of engagement. That is why sourcing talents is a recruiting strategy many companies are implementing.
Optimizing recruiting to lower costs of hiring
- Are you in the business of developing products/service-should your team not be focused on that, instead of interviewing over 303.8 candidates/per hire – what is their time worth for businesses
- What if the number of candidates your team needs to interview can be reduced to 5? What if 90% of your job offers were accepted? How much more time would you have to focus on your products and customers?
Companies should consider the costs of hiring or rather, possibilities of saving costs. To achieve placement success, there are various factors to consider and it’s best to start analyzing your recruitment processes at a deeper level. Where can you save countless hours of work? How can you optimize your communication? There are important questions to ask.
Successful placement should be a win-win for both candidate and company. Find out how you can optimize your recruiting efforts today by getting in touch with one of our experts.
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