Hiring is not just one of the most time taking activities it is also one of the chief contributors to the overall expenses of any organization. While it cannot be denied that human resources are the most crucial to any organization, spending money effectively to hire new candidates is something most hiring managers struggle with. Hence, making the talent acquisition process cost-effective is one of the biggest responsibilities for HR professionals. However, the million-dollar question here is how this can be done? In this article, we will talk about the steps hiring managers can take to reduce their cost per hire but before we touch upon that let us first understand –
What is Cost per hire?
Simply put, cost per hire is an organization’s talent accomplishment strategy that calculates the amount of money it takes to attract and recruit new employees. The financial investment that an organization has to make in recruiting new employees include various costs some of which are listed below:
– Relocation costs,
– Travel cost of the job applicants and interviewers,
– Employee referrals,
– Advertising cost,
– Commission to the recruiter(s) basis the total number of persons hired, etc.
7 Ways That Can Help You Reduce Cost per Hire
Here are some simple yet proven strategies to help you reduce the cost per hire in your organization:
1. Recruit Quality Candidates to Avoid Rehiring
One of the most effective ways to reduce the cost per hire is to hire qualified professionals in the first go itself so that you do not have to spend time and money again on finding replacements. The first step towards ensuring you get applications from good candidates is to provide specific and useful details about the positions you are hiring for. Next, screen candidate profiles carefully yet effectively to avoid spending too much time on unsuitable candidates. Clearly define the role and responsibilities of the open positions and try finding the best candidates who would not only suit the job requirements perfectly but also want to stick to the organization for long.
2. Build and Maintain a Talent Pool
Having a talent pool of good candidates can help minimize the cost per hire. What you need to do is build and maintain a pipeline of qualified candidates who are interested in your organization. Therefore, whenever a new position opens, you can reach out to your talent community to fill the position faster. This will not only minimize the costs associated with advertising jobs and sourcing new candidates, but also the time spent on interviewing unfit applicants.
3. Invest in the Right Tools
If you do not have the right technology at your disposal, it would be difficult to hire cost-effectively. It is always a wise decision to invest in a robust applicant tracking system (ATS). An intelligent ATS will not only help you streamline your recruitment process, but also reduce duplication of work and protect candidate data. Additionally, you can opt to integrate your ATS with other software intended for psychometric testing, background checking, profiling, etc. These will further help you hire candidates even more effectively.
4. Have a Referral Program in place
One of the easiest methods for bringing down the cost per hire is to build a robust referral program. Your employees fully understand the kind of work ethos and approach it takes to thrive in the workforce. Utilize their knowledge by asking them to refer friends, family, classmates, and colleagues, who would be suitable for the job opening. Sourcing from a ready talent pool will help you bring down the hiring costs and time. Attach some monetary or non-monetary incentives such as offering bonus, providing special recognition, discounts, free parking spot, etc., can motivate employees to make referrals without being too hard on your budget.
5. Interview Candidates via Skype or other Video Interviewing Platforms
While searching for a potential candidate, you may have to consider costs such as flights, stay and meals for inviting the qualified professionals for the later interview rounds. These costs can be easily avoided by scheduling your interviews over a video screening platform such as Skype. In addition to reducing the cost, it can also reduce the time you spend on screening the candidates significantly. Nevertheless, video screening should be used for screening purposes only and you must schedule a face-to-face meeting for the final interview, as it is important to be sure about the person you are going to hire.
6. Leverage the Power of Social Media
Social media has opened the door to network and even search for suitable candidates. It has changed the way recruitment functions in the organization. Millennials being social media savvy allows recruiters the opportunity to utilize social channels to advertising job openings (mostly for free or for a nominal price) as well as establish the organization’s positive brand image as an employer by communicating its values and vision, and work culture. Hence, it can be said that using social media not only saves time and money but also helps organizations interact with professionals regularly to understand how they view the company.
7. Offer Competitive Salary Packages
One of the major reasons why professional look for a new job or reject a job offer is because the salary package offered does not meet their expectations. This does not mean that hiring managers should accommodate unreasonable requests. As far as the professional’s expectations are within the budget and confirm with the industry standards, offering a competitive salary package right away will help you avoid wasting man-hours on negotiating and re-negotiating with potential candidates.
Hiring talent can be a costly affair for organizations and by using cost-cutting strategies like the ones listed above; you will not only keep your recruitment budget in check but also create extra efficiencies and value within your recruiting process.
All the best!
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