How To Reduce the Cost of Hiring, Not Applicant Quality
In today's workforce, tenure is shorter than ever. Employees tend to seek out better growth opportunities even if they are happy at their current job, reducing hiring costs is a growing concern. When you factor in the many costs of hiring, including advertising fees, signing bonuses, referral bonuses, relocation costs, not to mention third party recruiter fees, the average cost-per-hire is $4,000. That's a drain on resources.
While a high cost-per-hire isn't ideal, neither is a bad hire. Research shows that bad hires are 41% less productive, increase recruiting costs by 37% and negatively affect employee morale.
How can you reduce hiring costs without reducing the quality of applicants? Here are some suggestions.
Agree On Job Description And Desired Qualities
Successful hiring starts when everyone is on the same page not only in regards to the job description, but also the qualities you want in a candidate. And "everyone" includes, at minimum, the department head, hiring manager, human resources, and whoever is doing the recruiting. You don't want to spend money recruiting for the wrong skillset and personality traits.
Tap Referral Sources
There are two effective referral sources: social media and your employees.
Social Media: Social media is a great way to find candidates. LinkedIn, Facebook, and Twitter have connected many job seekers to new job opportunities. A recent Jobvite survey found that 36 million Americans found their current jobs through social media.
Employees: Consider this stat from the Jobvite survey: the average employee has 150 contacts on social networks. If you have 100 employees, that is a network of 15,000 potential hires.
Guess what? Employee referrals are the most cost-efficient new hires. According to the Jobvite survey, they're hired 55% faster than those who come through career sites, and stay longer: 46% stay more than a year, 45% stay for more than two years, and stay for 47% more than three years.
Also interesting to note: 51% of those in the Jobvite survey said it was less expensive to recruit via referrals. And 86% of recruiters said referrals were the highest quality candidates and a better cultural fit.
Review Applications in Bulk
Create blocks of uninterrupted time in your schedule to review applications. Doing so is an effective way to compare applicants at once, and make decisions on who qualifies to move forward in the process. This helps reduce the time to hire and overall hiring costs.
Schedule Panel or Group Interviews
Once you've narrowed the pool down to your top candidates, schedule interviews strategically so everyone, from teammates to managers, can meet the candidate in one visit. Include current employees and managers, including the hiring manager and potential teammates, so everyone has a chance to ask questions and consider whether the candidate is both a skills and cultural fit.
Have Candidates Demonstrate Their Skills
RÃ©sumÃ©s give you a sense of what the candidate has accomplished, and interviews give a sense of personality and cultural fit. Neither one sheds much light on how candidates work. This is where skill-based assessments are useful.
Skill-based assessments, especially for technical roles, help evaluate how a candidate will perform on the job. They also help clarify whether candidates possess the job skills they claim. For technical roles, or ones that involve coding, Codility or CodeEval are two great resources to try.
Don't Forget to Plan For Onboarding
The high-fives after a candidate accepts your offer shouldn't be the end. Now you have to integrate them into your company. Your onboarding program is a good way to do this, especially if you hire large groups of people at once. Onboarding helps acclimate new hires into your work environment, and reduces the time-to-performance. Though effective onboarding programs will cost money, these programs effectively increase retention rate by 50%, which will reduce overall hiring costs down the road.
Make your hiring efforts as efficient as possible, but remember not to compromise cost for quality. Bad hires are bad for business.
Do you have tips for reducing the cost of hiring? Let us know @goodhiretweets.