It's a thought that passes through the minds of Recruitment Managers at least once per week:' How can I reduce my cost-per-hire?
With budgets being squeezed, the ever present threat of treble dip recessions and economic uncertainty, managing a company's cost-per-hire is the one financial KPI that a Recruitment Manager is measured by.
It's not an easy thing to reduce though.
More often than not you'll be obstructed by Hiring Managers who have a preferred (but costly) recruitment agency that ''have always performed well for us before''
This might be true, but in the modern world of the internet, job boards and social media, sourcing candidates more directly and hence reducing your cost-per-hire has never been easier.
So, without further ado, here are our top 5 tips on the best ways to reduce your cost-per-hire:
This might sound like the most obvious of tips, but you'd be amazed at how many companies we talk to where they do not know their cost-per-hire.' It might not be easy to get all the financial data but it's a very simple equation:
Total costs of recruiting / The number of people hired
Make sure you include all costs (direct and indirect) in this equation.' This will include your department's total salaries, job board spend and recruitment agency fees for example.
You may want to specifically measure a particular recruitment campaign to make a direct comparison ' in which case just measure the direct costs associated with the campaign and the number of people you hire through it.
There are a huge number of online options available now to the modern day Recruitment Manager.' There are over 2,000 UK job boards, CV databases and social media options which potentially allow you to tap directly into talent pools and reduce your cost-per-hire.
It might sound obvious but choose the options that are right for your business, not just the cheapest.' For example, different job boards have differing strengths.' You may want to take an approach that covers a number of touchpoints to give you the biggest exposure.
Get this stage right and the drop in cost-per-hire will be pretty much instantaneous.
This might require a huge leap of faith on your part, but that trusted recruitment agency that you have worked with for years might not be all that they're cracked up to be.
There are so many alternatives out there, including flat-fee experts such as Response(!), that it's inexcusable to stick with the same recruitment agency just because you've worked with them for so long.
The options listed above make access to outstanding candidates easier today than ever before.' This means that the 20% placement fee is becoming increasingly harder to justify for today's Recruitment Manager.
At the very least, try some alternative cost-per-hire reduction methods alongside your trusted agencies, and see how many of the same candidates both methods produce.' You'll be very pleasantly surprised.
Quite simply, online is the place to be if you want to be at the forefront of the recruitment world.' Candidates are hanging out in all kinds of forums and communities ' social media, job boards, CV databases.
Print media isn't producing the results it once was.' People use their mobiles to search for jobs so make sure that you work with providers that position their opportunities online and through mobile platforms.
Make sure you take advantage of everything online has to offer ' all within budget of course!' If you're comfortable managing your own relationships with job boards, make sure you select ones which will walk you through the process.
Remember, there is a knack to building an effective online recruitment campaign ' don't just copy and paste your job spec in the ad text box.' If you need any free, impartial advice, call us on 01922 704 580 and we'll help you out.
Once you've worked out your current cost-per-hire,'you've'analysed your options,'you've'ditched your agency and you've taken the plunge online, measure absolutely everything.
You won't get everything right first time.' Online recruitment is a great way of filling about 82% of the roles, but you won't fill everything first time.
Eventually you'll be able to see your cost-per-hire decreasing, you'll know which attraction methods best work for your organisation and you'll be able to seamlessly bolt them into your current recruitment processes.
Happy days all round!