The average cost of replacing one employee is more than £30,000, when factoring in the 28 weeks taken for the new starter to get up to the required ability and standard of work, and the direct recruitment costs. The median direct hiring cost for sourcing and securing the average employee currently stands at £2,000, with senior managers and Directors costing £6,000, and more niche roles proving even more costly.
In difficult periods of time such as global recessions and the current Covid-19 pandemic, business leaders across industries are shedding costs in an effort to maintain business continuity. As industries slowly return to production, trading and travelling in the coming months, hiring the right talent to steer the company through its comeback – and at the lowest possible financial cost – will be integral to strategic success.
Here are seven ways that companies can reduce recruitment costs without reducing the quality of their hires.
1. Employer Brand
A positive employer brand will aid companies large and small to engage both active and passive candidates. Stand out amongst competitors by carefully crafting the image of the ideal place to work, by telling the story of how you brand came to be and the role of employees in your purpose and vision.
Emphasise your employee benefits, Learning & Development opportunities and the achievements of your staff, and promote testimonials from individual employees across the business as unique recommendations. Instagram is an excellent space to showcase the positive experiences of your existing workforce, including company social events, anniversary celebrations, promotions and charity days, to provide a first-hand perspective of life as an employee. By organically building up a positive image of your workplace, advertising will become increasingly less necessary to your hiring strategy and such costs will continue to fall.
A positive employer brand is vital to attracting diverse talent. Showcasing your support proves to applicants that you care about their perception of your business, positioning your company as a great place to work and attracting candidates to your business over a competitor. Businesses can reach diverse applicants by publicly championing inclusion through attending and speaking at relevant events, supporting initiatives such as getting women and ethnic minority talent into engineering, and donating funds and volunteering time to relevant social enterprises. Any diversity campaigns and policies must be authentic and the internal experience of diverse employee must match the public image promoted by the company; applicants will quickly spot attempts to cash in on trends rather than a permanent commitment to improving inclusion.
By incorporating diversity into the current employee experience as well as candidate attraction techniques, industry leaders align their brand with the values of their existing and potential diverse employee base and foster an inclusive culture that will increase applications and referrals.
Retaining existing employees – even at a cost of pay rises or additional benefits – are far less expensive than replacing them altogether, in both direct costs and damage to culture, innovation and project and programme continuity.
Use the pandemic as a unique opportunity to step back from day-to-day business and truthfully, holistically assess your culture. What does your retention rate say about your company as a place to work? Have your staff turnover levels peaked in certain times of year or project timelines, are certain departments regularly experiencing a greater loss of headcount, or are younger, more junior or diverse employees more likely to leave than their colleagues? No CEO wants to focus on the weaknesses of the business they spend every day working to help succeed, but alongside exit interviews, patterns in staff turnover are the most honest insights that leaders can ever access.
Conduct an anonymous employee survey using a free survey platform, or task employees from different functions and levels of seniority with ideas to improve employee experience. Enquire about what your teams and individuals most enjoy about working for you, what changes they would like to make, what would help them become more effective, efficient and ultimately happier in their jobs. Often changes that will have a small impact on the business itself – such as flexible working, proven to significantly improve productivity and wellbeing, and free initiatives like skills sharing and time to work on personal development – Give your employees more of what they feel they most want and need to ensure your staff are as happy, productive and loyal as possible.
A positive employer brand and increased employee retention will help build a culture that generates string referrals.
Whilst formal referral schemes usually involve a small cost investment, a few hundred pounds paid to referrers is definitely worth the return of a high quality new starter, especially given the alternative cost of recruiting from scratch. Smaller or start-up companies could offer different referral benefits other than cash, such as extra holiday or an early finish on a day of their choice, that are still valuable to existing employees but involve a very low impact to business finances.
Internal referrals are often ignored by hiring strategies, but can provide some of the most innovative and beneficial hiring results. Times of redundancies can retain the skills and knowledge an employer has already cultivated by assessing employees for different potential roles and including them in the creation of a new position.
Those staff members who are a great culture fit, possess a positive work ethic and happily support their colleagues, but who are unlikely to pass probation or develop their skills further in their role are excellent candidates for internal mobility: if one job description is not best harnessing their abilities, there will be dozens of others that could. High achievers can be continually engaged and empowered with new challenges in newly-created roles or the opportunity to live and work abroad in a company’s other offices.
Shortening interview processes can dramatically reduce time spent hiring each employee and will improve the candidate experience. Reading the skills, knowledge and experience of a candidate on their CV, checking these through references and a verbal conversation to reinforce their abilities are the majority of the factual confirmation you need to decide whether this hire will fulfil role requirements. Whilst HR Directors, executive and team leaders will understandably want to assess the culture fit of potential employees, this should be easy to establish quickly when planned correctly.
Operate with a two-interview process – three at an absolute maximum – even for the most senior roles. Review your interview practices to ensure you fully utilise the time that you have with your candidates. Ensure you ask open-ended questions to prompt any potential red flags or candidate concerns, question interviewees on their personality and what they want and need from their careers, and
Take advantage of technology. During Covid-19, video interviews have proven the only available form of candidate screening for many HR departments, and the thousands of new starters undergoing virtual onboarding has proven their usefulness and accuracy. Most video conferencing tools are free to use and enable interviewees and managers in different geographical locations to meet at zero cost to the business (removing significant travel and accommodation expenditure). Video and phone interviews and telephone interviews require much less time for candidates to make arrangements for travel or time off work, ensuring applicants can reach you days or sometimes weeks sooner than would be possible with face-to-face interviews.
Technology also facilitates flexibility on the employer side, which has enormous benefits for applicants and promotes the brand image of your company as one that truly cares about its workforce. Being more flexible around candidate’s schedules, family responsibilities and health and disability requirements can open up opportunities to a wider and more diverse pool of candidates than ever before – all for free.
Excellent candidates usually know their worth, and they will be willing to pass up otherwise brilliant career opportunities for jobs that don’t offer them the salary and benefits they want or need. Objectively assess what you’re offering for potential positions: is the offer going to attract somebody of the right calibre and experience and fit for your company? Less enticing opportunities will attract decent enough candidates, but to secure the best potential talent who will truly give everything and more to the role, for the best possible results, the package and its career development opportunities need to match the standard of candidates you expect.
Creating and continually reviewing and adapting an agile recruitment strategy can help your business appeal to the wants and needs of specific demographics and keep up with global lifestyle changes as societies and communities vary their job expectations every few years.
What kind of people are you attracting to your roles? Look at your hiring strategy and very communication point from a candidate’s perspective – what do they see, how does it make them feel, and does it make them want to work for your organisation?
For SMEs and those yet to build their employer brand, job adverts are often the first impression a candidate will have of your organisation. Ensure your adverts are written in a way that not only highlights the company and the role, but also allows applicants to imagine themselves in the position. Language is key: more ‘masculine’-sounding words based around competition and aggression can deter female and diverse applicants, and a long list of requirements will overwhelm or put off otherwise excellent applicants who lack personal confidence. Overly long adverts or extended paragraphs will cause quality applicants to give up halfway through reading – use a clear communication structure of bullet points, headings and short paragraphs to make it as easy as possible for the right candidates to apply for the role.
Experienced recruitment consultants who specialise in your industry will understand your market and be able to benchmark candidates to find those that fit with your team and help your business drive growth and success. A recruitment company can profile potential candidates not only on their skills and experience, but on their personality, personal goals and needs, and are therefore able to evaluate their all-round suitability for your organisation.
Working with a good recruitment agency will reduce hiring costs by improving both the quality and speed of the recruitment process. Experienced recruiters will already have relationships with a wealth of potential talent and can use their networks to identify and engage passive candidates much more quickly. Industry specialists will require less time being briefed to know what your business needs, will deliver excellent shortlists and longlists, and will secure the best possible candidate – all saving the time and resources of your senior executive teams.
The right recruitment agency will also continue to support your business and your new starter once an offer has been accepted. The best recruitment consultants will communicate regularly with the selected candidate to maintain their interest and enthusiasm throughout their notice period, and will help them through onboarding to ensure they get the best employee experience from the very beginning.
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