Recruitment can be expensive and it is no wonder why agencies and in-house teams are constantly searching for ways to reduce recruitment costs.
Every HR professional is under the same old pressure when it comes to cutting costs. We are sure we all agree that cutting costs is a good thing, but knowing you should and knowing how are two very different things.
Well, fear not, we have compiled 7 actionable ways that can help you reduce recruitment costs in 2024:
- Increasing staff retention
- Improving hiring processes
- Increasing direct hires
- Building your employer brand
- Hiring more freelance talent
- Considering recruitment process outsourcing
- Utilizing the power of recruitment software
And don’t worry. For each of these 7 tips, we have written in-depth explanations and actionable steps on how you can go about them.
Enjoy reading and reduce your recruitment costs now!
1. Increase Staff Retention
This has to be the first on our list because it’s such a no-brainer. In marketing terms, the cost of acquisition is five times higher than the cost of retention. The exact same applies to recruitment marketing (recruitment is marketing, after all).
The logic is simple.
Improving workforce planning and offering compensatory time-off plans or bonus hours can significantly increase staff retention, reducing the time to hire and overall recruitment costs.
If you keep more of your staff on board for longer, you need to recruit fewer new people in. Sure, retention does take investment too, but much less than acquisition does.
So, how do you increase your staff retention? Here are some suggestions.
Create a Beacon Culture
The first step to hiring these right people is creating the right culture. Your workplace is a beacon; you draw in what you radiate.
Create a profile of who you’re looking to attract. That’s your starting point. Then work out what is attractive to those people. That’s where you need your culture to be. If you’re looking to attract razor-sharp techs into a start-up environment, you’re probably going the wrong way about it if your culture is super strict, suited, and booted.
If you hire the right people, they’re infinitely more likely to stay with you longer-term because they buy into what you’re offering. There’s no right or wrong culture – you can be whoever you want to be – but there is a right and wrong culture for you.
Additional read: 4-Day WorkWeek: Pros, Cons, and Hidden Costs 2023
Develop your Training Offering
Progression is one of the most significant factors influencing candidate decision-making, but HR professionals and other business leaders are still glossing over it. In fact, studies have shown that career progression is the number one reason staff leave a role.
If you’re not offering exceptional training and development, your employee retention is probably suffering.
An obvious way to improve, and reduce recruitment costs, is to invest in training. You could employ a full-time in-house trainer or invest in external training or online learning platforms.
You need to send your employees the message that you invest in them, or they’re likely to find someone who will.
Pro tips:
- During the onboarding process, ensure to cover labor law postings and non-compete agreements, which are crucial for compliance and protecting the company’s interests.
- Encourage the development of internship programs as a cost-effective way to evaluate potential future employees and reduce recruitment costs by converting interns to full-time hires based on performance.
- Emphasize the importance of behavioral risk management in the interview process, using structured interviews and situational judgement tests to better assess candidates’ fit with the company culture and role requirements.
Embrace Flexibility
Thanks to COVID19 global pandemics, flexible working is a major trend that will definitely continue in 2023 too. Meaning, people are increasingly looking for opportunities that can be more flexible than the traditional 9 – 5.
This might mean allowing late starts and late finishes, or it might mean a four-day week. It might mean considering part-time options or job-sharing. The possibilities to increase your flexibility are endless. Using good online recruiting software, like Recruiteze, can also increase your flexibility and bandwidth.
Ultimately, the more flexible you can be, the wider the pool of candidates who want to work with you.
Your candidate retention is very likely to increase, as candidates who would leave to work in a more flexible environment find they can stay instead. Plus, this isn’t even really a business cost. It might seem counterintuitive, but multiple studies have shown that flexible workers are actually more productive.
Increase Salaries
It might seem like an expense too far, but if you work out what you’ll be saving on recruitment costs if you can increase your employee retention… increasing salaries is often an obvious move.
Just don’t see it as a fix-all solution. Sticking a zero on the end of it might work in the short term, but long term, you’re going to need to look at the more holistic factors above. Your aim should be to ensure your salaries are market competitive – to minimize the risk of an employee jumping ship for a quick increase. Introducing a bonus system could be a very cost-effective option to consider.
Food for thought.
2. Improve Your Hiring Process
Cost-per-hire is a ratio, right?
How much you’re putting in vs. what you get out. In other words, if you can get more out, then your recruitment is more cost-efficient. With that in mind, an excellent way to reduce recruitment costs is to increase the number of hires your recruitment process can yield… pushing cost-per-hire right down.
So how do you increase your candidate yield?
It’s about identifying mistakes in your process, mistakes that push good candidates away and could easily (and cheaply) be avoided. If you can minimize these errors, you’ll find you’re getting more qualified candidates through.
Utilize an Applicant Tracking System (ATS) to streamline your screening matrix and leverage applicant flow data for more informed decisions, enhancing the candidate experience and improving hiring process efficiency.
A better-qualified pool of candidates means you’re more likely to find the right candidate more quickly – which will also improve your employee retention. It’s a double whammy.
Here are some common elements of the recruitment process to consider overhauling.
Barrier to Application
- How long does an application take?
- Can candidates submit their details straight from LinkedIn?
- Can candidates just send you a resume, or do they have to fill in loads of forms?
The recruitment process is about balance.
How do you find the best people but also provide an optimum candidate experience? At the application stage, you should be aiming to lower your barrier to the application as much as possible.
We’re in a candidate-driven market at the moment, so the onus is on you to convince people to apply. If you make it difficult to do so, they simply won’t. Do you really want to risk losing the perfect candidate because you made it complicated to get in touch?
Transparency
Nothing more quickly undermines the candidate experience than a lack of transparency. Employers can get away with a multitude of sins if they’re honest about them. Build-in appropriate processes to ensure your candidates are always kept in the loop.
This means sending acknowledgment messages when you receive resumes, suggesting clear timelines, and delivering the news that applicants have been unsuccessful. Consider putting an FAQs section on your website to ensure candidates always know what to expect from you.
Don’t go quiet on your candidates – this is an easy way to improve your process, increase your candidate yield and therefore reduce recruitment costs.