Staffing costs form a major component of your company expenses. It is estimated that it consumes approximately half the yearly salary of an employee to recruit and get them to optimum functional ability.
That’s certainly a lot of money!
Even though these are considered to be the costs of being in business, and your employees form an indispensable part of your organization, the fact remains that you can’t go overboard in your expenses related to staffing. If you are facing a problem because you are spending more than average money on costs that are associated with staffing, you must cut them down immediately. Did you know that an ATS for small business can help you decrease your staffing costs? Recrutieze is the best free applicant tracking system on the market. Click here to use Recruiteze today and for FREE.
Why?
It is necessary because this will help improve margins in your business. Are you facing a similar problem and looking at cutting down staffing costs? The obvious solution to rein in the recruitment costs lies in taking a closer look at your staffing strategy. If you really want to maximize profits for your organization, the foremost thing to do is to deploy effective staffing methods.
Scroll down to find a list of staffing tips that are not only practical, but can easily be deployed to enhance organizational productivity, reduce overhead, and increase profits.
Reduction in Employee Recruitment and Training Costs
Recruiting and training an employee to a level at which they can yield maximum productivity costs a lot of money for the organization. In order to cut down the training costs and to improve the efficiency levels of your employees, have you ever considered recruiting skilled temporary employees? Recruitment of temporary staff when there are many projects in the pipeline and deadlines are looming is always a great option. Keep track with your hiring with an ATS for small business hiring.
Collaboration with a Staffing Agency
Have you thought about collaborating with a staffing agency to cut down on your recruitment costs? When you work with a staffing agency, you don’t have to worry about posting vacancies, conducting interviews, screening applicants or even recruiting them. All these activities are well taken care of by your staffing agency. You, therefore, tend to save a lot of money, time, and effort by teaming up with a recruitment or staffing agency. Such agencies understand your requirements well and also have a pipeline of candidates that suit your industry. Even more, they can help you with your seasonal demand for skilled or non-skilled staffers. You may even ask them to conduct training sessions or workshops depending on your needs. Eliminating the need to conduct in-house training and workshops will, further, help you save a lot of money.
How to Hire the Right Staffing Agency?
Advantages of Hiring a Staffing Agency
Skill Gaps Assessment and Work Outsourcing
As a recruitment manager or staffing expert, you must never underestimate the importance of skill assessment in your workplace. Why? It is crucial because it helps identify skill gaps that might be prevalent in your organization. Furthermore, it can be used for the identification and training of employees that show potential for getting trained in new skills and are open to learning. In order to enhance their productivity, you may even consider offering certification and educational incentives to them. Outsourcing the work, depending on your requirements, is a great option that will eliminate hiring needs for any unnecessary positions.
Working Towards Reducing Employee Turnover
Have you ever analyzed how much it will cost you if you continue the same process of hiring and rehiring within your organization? Even though it is normal for every organization to deal with small employee turnover, it must never exceed the threshold levels. You need to immediately identify the problems that are forcing employees to leave your organization. Is your company conducting exit interviews? Are you using the data from exit interviews to gain a better understanding of the problems that are being faced by your employees? All your efforts must be directed towards providing your employees with a congenial work environment and incentives that will make them want to stick with your organization for the long term.
How to Reduce Employee Turnover?
Reducing Administrative Burden
The formulation of the right staffing strategy is something that plays a crucial role in helping you reduce costs, enhance productivity and carry effective risk management. One of the critical components of an effective staffing strategy is to reduce the burden on your administrative department. How can you do that? It’s easy!
Encourage the recruitment of temporary staff in your organization and reduce the number of direct hires. This will transfer the costs linked with payroll processing and administrative tasks to the staffing agency/hiring firm you are teamed up with. Using an ATS for small business hiring, like Recruiteze, also reduces the daily redundant admin work you have to grind through. Get hours of your day back with Recruiteze!
Employee Overtime
Can your company really not do without overtime? Did you know that it is one of the most expensive methods of getting your work done? Why would you not want to make use of temporary employees when that can help you reduce your staffing costs by more than 20%? It is obvious why, therefore, experts recommend making use of a temporary staff when the workload is high and deadlines are approaching fast.
Employee Burnout Costs
Are you pushing your employees way too much in an attempt to get the desired results? Or, is it that you are taking the concept of “lean thinking” too seriously and quite far? Basically, what you are doing is increasing their stress levels by providing them with insufficient resources and expecting them to deliver more. Do you have any idea where it is leading to? It is certainly not yielding any positive results. In fact, it is leading to a number of serious problems like reduced efficiency, poor quality, frequent employee turnover and much more. A better way of handling things and taking excessive pressure off the minds of your employees is to recruit temporary employees. For those who think by recruiting temporary staff you’re going to add to the staffing costs, you are completely wrong. By avoiding employee burnout, you are going to save money in reality as there will be reduced production losses and fewer turnover expenses.
Mitigating the Risk of a Bad Hire
Do you have any idea how much a bad hire costs your company? It is estimated that a bad hire costs you somewhere between 2 and 7 times of the annual salary you pay to an employee. In order to reduce the hiring mistakes that you might be making very often, the most effective solution for you is to avoid direct hires and encourage recruitment through staffing agencies. Staffing agencies help mitigate the risks of a bad hire as their primary job is to provide you with a right candidature depending on the needs of your business. Because they follow strict guidelines and procedures for the recruitment process, they can provide you with candidates who not only possess desired skills, but also a sufficient amount of experience.
What Is the Cost of a Bad Hire?
Top 17 Signs You Made a Bad Hire
Attaching Benefits to Performance
Are you deploying a proper strategy when it comes to framing your policy for bonuses? Remember, benefits are meant to be attached to performance and not to be taken as rights. You must, therefore, carefully formulate a strategy under which bonuses and benefits are given as a reward for the value that has been created by your employees. The employees must never start viewing bonuses as a right.
Driving Forces
What are the forces that drive your employees to deliver their best performance? Most often, companies go wrong in attaching money incentives to performance. That is, the incentives are used to motivate employees to work better and even for controlling their behavior. You can certainly find more interesting ways of rewarding your employees. By eliminating financial incentives from your organizational policies, you will be making a significant cut in your expenses.
Fixed Cost Conversion
In order to minimize your expenses, you can implement a planned staffing strategy that allows you to direct your efforts towards converting fixed costs into variable costs. This can be done by making employee reductions in your core team with an objective of maintaining basic and most crucial work operations. Thereafter, you can start recruiting temporary personnel depending on the demand and needs of your organization. This strategy reveals very effective results especially in industries that are labor intensive. Also, the results are extremely beneficial in organizations that thrive on a number of technical or professional projects.
Removing Capacity Constraints
You need to really work hard towards improving the levels of efficiency within your organization. You need to remove all the constraints that may be even slightly affecting productivity at your workplace. In case there are any process constraints, you can consider adding personnel to your team. The whole idea is to add the right set of people that can add maximum value to your company by reducing administrative burden, decreasing costs and increasing the efficiency.
Final Words
Having deployed right staffing techniques and methods, it won’t take long for your organization to control its recruiting and hiring costs. In fact, you will be able to improve margins and still maintain high-quality work at the same time.
Also check out these articles which have additional tips to reduce staffing costs:
Best Ways to Reduce Recruitment Costs
How to Reduce Recruitment Costs – Part 2
Need A Free ATS For Small Business Hiring Needs | Recruiteze
Recruiteze is a free ATS for small business hiring and talent tracking. iReformat allows you to format up to 10 resumes per month, for free! If you’re ready to take the redundant administrative work out of your daily tasks, start using our free recruiting software today.