One of the most critical KPIs recruiters seek to improve is their cost-per-hire. Along with source pipeline, candidate quality, long-term retention, and other key performance metrics, tracking your cost-per-hire will help you to understand the performance of your recruiting initiatives better and minimize your expenses across the board.
For recruiters and hiring managers on a strict budget, there is a delicate balance between minimizing your cost-per-hire and getting the most out of the resources you have. Adequate planning, automation, and data-driven insights are helpful, but you need to know how to use the tools at your disposal. Here are some ways you can start cutting back on hiring costs and still maximize the results of your recruiting efforts.
1. Create a Candidate Persona
It's important to know from the get-go exactly what sort of background and experience you are seeking to fill a particular function. Using a mix of focus groups, meetings with hiring managers, and surveys you can start to paint a picture of who the ideal person to interview would be and which candidates would be most likely to be retained long-term. Ask yourself what relevant skills, background and personality traits they should have as well as where they would likely go job-searching if they are not currently employed.
2. Build Talent Communities
An engaged talent community can be your secret weapon for building a qualified talent pipeline that is ready and eager to work for your company. When new positions become available, you can source candidates from this pool instead of starting from square one, minimizing advertising and job board costs as well as other expenses typically associated with recruiting.
Talent communities usually consist of recruits with whom you have interacted in the past such as previous applicants and interviewees who perhaps weren't the right fit for a specific job at a particular time but could be engaged in a different function or department. Another way to source talent is to target passive job-seekers by providing a form on your careers page that allows interested parties to make general inquiries about being kept up-to-date on job opportunities and open positions.
3. Create Referral Programs
The average cost-per-hire is $4,129 according to SHRM data, and the average time-to-fill is about 42 days. Your employees already understand the kind of work ethic and attitude it takes to succeed in your workforce. By engaging your already-employed talent to refer friends, family, classmates, and colleagues, you can reduce hiring costs and time while sourcing from a ready talent pool. If you want to bring down costs even more, you can get creative with your referral incentives instead of the typical practice of offering a bonus. Providing special recognition, discounts, prize drawings, and non-cash rewards such as a free parking spot or extra PTO can also motivate employees to make referrals.
4. Utilize Social Media
Besides linking your job postings on social media channels like LinkedIn, Facebook, Twitter, and even Instagram and Snapchat, social media allows you to showcase your employer brand to the world through your recruitment process. Videos can show applicants what a "day in the life" is like at your company while bright, engaging images and links to blog posts also provide valuable behind the scenes insights into your culture and benefits. Social media also has the bonus of allowing you to find talent through targetted ads to job-seekers who may have an awareness of your company but may not start to actively apply for roles until they have been engaged on a more direct level.
5. Limit the Number of Candidates
With so many job-seekers out there, it's not unusual to get an overwhelming response to every job ad you post. Many recruiters have come to expect dozens or even hundreds of applications. This can quickly get overwhelming and can cause them to waste time and resources sifting through a seemingly endless supply of applicants. With this in mind; it's important to limit your energy and focus on only the most qualified applicants. Make it clear to your team that you want them to "think lean" and just interview three or four candidates per position.
6. Try Video Interviewing
Once you get to the later round of interviews with a qualified individual, the cost of flights, lodging and meals can add up quickly. Using a video interviewing platform can significantly speed up candidate selection while saving some costs often associated with screening candidates. However, video screening shouldn't replace a face-to-face meeting for the final interview. Putting the investment in a talented person shows you are interested and serious about moving forward.
7. Automate Your Processes
Interviewing candidates, screening resumes, and working with vast swaths of data all consume substantial time and labor costs. Automating specific workflows can remove human error (and the subsequent redoubling of work), reduce your staffing expenses, and improve the efficacy of your recruiting efforts. Efficient software platforms can do the job of several people at once, streamlining your recruiting work and instead allowing you to focus on essential strategic work like improving your employer brand or building valuable relationships.
Using these tactics are just a few ways you can lower your cost-per-hire KPI and start to attract higher-quality candidates to your job openings. Additionally, some of these methods will also improve your recruiting experience for prospects and by extension, promote your employee brand -- making your efforts all the more profitable over time.